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How One Trader Uses Pattern Recognition with Momentum
Specs: 33 mins, 29 secs | 15.4 MB
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The trader I interviewed for this episode uses a combination of pattern recognition and momentum indicators to find excellent swing trades he holds for 3-5 days. Frank seems to have perfected a very calm and confident way of trading short-term trends. In this interview we discuss in detail the scans he runs each evening to find his basket of tradeable stocks, why he likes a specific kind of equity to trade and his favorite chart indicators. He talks about what area of the markets he finds the most profitable long trades and the sector he avoids entirely. We also discuss how he sets his profit targets and why he only uses mental stops. Finally we discuss his position sizing techniques and a few of the stock symbols that are offering great trading opportunities now. Frank also explains a few of his recent trades to show how he looks for money-making positions.

Markets discussed: Stocks, ETFs


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How One Trader Uses Pattern Recognition with Momentum


Tim: Hello everybody and welcome back to Trader Interviews. Thanks very much for joining me for another episode. Today, we're going to be speaking with Frank. He's got a lot of good information to share about what he's watching in the markets and how he approaches good trades. We're going to ask him about that. So first of all, Frank, thanks very much for joining me on the phone today.

Frank: Thanks for having me.

Tim: All right. So if you can kind of describe if you would your overall philosophy, are you a day trader, a swing trader and then what markets do you trade?

Frank: I'm a swing trader and just the equities market, just the US Equities Market. I rarely do options -- you know, I might do some options every now and then but just strictly equities, specifically small caps.

Tim: Okay. And in terms of your approach, is it technical, fundamental, what do you do?

Frank: Technicals first and foremost.

Tim: What types of things are you looking for on a chart, garden variety things that you're look for in terms of technicals?

Frank: I'm a simple pattern recognition type of trader, pattern recognition/momentum trader. So, you know, on one of my charts, you'll see just the chart volume and a couple of moving averages and that's about it.

Tim: And is there a basket of stocks that you like to trade every day?

Frank: When I go through my scans like my universe is stocks with a market cap of less than $2.5 million. So my number one scan is I will just go through, you know, stocks below $2.5 million as far market cap and I'll just sort them by their performance in the last three months and then I'll switch to six months then I'll switch to a year.

Tim: So performance meaning percentage gain or...

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