Stock Traders Seeking Conviction | Game Plan 9.24.15

Turning pro as a trader is an interesting conversation…

Too many proprietary stock traders believe it’s when you get to trade full-time. Pass the series 7 or 56 and get leverage. Now you’re good. Time to make money right?

No. Not even close.

At this stage you don’t know what you don’t know. This is dangerous because you have leveraged buying power, but no idea how to use it. You want to use it, after all, that was the point of studying for that damn test.

You don’t know how to game plan. You don’t know how to game plan because you don’t have an edge yet. Sure, you took some training or your friend makes money, so you can too. Again. No. Not even close. You need experience. You need screen time. You need to place live trades and then manage them. You need to understand having ideas and making money is not the same thing.

Ask any stock broker who became a trader. It’s not the same. When you are responsible for the risk it’s a different experience.

And here is where most new stock traders drop the ball and never recover. They don’t pay attention. They don’t take notes to improve. They trade and focus on trade-by-trade results. You feel great when you make money and then confused when you don’t. You don’t know yet it’s a game played over time. Not trade-by-trade.

But that presents another problem. You need to make money and don’t have time to allow the probabilities to play out over time. You gave yourself 6 months to learn trading and be profitable.

Don’t be one of “them.” Be a pro from the start. Understand trading is a skill, not a bunch of charts. Define or better yet, ask what it is that you need to know, Then, you move to skill development. Then you trade and get feedback.

From the start focus. Focus on one strategy. One pattern. One entry signal.

Stock Market Today: Map of the S&P 500

(click the map for a full view)

Stock Traders Seeking Conviction

Day Trading Game Plan: The SPY ETF Chart

Traders are still seeking a trend day in the SPY. We need better volume to rely on it as a foundation for trading conviction.

(click the chart for a full view)

Stock Traders Seeking Conviction

Stocks to Trade | Thursday September 24, 2015

Pete’s Notes:

  • Have not traded a market this stock specific in, well, ever.
  • The best trades are in sector/industry related ideas, such as the agricultural stocks right now.
  • I can’t stress the importance of capital preservation if you don’t see an edge. The stock market is unforgiving for sloppy, lazy traders.

Charts in Focus

The Home Depot, Inc. HD

The HD breakout level to new 52 week highs was $118. The stock peeked above that price only once since the China meltdown. The current 5 week pennant is setting up a nice couple of trend days when it breaks out. Keep it on your radar. This chart pattern consistently offers good reward when it finally triggers.

(click the chart for a full view)

Stock Traders Seeking Conviction

Stock Traders Seeking Conviction

Earnings in play today > 1M avg shares: ACN, BBBY, JBL, KBH, NKE, PIR

Stocks that showed Relative Strength Yesterday– contra to the SPY Negative change from the open on 9/23/15TSO, CYBR, SPLK, NCLH, ESPR, DXCM

Above the 20sma, up for the week and closed 2% higher from the open: TSO, CYBR, DXCM

Below the 20sma, Down for the week and closed 2% lower from the open: scty, cf, amba, wynn, lng, uri, feye, wmb, jd, wpz, lvs, apa, clr, dvn, baba, lrcx, eog, gmcr, bidu, myl, apc, mon, ctrp, fslr, lulu, hes, cat, lyb, gpro, bxlt, ba, sndk, wba

Bullish Ideas ATR/Volume/Price: TSLA, UA, LB, AMZN, ADBE, SBUX, FB, RCL, UNH>125, NKE, LLY

Bearish Ideas ATR/Volume/Price: gpro, amba, wynn, lng, cf, mon, abbv, lulu, myl, baba, stx, hp, lvs, apa, wmb, wdc, feye, bidu, lrcx, mjn, utx, ir, de, etn, cat, apc, ppg, slb, hes, amgn, stt, qrvo, hon, twx, mmm, oxy, scty, cof

Weak Stock Weak Close: scty, epd, cf, amba, wynn, mos, pot, paa, lng, feye, dyn, wmb, lvs, mur, apa, kmi, ar, baba, lrcx, ete, bidu, myl, etp, apc, mon, fslr, emr, lulu, yhoo, cbs, hes, cat, gpro, nue, bp, rio

Strong Stock Weak Close: EXPE, GES, CTXS, LLY

Weak Stock Strong Close: axta, buff, espr, splk, syf, thc


20 day Breakdown: bwa, ete, lng, lrcx, mos, pot, terp, wynn


2x Normal Volume: CAG, POT, NYCB

Watch List Longs: BBY, SBUX, UNH>125, MO, TWC, ADBE, BRCM,

Watch List Short: mrk, abt, adm, kss, slb, met, amgn, wmt, cof, wynn, lvs, nue, m, dd, hpq, qcom, vz, wmt, orcl

Inside days: fb, exc, xom, wfc, ms, nflx, gpro, gild, hal, cag, ebay, ccl, cop, abt, dd, cog, luv, bmy, dyn, tsn, nvda, cl, jnpr, mbly, bk, mo, mcd, ea, len, tsla, aem, low, stt, amzn, bby, endp, dfs, azn, etfc, rcl, d, bhi, ua, qrvo, lnkd

Stock Traders Seeking Conviction | Game Plan 9.24.15


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