Archive for May, 2007
Shifting Market Exposure
May 11, 2007 at 8:26 am
This market has made an incredible run, and we’re finally starting to see some profit-taking. However as traders, we sure don’t have to predict where things are headed as long as we let the charts be our guide. That’s great news if you’re not the owner of a crystal ball, and it also means our market exposure can shift naturally.
If you’re trading from chart patterns, your market exposure will shift naturally if the market trend begins to change. That’s a beautiful thing, because bullish patterns emerge during uptrends and bearish patterns will surface during downtrends. It means there’s no need to predict what’s going to happen next.
That’s exactly how we swing trade at TheStockBandit.com. By sticking with the best technical setups, we not only reduce our risk per trade but we also find that we’re naturally hedged at turning points and always trading in the direction of the prevailing trend.
Case in point: this week we closed out some very nice gains in long-sided trades like AKS and ONAV, and also added a little short exposure when another bearish pattern was confirmed. It’s interesting how just locating the high-quality setups and letting them confirm will shift exposure naturally when the market changes.
So remember, there’s no need to predict. There’s no need to be a rip-snorting bull or a growling bear. Just let the setups show you whether you should be long, short, or in cash!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Timeframes Dictate Trading Plans
May 8, 2007 at 11:03 am
Last week at TheStockBandit.com, we caught some quick moves in a few stocks which were provided as day trading candidates. Each of them had earnings which were about to be released, which we won’t hold into, but yet their chart patterns were still very high-quality. So instead of looking for, say, a 15% move in a week or two by swing trading, we opted for the quick-hit style of a few percent. (It’s called The Stock BANDIT for a reason!)
We caught good initial moves for day trades in 3 stocks (2 longs and 1 short sale), taking the quick pops and then stepping aside. By adding up 2-3% at a time, we booked some solid gains by keeping timeframes abbreviated in these stocks which had earnings reports on the way but still had good chart setups.
I trade based on the charts, but I also incorporate the approach that each individual stock should be traded in a unique way. By evaluating not only the pattern itself, but also the stock’s personality and any scheduled news, an appropriate trading plan can be formulated which raises the odds of success (profitability).
Stocks which have already reported earnings should be given more time and room to move since there is no scheduled company-specific news to conflict with the trade.
On the contrary, a stock with earnings due out in 2 days should be kept on a pretty tight leash and not trusted very far, since the motivations of traders involved in the stock may change abruptly as the earnings release approaches. Taking the quick initial move in such stocks will still allow you to play the high-quality setups without having to take on additional (and unnecessary) risk with the potential landmine of an earnings report gap.
There will always be some news flowing into the market, but by staying aware of the scheduled news (like tomorrow’s FOMC announcement on interest rates), you can determine the right trading plan for the stocks on your radar.
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Finding Value in Losing Trades
May 7, 2007 at 1:17 pm
This week’s Free Newsletter over at TheStockBandit.com discusses the topic of Finding Value in Losing Trades.
We all have losing trades, that’s just a function of trading. However, as long as we keep them small and manageable, we’ll be alright. More importantly, if we can learn to evaluate them properly, we can improve.
A loss means you’ve already paid the tuition for a trade, so why not look a little closer and get the lesson you’ve paid for?! So for more thoughts on the subject, stop by and check out the Free Newsletter at TheStockBandit.com.
By the way, you can sign up for the free newsletter on the Free Newsletter page at TheStockBandit.com and we’ll notify you every time one is published. An opt-in form is provided at the top of the page which puts you in full control of your email subscription at all times.
Trade well this week!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Small-Caps Need Rotation
May 6, 2007 at 5:21 pm
The major market averages have been climbing steadily for some time now, with the large-caps leading the way. The DJIA and S&P 500 have each tacked on big gains in recent weeks, while the NAZ has followed along.
Lagging the others is the RUT small-cap index, but it cleared a big hurdle again on Friday that could mean good news for the bulls. In fact, if the large-caps can rest and the bulls can produce some rotation into the small-cap stocks, it would be very positive to keep the strength going in the market.
We’ve got a lot of scheduled news out this week with the Fed, economic reports, and the continuation of earnings season, so stay alert out there because news is a major factor in the market action. And be sure to check out this week’s Market View page over at TheStockBandit.com for a closer look at the indexes tonight before you start your trading week.
Trade well this week!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
