Jarrett wrote: “How do you know when a stock will go from momentum/ trending nicely, to consolidating. This always get me in trouble. I will trade a stock, like IBN, from short side 32 to 30, than it traded 30, so i got short, then it bounces to 30.20 i cover, back and forth, and it turns out the stock … Read More
One That Got Away
RIMM has been my favorite trading stock for the past year or so. I have blogged about trading it a few times already. On Friday it presented a phenomenal trading setup. A setup that I believe works over 70% of the time and offers a risk to reward of greater than 10:1. This setup does not occur that often but … Read More
All Trades Are Not Created Equal
On our desk newbies are taught to look for setups where they can risk one unit to make five. By constantly looking for these great risk/reward setups they can become consistently profitable. But there is something more important one needs to recognize in order to move to the “next level”. Traders must recognize that unlike people all trades are not … Read More
The Advantage of In Play Stocks
I have written extensively since our blog began regarding “In Play” stocks. During earnings season there are many In Play stocks to choose from each day. Traders should choose no more than two or three of these stocks each day to focus on. This is the case because you can make a lot more money trading one or two stocks … Read More
MS: A Great Second Day Play
The theme of the day is the “Second Day Play”. Jtoma talked about it on Fast Money and now I will review the best Second Day Play from today. Yesterday, MS released earnings and traded in a 2 point range for the day between 22.50 and 24.50. MS was behaving relatively weaker than the market yesterday afternoon. When the market … Read More
28 Days Later
Today I saw strong evidence that the recent market rally has come to an end. Today was the 28th trading day since the Reversal Day which established the five week run we have seen in the market. I like to jokingly refer to the rally as the “Obama rally” as the constant bashing of Obama on CNBC seemed to coincide … Read More
Attention All RIMM Traders!
I love trading RIMM. Not because it was my most profitable stock in 2008. Well maybe partly. I love trading RIMM because it is one of those few stocks that all the major players on Wall Street trade. Hedge funds flock to RIMM when the market is moving. As do mutual fund managers, professional traders, and retail brokers. With so … Read More
The Opening Drive
Here is a setup to help you during earnings season: A stock gaps up or down on earnings and drives strongly in one direction during the first few minutes of the Open. This stock should be In Play for the rest of the day. The large supply/demand imbalance that is indicated during those first few minutes should create a bunch of great … Read More