The stock market is offering plenty of day trading opportunity this week, you simply need to be prepared.
2015 is not the year of “buy and close your eyes.” The two years of buy every dip is gone.
A clear bullish tape is now making you work for the money. A part of making the high-probability trade is having a good reason for every trade you make, as opposed to making rushed, random bored trades.
This is why planning trades in advance will improve your performance. Ask yourself, “why am I making this trade?” Today I see too many traders allocating capital because they need to, or they are simply bored and want some action. These are poor decisions.
So what do you do? Since the general market is lacking consistency from day-to-day, we need to focus on sectors, and then make a list of the top stocks in each sector.
Sector specific, and then stock specific. A few month back we had cyber-security stocks. Then we had oil and gas. Then we had casino stocks short (for months) and then long for a couple of weeks.
There is money flow from week-to-week, if you’re prepared you will make money. If you’re lazy you will bleed your account dry and be gun-shy when the market picks a direction and offers some bigger trades.
This also means you should adjust your trade management. The smart play right now is booking profits into support or resistance as opposed to holding and expecting new levels.
A good example of this is TWTR on the daily chart. $31.50 keeps attracting topping tails that never break out.
Stock Trading Recap 10-27-15 | Tuesday Video
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End of Day S&P 500 Map 10.27.15
S&P 500 heat map shows biotech and healthcare with a bid under the tape. Many of these stocks, especially AMGN have produced some nice trades the last 2 days. Keep them in your tracking journal.
SPY End of Day Chart 10.26.15
Basic materials short, and healthcare long, a solid play second day running.