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Frequently Asked Questions

What does a Day Trade Alert and a Swing Trade Alert mean? and what does "scalp" mean?
Day Trade alerts are notifications that a stock may be entered for a day trade (long, unless otherwise stated). A day trade should be exited when it hits its target or (trailing) stop and at latest by end of day. If the day trade is designated as a "Scalp," this means a quick trade for 2-4%. Swing trade alerts indicate a stock may be entered for a several-day to several-week trade. Swing trade alerts are posted in the Trading Diary (for those who have the swing trade service) and also available by email. Harry's day and swing trade alerts are trade set-ups only -- not tracked in a portfolio nor with exit alerts provided.
How can I best take advantage of Harry's Day Trade Alerts?
See Harry's Tutorial on Using his Day Trade Alerts. Some key points from the tutorial:
  • Day trade picks are reviewed in Harry's live video talks both pre-market and throughout the day.
  • Day trade alerts prior to market open are typically stocks that are big pre-market movers -- often best to buy on first pullback rather than chase on a gap. As Harry says: "We most often state to wait for the first pullback to see if gap or nearby support does hold. This pop & retest results in many stocks that hold support, then trend or channel up throughout the day (my favorite day trade pattern). It also enables you to stop the trade quickly if the opening gap or nearby support is violated, resulting in quite small losses and allows you to 'stay with the intraday up-trend' longer."
  • If a stock drops below opening gap price, best to exit and wait to re-enter.
  • No need to try to play all the picks, just select a few.
  • "Scalp" means enter for a quick day trade.
  • Day trading means being out of the trade by the end of the session.
  • New subscribers best to observe for a few days before committing to real trades.
What indicators do you follow in day trading to spot breakdowns or breakouts?
I follow 1 and 5 min charts with 21 and 50 day moving averages. (See more on "Moving Averages" below.) Breaks of support, resistance and moving averages on high volume with intensity confirmed by TCNet's proprietary indicators -- On-Balance Volume, Money Stream, and Balance of Power -- serve as guides in my trading decisions. The rest is instinct from more than 40 years trading.
What does your trading room like look in terms of equipment/software?
I have three monitors and two phones. My quote system is on a 20-inch screen with a market monitor of all my stocks and four index charts (2 SPX, 2 NDX). My 17-inch screeen is my Technical Trader screen for entering trades and comments. The computer is strictly for my TC Net live streaming charts.
What kind of technical tools do you recommend?
I use TCNet charting software & realtime data feed by Worden Brothers, which I've been using exclusively for many years! They offer most normal technical indicators and have developed several proprietery indicators such as Money Stream, Balance of Power & On Balance Volume . See "Settings" below.
What is TheTechTrader.com "board" you mention in Harry's Closing Comments?
The "board" refers to stocks Harry has been watching throughout the trading day for day trades. The board is not listed on the site, although Harry does often mention pre-market the stocks he'll be watching closely that day and also discusses them in his intraday talks.
Are the diary trade alerts real, actual fills?
None of the trade alerts are actual fills. Harry's day and swing trade alerts are meant to be a guide as to his view on approximately when to get into a stock and the stop and target levels to use.
What kind of trading system or online broker do you recommend
There are many good trading systems and brokers and none in particular that we recommend.
Should you place market orders or limit orders?
This depends on the position of the stock, the volume, the rapid movement of it. If a stock's in a consolidation pattern and you're anticipating, you can put a buy stop limit order in and wait for it to hit you. If it breaks out and you want it immediately without missing it, you may want to just put a market order in. Or you can put an order in below the market and let it come to you, as well as be a seller above the market and let it come to you.
What moving averages do you use?
The 50 day simple, the 21 day simple & the 10 day simple. After nearly 40 years of trading, trial & error has told me that the 40 day more closely aligns with price on the daily charts than the 50 day, which is the more commomly used & accepted moving avg by many traders. However, I've recently moved back to the 50 because it allows more leeway. The 20 or 21 also is very good for short term traders (with the 10 day being useful for very short term traders). I am 100% convinced that using these time periods will enhance your ability to pick KEY support & resistance levels, as well as important tops & bottoms.
I often hear, "Buy on a pullback." What amounts to a pullback?
Look for a pullback that retests prior high or moving averages, basically retesting support to make sure that support is good.
What are the settings and indicators on Harry's TCNet charts?
The moving averages are 21 and 50 day, and the indicators are Money Stream, Balance of Power and On-Balance Volume. Here is an illustration of Harry's chart settings.
Is technical analysis only good for short-term market analysis?
No, absolutely not. It's good for any trend of any length of time. The same patterns repeat intraday, daily, weekly and even monthly. So technical analysis is good for any time basis.
How much fundamental research on a stock should accompany a technical approach?
That varies in opinion. My opinion is it's probably 80-90% technical and you look at fundamentals to see they're at least in line, but most technicians would say ignore fundamentals because fundamental news is built into the price of the stock, and technical analysis is a gauge and measurement of price action. It's been proven that stocks continually repeat the same patterns -- flags, triangles, W-bottoms, head-and-shoulders, trend lines, moving averages. When the majority of them are in one direction, the stock has a very high degree of probability of continuing to move in that direction until the direction changes.
I've often heard it's bullish for a stock to be rising on heavy volume, why?
It indicates accumulation and buying pressure. Just the opposite occurs when a stock is in a bullish trend and is pulling back. It should be on lighter volume, which indicates that a stock is only coming down because buyers are backing away, not so much because there's tremendous selling pressure. See video on Price-Volume surge.
How can a technician conclude that we're at the onset of a new positive "trend" as opposed to just a dead-cat bounce?
Dead-cat bounce usually occurs when a price is so stretched so hard so fast that it bounces but normally does it on lower volume and it's a very unimpressive and probably short rally. A high-volume strong rally with big up-bars on the bar charts are usually more indicative of buying intensity and a possible turnaround in price action.