1-WORKFLOW

The Part-Time Trader’s Daily Workflow

This plan provides a structured, repeatable process for making 1-2 high-quality trades per day. It’s broken down by the two core strategies you’ll use—Momentum and Mean Reversion—and includes notes for different asset classes.

✅ Step 1: Strategy Selection

Your first decision of the day. This dictates every subsequent step.

• When to Use Momentum LOW FLOAT - VOLATILE :

  • Market Condition: The overall market (e.g., SPY, QQQ) is clearly trending in one direction (bullish or bearish).

  • Goal: To catch a stock that is already moving strongly and ride the trend for a short-term gain. You’re buying high and selling higher.

  • Asset Behavior: Individual stocks, ETFs, or crypto are breaking out of previous price ranges on high volume.

• **When to Use Mean Reversion: HIGH FLOAT - NONVOLATILE **

  • Market Condition: The overall market is choppy, range-bound, or moving sideways without a clear direction.

  • Goal: To identify an asset that has moved too far, too fast from its average price and bet on its return (or “reversion”) to that average. You’re buying weakness and selling strength (or shorting strength and covering weakness).

  • Asset Behavior: Assets are oscillating between predictable levels of support and resistance.

✅ Step 2: Technical vs. Fundamental Analysis

• For both Momentum and Mean Reversion (as a part-time trader):

  • Focus: 90% Technical, 10% Fundamental.

  • Why: Your trades are short-term (intraday or a few days). Charts, price action, and volume (technicals) will dictate your entry and exit points far more effectively than a company’s P/E ratio.

  • When to use Fundamentals: Use fundamentals primarily as a catalyst for a momentum trade (e.g., a surprise earnings report causes a stock to gap up) or as a general quality filter. You don’t need a deep dive.

✅ Step 3: Pre-Trade Screening

This is where you filter the entire market down to a manageable list of potential candidates. Use a stock screener (like Finviz, TradingView Screener, or your broker’s tool).

• Screening for Momentum:

  • Volume: Average Volume > 500k (ensures liquidity).

  • Performance: Price above the 20, 50, and 200-day moving averages.

  • Volatility: Look for stocks making new 52-week highs or multi-month highs.

  • Catalyst: Scan pre-market news for earnings winners, contract wins, or sector-specific news.

  • Float: Lower float stocks (<100M shares) can move faster, but are more volatile. Start with higher float stocks (>100M) for stability.

  • Institutional Ownership: > 30% suggests professional interest.

• Screening for Mean Reversion:

  • Indicators: Use technical filters.

    • RSI (14) > 70 (for overbought/short opportunities) or < 30 (for oversold/long opportunities).

    • Price is >10% above or below the 20-day Simple Moving Average (SMA).

  • Volume: Average Volume > 500k.

  • Asset Type: ETFs (like SPY, QQQ, IWM) are excellent for mean reversion as they tend to be less erratic than individual stocks.

✅ Step 4: Asset Selection

From your screened list, pick the top 1-3 candidates for a deeper look.

• Momentum: - Low Float Choose the stock with the “cleanest” chart. This means a clear breakout, minimal overhead resistance, and ideally, a surge in volume confirming the move.

• Mean Reversion: - High Float Choose the asset that shows a clear history of respecting support and resistance levels. Look for assets trading at the extreme edge of a well-defined range.

✅ Step 5: Chart Analysis (The Deep Dive)

Open the charts for your selected assets. Use a 15-minute or 1-hour chart for your primary analysis.

• Momentum:

  • Candlesticks: Look for large, bullish (green) candles with small wicks, indicating strong buying pressure.

  • Volume: Confirm that volume is increasing as the price breaks out. This is your validation.

  • Indicators: The price should be riding above a key short-term moving average, like the 8 or 21 EMA.

• Mean Reversion:

  • Candlesticks: Look for reversal signals at the edges of the range: Dojis, Hammers, Engulfing patterns. These suggest the extension is losing steam.

  • Volume: Look for declining volume as the price hits its extreme. This indicates the move is running out of fuel.

  • Indicators: Look for divergence. For example, the price makes a new high, but the RSI makes a lower high. This is a classic sign of weakening momentum.

✅ Step 6: Support and Resistance

Draw these levels on your chart. They are the foundation of your trade plan.

• Momentum: The resistance level you broke through now becomes your support. This is a potential area to place your stop-loss. Your profit targets will be the next key resistance levels above.

• Mean Reversion: These levels define your trade. You enter near a support/resistance level and your profit target is the middle of the range or the opposite boundary.

✅ Step 7: Entry and Exit Planning

Define the exact parameters of your trade before you enter.

• Position Sizing: Use the 1% Rule. Determine where your stop-loss will be (Step 8). Calculate how many shares you can buy so that if your stop is hit, you only lose 1% of your total trading capital.

• Entry Signal:

  • Momentum: Enter on the breakout of a key level, or on the first pullback to test that level as new support.

  • Mean Reversion: Enter after you see a candlestick reversal pattern confirming that the support/resistance level is holding. Do not try to catch a falling knife.

• Exit Signal (Profit Target):

  • Momentum: The next clear resistance level or a specific Risk/Reward ratio (e.g., 2:1 or 3:1).

  • Mean Reversion: The midpoint of the trading range or the opposing support/resistance level.

✅ Step 8: Risk and Reward

The final sanity check.

1. Calculate Your Risk: (Entry Price - Stop-Loss Price - set from the incdicators and supp or res) * Position Size (from 1K its 2% PS is 20$ ). (Entry Price - Stop-Loss Price) * Position Size This should not exceed 1% of your account.

2. Calculate Your Reward: (Profit Target Price - Entry Price) * Position Size.

3. Determine the Ratio: Reward / Risk. Do not take any trade with a ratio below 1.5:1. Aim for 2:1 or higher.

✅ Step 9: Market Context Awareness

Zoom out. What is the broader market doing?

• Check the SPY and QQQ charts. Are they trending up, down, or are they flat?

• A great momentum breakout setup is more likely to succeed in a bullish market.

• A mean reversion trade is more reliable in a choppy, sideways market.

• Check an economic calendar for major news events (CPI, Fed meetings). Avoid taking a trade right before a major announcement.

✅ Step 10: Mental Preparation & Discipline

The psychological check-in. Ask yourself:

• Am I calm and focused?

• Am I taking this trade because it meets my plan, or because of FOMO?

• Have I accepted the risk? Am I mentally prepared to lose the 1% I’ve staked on this trade?

  If the answer to any of these is no, do not take the trade. There will always be another one tomorrow.

✅ Step 11: Trade Execution

This should be the easiest step because you’ve planned everything.

• Use limit orders to enter and exit at your desired prices. This prevents slippage (getting a worse price than you intended), especially in fast-moving stocks or crypto.

  DO NOT ENTER ON ROUNDED NUMBERS. SELL ON LESS AND BUY ON MORE

• Place your stop-loss order at the same time you place your trade order. No exceptions.

✅ Step 12: In-Trade Management

Once the trade is live, your job is to manage it according to your plan, not your emotions.

• Momentum: If the trade moves in your favor, you can use a trailing stop-loss (e.g., manually move your stop up below the low of each new candle) or sell partial profits (e.g., sell half at your first target) to lock in gains.

• Mean Reversion: These are “set it and forget it” trades. Let the trade either hit your profit target or your stop-loss. Do not widen your stop-loss if the trade goes against you.

✅ Step 13: Post-Trade Review

Win or lose, every trade is a lesson. Log it in a journal.

• Screenshot: Take a screenshot of the chart at entry and exit.

• Log:

  • Setup: Why did you take this trade? (e.g., “Momentum breakout on AAPL after news”).

  • Entry/Exit/Stop: The prices you planned and the prices you actually got.

  • What Went Right? Did you follow your plan? Was your analysis correct?

  • What Went Wrong? Did you exit too early? Did you hesitate?

  • Lesson Learned: What will you do differently next time?

✅ Step 14: Ongoing Optimization

Once a week (e.g., on Sunday), review your trade journal from the past week.

• Look for patterns: Are all your losses coming from momentum trades in a choppy market? Are your biggest wins all from mean reversion trades on ETFs?

• Tweak your parameters: Use this data to refine your screening criteria (Step 3) or your entry signals (Step 7). This feedback loop is how you evolve from a beginner to a consistently profitable trader.