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Getting Technical

TRADERS ASK: “HOW DO I FIND THE RIGHT STOCKS?”

WHAT IS A STOCK IN PLAY?

What is a Stock In Play? This could be, in no particular order: 

 A stock with fresh news 

 A stock that is up or down more than 3 percent before the Open 

 A stock that does more than one million shares of volume  A stock that will move more than 3 points intraday 

 A stock that will have real order flow and develop important intraday levels, which we can trade off of


We trade Stocks In Play because they: 

 Allow us to be most efficient with our capital. 

 Offer MORE excellent risk/reward opportunities intraday. 

 Ensure additional opportunities to load up. 

 Allow us to execute our ideas and trading rules with more consistency.  Help us combat algorithmic programs. 

 Allow us to utilize our superior trading skills. 

 Help the developing trader develop faster.

You do not need the markets to be active, just as long as one stock is a Stock In Play.


WHAT IS A GOOD INTRADAY STOCK?

TRADERS ASK: “TELL ME MORE ABOUT INTRADAY STOCKS”

A good intraday trading stock offers you excellent risk/reward opportunities. It is a stock that you can regularly read is about to trade higher or lower from its present price, offers good prints, and moves. And these moves are predictable, frequent, and catchable.

"Stocks In Play are liquid such that you can exit without unexpected slippage."

As long as the stock meets my criteria (as a rule, we do not trade stocks with an enormous short interest, nor with a daily volume likely to be less than 600k shares intraday), no matter if I know the way it moves well or not, I will trade it.

WHY TRADE STOCKS IN PLAY?

Percentage Returns for Day Traders

. We are interested in our growth as traders: learning to adapt to the changes in the market, learning to eliminate that which does not work, and further developing our trading skills. Placing too much emphasis on our results just causes unnecessary anxiety. The bottom line is that if we are trading well, working hard, and spending all of our mental energy to get better as traders, then the results will follow.

Stocks In Play offer us more opportunities, and trades that we have to hold for only short periods of time.

The huge advantage of trading Stocks In Play is that you only need one stock to be In Play. Not only that, but you need only one stock to be In Play for a few days.

Trade with an open mind at all times. Expect the unexpected. Just because every August I have ever traded was slow does not mean there would not be opportunity in my twelfth August of summer trading. And this is straight out of the “Black Swan.” We overvalue what we know and undervalue what we do not know. Eleven straight years of a quiet last week in August does not mean this year will be similar.


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