Question:
Greetings From The Great White North Bella,
Just re-read One Good Trade again (it just keeps getting better) and I found myself asking the same question. Are we better to trade Stocks in Play that may be news to us but have momentum and/or should we be playing a basket of names which we have become familiar with. By watching the same names repeatedly we in effect are consciously and subconsciously developing our intuition in those names. Or perhaps the answer is a little of both.
Appreciate your thoughts in straightening out the conflicting thoughts.
Bella
My response initially to this email was: What do you think is best for you?
As I write often if I can get you to think about your trading so that you improve then I sit with a proud smile on my face. There is no right answer to the question above for every trader. I made the case for why I trade Stocks In Play in One Good Trade. There are fifteen books available for sale on Amazon if you are interested in what I had to say 🙂 For me Stocks In Play:
a) offer more trading opportunities
b) allow me to be more efficient with my trading capital
c) offer a larger margin of error
At SMB we teach out trainees to find them. The SMB Radar helps. The SMB AM meeting helps. The SMB Virtual Trading Floor helps.
But if you feel most comfortable trading a basket of stocks then fine. I would first recommend you start with a basket of high beta stocks. BIDU, AAPL, AMZN, POT, etc. With a basket of stocks you gain the advantage of knowing these stocks better for less intraday opportunities. It is up to you which approach is best for you to attack the market.
Bella
disclosure: no relevant positions
3 Comments on “Traders Ask: Is it Better to Trade Stocks in Play or a Basket?”
Whats the SMB Virtual Trading Floor? How do we get access to it? Is it similar to T3’s?
What you cannot just send me a personal email Paul? The SMB Virtual Trading Floor allows for chatting and an audio feed to our desk. My best to you and your family. Happy Thanksgiving!
I personally like to have a list of few large cap names with high beta out of different sector, which assures me at any point of time there is enough liquidity and sufficient intraday movement. sometime in-play stocks hve volume dry up after the early morning drive imo.