08/23 – Which stocks to pick

I started my day trading career with Tim Sykes and when I wanted to learn more, I joined Investors Underground. The DVD’s that helped me the most were Tim Grittani’s Trading Tickers and Nate Michaud’s Tandem Trader.  Software that has helped me in my early years was: Trade Ideas software. Now I use FINVIZ ELITE. Click on the highlighted links for more details. For my main page, please click here: Day trading for beginners


 

Introduction for today

I guess my blog posts are laughable because I still promote Tim Sykes. Let me be honest, his service has helped me. Maybe it isn’t anymore, what it was in the past. Mind you, there wasn’t much around 8 years ago. What helped me the most were the videos, not the alerts. Please, if you want alerts, kindly do not follow me. I have worked hard and adapted through harsh market conditions. Reviewing my niche, reviewing what works and what not. Tim Sykes taught me how to look for stocks and how to build a watch list.

About Investors Underground, I feel similar too. They helped me a lot in regards of how to trade stocks and setups. How to look at charts and how to review support and resistance. Also important.

What, at least this is how I feel, makes me different is that I make my own plan. I am way too arrogant to listen to other people. in that regard I have always done my own thing. And I urge you to do the same. Learn what you can and bin the rest. There is so much talk, which does not add to any of your knowledge. So don’t listed to me, do not copy me. Learn from what I have to offer. Give my post a like, if you like it and share if it holds meaningful information. Comment if you have any questions. I am more then willing to answer. And no, I will not spam you with offers and what not. I earn money trading stocks, not promoting services. I do that for shits and giggles.

AMD – IQ – TSLA: the perma-watch watch list

Back to today, I am looking at large caps or mid caps. My pre-market watch list is is made up of simple parameters: 1). 10 million average volume 2). price above $2.00 and 3). Change above 0%. Then I look if stocks have any range. I rarely look at stocks like AAPL, MSFT, NFLX and NVDA. My strategy works on range, so there needs to be volatility.

I basically have the same stocks on watch every day, for a few exemptions. AMD, IQ and TSLA seem to be the most volatile. BABA, JD and TWTR pop up occasionally too. You could say these babies are on permanent watch. Much like TRXC, GERN and VKTX were on permanent watch om penny stock land.

The second step is review support and resistance. This is different from small caps as previous day support and resistance can and will be respected on many occasions. This makes mid/large cap trading much easier. What makes it more intense (and worth trading) is margin. On most of these stocks you can easily trade quantities (further “Q”) of 10,000Q. You also do not need 30% or 50% moves. I loved that idea on small caps, but can also bite your account if you are stubborn, stupid and/or greedy. I have lost well over $20,000 in a single trade in small cap world. Large/mid cap I haven’t seen this yet. To be honest, my win rate is well over 80% right now, simply because there is a 90% chance to cover / sell at cost. These odds cannot be beat by Small cap stocks.

JD – a basic resistance to support short

Explaining how to choose stocks to trade is not as simple. What I mostly do is scan through my watch list and see if any, previously reviewed, support or resistance hold or fail. Volume is also a key indicator. I would not trade anything without volume. Also, you need to review the overall market / bigger picture. Where does this stock want to go to. What level is this.

In case of JD it was very simple. 33.00 is a whole number. She was piggy back riding on BABA’s massive gain so she seemed like a freakin’ sympathy plays. Back to my experience with Investors Underground (click for more details), I remember that some traders live of sympathy plays. This was reason enough for me to short this baby. There was nothing other too it other then patience. Covered when things seemed to turn around. I didn’t have too. But I made $350 and that is well above my daily $300 income target.

Other stocks I looked at were AMD, which was nowhere near any price targets on my list and you cannot blindly short into stocks that are up. Especially when they are breaking out of 52 week highs. Also, AMD was up due to some bogus $30 price target. Reason enough to short, but risky enough to avoid.

I wanted to buy TWTR at 33.55 but this target was never met.

Last but not least was TSLA, which I completely missed. I had a plan, should have traded it. Tested and held the 200 SMA. Would have made a massive $500 gain on the day. But I had my mind and cash in JD.com so yeah.. bummer.

Conclusion

Keep in mind you need to respect your stop losses. Being mental (like me) or being the hard stop type. It doesn’t matter. Just respect the trend. Large caps are easy if you understand the trend. Keep in mind, also, that the market doesn’t give three shits about you, your target, your plan or what ever. The market follows trend and so do large caps / small caps. Don’t fight it, just let it go. There is always tomorrow, there is always another trade. Keep it simple. That’s what I do.

SERVICES THAT CAN HELP YOU

Trading large and mid caps is hot business. Tandem Trader offers some insight on how to trade them.

Kindly click the following link here for more info on Tandem Trader:

Tandem Trader DVD

I hope you enjoyed this blog entry! As always, feel free to share this post!


If you are interested in Investors Underground and would like to learn more, please click the link here: Investors Underground.

 

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