In this post I will show you a strategy that can be long and short financials at the same time and end profitably. The concept is based on pairing instruments that have different natures. The nature of leveraged instruments is to increase the impact of one-way movements. The nature of unlevered broad-based indexes/funds tends to have more reversion and overlapping … Read More
Trading Lesson: Explosion After Rest—$TWTR
Today’s video trade review highlights a few key points for short-term equity trading. One, how to identify important “inflection points” which can be used as the basis for low risk high reward trades; two, when to consider getting back into a position that doesn’t work initially; and three, how to actively manage a position versus taking your hands off the keyboard and letting … Read More
The Reversal Trade: $TWTR
The short setup that continues to yield the best results in this Raging Bull market is finding stocks that have run for several days and then looking for a “catalyst” for a change in direction. In our last Two Minute Trade Review, $AAPL had a news catalyst that created a short term top (currently about $20 lower). In this example I was … Read More
Spencer Trade Review–$AAPL “Sell The News Trade”
One of the few short setups that has consistently worked in 2013 has been shorting stocks after extended moves that then gap higher after some sort of news catalyst. We saw this on Monday in $AMZN after the “drone story” on Sixty Minutes and again yesterday after $AAPL inked a deal with China Mobile that had been discussed ad infinitum … Read More
Lessons Learned From A Million Dollar Loser
Imagine that you’re on top of the world…You have achieved brilliant career success on the trading floor of Chicago; you sit on the important governing body of your industry; you’ve got a wonderful family; and plenty of toys to enjoy in your spare time. And then, in what seems like a blink of an eye, you lose it all. You … Read More
$CREE Went Down & $NTAP Went Up
Following their respective earnings releases $CREE and $NTAP both gapped lower. Yet during our morning meeting I discussed trading $CREE on the short side and $NTAP on the long side. What was different about their price action that caused me to focus on a particular bias? If you look at the longer term charts below they seem fairly similar yet … Read More
Before Placing a Trade: Embracing Risk Management for Success
Today’s lesson is going to be a little about trading psychology and a little about money management. At the end of this post we have provided additional training videos to further enhance your skills. We are going discuss what risk is and how most traders view it from the wrong perspective. First, let’s cover a couple of definitions: Money management is how … Read More
Proper Preparation Disguised As Luck– $WLT
I was long WLT two weeks ago as it was trending higher from 11 to 14. Then they made an announcement after the close about a new financing deal and it gapped lower the next morning causing me to give back a decent chunk of my profits. After trading down to 12 in the morning where it did huge volume … Read More