Essential for Stock Trading Success
Stockscores Foundation for the week ending July 22, 2019
In this week's issue:
In This Week’s Issue:
- Free Webinar – So You Want to be a Day Trader
- Stockscores’ Market Minutes Video – Make More Money by Trading Less (but Harder)
- Stockscores Trader Training – Essentials for Stock Trading Success
- Stock Features of the Week – Abnormal Breaks
Free Webinar – So You Want to be a Day Trader
For anyone who aspires to day trade the stock market this presentation should not be missed. I will take you through my day trading method, show the tools and processes that I use and give you a list of things to know about being a day trader. Whether you want to do it full or part time, now or sometime in the future, this will give you a good overview of what I have learned after day trading for 30 years.
Click here to register for this free event
Stockscores Market Minutes – Make More Money by Trading Less (but Harder)
Can you make more money trading stocks if you actually trade less? Yes, and this week I discuss how before I do my regular weekly market analysis, a market scan and stock analysis and then the trade of the week on ATI.
Click here to watch this week's video
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Commentary of the Week – Essentials for Stock Trading Success
Here is a list of things that I think are essential to becoming a successful stock trader:
Find Alpha. These are the stocks that are moving on their own story, with less correlation to the overall market. There will be a different list of Alpha stocks every day but they are characterized by abnormal price and volume activity. These attract the crowd, the crowd brings the emotion, emotion causes a break down in market efficiency and that creates opportunity.
Overcome Yourself. Humans are predisposed to fail in the stock market because we have an emotional attachment to money. That clouds our judgment and makes us do irrational things. Computers have been programmed to take advantage of those emotions. To be successful, you have to learn to overcome yourself.
Trade Positive Expected Value. Your trading strategy should be based on logic based rules that can be tested over a large sample size. That testing should show that the strategy makes money consistently through varied market conditions. Just as the odds favor the casino, your strategy should have odds that favor you. Otherwise, you are just the gambler on the wrong side of the table.
Define Your Process. A great strategy is useless if you don’t have the process in place to find and execute the trades before the opportunity is gone. It is not about buying or shorting the right stock. It is about buying or shorting the right stock at the right time. With a sound process, even the best strategy will fail.
Have Optimism. You are what you think. If you are negative then you will get negative results. With optimism, you can overcome the hard times and find your path to trading success. Optimism does not mean recklessness, for that is the way of the gambler who seeks fast riches without the hard work.
Work Hard. Once your trading strategy is defined and your emotions under control, trading is not that difficult. However, getting to that point takes hard work, discipline and perseverance. Many aspiring traders fail because they give up.
Focus. The market can change direction very quickly. If you are not focused, you can miss opportunities or quickly watch a good trade turn in to a bad one. When you are trading, trade.
Have a Plan. Without a well thought out and tested trading plan, you will succumb to your emotions when trading gets difficult. The plan should be concise enough for a computer to follow. Don’t leave room for judgment because your judgment will be clouded when you risk your capital.
Have an Edge. You are competing against millions of other traders. To win, you have to have an edge. That could be better information, a better strategy, better technology, better emotional control or anything else you can find that most people don’t have.
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This week, I ran the Stockscores Abnormal Breaks Market Scans in search of stocks showing good chart patterns and abnormal trading activity. Found one that I like:
DRRX has made a triple bottom around $0.50 and today breaks up through $0.85 resistance with strong volume support. Support at $0.65. 6.5/10.
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