[Do Or Die]

Hi

As mentioned in my introductory post, I am very much a stocks person. TL has rich material on almost everything, but I see little activity in these sections. I will share a few things in this thread which beginners will find useful. The experienced stocks/futures traders will also see my perspective on why I prefer stocks over other trading instruments.


DD

[Do Or Die]

1. Each stock has its own characteristics

And not just each stock, each stock group has its own characteristics. The SnP has its own as a market index. Gradually you start picking them. This gives you edge against randomness, and a base for defining a set of strategies.

2. Regime shifts

Stocks show regime shifts remarkably clear. There will be phases when you will make money in every trade, and there will be phases you won’t get a clue about what’s happening. The phases usually occur when there is a fundamental shift in underlying.

3. Diversification

Diversification isn’t simply buying uncorrelated instruments. For professional traders, a much better form of diversification is trading uncorrelated strategies. This is easier done in stocks than futures.

4. Gaps and Pre-market trading

Gap trading in stocks is still one of the easiest plays for a beginner. There are many types of gap patterns to play and thousands of stocks to choose from. You can choose stock screeners such as Trade-Ideas and get started.

5. Event- based Trading

5 years back things were very easy for scalpers and daytraders (the time I started trading). You could make money just by trading on news only- using a premium news service, of course. Even these days, trading around news events in stocks is easier than in futures. Option spread strategies can be used to their full potential around such events.

6. Trading as well as Investing

Once you start trading profitably in stocks, chances are high that every couple of years you will pick 5-10 great investment stocks. This comes automatically as insight after day to day trading for a long time. Having your investment portfolio is a great way to park your investments.


DD

[Do Or Die]

1. It is purely Technical

If you read my say on regime shifts, you will appreciate that it is good to know what is happening in the underlying.

2. Stocks Trading is for newbees only

I know several millionaire traders in stocks, and have personally met few.

3. Stocks Trading is for wimps

LOL, I’ve heard that from futures traders. Again, it’s all about the money you’re making

4. Stocks trading is difficult because stocks are highly manipulated

Bears are manipulative to bulls and vice-versa. Suppose two playful brothers have to divide a cake between them; isn’t that one of them will try to get a bigger piece? You just have to turn things in your advantage and avoid ranting.


DD

[Do Or Die]

OK guys... sorry about the brevity and your questions are most welcome. And please don't mind if I'm slow in responding (habitual laziness).


DD

[Do Or Die]

One of the best websites for stock traders: FINVIZ.com - Stock Screener

Stock Screeners is one of the most important tools. Check the free ones before you go for a paid subscription:
Stock Screener - Overview
Google Finance: Find top stocks with our stock screener
Stock Screener - Yahoo! Finance
Stock Scan: Predefined Scans - Charting Tools - StockCharts.com
Stock Screener Control Panel | Phil's Stock Market Blog
Zignals; free stock screener and fundamental trading strategies
Free Stock Screener - Stock Market Screener - Technical Stock Screener - MarketWatch


DD

[reset.no.regret]

Originally Posted by Do Or Die »

4. Gaps and Pre-market trading

Gap trading in stocks is still one of the easiest plays for a beginner. There are many types of gap patterns to play and thousands of stocks to choose from. You can choose stock screeners such as Trade-Ideas and get started.
DD

Can you tell me more about these gap patterns or point me somewhere? I've stayed away from gaps, but I'd like to be able to add them to my strategies. thx

[Do Or Die]

Hi,

For analyzing any gap there are two main things to look for:
1. Prevailing trend/momentum when the gap occurs
2. The price shock that the gap delivers

For gaps people usually look for white space between two bars. I'm referring to all gaps- those which occur when Open is significantly different than previous Close. For example a full green candle for today -> next day the stock opens near the base of candle.

For open range trades... this can be very useful. I'll write more and take a example on Monday. In the meanwhile comments can keep me motivated


DD

[reset.no.regret]

Thanks. I think an example would help me understand. I understand gaps and some of the things that can cause them, but not how to trade them. Because of that, if I see a stock that is gappy I move on. Its actually one of my written trading rules. But only because I don't know how to handle them.