Stock Trading: Why Traders Need More Than One Way to Win
One of the most important truisms in sports is that the team or competitor with the most ways to win is the team or competitor that is more likely to win over time.
Play 100 baseball games and the team with good pitching, good hitting and good managing will tend to beat the team with good hitting alone. The fighter who can both box and brawl is
more likely to win more prizefights than the fighter who must rely on the “one big punch” – even if it’s a pretty big punch.
The same is true in trading. The more ways you have to win, the more edges you can bring to bear with every single trade, the more likely your trades will have success over time.
One of the things Larry Connors set out to do in his book Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs, is to introduce the concept not just of finding quantified edges in the stock market for trading stocks and ETFs, but also the critical idea of how combining different quantified edges is the way to build truly high probabiliy trading strategies and truly high performing trading portfolios.
Read more in Short Term Trading Strategies That Work – now available for free right here as a pdf download or in paperback.
Huge gains in both ^MA^ and ^V^ are likely to be the talk of traders overnight and heading into trading on Thursday. In addition to those two stocks …
Here are 7 Stocks You Need to Know for Thursday
Leading the S&P 500 higher heading into trading on Thursday as a group were steel stocks. In fact, out of the top 10 best performing stocks in the S&P 500 on Wednesday’s session, three were steel companies.
Of the three, ^X^ is trading below its 200-day moving average and is now in overbought territory below that level. Rallying above their respective 200-day moving averages were fellow steel names ^ATI^ and ^AKS^.
What’s down on an up day? In addition to weakness in a number of homebuilding stocks, shares of ^MWW^ sold off by more than 2% after rallying into overbought territory below the 200-day on Tuesday.
Up big for a second day after a four-day pullback into oversold territory above the 200-day moving average were shares of ^ERTS^.
Electronic Arts was one of the stocks we highlighted in the Subscribers Only section of 7 Stocks You Need to Know a few days ago. To get your free subscription to the daily newsletter edition of 7 Stocks You Need to Know, click here.
Shares of ^BJ^ soared by more than 4% on news that the company was being sold to private equity investors for $2.8 billion. The stock was deeply oversold less than two weeks ago.
Note that BJ’s Wholesale Club belongs to the same group of discount specialty retailers as ^DLTR^. Trading at their highest levels of the year, shares of DLTR have closed higher for the past three days in a row.
David Penn is Editor in Chief of TradingMarkets.com