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The stock choices provided in our top stock picks email have been chosen for several reasons.
Besides the specific rationale for each stock, the top stock pick email always contains selections for the current market environment.
In other words, if the market timing strategy is bullish then the top stock picks email will contain bullish choices. If the market environment is bearish the top stock pick email will contain bearish selections.
The following paragraphs only address the bullish case. For bearish market conditions change the strategy to the opposite direction. For example prior highs for stops vs. prior lows.
Here is the selection criteria for the stocks provided in the top stock pick email:
First, these stocks are currently in persistent up trends. The 20 day moving average is above the 40 day moving average and they are moving up fairly close to parallel. In some cases the moving averages are so consistent they look like railroad tracks.
Second, these stocks are making higher highs and higher lows and have in fact made a recent new 30 day high.
Third, from the recent high these stocks have pulled back, often on lower volume, to either their support level of the prior high or the 20 or 40 day moving averages.
Fourth, the CCI (5) momentum indicator has recently been below the -100 level during the pullback period indicating that the stock can be considered undersold to a fairly high degree.
These stocks present a fairly high probability of creating a profit if purchased in the correct market environment, at the right moment, and with the correct exit strategy.
These stocks are for the more active trader and the positions are usually held from 2 to 5 days. Sometimes more than 5 days if the stock moves sharply in your favor. Rarely less than 2 days.
Being an active trader doesn’t mean that you will have to watch your position during market hours. On the contrary, you will likely do better if you do your analysis when the market is closed and wait for your orders to exit the position automatically. Follow the strategy below, place your orders after the market has closed and let the system work for you.
Here is a suggested trading strategy for these stocks:
The basic strategy is to purchase these stocks the moment they move above yesterday’s high price. The smaller the trading range during yesterday’s market, the more profitable your trade has the potential to be. I’ll explain why in a minute.
Here are some options on timing your trade, you can either
• Create an alert for the stocks you would be interested in buying that would be sent to you during market hours and place your trade when you get the alert
• Create an order before the market opens that will be triggered if the price moves above yesterdays high and will also place a stop at the required point if the purchase is made (talk to your broker if it is not clear to you how to set this up).
Determine your stop by subtracting 5 or 10 cents from yesterdays low or today’s low (the day you enter the trade) – whichever is lower. This is why the size of yesterdays trading range can improve the profitability of a trade.
If yesterdays range is small then your position exit stop will be much closer to your purchase price than if the trading range is large. If you do get stopped out your loss will be small.
Leave the first stop in place for two trading days including the day you place your order. So the first time you modify your stop would be on the third day of the position – unless stopped out by then.
Every day after the third trading day, move your stop up to 5 or 10 cents below the prior day’s low until the position is stopped out automatically for you.
One last suggestion, but this could be the most important one. Do not watch your positions during market hours. Tracking a position during market hours turns you into a day-trader. That can be ok if you have an education and training in day trading, but for most of us – including me – watching a position will lead to emotional decisions that will usually end up costing profits, losses, or both.
If this strategy is new to you then please trade on paper before risking real funds to the market. Visit the links on the web-site for a great paper-trading application that uses genuine market data.
Check out pragmatic info about the topic of forex trading – please read the web site. The times have come when proper information is truly only one click of your mouse, use this chance.