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The tests have succeeded, during which the two formed the Qain important affirm the power of the upward trend
Monday, May 2, 2011
Technical Analysis for s&p in 2011
Shown in the picture above for the s&p that in the upward trend has passed on his way to the rise of
The tests have succeeded, during which the two formed the Qain important affirm the power of the upward trend
Technical Analysis for Dow Jones in 2011
Shown in the picture above for the Dow Aljones that in the upward trend has passed on his way to the rise of The tests have succeeded, during which the two formed the Qain important affirm the power of the upward trend
Shown in the picture above for the Dow Aljones he had exceeded the peaks of the points of resistance Have become for the current trend points to support
Sunday, May 1, 2011
DAY TRADING STOCKS
DAY TRADING STOCKS
In this phase, you plan out your stock trades. This strategy must include an entry price, a target price, a stop loss price and a time frame. Once you have completed the strategy for your trade you move on to execution.
Execution is done during market hours in which you simply execute your stock trading plans (strategy). This is the fun part. You have worked so hard to find day trading stock candidates for your next trade. You have developed a trading plan for each one of the candidates. Now, all that is left to do is execute your trading plan.
Day Trading Stocks for a Living
This is a full-time job! In fact, it is more than a full-time job. Day trading stocks and any form of Short-term stock trading consists of three key elements:
- Stock Trading Research
- Stock Trading Strategy
- Stock Trading Execution.
In this phase, you plan out your stock trades. This strategy must include an entry price, a target price, a stop loss price and a time frame. Once you have completed the strategy for your trade you move on to execution.
Execution is done during market hours in which you simply execute your stock trading plans (strategy). This is the fun part. You have worked so hard to find day trading stock candidates for your next trade. You have developed a trading plan for each one of the candidates. Now, all that is left to do is execute your trading plan.
STOCK TRADING SOFTWARE
STOCK TRADING SOFTWARE
Real-Time Stock Scanning and Stock Screening
With over 12,000 stocks to look at every day, you can use a state of the art stock trading software tool to quickly and effectively find stocks to trade. The technical scanning trading software, Oz Scanner, applies technical screening formulas to a large population of stocks. It then returns a list of stocks that meet a pre-determined filter criteria throughout the trading day. Once you receive the list of stocks generated by the scanner, you can then proceed to evaluate potential risk and potential reward prior to establishing a position in the stock.
Understanding the Stock Market
What is a stock market? The stock market is a marketplace where buyers and sellers meet. The items that are being bought and sold are stocks also known as shares which represents ownership in a company. Professional stock traders see the stock market as nothing more than letters and numbers changing rapidly. Four letters in the NASDAQ stock market represent the ticker symbol for that specific stock that is being traded which is followed by a number which represent the price the stock last trade took place at. The four letters being the ticker symbol remains the same. It does not change unless the exchange removes the stock from being listed or the company may have merged with another company or applied to change its ticker symbol which happens rarely. The number that follows the stock symbol is the price per one share (unit) of that stock. The price of course changes many times during the day because of the forces of supply and demand. When there are more shares for sale then buyers then the price of a stock will go down, and when there are more buyers then shares available for sale the stock price will go up
STOCK TRADING SYSTEM
STOCK TRADING SYSTEM
Buying a Dip Stock Trading System
These different instances will qualify as buying a dip in a stock. I will employ similar strategies in each one of these examples:
1. A stock which is trading in a rising channel or horizontal channel and is at or near the bottom line. I will buy 1/3 of a full stock position at 5 -15 cents over the trend-line. I will be more flexible on my stop loss because I took a relative small position and give the stock a chance to bounce. If it falls below a predetermined price, I will sell. If the stock held at the trend-line or slightly below it and started to move up, I will add 1/3 of a full stock position at some predetermined point.
1. A stock which is trading in a rising channel or horizontal channel and is at or near the bottom line. I will buy 1/3 of a full stock position at 5 -15 cents over the trend-line. I will be more flexible on my stop loss because I took a relative small position and give the stock a chance to bounce. If it falls below a predetermined price, I will sell. If the stock held at the trend-line or slightly below it and started to move up, I will add 1/3 of a full stock position at some predetermined point.
I will add the final 1/3 of a full stock position as the stock continues to move in the right direction at a predetermined point and complete my desired position. I will trail a stop and tighten it as
the stock approaches the top range of the trading channel.
2. A stock which has fallen sharply from recent highs and the outlook for the stock remains bullish. I will use the same stock trading system here. I will look for the first signs a rally might take place, looking at intraday activity. I would like to see a reversal pattern (such as double bottom, round bottom, falling wedge, etc.) on an intraday chart with heavy volume at the bottom. I will buy 1/3 of a full stock position there, and 1/3 of a full stock position twice more on the way up at predetermined entry points to complete the desired position, as the stock moves in the right direction. I will again let the stock wiggle when I start the position and give it a chance to prove it wants to go back up, I will be more liberal with my stop loss as it is a small position at first.
3. A stock which has sold off and is at support levels. I will use the same stock trading system here. I will buy 1/3 of a full stock position at 5 -15 cents over the support level. I will let the trade wiggle and keep a stop loss just under support. If support holds, I will add the remaining shares as the stock moves up at predetermined entry points, 1/3 of a full stock position at each point and trail a stop.
4. A stock that is testing a previous bottom and might form a double bottom. I will use the following stock trading system here. Buy 1/4 of a full stock position at the bottom level or close to it. Add 1/4 of a full stock position on the way up to the previous top. Add the remaining 1/2 of a full stock position once the stock breaks out over the previous top. The initial stop loss should be liberal as many times a double bottom pattern has a lower second bottom than the first one.
3. A stock which has sold off and is at support levels. I will use the same stock trading system here. I will buy 1/3 of a full stock position at 5 -15 cents over the support level. I will let the trade wiggle and keep a stop loss just under support. If support holds, I will add the remaining shares as the stock moves up at predetermined entry points, 1/3 of a full stock position at each point and trail a stop.
4. A stock that is testing a previous bottom and might form a double bottom. I will use the following stock trading system here. Buy 1/4 of a full stock position at the bottom level or close to it. Add 1/4 of a full stock position on the way up to the previous top. Add the remaining 1/2 of a full stock position once the stock breaks out over the previous top. The initial stop loss should be liberal as many times a double bottom pattern has a lower second bottom than the first one.
ONLINE STOCK TRADING
ONLINE STOCK TRADING ORDER ENTRY TO OPEN POSITION
Market Order: This is an order to immediately buy or sell a stock at the current market price. By "current" it means at the inside market (best Bid or Ask) or at whatever price the seller/buyer will be willing to fill your online stock trading order at, and "immediately" can mean up to 7 1/2 minutes at times and 5 points later (from my own experience).
When trading online, you should hardly ever use a market order to buy a stock before or at market open. You are almost guaranteed to get a lousy fill. You may use market orders to buy stocks after the open, depending on the issue and its spread (the difference between the Bid and Ask). However, we recommend you try and avoid placing market orders at all times, unless you feel you have to use one. (Please note that the online stock trading execution system you use or are able to use, your broker, etc., are variables that differ for all investors. Therefore, you must determine how you can enter a position in the best and most profitable manner according to all the variables and tools you have.) We will look at advanced order entry systems later in other sections of this website.
Limit Order: This is an order to buy or sell a stock at a specified price. When using this type of online trading order, you specify a price and the order can be executed only if the market reaches or betters that price. It is a conditional trading order designed to avoid the danger of adverse unexpected price changes. This is the type of order that should be used most often to enter positions. It is great to use on stocks with bigger than a 0.03 spread as well as extra volatile stocks.
All of the content published on this website is to be used for informational purposes only and without warranty of any kind. The materials and information in this website are not, and should not be construed as an offer to buy or sell any of the securities named in these materials. Trading of securities may not be suitable for all users of this information.
Market Order: This is an order to immediately buy or sell a stock at the current market price. By "current" it means at the inside market (best Bid or Ask) or at whatever price the seller/buyer will be willing to fill your online stock trading order at, and "immediately" can mean up to 7 1/2 minutes at times and 5 points later (from my own experience).
When trading online, you should hardly ever use a market order to buy a stock before or at market open. You are almost guaranteed to get a lousy fill. You may use market orders to buy stocks after the open, depending on the issue and its spread (the difference between the Bid and Ask). However, we recommend you try and avoid placing market orders at all times, unless you feel you have to use one. (Please note that the online stock trading execution system you use or are able to use, your broker, etc., are variables that differ for all investors. Therefore, you must determine how you can enter a position in the best and most profitable manner according to all the variables and tools you have.) We will look at advanced order entry systems later in other sections of this website.
Limit Order: This is an order to buy or sell a stock at a specified price. When using this type of online trading order, you specify a price and the order can be executed only if the market reaches or betters that price. It is a conditional trading order designed to avoid the danger of adverse unexpected price changes. This is the type of order that should be used most often to enter positions. It is great to use on stocks with bigger than a 0.03 spread as well as extra volatile stocks.
All of the content published on this website is to be used for informational purposes only and without warranty of any kind. The materials and information in this website are not, and should not be construed as an offer to buy or sell any of the securities named in these materials. Trading of securities may not be suitable for all users of this information.
Technical analysis in stock trading
Technical analysis in stock trading can be described as the study or use of technical indicators in an attempt to forecast future price movements in the stock being analyzed.
Technical Indicators are merely representations of several price points on stock charts based on pre-set formulas.
In addition to using some of the indicators listed below, you can also add "Trend Lines" on the charts. Trend Lines connect two or more high or low price points to form a line. You can find some examples of using Trend Lines here:
Trend Lines form support and resistance levels on a stock chart. These can be used as additional confirmation that a trend is still in place, or has been broken and started to reverse causing a "Breakout" to occur.
You can find an example of identifying a potential Breakout using trend lines as it actually occurred here: Read More.
When performing Technical Analysis, charts are used with technical indicators added to the charts to look for patterns that have occurred in the past under certain conditions. Once the patterns are recognized, the Analyst or Trader then looks for the same or similar conditions that occurred in the past to happen again.
When these conditions are noted again, you can use the past studies to make a trading decision with increased probabilities of success because it has happened before.
Read our other article here to learn about how to forecast markets using Technical Analysis with a chart and example.
While there are many technical indicators and techinques that can be used, here is a list of some of the most common:
Technical Indicators are merely representations of several price points on stock charts based on pre-set formulas.
In addition to using some of the indicators listed below, you can also add "Trend Lines" on the charts. Trend Lines connect two or more high or low price points to form a line. You can find some examples of using Trend Lines here:
Trend Lines form support and resistance levels on a stock chart. These can be used as additional confirmation that a trend is still in place, or has been broken and started to reverse causing a "Breakout" to occur.
You can find an example of identifying a potential Breakout using trend lines as it actually occurred here: Read More.
When performing Technical Analysis, charts are used with technical indicators added to the charts to look for patterns that have occurred in the past under certain conditions. Once the patterns are recognized, the Analyst or Trader then looks for the same or similar conditions that occurred in the past to happen again.
When these conditions are noted again, you can use the past studies to make a trading decision with increased probabilities of success because it has happened before.
Read our other article here to learn about how to forecast markets using Technical Analysis with a chart and example.
While there are many technical indicators and techinques that can be used, here is a list of some of the most common:
- Volume
Stock Trading Online
Stock Trading Online
The choice to trade stocks online is made by many independent investors that no longer seek the help or advice of the traditional stock broker. Instead, these investors are opening online trading accounts with discount brokerage firms and take control of their stock trading. While the technological advances have created numerous online trading software of which many specializes in stock trading online, there is still a need from potential stock market investors for online trading education.
When an investor is trading stocks online, he makes choices based on his own research and there is no human broker on the other side to confirm his order. Consequently, it is extremely important that investors and online traders alike take a long breath before they press the buy or sell button on their online stock trading software. We have heard many stories in which investors have pressed the buy button instead of the sell on their online trading software by mistake.
There are definitely advantages to stock trading online, but the casual investor will have a learning curve if he wants to turn into an online trader. In addition, an online trader needs more than basic computer skills if he wants to excel in trading stocks online. In fact, some of the online stock trading software may be quite complicated if a trader only has basic knowledge of computer operation. However, it is a logical course of action to face the stock trading online beast rather than run away from it.
Stocks
Stocks
Introduction
Everything is now working in favor of individual investors to learn about stocks and trade them. The Internet has opened up a new world to everyone.
Online trading has changed the average investors' involvement in trading their own stocks. The availability of company information has become so widespread and easily attainable that researching and finding stocks to buy and sell is as easy as logging onto your computer.
Buying a stock for the long term means that you want to own part of a company and you think that in the future the company will be profitable. If you buy stock in a company and the company performs well, the stock's price should rise. If the company fails, then the stock should fail you, too and go down.
Companies list their stocks on the various stock exchanges located throughout the U.S. The stock exchanges actually compete with each other for these listings, since companies that attract more trading make more money for the stock exchange that listed it.
Company stocks are assigned a "ticker", or trading symbol by the listing exchange. You may notice some well-chosen tickers that are easy to remember, like "DNA" for the company Genentech, a biotechnology firm. Or some companies' ticker is the same as its name, Nike for example.
You need to know the ticker of a stock in order to access information about the stock and eventually trade it.
The various stock exchanges are a very good place to start getting information on stock trading and general investing. We suggest you visit the following web sites:
Introduction
Everything is now working in favor of individual investors to learn about stocks and trade them. The Internet has opened up a new world to everyone.
Online trading has changed the average investors' involvement in trading their own stocks. The availability of company information has become so widespread and easily attainable that researching and finding stocks to buy and sell is as easy as logging onto your computer.
Buying a stock for the long term means that you want to own part of a company and you think that in the future the company will be profitable. If you buy stock in a company and the company performs well, the stock's price should rise. If the company fails, then the stock should fail you, too and go down.
Companies list their stocks on the various stock exchanges located throughout the U.S. The stock exchanges actually compete with each other for these listings, since companies that attract more trading make more money for the stock exchange that listed it.
Company stocks are assigned a "ticker", or trading symbol by the listing exchange. You may notice some well-chosen tickers that are easy to remember, like "DNA" for the company Genentech, a biotechnology firm. Or some companies' ticker is the same as its name, Nike for example.
You need to know the ticker of a stock in order to access information about the stock and eventually trade it.
The various stock exchanges are a very good place to start getting information on stock trading and general investing. We suggest you visit the following web sites:
- The American Stock Exchange (www.amex.com)
- The Nasdaq Stock Market (www.nasdaq.com)
- The New York Stock Exchange (www.nyse.com)
- The Pacific Exchange (www.pacificex.com)
- The Philadelphia Exchange (www.phlx.com)
Learn How to Invest
Uncover All the Investing Secrets
Using expert investment advice and financial planning, GreekShares.com assists you in learning how to invest in the world stock markets, in equities and money markets and extremely improves your investing skills.
1. With the Online Investing Education and the Investing, Stock Market and Financial Planning guide:
- To provide you with all the free information and financial advice, so that you can learn to invest profitably in stocks and be able to successfully manage your financial future.
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- To present a clear, easy and safe investment e-Book and educational method by which you will be able to invest profitably in the stock market.
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Expert Financial Advice?
Knowledge IS POWER!
Trading Strategies
Trading Strategies - What's Right for You?
It’s the age-old question that so many traders ask themselves and each other: which stock trading strategy should I follow? Does day trading offer better rewards than swing trading? Should I scalp or hold positions? How can I best limit my risk, yet still generate the returns I want?
Like others, I have often wondered whether I should be day trading or swing trading. I have found ways to do both, and each style has its advantages and disadvantages. Ultimately, I think it’s a question traders should continually ask themselves, rather than just once early in their trading careers. Isn’t adaptation the key to successful trading over time?
The adaptive trader is always evaluating current conditions. Always be asking yourself questions. Is the market in an uptrend? Is the market in a downtrend? Is the market trending at all? Are the intraday moves smooth with good volume, or are they narrow, choppy and drifting on light volume? By staying aware of current conditions, a trader is able to determine which trading style will suit him best in the near term, allowing him to limit risk and maximize the rewards of profitable trades.
As you consider the best way for you to trade, be sure to evaluate your own personality traits. By employing a trading style that corresponds with your personality, you are essentially being your own best friend (a cheesy phrase but a necessity for traders). If you’re patient, consider a longer timeframe. Your personality will help you to stay in positions while you wait for the outcome to develop. If you are hyper-active with lots of energy and a short attention span, you may be better of day trading smaller incremental moves on a short term basis. Take stock of your personality when contemplating the best trading strategy for you, and soon you’ll be on the right path toward claiming the profits that have your name on them.
In Part 2, we will take a look at day trading strategies, the pro’s and con’s of that approach, and what market conditions are best suited for that style of trading.
Like others, I have often wondered whether I should be day trading or swing trading. I have found ways to do both, and each style has its advantages and disadvantages. Ultimately, I think it’s a question traders should continually ask themselves, rather than just once early in their trading careers. Isn’t adaptation the key to successful trading over time?
The adaptive trader is always evaluating current conditions. Always be asking yourself questions. Is the market in an uptrend? Is the market in a downtrend? Is the market trending at all? Are the intraday moves smooth with good volume, or are they narrow, choppy and drifting on light volume? By staying aware of current conditions, a trader is able to determine which trading style will suit him best in the near term, allowing him to limit risk and maximize the rewards of profitable trades.
As you consider the best way for you to trade, be sure to evaluate your own personality traits. By employing a trading style that corresponds with your personality, you are essentially being your own best friend (a cheesy phrase but a necessity for traders). If you’re patient, consider a longer timeframe. Your personality will help you to stay in positions while you wait for the outcome to develop. If you are hyper-active with lots of energy and a short attention span, you may be better of day trading smaller incremental moves on a short term basis. Take stock of your personality when contemplating the best trading strategy for you, and soon you’ll be on the right path toward claiming the profits that have your name on them.
In Part 2, we will take a look at day trading strategies, the pro’s and con’s of that approach, and what market conditions are best suited for that style of trading.
When to Adopt a Swing Trading Strategy
In evaluating trading strategies, we have seen that personality plays its part, and we’ve taken a close look at when day trading can be effective. Now let’s take a look at swing trading as a way for traders with a longer timeframe to achieve their profit expectations.
Swing trading allows the trader to take a position in a stock and look for an intermediate-term move of a few days to a few weeks before their profit objective is met. I feel it is no more or less risky than day trading, but rather a different way of finding stock market profits. The swing trader takes smaller positions and is therefore less exposed from a dollar standpoint intraday, but faces overnight exposure and the inherent gap risk associated with holding stocks overnight. Not all gaps are bad, it should be noted. Sometimes a swing trade meets its profit objective faster than anticipated due to a favorable overnight gap, but the opposite can also be true. It’s important to adjust trading size appropriately when considering holding a stock overnight.
When determining if conditions are proper for swing trading, take into consideration whether the overall market is trending or not. This observation alone can be helpful when deciding if stocks are likely to see follow-through for multi-day moves or if they will instead reverse course and not trend at all. Also, look at the price history for the stock in question. Does it have a history of large price gaps? Does it seem to trend well when it breaks out from chart patterns? Does the stock move for several days in a row when it breaks out or does it go for one day and soon after reverse course? Questions like these will help you decide if a swing trading approach is best for the stock you are looking to trade.
Another important consideration is scheduled news. Is the market on hold awaiting a big announcement or event such as a decision on interest rates or an unemployment number? Does your stock have an earnings announcement or conference call scheduled to take place soon? While there are definitely many unknowns in the market, one can be sure that scheduled events will command respect from traders who know their importance. This means your stock with a great setup may simply not move much ahead of such an event, with the deep-pocket traders waiting to take a large position until after the unknowns have seen the light of day. During such times, a day trading strategy is often a better approach.
Swing trading certainly has its advantages. When the market is moving well and volume is strong, swing trading can offer great rewards. Stocks and markets with momentum will often see follow-through in the form of favorable gaps. A swing trade allows the trader to participate in these gaps, which adds to your profit in the trade literally overnight. This is an opportunity cost of day trading. Swing trading also has the potential to generate big returns in short amounts of time, as breakout stocks can find momentum and move quickly to a profit target. Swing trading also allows a trader to enter positions and follow-up stop-loss and profit-taking orders and simply let the trades go. Swing trades require little maintenance once exit orders are entered, with trailing stop-loss orders being the only dynamic element of the trade. The part-time trader can enter a position, set a limit sell and a stop-loss order, and then walk away. This can be far less stressful than watching every tick on the edge of your seat.
If you’re a part-time trader or a full-time trader with patience, the right market conditions can mean great profits with the right swing trading strategy. Always be evaluating your approach and the market conditions, and then stick to your game plan as your trades develop.
The Stock Bandit
thestockbandit@thestockbandit.com
www.thestockbandit.com
Swing trading allows the trader to take a position in a stock and look for an intermediate-term move of a few days to a few weeks before their profit objective is met. I feel it is no more or less risky than day trading, but rather a different way of finding stock market profits. The swing trader takes smaller positions and is therefore less exposed from a dollar standpoint intraday, but faces overnight exposure and the inherent gap risk associated with holding stocks overnight. Not all gaps are bad, it should be noted. Sometimes a swing trade meets its profit objective faster than anticipated due to a favorable overnight gap, but the opposite can also be true. It’s important to adjust trading size appropriately when considering holding a stock overnight.
When determining if conditions are proper for swing trading, take into consideration whether the overall market is trending or not. This observation alone can be helpful when deciding if stocks are likely to see follow-through for multi-day moves or if they will instead reverse course and not trend at all. Also, look at the price history for the stock in question. Does it have a history of large price gaps? Does it seem to trend well when it breaks out from chart patterns? Does the stock move for several days in a row when it breaks out or does it go for one day and soon after reverse course? Questions like these will help you decide if a swing trading approach is best for the stock you are looking to trade.
Another important consideration is scheduled news. Is the market on hold awaiting a big announcement or event such as a decision on interest rates or an unemployment number? Does your stock have an earnings announcement or conference call scheduled to take place soon? While there are definitely many unknowns in the market, one can be sure that scheduled events will command respect from traders who know their importance. This means your stock with a great setup may simply not move much ahead of such an event, with the deep-pocket traders waiting to take a large position until after the unknowns have seen the light of day. During such times, a day trading strategy is often a better approach.
Swing trading certainly has its advantages. When the market is moving well and volume is strong, swing trading can offer great rewards. Stocks and markets with momentum will often see follow-through in the form of favorable gaps. A swing trade allows the trader to participate in these gaps, which adds to your profit in the trade literally overnight. This is an opportunity cost of day trading. Swing trading also has the potential to generate big returns in short amounts of time, as breakout stocks can find momentum and move quickly to a profit target. Swing trading also allows a trader to enter positions and follow-up stop-loss and profit-taking orders and simply let the trades go. Swing trades require little maintenance once exit orders are entered, with trailing stop-loss orders being the only dynamic element of the trade. The part-time trader can enter a position, set a limit sell and a stop-loss order, and then walk away. This can be far less stressful than watching every tick on the edge of your seat.
If you’re a part-time trader or a full-time trader with patience, the right market conditions can mean great profits with the right swing trading strategy. Always be evaluating your approach and the market conditions, and then stick to your game plan as your trades develop.
The Stock Bandit
thestockbandit@thestockbandit.com
www.thestockbandit.com
Finding Stocks to Trade
Producing a stock newsletter every night requires finding good chart patterns on a regular basis for members of my service. My inbox is frequently full of inquiries of just how to go about finding chart patterns for trading. The short answer is that I look for them!
Each afternoon following the market close, I use TCNet by Worden Brothers to scan for stocks which meet a variety of criteria. This tool is essential to my finding good trade setups for my own trading and for my newsletter. Because I trade the stocks in my newsletter, I want to find and highlight only the best technical setups.
The scans I run are basic, filtering out the low volume stocks and cheap stocks which don’t move enough for short-term trading. I generally will cut out all stocks below $10.00, and will rarely look at a stock with less than 250,000 shares/day average. This leaves me with a large list of stocks which have adequate volume for getting in and out of trades with minimal slippage, as well as stocks which have a larger range of movement.
From this point, I sort the list according to how strong or weak the stocks closed that day. Stocks which finished at their highs for the day are at the top of the list, and stocks that closed at their lows of the day are at the bottom of the list. Sorting stocks by this method helps me to find more long trading candidates at the top of my list, while finding more shorting candidates (weak stocks) at the bottom of my list.
Finally, it takes time. TCNet allows me to quickly scroll through all stocks in the list by hitting the spacebar. I generally will end up with about 1500 stocks in the list, which takes me a little over an hour to manually review. The rate at which I go is fast, because I am flagging stocks as I move through the list. At the end of the review, I am left with around 40 stocks which I will look more closely at to locate my swing trading picks for the following day. My final selection is based on market direction, the momentum of the stocks in the list, and how clean each chart looks to me as a trading candidate.
Jeff White
President, TheStockBandit.com
http://www.thestockbandit.com/
Each afternoon following the market close, I use TCNet by Worden Brothers to scan for stocks which meet a variety of criteria. This tool is essential to my finding good trade setups for my own trading and for my newsletter. Because I trade the stocks in my newsletter, I want to find and highlight only the best technical setups.
The scans I run are basic, filtering out the low volume stocks and cheap stocks which don’t move enough for short-term trading. I generally will cut out all stocks below $10.00, and will rarely look at a stock with less than 250,000 shares/day average. This leaves me with a large list of stocks which have adequate volume for getting in and out of trades with minimal slippage, as well as stocks which have a larger range of movement.
From this point, I sort the list according to how strong or weak the stocks closed that day. Stocks which finished at their highs for the day are at the top of the list, and stocks that closed at their lows of the day are at the bottom of the list. Sorting stocks by this method helps me to find more long trading candidates at the top of my list, while finding more shorting candidates (weak stocks) at the bottom of my list.
Finally, it takes time. TCNet allows me to quickly scroll through all stocks in the list by hitting the spacebar. I generally will end up with about 1500 stocks in the list, which takes me a little over an hour to manually review. The rate at which I go is fast, because I am flagging stocks as I move through the list. At the end of the review, I am left with around 40 stocks which I will look more closely at to locate my swing trading picks for the following day. My final selection is based on market direction, the momentum of the stocks in the list, and how clean each chart looks to me as a trading candidate.
Jeff White
President, TheStockBandit.com
http://www.thestockbandit.com/
How I Select Trades
Successful trading is about managing trades once you are in them, regardless of where they came from. I think a great trader could probably turn a profit taking random trades, as long as he manages them well. Now I do believe that finding quality chart patterns is essential, mostly because trading good setups in liquid stocks allows for the best risk/reward relationship on the front end. That is why I run my swing trading website – to highlight the best charts in the market for potential trades. My trade selection process is based on my ability to manage those trades, therefore I want to find only the best. Why not predetermine your stop in case you are wrong by taking the trades with a natural stop-loss nearby?
Having said that, let me touch on the last comment regarding stops. One of the first things I want to know before I take a trade is how much I am likely to lose in case I am wrong (and I will definitely be wrong some of the time). This helps me to determine two things: position sizing and profit expectation. If I am willing to lose $1000.00 on a trade and the natural stop is 1 point away, then a position size of 1000 shares will be obvious. Furthermore, if I want to keep my reward-to-risk relationship at 3 or 4 to 1, then I would look to pull at least 3 times my potential loss out of the trade on the profit side. This would be a 3 point profit for this example.
Now, how do I go about finding those trades? Each night I begin with all the stocks in the market and run some basic scans on them which filter out the low-dollar stocks and the low-volume stocks using TCNet, my charting software. Once I have the remaining list, which is typically about 1600 stocks, I sort that list by their close relative to that day’s range. This simply means the stocks at the top of the list finished the day near their highs, and the stocks at the bottom of the list finished near their lows. Sorting by this helps me to first find my likely long candidates and then move on to the short candidates, as I typically like continuation plays. Once the list is sorted, I use the spacebar to screen each stock in pretty rapid succession. Going through the list takes me about an hour. Simply scrolling through so many stocks each night also helps keep tabs on the overall market health
Having said that, let me touch on the last comment regarding stops. One of the first things I want to know before I take a trade is how much I am likely to lose in case I am wrong (and I will definitely be wrong some of the time). This helps me to determine two things: position sizing and profit expectation. If I am willing to lose $1000.00 on a trade and the natural stop is 1 point away, then a position size of 1000 shares will be obvious. Furthermore, if I want to keep my reward-to-risk relationship at 3 or 4 to 1, then I would look to pull at least 3 times my potential loss out of the trade on the profit side. This would be a 3 point profit for this example.
Now, how do I go about finding those trades? Each night I begin with all the stocks in the market and run some basic scans on them which filter out the low-dollar stocks and the low-volume stocks using TCNet, my charting software. Once I have the remaining list, which is typically about 1600 stocks, I sort that list by their close relative to that day’s range. This simply means the stocks at the top of the list finished the day near their highs, and the stocks at the bottom of the list finished near their lows. Sorting by this helps me to first find my likely long candidates and then move on to the short candidates, as I typically like continuation plays. Once the list is sorted, I use the spacebar to screen each stock in pretty rapid succession. Going through the list takes me about an hour. Simply scrolling through so many stocks each night also helps keep tabs on the overall market health
Definition of price models
The definition of support and resistance
Support is the lowest level of bounce for price
Resistance is the highest level of reported price falls back
Price models are divided into two groups, two basic
Resistance is the highest level of reported price falls back
Definition of price models
Price models are divided into two groups, two basic
1 models are essential to reversal of price in the graph
2 models are essential to the continuation of the trend in the graph
* Models are essential to reversal of price in the graph
2 models are essential to the continuation of the trend in the graph
* Models are essential to reversal of price in the graph
1- head and shoulders
Is a model that consists of 3 beds and Qmtan in the direction of descending peaks or 3 and Qain in the upward trend
The bypass line of the neck is an indicator of the beginning of reflection
The bypass line of the neck is an indicator of the beginning of reflection
2 - twin peaks
Two Qmtan Icklhma graph of the price movement at the top level up to him an apostate vindicated them breaking the trend line
3 - Tri-Peaks
Are 3 peaks formed by the graph at the top level of his boomerang with him after the piece, breaking the trend line
learn stock market
To succeed in any kind of trade you should examine this area very well and know the strengths And points of weakness. Stock market or what is known as the Stock Exchange is one of those types that you should know a lot Them before entering them. The stock market became the assistant provides an income for many people who are in need of money to cover expenses Daily living and others to spare them his money as an investment to ensure long-term future.
How to get started in the stock market
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