How to trade PLTR

8 août 2024

I have many people asking how to trade a stock more successfully. I would like to share with you what I do daily before trading:

I treat trading as a business, not gambling.
As in any business, I always plan my business strategy.
My plan and actions are based on the playbook I create for each stock trade.
Creating a playbook for trading PLTR (Palantir Technologies) stock involves several key steps to ensure you have a comprehensive plan. Here’s a step-by-step guide:

1. Pre-Market Analysis
Check News and Catalysts: Look for any news related to PLTR that could affect its price, such as earnings reports, product launches, or market news.
Review Overnight Developments: See how PLTR traded after hours and in pre-market trading. Look for any unusual volume or price movements.

2. Technical Analysis
Identify Key Support and Resistance Levels: Use historical price data to identify important support and resistance levels. On Thinkorswim (TOS), you can use the drawing tools to mark these levels on the chart.
Analyze Chart Patterns: Look for any chart patterns such as flags, pennants, head and shoulders, etc., which might indicate future price movements.
Check Indicators: Use indicators like Moving Averages (MA), Relative Strength Index (RSI), and MACD to get a sense of the stock's momentum and potential reversal points.

3. Define Your Trading Strategy
Scalping or Day Trading: Determine whether you will scalp or day trade PLTR. Scalping involves quick, small trades, while day trading involves holding positions for a longer period during the day.
Entry and Exit Points: Define your entry points based on your analysis. Decide on your exit points to take profits or cut losses.
Set Risk Management Rules: Define your stop-loss and take-profit levels to manage your risk.

4. Develop Your Watchlist and Alerts
Create a Watchlist: Add PLTR to your watchlist on TOS.
Set Alerts: Set alerts for key price levels, volume spikes, or other criteria that match your trading strategy.

5. Plan Your Trades
Pre-Market Orders: If you trade in pre-market hours, plan your orders based on your analysis.
Intraday Execution: During market hours, follow your plan and execute trades based on your predefined strategy.

6. Post-Market Review
Review Trades: After trading, review your trades to see what worked and what didn’t.
Adjust Your Strategy: Make any necessary adjustments to your strategy based on your review.

Example Playbook for PLTR
Pre-Market Analysis
News Check: No significant news reported.
Overnight Trading: PLTR traded in a range of $16.50 to $17.00 with higher volume in the last hour.

Technical Analysis
Support Levels: $16.00, $15.50
Resistance Levels: $17.50, $18.00
Chart Patterns: Potential ascending triangle forming on the 1-hour chart.

Indicators:
MA: 50-day MA at $16.75, 200-day MA at $15.80
RSI: Currently at 65, indicating slight overbought conditions.

Trading Strategy
Entry Point: Look for a break above $17.00 with high volume for a long position.
Exit Point: Target price of $17.50 with a stop-loss at $16.70.

Risk Management: Risk no more than 1% of your trading capital on this trade.
Watchlist and Alerts
Add PLTR to Watchlist.
Set Alerts:
Price crossing $17.00.
Volume spike above average.

Trade Execution
Pre-Market Order: None planned.
Intraday Orders: Place order to buy if price breaks above $17.00 with volume confirmation.

Post-Market Review
Trade Review: Check if the trade was executed as planned.
Strategy Adjustment: Make notes of any deviations and adjust strategy for future trades.
This playbook provides a structured approach to trading PLTR, helping you make informed decisions and manage risk effectively. and this is not financial advice. Just for educational only.

8 août 2024

Note

When creating a playbook for scalping and intraday trading, selecting the right time frames is crucial. Here's a detailed guide on the best time frames to use:

Scalping
Scalping involves making numerous trades within a very short time frame, typically holding positions for seconds to minutes. The focus is on small price movements.

Best Time Frames for Scalping:
1-Minute Chart: Ideal for identifying immediate price action and making quick trading decisions. This is the primary chart for scalpers.
5-Minute Chart: Provides a broader perspective to confirm trends and price movements observed on the 1-minute chart.
Tick Charts: Show price changes based on a specific number of transactions, offering a very granular view of market activity.
Intraday Trading
Intraday trading involves holding positions for a few minutes to several hours but closing all positions before the market closes.

Best Time Frames for Intraday Trading:
5-Minute Chart: Commonly used by intraday traders to identify short-term trends and entry/exit points.
15-Minute Chart: Offers a balance between capturing short-term trends and filtering out noise. Good for identifying major intraday support and resistance levels.
30-Minute Chart: Helps to see the bigger picture of the day's overall trend and key levels.
Hourly Chart (1-Hour): Provides an overview of intraday trends and significant price levels, useful for confirming the primary trend.
Combining Time Frames
Using multiple time frames can provide a more comprehensive view of the market and improve decision-making. Here’s how you can combine time frames for both scalping and intraday trading:

For Scalping:
Primary Time Frame (1-Minute): Make entry and exit decisions.
Confirmation Time Frame (5-Minute): Confirm the trend and check for key support/resistance levels.
For Intraday Trading:
Primary Time Frame (5-Minute or 15-Minute): Identify entry and exit points.
Confirmation Time Frame (30-Minute): Confirm trends and key levels.
Broad Time Frame (1-Hour): Understand the overall intraday trend and significant price levels.
Example Playbook Time Frame Usage for PLTR
Scalping PLTR:
1-Minute Chart:

Identify Entry Points: Look for quick price movements, breakouts, or breakdowns.
Exit Points: Quickly exit trades based on small profit targets or stop-loss levels.
5-Minute Chart:

Confirm Trends: Ensure the price action aligns with the short-term trend.
Support and Resistance: Identify key levels to inform scalping decisions.
Intraday Trading PLTR:
5-Minute Chart:

Entry Points: Identify short-term trends and entry signals.
Exit Points: Determine exit points based on shorter-term price movements.
15-Minute Chart:

Trend Confirmation: Confirm the trend direction.
Support and Resistance: Identify more significant intraday levels.
30-Minute Chart:

Overall Trend: Understand the broader trend for the day.
Key Levels: Identify major support and resistance levels that might affect intraday trading.
1-Hour Chart:

Broad Perspective: Check the overall trend and significant price levels to align your trades with the general market direction.
Using these time frames effectively can help you create a robust playbook for both scalping and intraday trading, allowing you to make informed and timely trading decisions.