The following is the transcript from a discussion in my Chatroom today were we are discussing finding strategies to trade with. ---- [13:55] <primelaw> B, do you think it worthwhile to specialize in one stock while learning the ropes? [13:56] <Brandon> well I dont like the idea much of one stock [13:56] <Brandon> but its valid if you do the QQQ, NQ, SPY or ES [13:56] <Brandon> simply because its a broad represenation [13:56] <Brandon> what I do strongly thing people should do [13:56] <Brandon> is specialize in ONE SETUP [13:56] <Brandon> here is an example [13:57] <Brandon> we have a member who is on vacation right now [13:57] <Brandon> but he sent us his trade logs and was very frustrated with his results [13:57] <Brandon> and rightfully so [13:57] <Brandon> but as we started to look over them [13:57] <Brandon> we noticed that he picks the pheonix setups out very well [13:57] <Brandon> and trades them excellent [13:57] <Brandon> so we said why are screwing around with this other stuff? [13:57] <Brandon> just trade the pheonix [13:57] <Brandon> there are a few of them a day [13:58] <Brandon> and your making $400 to $500 a day on them [13:58] <Brandon> and then pissing that away on everything else [13:58] <Brandon> now he just trades the pheonix setups [13:58] <Brandon> and he has gotten even better at picking them [13:58] <Brandon> and is pulling out $600 to $800 a day [13:58] <Brandon> only trading the pheonix [13:58] <Brandon> and just getting a few day [13:58] <Brandon> but he knows that setup inside and out [13:58] <Brandon> I think that for a new trader [13:59] <Brandon> that is the best way to go [13:59] <Brandon> and as you get better with it [13:59] <Brandon> maybe try adding an indicator or filter to it [13:59] <Brandon> and as you improve there [13:59] <Brandon> then SLOWLY [13:59] <Brandon> move on to another setup [13:59] <Brandon> SLOWLY [13:59] <Brandon> dont risk everything you are making on your bread and butter [13:59] <Brandon> but slowly get into another setup [13:59] <Brandon> expand your revenue streams [14:00] <Brandon> and once you have done that and gotten comfortable with two [14:00] <Brandon> see if you can combine that to one [14:00] <Brandon> if not fine [14:00] <Brandon> move on to hte next [14:00] <Brandon> but become an expert in a few (2 to 5) setups [14:00] <Brandon> and thats all you will ever need to a successfull market player [14:00] <Brandon> so many people, thier heads are just full of noise [14:00] <Brandon> and it leads to much confusion and losses [14:01] <Brandon> and its not helpful to profitable trading at all [14:01] <Brandon> they just end up running around like willy wanker in circles [14:01] <Brandon> and nothing productive comes of it
[20:04] <Brandon> Im going to talk a bit about scanning tonight [20:04] <Brandon> because I get a lot of questions about [20:04] <Brandon> what should I look for [20:04] <Brandon> I will just start from the time the market closes [20:04] <Brandon> and then progress as the day moves on [20:04] <Brandon> what im looking at etc [20:04] <Brandon> sound ok? [20:05] <Brandon> ok [20:05] <Brandon> well after the market closes [20:05] <Brandon> the first thing I do is take a nap [20:05] <Brandon> [20:05] <Brandon> but when I wake up I start the scanning process [20:06] <Brandon> the first thing I look at is a few variations of the VIX that I like [20:06] <Brandon> and this gives me a good market bias [20:07] <Brandon> I dont look at things such as absolute price like other people do [20:07] <Brandon> but I look at to see if we are 20% or more above or below the 10 day moving average [20:07] <Brandon> and if we hit a new 20 day high or low [20:07] <Brandon> I find these to be much more useful [20:07] <Brandon> generally within two days [20:07] <Brandon> for my timing [20:08] <Brandon> if both of these give me a bias one way [20:08] <Brandon> then I will focus most of my attention on that direction [20:08] <Brandon> my next step is to look at the SP500, Nasdaq100, Russell2000, SP400 [20:08] <Brandon> this will help me identify the major sector areas where the leadership is likely to occur [20:09] <Brandon> then I look at the major sector indexes to see if any of them have a setup [20:09] <Brandon> most of the time they do not [20:09] <Brandon> but in the event that they do [20:09] <Brandon> I will then next go through each stock in that sector [20:09] <Brandon> what Im looking for are the stocks which performed better (or worse if im looking short) than the overall market. [20:09] <Brandon> and the sector [20:09] <Brandon> this will give me a list of a few stocks to watch [20:10] <Brandon> with me so far? [20:10] <Brandon> after I have done this I will just pull up all stocks on TC2000 [20:10] <Brandon> and start flipping [20:10] <Brandon> I tend to look at everything that trades over 500K shares [20:10] <Brandon> and sometimes go down as low as 150K [20:11] <Brandon> I will have a bias towards certain types of setups based upon my assesment of the market [20:11] <Brandon> for example right now I think we are oversold and that we are going to get a short squeeze [20:11] <Brandon> so tonight I have been looking for stocks which have sold off heavily [20:11] <Brandon> as I think they will rebound [20:11] <Brandon> other times though [20:12] <Brandon> lets assume we had just had a "normal" pullback [20:12] <Brandon> then I would be looking for those issues which do move in general with the market [20:12] <Brandon> but has out performed it in the direction Im looking for it to go [20:12] <Brandon> always look for relative strength [20:13] <Brandon> before the market opens I scan again [20:13] <Brandon> this time looking at the gaps [20:13] <Brandon> I look for traps [20:13] <Brandon> a trap occurs when (for example) a stock opens yesterday basiclly at the days high, and closes at the low [20:13] <Brandon> then today it is gapping above yesterdays high [20:13] <Brandon> this is one of the most powerful setups to take off the open [20:14] <Brandon> a good example of this is NXTL yesterday, and PG today (which I missed!!!) [20:14] <Brandon> traps are among the best setups out there [20:14] <Brandon> so I am always looking for those [20:14] <Brandon> one the market is open [20:14] <Brandon> its initial direction will be key [20:15] <Brandon> and I will look to trade to fill in gaps [20:15] <Brandon> or traps right off the open [20:15] <Brandon> but im also carefully observing the strongest and weakest shares [20:15] <Brandon> the best time to see how things are going to be [20:15] <Brandon> is the first reversal persiod [20:15] <Brandon> which occurs about 20 minutes after the open [20:15] <Brandon> if the market has gone up [20:16] <Brandon> you want to see that it does not give back more than half of that move [20:16] <Brandon> if it can do that [20:16] <Brandon> it should be strong the rest of the day [20:16] <Brandon> and at the very least the morning [20:16] <Brandon> during this time then [20:16] <Brandon> you want to observe which stocks have the best relative strength [20:16] <Brandon> they are likely to continue to be leaders [20:17] <Brandon> after that, its really just a matter of keying in on the strongest and weakest stocks in the overall market [20:17] <Brandon> and hte strongest/weakest stocks [20:17] <Brandon> in the strongest/weakest sectors [20:17] <Brandon> I look for bullflags, bearflags and breakouts [20:17] <Brandon> in the indexes I just watch the relationships all day [20:17] <Brandon> and if there is non confirmation I fade the move [20:17] <Brandon> and thats pretty much it
Qualcom, Inc (QCOM). Among the former "glamour" names none has held up as well as Qualcom. It is one of only a few that is still priced above $25, and while it could be argued that this means it is simply more over valued than the others from a technical perspective it also is showing relative strength. One of the most powerful concepts for traders is that over relative strength, and those stocks which are strong on a relative basis often give very good buying opportunities. With the market sitting at oversold levels and a possible short term pivot low in place, we will look for QCOM to be one of the upside leaders. Look for buying opportunities in QCOM on trades above $33.20. Brandon
here is a list of a few more stocks with upside potential. ATH CSCO DIGL FDP DLTR Good Trading, Brandon
[09:31] <Brandon> 09:31:38 DAY TRADE: (Based on daily and intraday setups. Holding period = several minutes to several hours. Closed by end of day) BUY SETUP TRDO can be taken long above 17.85. Stops under $17.50
[08:34] <Brandon> 08:34:37 DAY TRADE: (Based on daily and intraday setups. Holding period = several minutes to several hours. Closed by end of day) BUY SETUP SEBL above $15.80. Stop under $15.60