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🎛Microstructure Trading with moomoo!
Happy Easter Mooers! Spurred on by my friend @Polefessor, I thought I’d just share a little about a trading strategy that I’ve managed to deploy, facilitated by several features discovered on moomoo’s awesome interface. I have been on moomoo on IOS for just 21 days and been enjoying it more than any other platform.
As a microstructure trader, I typically hold stocks for not more than 45 mins and look to profit from an “dumb money” fueled uptrends that ideally yield around 2-4% within this short time frame. If a position fails to yield this result, we either exit at a controlled loss, or “upgrade” the position to a day or swing trade, depending on the prospects and risks of the specific stock. Unless you have an enormous bankroll, moomoo is the perfect (almost the only viable) platform for this trading style due to the low platform and zero commission fees that don’t cut you deep on every trade.
1.Start off with Heat Lists
As a microstructure trader, I typically hold stocks for not more than 45 mins and look to profit from an “dumb money” fueled uptrends that ideally yield around 2-4% within this short time frame. If a position fails to yield this result, we either exit at a controlled loss, or “upgrade” the position to a day or swing trade, depending on the prospects and risks of the specific stock. Unless you have an enormous bankroll, moomoo is the perfect (almost the only viable) platform for this trading style due to the low platform and zero commission fees that don’t cut you deep on every trade.
1.Start off with Heat Lists
Obviously, blue chips aren’t going to be prime candidates to yield notable profits in 45 mins. You are looking for highly volatile stocks, period - not just on record, but on any given day. The Trade Heat list is a great place to start. For this trading style, the first 2 hours after the bell are absolutely critical, as “dumb money” fluctuations tend to be much scarcer and less pronounced thereafter.
2. Technical Analysis
Once you have a couple of target stocks for the day, look into their Technical Analysis page to identify those with 1m and 60m bullish MACD trends. While this is by no means a guarantee that a stock is going up, it indicates an edge. You should combine this AI with your manual sighting for bullish W, teacup trends etc. Stocks with bullish 1D trends may be suitable for overnight positions instead of a forced exit, and an eventual swing trade upgrade if the microstructure trade fails.
3. Fundamental Analysis
While FA is obviously not central to this trading strategy, we look at it primarily to assess if a position can be reasonably held beyond a microstructure trade timeframe without incurring massive risk. As target stocks tend to be high growth type with negative P/L, the PS ratio tends to be the most viable measure. The “safe” number depends on industry and your own risk profile.
4. Multiple Stocks view
Once you have entered your positions, active monitoring is key. In this trading style, every second makes a difference. yes, it helps that orders on moomoo are executed at lightning speed.) Find the 4 squares on the main watchlist page and visualize your current and/or target positions, watching closely for trends that indicate whether you should hold, take profit, or fold. Personally, I try not to enter more than 3 positions at once. That is already super intense when you are monitoring almost every tick.
5. Exiting Positions
Like all good brokers, moomoo allows you to configure your limit sales and stop losses. I generally recommend a 2:1-3:1 R/R ratio, which translates to setting your TP at about 4% up and SL at about 1.5-2% down. Doesn’t matter how you feel when the numbers are hit, let your configuration execute and get out. An ultra essential ingredient of this trading strategy is exit discipline. It can be tempting to keeping holding on an uptrend or refusing to fold on a downtrend, hoping it will reverse. Especially for the latter, remember that you can always exit and buy back the same stock at a lower point in the downtrend, closer to the pivot.
After reading all this, you may be thinking that this is an ultra-risky trading strategy. Honestly, it isn’t if you do not hold a position longer than you should.
Greed precedes Fear.
Greed is constantly by our side in the trading room.
Control Greed before Fear walks in and controls you.
I am by no means an expert, so if you found this helpful or have any thoughts, do leave a like or drop a comment below!
Stay safe and have fun on the awesome platform that is moomoo!😄😄
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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SwingingRingo : Very well written. Much appreciated for taking the time for sharing your thought process and strategies.