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Investment Trading - How To Choose Stocks For Investment Trading
02-14-2018, 04:38 AM
Post: #1
Big Grin Investment Trading - How To Choose Stocks For Investment Trading
I've found that the best stocks for day trading and share trading are the stocks that make up the S&P 500. The reason for this is that the large Mutual Funds and large Institutional Buyers pay attention to these shares within their never-ending quest to beat the S&P 500. These shares usually have strong relative strength and overall performance towards the S&P 500 Index. Of the shares, I love to pay attention to the ones that come in the Nasdaq 100 Composite Index. It's the Nasdaq stocks that I like to deal the most for their volatility of the stocks in the Nasdaq 100, I focus on these stocks that I that I like to refer to as 'trading where in fact the action is' stocks. These are stocks that show huge size in the number of shares being traded throughout the day, a minimum of 1-5 million shares and preferably 20 million shares and more. My real choice is share amount of 30 million-plus per-day.

Additionally, the stocks will need to have a large daily stock trading range, which is a lot of volatility and low price of that stock for the prior trading day, and the difference between the high price. I locate a trading range of at the least $2.00 per-share, but I really prefer those that are more unstable and have an everyday travelling range of $3.00 to more and $6.00.

The reason behind this is the fact that I trade the long side, both both sides of the market and the short side on an intra-day basis. I've no interest in if the stock closed in positive, or negative place the prior day, just as long as the volume and price action is there.

All I want is high-volume, the price action and the volatility. I know that the main players are very effective in that stock and they are either increasing, or reducing their weighting in that stock, if I have these three ingredients. Increasing and contributing to the value and volume activity are what I call the 'accelerators', which are the push players, the program traders and the hedge funds who are trying to jump in ahead of the mutual funds and front run the stock, either up, or down. That is when the action really heats up and you will see 'climatic size' where each stock trade is occurring in under a second. I've seen this often each day. I-t happens all the time.

Something that might not be evident to you on top is that what I've done when I pick stocks for trading is as my research team that I've used the major participants. The money flow is extremely visible because most organizations are on a single site with regards to the things they are buying and selling. This turns up in volume for that stocks in play, and the cost action, the volatility. It is terribly difficult for a herd of elephants to hide their foot prints in the mud.

Now using a possible list of stocks to trade. I then load those stocks in-to my 'trading and investing' watch number. As well as that watch list I've yet another watch list that includes every investment in the Nasdaq 100. Observing the quantity, value action, when the market opens I spend the initial five minutes or so, and direction of the shares in both watch lists.

I'm trying to find particular patterns to build up and if I see a pat-tern that I want to day trade, I will pull the trigger and get the trade, both on the long side or the short side centered on what the stock (price action and amount) inform me, what I see the market-makers performing on the Level II screen, and provided the stock is trading consistent with the data of the Nasdaq 100.

I will have a fairly small defensive stop in place to safeguard me just in case I'm wrong and got the industry too quickly. Visiting more information seemingly provides tips you might tell your cousin. I may try that industry a few times before I have the right entry, each time taking a drop. Nevertheless when I get the right entry, there is lots of money to be made, specially when you're in the right stock.

Among the things I like to do is to stick with the same stock, provided that it meets my stock trading needs. The same stock may be traded by me all week as along as it's performing for me personally and I'm making great worthwhile deals with it. One of the benefits in doing this is the fact that you really get to know the stock well, and how it trades.

To summarize, I think the best stocks for stock trading are these stocks with very high velocity and high volatility, high volume and a great intra-day travelling variety. When you have these qualities, you know the large institutions and the 'accelerators' are involved in the stock.

For stock trading, you will require a direct access morning trading account from a stock trading agent that offers direct access stock trading software. This really is an absolute must have for daytrading. The application may have Level II, maps, technological indications, etc. Direct access ensures that your purchase and sell orders are sent directly to the marketplace by you without using a middle man to put the orders for you..

The very first thing you should do before you even attempt stock trading, and this is even if you do have some experience, would be to get an excellent day trading class to ensure you really understand how the business of stock trading works, what patterns to consider, how the markets function and how everything fits together. It will be the very best investment you ever make. If you do not eductae yourself - you've better-than a 3 months chance of a deep failing.

* what stock trading and day trading are compatible.

Good luck and good trading,

The Maverick

Larry Schade.
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