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When to buy Stocks - High of the Day (HOD) - Stock Trading

Here is an example of trading stocks on a break up through the high of the day (HOD).  If you are day trading, I give it about an 75-80% success rate.  I have been using this stock trading trick for years.

When to Buy a Stock - When a stock breaks up through the high of the day (HOD)

Goal - Buy when the stock breaks up through the high of the day and sell into the rally.  Place a downside stop loss order at the low of the day or just use a mental stop.

Example:  The high of the day is the highest price the stock or etf hit during the trading day.    If TVIX opened at $7.40, ran to $7.81, and then dropped back to $7.60, the high of the day would be $7.81.  If TVIX would break $7.81 again, it would most likely ( but not always ) surge again, probably into the $8's.  You would then want to sell into the rally or place a stop loss order at $7.81 or $7.60 for protection if you decided not to sell into the rally.
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will try this trick Mr. STB

I guess this only works if you're buying a large amount of shares, since percentage gain will be minimal.

Yes this only works if you have at least $5000.  The more the better obviously.  I use real time charts, they move every second it trades.  I can see the last 10 minutes which is really all I need.

How do you decide it breaks HOD, i mean sometimes it touches the HOD, or increase by 1 or 2 cents and then drop again..on otherhand it would have already 10 - 20 cents up from its hard for me decide whether its breaking out or will be dropping..??? Can you share your thoughts on the exact buying point? Plz

Curious about this too...

Thanks for the great strategy..worked great for today with ARNA...bought little early at 2.99 hoping it will break HOD 3.03 and it did...rallied immediately to 3.19..i sold at 3.15. I know i was little early @ 2.99 even before HOD break but this one worked today..:) 

Nice, yes, it usually works the best with hot stocks that have fresh news and heavy volume.  When a stock has light volume, it doesn't work as well.

Hi Tim, whenever I buy stocks, I have to wait about 15-20 minutes for the transaction to actually go through. Can this strategy also work with that?

Is your broker offline that you have to wait 15-20 minutes?  Yes, this would be difficult to maneuver with such a large time gap.  You're better off waiting for a stock to break multiple resistance levels and then jump in.

I don't use any brokers at the moment. I'm currently a high school student interested in finance - leading me to use a stock market simulator to get more familiar with stocks and real world stock markets. The simulator delays NASDAQ transactions for 20 minutes and NYSE transactions for 15 minutes, but I use a real time stock chart. I have been visiting your daytradingstockblogs, blackberry stocks website, and other forum posts for some time now on a daily basis and they have really advanced my research and learning experience. Thank you for all you do here and replying back to my post. Extremely helpful !

I've always had a theory about high of day trading.  My theory is that the high frequency computers are programmed to buy strength and sell weakness.  The high of day or low of day is the trigger point for this.  When a stock has high volume you will see it explode on a break through the high of the day or a resistance level, and drop hard through the low of the day.

i did it today with PLUG. pretty solid how it works. I ended up holding onto plug though


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