As a swing trader, many times I trade of end-of-day data, and my style is trading fib levels I wait for a stock to break previous highs/lows from the previous day. Problem is there are so many stocks that are breaking highs/lows that i look at so many charts, and sometimes its hard to filter out the best trades. for example im long both PNRA (restaurants) and NFLX ( Recreational Activities ) two very different sectors, but i have no clue which one has the better chance of success. my question is, how do pro traders figure out what stocks are going to be hot, or what sector is going to be hot for the next day, or in my case, the next week or longer. is it just a matter of watching cnbc and seeing what stocks they're talking about and then watching those sectors? for example if they talked up walmart, would trading retail stocks be in play? how do you guys decide from your list of stocks, which ones are going to be the best trades? thanks cm
First off, turn off CNBC and never turn it on again. You'll be a better trader right there. Then get a stock scanner / screener and let the computer do the chart-scanning and searching for you based on whatever technical or fundamental parameters you trade from. Having 50 charts to look @ versus 5000 is much easier. Then skim some news sites / blogs to see what's happening since the last trading day, and if that effects your trading plan for the new day.
me reckons it is difficult to ascertain what is going to happen for the next 20 minutes let alone week but i have also had a part of my temporal lobe removed so... some ideas from what remains, you may look to the weekly indicators that come out to affect at least the specific sectors, like the Tuesday Goldman store sales at 8:30 to affect the retail for that day or the wednesday 10:30 oil report to affect oil and oil services if the numbers are way off consensus, etc. yeah, cnbc will create chaos and give most certain mixed signals that will likely make you wish you also had sections of your brain removed. on cnbc, the cramer stocks may move on the uber short term but used to do pretty well with the anti-cramer indicator, i.e. wait for the move engendered by his, at least educated, spew then buy/short diametrical to his recommendation. clearstation.com has their previous 5 day hot sector and industry section so you can at least see where the relative strength is. good luck