One of the more common patterns seen in a strong market are longer term players buying stocks that have gapped lower after earnings. Sometimes this plays out on Day 1 with momentum buyers aggressively buying the stock leading to a gap fill. But many times a gap fill will play out in the days following the earnings release once the … Read More
Learn To Take A Loss
I was trading GMCR this morning. I consider it to be a Top 8 “momo” stock. It would probably be #2 behind NFLX if it hadn’t done a dopey 3/1 stock split a couple of years ago. “Momo” stocks are stocks that “fast money” hedge funds are constantly pushing around. GMCR gapped lower on earnings last week and had a … Read More
Should Short Term Traders Consider Fundamentals–Part II
In Part I of this series I discussed whether understanding the news could help short term traders limit their risk on overnight positions. Today’s post discusses whether understanding the news gives a short term trader a possible edge in determining profit targets and when to exit an intraday position. As examples I will use two trades that Sammy, an SMB … Read More
My Thought Process: $MCO
I shared this because it moved above INTU into the #1 spot on SMB Radar “weak today”, while it was also #4 for “in play”. Stocks that appear across the top of multiple lists in the SMB Radar usually offer the best risk/rewards setups. A quick look the daily chart shows the next possible support area which had been resistance … Read More
Should Short Term Traders Consider Fundamentals? Part I
I believe the majority of market participants agree over longer time horizons fundamentals will influence the price of a stock. But what about in the short or medium term? Should intra-day traders or swing traders be evaluating fundamental news related to the stocks they are trading? Or should they simply focus on price action in relation to news? I have … Read More
Placing Your Stops Correctly
If you become skilled at stop placements your win rate increases. It’s a skill that we teach traders on our desk but it is something that takes live trading experience to ingrain in a trader’s brain. Newb traders are all over the place in this area. You have some who will risk a few cents, which is awful in an … Read More
Using The Tape: $PRGO
Reading the tape is an essential skill for actively day trading. The tape, also known as the time and sales window, shows the trader important information about order flow. It is a stream of data on price and volume, which are two important criteria for intra-day trading decisions . Tape reading takes time to learn and takes practice to understand … Read More
A Trading Conversation
When I began trading in 1996 the lifeblood of the trading floor was the chatter that was exchanged loudly between traders. If a trader was making money in a ticker that information was shared. If a trader found a favorable entry price that information was shared. If a large buyer or seller was identified that information was shared. I made … Read More