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

Post a Comment

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...
Post a Comment
Read more

Design Your ideal Mate

The first step in finding and attracting your ideal mate is defining what you want in that person. If you don’t know what you’re looking for, your ideal mate could walk right by you and you might not even notice him or her! By clarifying precisely what you want and reviewing your list each day, you will literally program your unconscious to help you find your ideal person. EXERCISE: Design Your Ideal Mate The Ideal Mate Describe your ideal mate’s traits, habits, qualities, appearance—everything you can think of that would be important to you.  The Mate from Hell If you have a hard time coming up with your “wish list,” start by defining “the mate from hell.” Write about the person you couldn’t stand to be with. What traits would they have? What qualities could you not stand? Attract Your Ideal Mate EXERCISE: Design Your Ideal Mate (continued) What Kind of Person Would You Have to Be to Attract Such a Mate? You need to become the kind of person you would like to find. Describe the va...
Post a Comment
Read more

The law of social heredity

It is hardly sufficient to say that social heredity is the method through which humans gather all knowledge that reaches us through the five senses. It is more to the point to say how social heredity works, in as many different applications as will give you a comprehensive understanding of that law. you are fortunate if you have learned the difference between temporary defeat and failure, more fortunate still, if  you have learned the truth that the very seed of success is dormant in every defeat that you experience. It is well known fact that a fox will prey upon all manner of fowl and small animals, with the exception of skunk. No reason need to be stated as to why Mr. Skunk enjoys immunity. A fox may tackle a skunk once, but never twice! for this reason a skunk hide, when nailed to a chicken roost, will keep all but the very young and inexperienced foxes at a safe distance. The odor of a skunk, once experienced, is never to be forgotten. No other smell even remotely resem...
Post a Comment
Read more