Trading the markets with Alan Rich.

[Naz]

My friend Mike came over from New York on Friday, he's been trading the US markets for years. As we walked along after meeting at 5pm he asked how i'd done today, one trade $3.56 run i said. What was that on? TIE. Oh yeah TIE climatic sell signal he said. Yes you're right i replied.

It was the hot stock that was the key. He already new about it because it had been starring out from the daily charts for 24 hours. As it was hot over the last few weeks lots of traders had picked it up and kept it on a watch list. Did he ask me how i traded it? no way. All he was really saying was he knew of the stock and exactly what was occurring with it.

If he'd of mentioned a hot stock to me that i didn't know about i'd have that written down and be looking at it the next day. if it was the other way around i'm sure he'd be doing the same thing. I dont think he'd be e mailing me asking me how to trade it.

So you see the key is to find and know about those hot stocks. I mentioned that stock some days earlier on this thread. Any basic trader with a knowledge of t/a ie. a copy of Murphy's in his/her bookshelf could have played my Fridays move. ...but it was knowing where to look first that was the key.

That 's what scanners are about they find opportunities. They show you where to look in the time frame you're interested in.

Then you need to trade it. If you're unsure how to do that then you need to get some basic training where ever you feel is the best place.

The key is knowing whats hot, how anyone trades it is up to them. Even if you took a dollar run out of the move i played on Friday, there was days money and you could have packed up for the day. It was knowing about it that counted.

Alan

 

[Naz]

Lets hope that gradually the Nasdaq takes control of the LSE, attracts even more liquidity to UK stocks and gives us the direct access trading platforms many of us use for trading the US markets.

Market makers might be initially stunned, because a new wave of SOES bandits will no doubt be taking advantage of the situation just as happened in the US, if you dont know how to play the new game in town when that happens then you'd better get trained. One UK trader took a spread bet company for many, many, many thousands before getting banned by using his US level 2 direct access skills over their naivety. The only way they could stop him was to ban him until they sorted out their problems.

I notice that Archipelago has opened an office. Showing even more, that US style direct access trading is coming to the UK. Here is the story.

Chicago-based Archipelago has not let the stock market's erratic behaviour put a crimp in its European plans. The firm has just opened a London office and is hoping to emulate the success it has enjoyed in the US with its electronic communication network (ECN),

The firm plans to market the transaction services offered by Archipelago ECN to UK and European broker dealers and institutional clients.

Alan

 

[BlueChip Trader]

. One UK trader took a spread bet company for many, many, many thousands before getting banned by using his US level 2 direct access skills over their naivety. The only way they could stop him was to ban him until they sorted out their problems.

I notice that Archipelago has opened an office. Showing even more, that US style direct access trading is coming to the UK.

Alan

Hi Alan,

I'm still banned by CMC for "taking advantage of the order book". I then told couple of my friends and one of them is now better off by over £40k. Thank you CMC!

 

[Danger Field]

My friend Mike came over from New York on Friday, he's been trading the US markets for years. As we walked along after meeting at 5pm he asked how i'd done today, one trade $3.56 run i said. What was that on? TIE. Oh yeah TIE climatic sell signal he said. Yes you're right i replied.

It was the hot stock that was the key. He already new about it because it had been starring out from the daily charts for 24 hours. As it was hot over the last few weeks lots of traders had picked it up and kept it on a watch list. Did he ask me how i traded it? no way. All he was really saying was he knew of the stock and exactly what was occurring with it.

If he'd of mentioned a hot stock to me that i didn't know about i'd have that written down and be looking at it the next day. if it was the other way around i'm sure he'd be doing the same thing. I dont think he'd be e mailing me asking me how to trade it.

So you see the key is to find and know about those hot stocks. I mentioned that stock some days earlier on this thread. Any basic trader with a knowledge of t/a ie. a copy of Murphy's in his/her bookshelf could have played my Fridays move. ...but it was knowing where to look first that was the key.

That 's what scanners are about they find opportunities. They show you where to look in the time frame you're interested in.

Then you need to trade it. If you're unsure how to do that then you need to get some basic training where ever you feel is the best place.

The key is knowing whats hot, how anyone trades it is up to them. Even if you took a dollar run out of the move i played on Friday, there was days money and you could have packed up for the day. It was knowing about it that counted.

Alan

Hi Naz, I am enjoying your posts a great deal. You are quite right to highlight the fact that if anyone on this thread wants to discuss hot stocks, there has to be a working assumption they know more than a little about the markets to participate in the discussion in the first place. This is not an area for anyone other than pros and experts. Too many newbies get burned trying, and much worse, pretending to understand advanced aspects of trading which are quite out of their league. And as you have yourself found, very few ever make to this level. As they say, lonely at the top.

If I am interpreting what you say correctly, the scanner you market is only for traders who already are experts and have been trading the market for years, such as yourself and your friend Mike. This is an important distinction for you to be making. Too may will feel anything commercially marketed and having a polished, professional look and feel is going to be all they need to make their fortunes trading the markets. You need to know how to trade and at a high level of competence before you can make any use of something which identifies the hot stocks for you. Your scanner is just the potential starting point of the cycle, not the cradle-to-grave or the how-to and how-not-to of trading itself.

Too many will try and put the cart before the horse with the inevitable result of being too close to the critter's rear end at the wrong time. Many will not like the bitter truth that some topics, such as this thread covers, are for experts only. I admire your integrity in making this point at the potential expense of less revenue from your scanner sales. This topic is really only for those who are comfortable with high risk trades, microflash quick trading reflexes, significant experience in the markets and the ability to swing a big line.

 

[samtron]

Lets hope that gradually the Nasdaq takes control of the LSE, attracts even more liquidity to UK stocks and gives us the direct access trading platforms many of us use for trading the US markets.

Market makers might be initially stunned, because a new wave of SOES bandits will no doubt be taking advantage of the situation just as happened in the US, if you dont know how to play the new game in town when that happens then you'd better get trained. One UK trader took a spread bet company for many, many, many thousands before getting banned by using his US level 2 direct access skills over their naivety. The only way they could stop him was to ban him until they sorted out their problems.

I notice that Archipelago has opened an office. Showing even more, that US style direct access trading is coming to the UK. Here is the story.

Chicago-based Archipelago has not let the stock market's erratic behaviour put a crimp in its European plans. The firm has just opened a London office and is hoping to emulate the success it has enjoyed in the US with its electronic communication network (ECN),

The firm plans to market the transaction services offered by Archipelago ECN to UK and European broker dealers and institutional clients.

Alan

Well they allways say we're about 5yrs behind the US and i'm normally another 5yrs behind that!.

 

[Mr. Charts]

I agree with Naz about ARCA and the LSE.
I also expect much greater visibility and more opportunities on NYSE stocks in the coming months, perhaps with fills faster than the appalling five seconds you sometimes have to wait on the Big Board.
Several of my HOT STOCKS this afternoon include the oils and gold and silver stocks.
Richard

PS My personal opinion is there are plenty of stocks, including hot ones, that more inexperienced traders can safely trade provided their position size, money management and open position management skills are adequate - one of the several keys to this is rigid self -discipline and control. Decide on the evidence available, not your opinion, and execute immediately.

 

[Mr. Charts]

Here's my GOLD trade. Screen shot taken at time of entry.
Long on strong support, with 6c stop dictated by micro-analysis
Richard

 

[Mr. Charts]

Here is the screen shot taken at time of exit for an 83c per share profit. That's $830 on a hot stock for a 1000 share day trader with a risk of $60.
After I exited the price fell steadily to a low of 21.25. This is a business of taking profits when the market hands them to you on a platter.
I concern myself with risk primarily and reward usually takes care of itself if you just keep on doing the right thing.
In my opinion, a combination of hot stocks plus core traders, the right patterns, tight money management and micro-analysis (level 2, reading buy/sell pressures, market participant behaviour and actual trades printing off) produces consistent profits.
Richard

PS
And rigid self discipline is vital, too.

 

[samtron]

PS
And rigid self discipline is vital, too.

can i get this with esignal?

Mr C thanks for posting the trade.

 

[Mr. Charts]

Afraid not, samtron, but there are relatively easy ways of acquiring the self control needed.
My only other trade today was BOL which I mentioned on another site before the market opened ;-)
That was really a complete no brainer and produced $1.95 per share.
If you want details of that and the chart, drop me an email, samtron. I'd be glad to help you with an example and explanation.
[email protected]
Richard

PS What with 83c on GOLD and $1.95 on BOL I'm stopping now - it remains a choppy day.
Again this indicates how there is serious money to be made 98 days out of 100 on HOT STOCKS with the right approach.

 

[smbtnt]

I have mentioned HANS on this thread numerous times, daily it offers mutliple $ runs and is a great swing contender too.
Upgraded to my basket of 'sizzling' stocks.

 

[Naz]

Hi Alan,
I'm still banned by CMC for "taking advantage of the order book". I then told couple of my friends and one of them is now better off by over £40k. Thank you CMC!

Thats the power of Nasdaq level 2 now. Imagine what will happen if/when the LSE is traded that way, there will be a an awful lot of opportunities for people that understand it.Thats what happened in the US when it was introduced.

I was lucky enough to be invited to talk on the subject many times by CNBC europe.
Anyone who wants to know more about it can e mail me at [email protected]


Alan

 

[Naz]

HANS was great mover yesterday.

A $20 move. pulling back to fib levels a lot. Just simple plays, that anyone could learn from and follow.

Our scanner caught three great entries for 9.4%, 9.13%, and 6.06%.

Alan

 

[TrendTracker]

Stocks to watch

Thank you everyone. This is a very interesting thread. Keep up the good work all of you. I'm a type of person who's not eager to present ideas publicly. At least not at this stage where I consider myself very much of a learner. Therefore, I usually just read the posts and try to learn as much as possible.

However, I'd like to humbly post something that might be of value to those looking for mover stocks. Here's my watch list for today:

ESCL (went up with good volume yesterday) SEPR, XMSR, CELG, SNDK, BRCM

There's also quite a lot of data coming out today, so we might see some volatility.

All the best

TT

 

[samtron]

There's also quite a lot of data coming out today, so we might see some volatility.

All the best

TT

So we could be in for another HOT one (or two)?

I was just wondering how much of the economic event releases are leaked before hand? I would think quite a lot.

 

[Naz]

ESCL was indeed a good one , PB a t2W member alerted me to that. Thanks L


Alan

 

[samtron]

One of the reports on my scanner today read something like

GB to go nuclear, will effect some Nasdaq stocks

Well, its a small World, and to think the effect on the the NAS was the last thing I would have thought of when I heard it on the news last night.

 

[Mr. Charts]

LOL
Hope you got the material I sent you and found it useful, samtron. If it didn't arrive, email me.
Richard

 

[Mr. Charts]

Another very easy day's trading today
One thing that hasn't been mentioned here, of course, is coming across/finding HOT STOCKS during the trading day as well as before the market even opens.
Like everything else in the markets, it does require a little effort, but once you've got your structure and methodology it merely becomes routine.
In the middle of the afternoon today, for example, I found several potential set ups, three of which triggered. GENZ within one minute of mentioning it , FFIV and also CELG within minutes - mentioned elsewhere on the web before the trades triggered.
GENZ was a continuation long, FFIV a continuation short and CELG produced two continuation shorts followed by a classic bounce reversal. I'm not going to post the charts or images of any of them. Now all of these were hot stocks in the sense that they were actively moving and presenting multiple opportunities for simple basic day trading and all had spreads of one or two cents and were very liquid so were very easy to trade.
If you read that hot stocks are difficult to trade you must consider the nature of the stocks themselves. Are they liquid with narrow spreads? Are they readable? If so you can consider them. If not, pass up unless you are experienced.
Let's put it this way. To say hot stocks are dangerous is as ignorant as saying that kitchen knives are dangerous. Yes, in the sense that they are if mis-used, but in the right hands they are indispensable.
Another analogy: playing football can be dangerous. True, you can get a broken leg; but kicking a ball around in the garden with the kids isn't particularly dangerous as long as you are careful.
The stocks I mentioned earlier were very safe to trade for any reasonable trader.
If a stock has a wide spread, then you need to acquire the skills to trade like a market maker inside the spread and capture part of that spread for yourself. However, that's another and more advanced skill for the very experienced. Beginners, NO.
Now, I have coloured hot stocks red.
If I had coloured hot stocks blue would you think they were safer to trade?
This might seem a silly point at first, but perhaps it's worth considering as colour affects human judgment. A good trader moves beyond such responses to see objectively, not to have their minds coloured by the way something is presented (the mind thinks HOT is red and is dangerous) because that is the way we are conditioned.
If you want to trade successfully and not be part of the mass who lose or live in tiny boxes which they think constitute all there is in the world of trading, then you move out; you expand the envelope and base your understanding of what is going on, FACTS not your own opinion and subjectivity and much less the opinions of others on BBs. Think for yourself.
Another thing: most people skim through posts and see only what they want to see or expect to see. I'll be happy if just two or three people read this post and understand what I am saying. The rest won't. They are the people who take the wrong side of trades..................
Richard

 

[TheBramble]

Hi Richard. I think the problem is that neither you nor Alan have ever really expanded on what 'you both' mean by hot stocks. You mention in your post above 'actively moving'. Well that's all well and good, but what does it mean? What is the basis for assigning that term to those stocks you mention? Can you empirically define criteria that you could shake a stick at?

I don't want you to of course, I'm just highlighting the questions that perhaps leave some wondering what you and Alan are talking about, or what you mean by 'hot'.

For instance, my pre-selection of stocks I will be looking at during the trading day consists of the value range of the stock (I'll only look at stocks in the $20-80 range), 30-day historical volume will need to be 1.5 million of higher with a 30-day historical range of $1 or more. That's my starting point.

Then I'll be looking to see what sort of day 'they' are having. If they're into a trending day, I'll play off the 52wk Highs or Lows (depending on 'the market' direction). If they want to lay oscillate, I'll do VWAP pairs.

I'll also avail myself of obvious simple chart setups and traditional chart formations.

Nothing fancy. Nothing flash.

The problem is not in how you trade - I'm sure you're a masterful trader - but in how you lack clarity in what you mean by 'hot'.

To many. I'm sure, it's the 'hot' of 'what's new', 'what's happening' 'what's in the news' 'what's everyone else doing or talking about'. It's the 'hot' of the 'hot' Internet stocks that Buffett stayed away from while others piled in 'making a killing' - shortly before they were themselves 'killed' by the inevitable and massive and sudden slump. Very few came out ahead - and it was the usual few by the way.

Many of those who were 'caught' in the fashion and the frenzy for 'hot' stocks back then wish they'd never had.

So I think it's just a case of clarity rather than style or mode of trading that's catching some out Richard.

hth