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Investment Trading - How To Choose Shares For Share Trading - Printable Version

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Investment Trading - How To Choose Shares For Share Trading - gordon - 02-14-2018 04:38 AM

I've found that the best stocks for stock trading and day trading will be the stocks that constitute the S&P 500. The basis for this is that the large Mutual Funds and large Institutional Buyers focus on these stocks within their constant quest to beat the S&P 500. These stocks broadly speaking have absolute performance and strong relative strength to the S&P 500 Index. Of the shares, I like to pay attention to those that have been in the Nasdaq 100 Composite Index. It is the Nasdaq stocks that I like to trade the most due to their volatility of the stocks in the Nasdaq 100, I concentrate on those stocks that I that I like to refer to as 'trading where the motion is' stocks. This unusual <a href="http://superstar1.com/?option=com_k2&view=itemlist&task=user&id=406864">more information</a> essay has numerous unusual warnings for the purpose of this hypothesis. These are stocks that show tremendous volume in the amount of shares being traded during the day, a minimum of 1-5 million shares and preferably 20 million shares and more. My true choice is share volume of 30 million plus every day.

In-addition, the shares must have a big daily stock trading variety, which is a great deal of volatility and low price of that stock for the prior trading day, and the distinction between the high price. I locate a trading range of at least $2.00 per share, but I really prefer those who are more volatile and have a regular travelling range of $3.00 to more and $6.00.

The reason for this is that I trade the small side on an intra-day basis, both the long side and both sides of industry. I've no interest in whether the stock closed in positive, or negative area the last day, in the same way long as the volume and price activity is there.

All I need is the price action, high volume and the volatility. I know that they're either increasing, or decreasing and the main participants are very active in that stock their weighting in that stock, if I have these three elements. Increasing and contributing to the value and volume action are what I call the 'accelerators', which are the energy participants, the pro-gram traders and the hedge funds who are trying to jump in before the mutual funds and front run the investment, either up, or down. That is if the action really gets hot and you'll see 'climatic volume' where each stock industry is happening in less than another. I've seen this many times each day. I-t happens all of the time.

One thing that may not be apparent to you on the surface is that when I pick stocks for trading and investing what I've done is that I've used the key participants as my re-search department. The money flow is very obvious because most institutions are on the same page with regards to what they are buying and selling. This turns up in the price action, the volatility, and volume for your stocks in play. It's awfully hard to get a herd of elephants to cover their foot prints in the mud.

Now having a potential list of stocks to trade. I then load these shares in to my 'trading' watch list. As well as that watch list I've yet another watch list that contains every investment in the Nasdaq 100. Seeing the volume, price activity, once the market starts I spend the first five minutes or so, and direction of the stocks in both watch lists.

I'm looking for particular styles to produce and if I see a pat-tern that I like to day trade, I will pull the trigger and take the trade, either on the long side or the small side based on what the stock (price action and size) tell me, what I see the market makers doing on the Level II screen, and provided the stock is trading in line with the chart of the Nasdaq 100.

I also have a fairly limited protective stay in position to guard me in the event I am wrong and took the deal too quickly. I may try that industry 2 or 3 times before I obtain the right entry, each and every time going for a lose. But when I get the right access, there's a lot of money to be made, especially when you are in-the right investment.

One of many things I like to do is to stick to the exact same stock, so long as it pays my stock trading requirements. I may possibly deal the same share all week as along as it is doing for me and I am making good successful deals with it. One of many benefits in doing this is that you truly get acquainted with the stock effectively, and how it deals.

To repeat, I think the most effective stocks for trading are those stocks with very high rate and high volatility, high quantity and an excellent intra-day travelling range. When you have these features, you know the large institutions and the 'accelerators' are involved in the stock.

For stock trading, you will desire a direct access time trading account from the stock trading broker that offers direct access stock trading software. That is an absolute must have for stock investing. The application can have Level II, maps, technological signals, etc. Direct access implies that your buy and sell orders are delivered right to the market by you without using a middle man to put the orders for you..

The very first thing you need to do before you even attempt stock trading, and this is even if you do have some knowledge, is to just take a great time trading class to ensure that you really understand how the company of stock trading works, what patterns to look for, how the markets function and how everything fits together. It'll be the very best investment you ever make. If you do not eductae yourself - you've better-than a 9-0 possibility of failing.

* the words share trading and day trading are compatible.

Good luck and good trading,

The Maverick

Larry Schade.