JCP JC Penny is in play today setting up a classic pause after a breakout.
M Macy’s had a similar run in price action, but needs to consolidate before it sets up a better risk to reward ratio. Swing traders should have both of these stocks on the watch list for a future game plan.
A big trading lesson to learn early is making a list of trigger points for stocks top trade in the future. Never give up on a stock if the price action matches your edge. Day trading success requires being in the rights stocks in a short window.
Be diligent and track stocks from day-to-day. Second day momentum trades are important to be ready for. The chart of Macy’s below is a good example.
M Macys Chart
Game Plan Video and Stocks to Trade 4.9.15
In the video I touch on the topic of liquidity and the difference for a day trader versus a swing trader.
Many new day traders mistakenly trade the wrong stocks. The theory is they can manage a trade with 100 shares in an illiquid stock because of the share size. A trader should “practice” how they actually plan to make a living. Practicing, in day trading, means trading the stocks you think you will eventually have in your trading game plan.
It will be very difficult for a day trader to move to different stocks when increasing share size. Stocks have personalities. Strive to learn how a stock trades so that you have conviction in your skills to read the price action. Learn the price levels and volatility with less shares before you move on to the same stocks with increased share size.
Swing trading is a little different. A swing trader does not need an immediate fill the way a day trader does. Pennies matter to a day trader plus you can work the trade a little more as a swing trader.