Sitting and doing nothing is a major portion of online stock trading. Boredom is good. You won’t always have action. Yesterday was one of those type of days. Waiting for a day trading pattern rewarded this patient trader today.

Three stock trades were provided by the morning gap list. These are stocks gapping up or down from the previous close a significant amount. I’m usually looking for a .50 - 1.00 gap at a minimum. KYPH, KOSP, and DDSS were the the traders today.

The first trade in KYPH, Kyphon Inc. was executed using a BS2 trading pattern. Having a stock trading system that allows you to execute your trades automatically, takes the guesswork out of knowing if the trade should be taken. Once you learn a few patterns, it boils down to trading psychology. That’s where it gets tough!

The length of the 4th bar on the 15-minute chart was .47. I wanted to help out my R for this trade, and thought the stock might go a little higher again first. If it didn’t, I would just miss the trade. This strategy worked and the trade was filled with R = .31. I used the same number of shares I would have, had I used .47 as R. If I was wrong, it would basically result in losing less in the trade. And losing small amounts is the strategy you want to take. A stop-loss was set a penny over the day high. 1/3 of the stock was covered at 1.6 R. The 2nd 1/3 at 1.6 R, and the rest held for the next trading session on Monday. I will probably use a pivot, or prior day’s high method for the stop-loss.

Waiting for your trading system to present a trading opportunity takes patience. After I executed my trades in the morning and the market slowed down mid-day, I left my monitors for a while. Trading stocks online is a marathon, not a sprint. Take time to wait for your setups and trade conciously.

Trading was fairly uneventful today for this trader. Scalps were taken in NVDA and CROX for lunch money. I’ve been watching the gold and oil stocks on their bounce though. It’s been a while since oil stocks have put on a rally. A few profits were taken from CLB and ATI this week, but looks like now both sectors have come up against their first level of resistance.

ECA, MRO, and VLO in the oil sector, and AEM, GG, GLG, and AUY in the gold sector, have reached their simple 20-day moving averages and stopped. These stocks are all on my watchlist. Is this a dead cat bounce, or do we have a bottom forming in commodities? One way to play the sectors is by trading the OIH Holdr (Oil Services), or GDX (Gold stock) ETF shown in the charts.

I have no clue what these stocks will do from here, but I’ll be watching for potential setups. They’re either going to pull back, base, or continue higher quickly. I wouldn’t discount a little short squeeze if they do continue higher quickly. Pure speculation.