How I Find Possible Trades

Hello everyone and thanks for stopping by. I hope you are all having a good weekend and enjoying some rest away from work. Today I want to start going over in detail the key points of my trading plan. Hopefully by doing this we can all gain a little more insight in how to better pick stocks.

First up is how do I find prospective stocks that I would like to put into my watch list. You may recall from my last post on "My New Trading Plan" that I like to pick possible trades out of the top daily percentage gainers or losers for the day. The reason I do this is only the strongest stocks or weakest stocks are going to make the biggest moves. Now we could just follow any group of stocks and find some trades but most likely the breakouts would not be very strong and without any conviction. Now by reviewing the top gainers and top losers we find stocks that are most likely moving because of some sorta of catalyst, such as earnings or revised guidance or even news regarding the industry that they are in. Also stocks can make very strong moves because the sector they are in happens to be the flavor of the week. The commodities sector is a good examples of this.

One key point to make is you have to make sure you have a solid idea on why a stock is moving before you consider it for a trade. If you don't know whats going on then you will have no idea when a stock might reverse and leave you holding the bag.

So thats it for now on that subject, as always please don't hesitate to send any comments or suggestions my way at uttrader@gmail.com or its always good to leave a comment.

My New Trading Plan

Hello and welcome back to my little trading blog. As I said in my last post I have updated my trading plan and hopefully have a new strategy for success. As I have in the past I hope to use this blog to detail my daily trades and ideas and use this space as a detailed trading journal. Of course I hope to also get feedback from all of you out there on my ideas and trades.

So without further ado I present my new plan. This plan is much different than anything I have done in the past and is much more short term in nature than my past strategies. First I continue to get new trade ideas from the top daily percentage gainers and losers in the NASDAQ and NYSE. From these I build a watch list that I monitor on a daily basis. Currently this list contains 38 companies. On a daily basis I monitor these companies and trade on a variety of indicators. Currently I am baseing my trading on mostly technical signals as my trades are short term in nature, consisting of a few days to a few weeks. Currently I try to trade stocks that are at support or resistence and looking to break out. I also look for stocks that are breaking trend lines as well. As verification on these trades I use a combination of MACD, MACD Histogram, RSI, Stochastics, and Moving Average Envelopes.

Once I have selected a stock I only place orders after the market close, this way I take any emotion out of the trade. For this type of trading I place a contingent order to buy just on the other side of the resistance or support, usually try to put it about 4 cents or so over resistance. If in fact the stock moves as I hope my trade will trigger and I will automatically be in the position and hopefully on my way to riches. Once in a trade I place a stop below the average range of the stock to protect myself from any big losses. Once the stock moves up a little I move the stop up to break-even thus protecting myself from loosing any money on the trade. If the stock continues to move up I will continue to move my stop up and locking in more and more gain.

So there you go that is the basics of how I trade. I hope to dedicate at least a post on each key item and give more detail on how I use each indicator. I also will list my watch list and detail every trade I make and why I have made it.

As always please send me any questions or comments you might have on anything I post, I am far from perfect and love to get new ideas. This way we can hopefully all improve our trading and make a little more money!

I'm Back!

Its been so long since I last wrote on here and I have missed it. I hope everyone is doing well and making tons of money in the markets.

Now that the crazy tax season is over I hope to start blogging a lot more often now. I have changed up my trading plan as the markets have turned into a sideways trading market and because of this I have had to rethink my strategies and plans. I will follow up this post with one detailing my new ideas and I hope you all will comment on it and tell me your ideas.

Also just wanted to say thanks for all your support and emails trying to get me going again, I appreciate it.