Day Trading Thoughts For Thurs. Dec. 18

Discussion in 'Trading' started by erikrkolodny, Dec 18, 2008.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    Any person who has even a rudimentary understanding of economics much less the markets has come to know the phrase “risk-reward ratio.” But most people do not truly understand the term. And very few day traders even realize what this term mean because when they enter a position that they intend to hold for, say 2-3 minutes, all they see is the pot of gold waiting them rather than the perils of actually doing the trade. There are two basic tenets that I abide by and encourage all traders to use. First, do only trades in which a minimum of 20 cents can be made relatively easily. It is easier to make 20 cents in Dryships (DRYS) if it has been in a tight range for an hour than say General Electric (GE), i.e. pick the issue with the volatility. Second, if you are not sure that something will happen, at best it is a 50-50 shot of working. That sounds obvious, but we’ve all said things like “I’m not sure, but I’ve gotta try this.” Thus, focus on trades that you feel have a near 100% shot of working. For instance, if a stock has been down after news that they missed their earnings and warned on forward guidance yet the stock crosses the unchanged marker on the day, it is highly likely that short covering will follow. So, again, by not going for the tiny scalps of the world and doing only the trades that optimal circumstance allow, you put yourself in a much better position to become a profitable day trader.

    Stocks overnight was awhile since I said that. Averages across Asia ranged from down 0.5% to up 1% while European bourses are down 0.5% to up 0.5%. Oil is down a touch again but the dollar is bouncing although bonds are up. Look for a darn near typical mid-December day today (much like yesterday)- it will likely be directionless and choppy. This is why I chose to pick the theme in the first paragraph in today's post- pick your spots.

    Reiterating-If the whole story is not there -
    If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-

    Good- The following stocks have good news and/or a strong technical pattern

    CMED- good earnings

    LEN- good earnings

    PAYX- decent earnings

    DRYS,GNK, SB- drybulk shippers closed relatively strong; if they open down and go toward unch, likely a buy thru unch

    DVAX- massive rise yesterday on collaboration with Glaxo; it is likely an A-B-A2 to the upside today as well, particularly pre-hours

    ANW- closed on high of day

    BFR- closed on high of day

    AUXL- announced collaboration with PFE

    Bad-The following stocks have bad news and/or a weak technical pattern

    NKE- beat earnings slightly, but outlook hazy

    TTWO- atrocious earnings

    NDSN- bad earnings

    ATHR- warned on earnings

    SGY- cut capital budget

    CYMI- CFO suddenly resigned

    FORM- warned on earnings

    WFR- warned on earnings

    CEG- crushed yesterday after they spurned Buffett’s deal for another; if it opens higher, looking to short thru 23 and a 2nd trade later in day as A-B-A2 thru 22.62

    SIVB- broke to a new trend low; odd.

    ATU- bad earnings

    SCHL- bad earnings

    WBD- bad earnings

    WGO- bad earnings

    WOR- bad earnings

    IR- warned

    PNR- warned on its outlook









    Good luck today.

    Erik R. Kolodny
  2. quality material
  3. Agreed. If you follow his Epiphany Method, you can experience some amazing consistency.

    I am currently on an 18 day profit streak. I do not make alot each day, 500-1500 but I make, which is what I am here to do.

    A huge futures trader and fromer NYSE specialist, Frank Delaney, has join this blog and adds volumes and deeper knowledge to the market.
  4. Like I said consistency. Compare this to the blog, blog. These stocks were also on his Watch List.