One-Minute Patterns for Daytraders
02/13/2014 10:12 am EST
Veteran trader Harry Boxer talks about what he looks for in stock charts to find trading opportunities and identify optimum entry and exit points.
SPEAKER: My guest today is Harry Boxer and we’re talking about a one-minute chart pattern to watch for as day traders so Harry, describe this kind of one-minute pattern you use to trade.
HARRY BOXER: Well I found that over the years after doing daily bars and graphs and trading on a daily patterns over a longer period of time, that through pattern recognition, the same patterns occur in all timeframes so why not use them for intraday day trading and so over the last 10, 15 years, I’ve been trading more aggressively with using one-minute patterns and yet it’s amazing to me the same rules apply and I’m writing a book that has a whole chapter on that because I feel like a lot of people don’t know how to accurately analyze the intraday patterns on a one-minute basis and make productive trades from those patterns.
SPEAKER: Alright, talk about what it is, what is it you’re looking for in the bar, before the bar, or after? What triggers it?
HARRY BOXER: Well, first of all we’re looking for an opening gap or thrust in price and then the first consolidation or pullback, I want to see where it holds, how it holds, whether it pulls back in low volume and whether the pattern creates a wedge, coil, flag, something that’s more of a bull consolidation. We don’t want the pullback to be too steep but even a falling wedge sometimes breaks out to the upside so and then beyond that, we find out when we catch the right stocks, they end up trending in a channel the rest of the day off of that thrust and first pullback so I find that the ideal point to buy the stock is on the full pullback or after that pullback stopped and started moving up again, right at that point.
SPEAKER: Do you use any type of volume or anything other than this to determine when you get in?
HARRY BOXER: Yes, well, yeah. There’s another thing that Wharton Brothers has that the proprietary index called buy and buzz and it shows you early in the session what percentage of volume is trading as opposed to historical buying meaning over a 100-day period if a stock was trading in average in the first 20 minutes of 10,000 shares, in today’s trading 150,000, you’re seeing 15 times normal buying. That’s to me a heads up as to a stock that may be about to make a big move intraday.
SPEAKER: How many trades a day do you find that this comes up with?
HARRY BOXER: Dozens. It’s amazing.
SPEAKER: Are you taking all of them?
HARRY BOXER: No, it’s kind of funny because when I do my, during the course of a session, I’ll do live webinars and I’ll show people how the patterns are developing and often times they’ll put a symbol up for me and I’ll look at it and I’ll say, looks awesome, it’ll probably go higher but we’ve already got 10 or 12 trades in. We don’t want to overtrade either.
SPEAKER: Alright, how about like a sell signal for when you do get into this, what are you looking for?
HARRY BOXER: I’m looking for the stock when it’s trending to hold support on a previous low or to hold a channel line or to move the moving average or all three ideally. As soon as they start to rollover, the moving averages cross over, the trend line gets broken or a major support level may be taken out and the buying picks up to the downside, that’s when you want to get out.
SPEAKER: You mentioned the two moving averages. Do you know which ones do you use?
HARRY BOXER: I use chiefly, I use three actually. I use a 10-, 21-, and 50-day moving average or 50-period moving average with the one-minute charts.
SPEAKER: Do you find that a certain sector of stocks, are they with the tech stocks are the more active ones than the ones that typically hit this?
HARRY BOXER: Well, during the day when I’m getting news on stocks that are gapping up, it could be Travelocity. It could be anything that’s non-tech but for the most, it turns out a lot of the stocks because they’re more volatile in the tech sector and the biotech sector and even the solar sector, those have become great trades this year.
SPEAKER: Harry, thanks for your time.
HARRY BOXER: My pleasure.
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