How to find the best short sale candidates
In today’s Chart of the Day we’re going to take a look at a setup from the TradingMarkets Short Windows Candidates List.
Q: I want to know if you think a short-term trader should only trade stocks that set up in the top two or three strongest sector
A: In general, you’re better off sticking with the stocks in the strongest two or three sectors. This way, the “rising tide” will tend to lift all boats. So even if you don’t pick the best stocks in the sector, your stocks may rise anyway. However, depending on how confident you are in picking stocks, you may occasionally want to consider stocks outside the strongest sectors. This may allow you to catch industry leaders in a soon-to-be-strong sector or niche stocks.
Q: Could you explain selling short to me?
A: Thanks for the question. Shorting is generally considered more risky because of the risk-and-reward factor. Consider this: In the case of buying a stock, your maximum risk is the price of the stock and reward may be infinite. For example, when you buy a stock at $10, your maximum loss will be $10, but there’s no telling how much higher the stock can go, thus the reward may be infinite. On the other hand, shorting the stock is the total opposite. Your maximum return is the price of the stock, but your risk in unlimited. Thus, it is more important to have a stop loss when shorting. In order to be able to sell short, you must have a margin account, since you are borrowing the stock from the brokerage. Your brokerage must have the shares available for you to short a particular stock. Also because of the “Uptick Rule,” the stock must tick higher before a short-sale order can be executed. This adds to the challenge of short-selling.
Fed comments could be the catalyst for a big move
The short-term market trend is down, and the intermediate-term market trend is up.
Love sought is good, but given unsought is better.
Love sought is good, but given unsought is better. William Shakespeare
Trading Patterns Within Patterns
My favorite strategy for entering trades is to look for
patterns within patterns where a breakout in the lower
timeframe could lead to a breakout and significant move in
the larger timeframe.
An oversold bounce is due
On any further decline, there is extremely strong support for the S&P 100 index at the 545 level.
How To Trade PowerRatings In 7 Steps
kaboom
7 Steps To Daytrading
Day trading is not easy. These 7 steps are not designed to give you a fool-proof, easy trading system that will always make you money. If there were 7 such steps, day trading would be easy and we would all be millionaires. Instead, use these steps to frame your own plan of attack and you
7 Steps to Trading Moving Averages
7 Steps to Trading With Moving AveragesMoving averages are one of the most widely used and easiest to understand tools in trading. CheckWikipedias article on moving averages for a brief rundown of the different types of moving averages that are used. For our purposes we will use Wikis defi
7 Steps (or Less) on How To Use Stochastics
Strategy 1: Oversold/Overbought1. Set yourstochastics for 8,3,3 and use 80 foroverbought and 20 for oversold.2. Buy when %K and %D are oversold (below 20). Exit your position when stochastics become overbought.3. Sell when %K and %D are overbought (above 80). Exit your position when stochastics beco
Why holding cash seems to be the smart move
The current test of the 580 level is quite important for the S&P 100.