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
