Skip to main content

The Importance of Being in the Right Stocks

 As mankind has proven time and time again, human emotion will trump even the best of automated intentions. And to understand that past data may not help you in a current market.

you have a choice. You can spend your energy complaining or you can compete.

what a trader must never do, is make excuses.


SHORTENING THE LEARNING CURVE

The volatility of the markets transformed one trading day into the equivalent of five trading sessions of market patterns.

Since you are trading a stock that is moving more intraday, you are seeing more market patterns. And as a result, you are gaining added experience over someone who might just be trading a basket of stocks.

 Using the “five trading days” equivalent from above, think of it as the difference between taking 250 free throws in your driveway before going in to dinner, instead of the normal 50, but in the same amount of time. Trading the Stocks In Play will speed up your learning curve.


FINDING STOCKS IN PLAY 

Stocks In Play generally have unexpected fresh news, either positive or negative. News that most interests me is higher margins, better sales than expected, or increased market share.I check the news on all stocks up or down 3 plus percent premarket. Stocks In Play the day before often are still In Play. Stocks near important support and resistance levels are also considered. I ask this simple question: If I was a Hedge Fund and a sales trader called me to pitch a trade in this stock, would I be interested? If so, then this stock will be In Play.

If we choose properly before the Open, we often trade just one stock. If we choose very wisely, we often trade one stock for three days and squeeze every cent we can out of it. Short, long, light, loaded, millisecond-holding periods, positions held all day. It’s called trading.

We choose our stocks before the Open so we can best prepare. We find the levels on our charts and from our trading notes that are most important and consider the different ways the stock may trade. Now often, we don’t know the stocks we are trading very well so we must do research to ensure we are properly prepared. (Remember The Butcher, failing to prepare is preparing to fail.) We ferret out data about the stocks that is meaningful to us such as average daily volume, short interest, important technical support and resistance levels, average daily range, etc. After all of our morning preparation, we determine which stocks out of about a dozen with fresh news are best to trade.

Experienced traders are hypersensitive about being in the right stocks, as we have learned we are all just as good as the stocks we trade.

Reading the Tape is the first skill that new traders should master, the very first skill!

Comments

Popular posts from this blog

Maximizing Your Profits with Scoring

SETTING YOUR MAXIMUM INTRADAY TRADING LOSS First things first: set a max intraday trading loss. There will be days when you just do not have it. Why do you think coaches pull their players when they are not playing well? They are more harmful on the field than off. When you are underperforming, you are hurting your team and your trading business. You need a system to yank yourself over to the bench. A stop loss is your answer. TRADING BASED UPON THE TIME OF DAY A good trader makes note of what time of day it is, when he trades most profitably, and adjusts his trading to fit such times. Your numbers at the end of the month will not reflect your true trading potential. Make the most trades with the most size during the trading periods that statistically are most profitable for you. Money saved during your weaker trading periods is money earned. Consistency The fact is that most trades you make will start working for you right away. But the new traders also hold stocks that are trading ag...
 Loss is painful, guilt can be devastating. Worse than losing one's dream is the knowledge that the loss was self-inflicted. Problems are solutions that have outlived their usefulness. Problems are pattern that were learned in emotional circumstances during one period of life and that now have taken an existence of their own. Many times, outdated solutions replay themselves in a variety of life situations, leaving people mindlessly repeating their mistakes in work, love, and trading. There can be no free will for people who are locked into patterns developed for past challenges. Successful traders are therapists both learn to do what comes unnaturally. The resolution to problems can be found in what people are doing when those problems are not occurring. The problem with many traders is not that they have problems, but that they are focused on their problems. It is this problem focus that prevents them from appreciating what they are doing right, that blinds them to solutions alrea...

So what is your money blueprint set for?

Are you programmed for managing your money well or mismanaging it? Are you a spender or a saver ? Wealth principle: The only way to permanently change the temperature in the room is to reset the thermostat. In the same way, the only way to change your level of financial success "permanently" is to reset your financial thermostat. You can become an expert in real estate or the stock market. All of these are tremendous "tools." But in the end, without an inner "tool-box" that is big enough and strong enough for you to create and hold on to large amounts of money, all the tools in the world will be useless to you. Your income can grow only to the extent that you do. Remember that the first element of all change is awareness.Watch yourself, become conscious, observe your thoughts, your fears, your beliefs, your habits, your actions, and even your inactions. Put yourself under a microscope. Study yourself. Wealth principle: Consciousness is observin...