WSW presents⦠Wall St. Warrior âï¸ Consider THESE When Making Your Trading Decision - The less-popular trading strategy that requires intense concentration and staminaâ¦
- Why high liquidity means high stabilityâ¦
- What you can learn from a highly volatile stock⦠Yesterday I started talking to you about trading strategies. There are five top ones you should consider. We covered the first three yesterday. Today weâll go over the final two. And then Iâll talk to you about what you need to analyze once youâve picked the strategy best for you. 4. Scalping No, weâre not talking about concert tickets here ⦠Scalping is one of the less-popular trading strategies because it requires intense concentration and stamina. Scalpers take tiny profits off small price movements over and over again. Each play only exposes the investor to the market for brief periods of time, which can mitigate risk. Think of scalping as day trading in micro moments. You canât lose much money if youâre moving in and out of the market constantly, but you can lose money over time if youâre consistently wrong about the price action. 5. Long Term Investments Youâve probably heard of buy-and-hold strategies. They involve buying shares in a relatively stable stock â your Apples and G.E.s and IBMs of the world â with the goal of profiting modestly over a long period of time. Long-term investments might remain in your portfolio for years or even decades. Thereâs nothing wrong with long-term investments, but theyâre not why I trade. I want every play to result in exponential profits. Iâm not interested in profiting 10 percent. I want to profit 20 percent, 50%, or even 100%. Stock Market Strategies: What You Need To Analyze? Now that youâre a little bit more comfortable with trading strategies, what do you need to analyze? No matter what trading strategy you espouse, you need solid analysis under your belt. Otherwise, youâre destined to lose money. I emphasize to my students all the time that education is everything. If you donât know anything about a given stock, how can you possibly predict the price action, whether itâs over a few seconds or several years? Letâs look at some of the factors that should play into your trading decisions. Each one deserves careful consideration as you move in and out of positions. Liquidity Illiquid companies donât interest me. Thereâs not enough money to go around, so theyâre inherently dangerous. When Iâm choosing penny stocks, I look for maximum liquidity so I can exit my trade quickly when necessary. Essentially, liquidity refers to the ease with which you can enter or exit a trade. When there arenât any shares to buy, for instance, you can enter the trade. And if nobodyâs willing to buy shares, you canât exit. High liquidity equates to high stability. Most penny stocks are unstable by default. Theyâre small companies with very little money and few assets. Lots of them will inevitably fail. Thatâs why you have to constantly look for better opportunities. When a penny stock â or any security, for that matter â offers high liquidity, you can feel more confident in the play. Volatility A highly volatile stock experiences radical price action. There might be a general trend up or down, but you see spikes in both directions. High volatility tells you that people are actively trading that stock. Itâs a positive sign when it comes to setting up the right position. If a liquid stock has high volatility, I know I can get in and out of the position with no trouble and that I can take advantage of the price action to profit. You can visually point out a volatile stock on a chart because you see movement over time, whether itâs five days or 200 days. Trading Volume You need to understand trading volume, no matter which of the trading strategies appeals to you most. Volume tells you how many shares of a security have been traded over a specific span of time, such as between market open and close on a certain day. High volume indicates lots of trading activity in large positions. Candlestick Patterns Lots of different stock charts exist, but I prefer candlesticks. Theyâre packed with information you can digest quickly, which makes them ideal for sussing out your next play. Keep in mind, though, that even charts can deceive you. Iâve seen patterns play out over and over again, and then suddenly stop. When you buy into a position based on patterns you see on a candlestick chart, donât let your attention waver. If the price action moves against you, get out. Technical Analysis Candlestick chart patterns are part of technical analysis, which is just a fancy way of saying that you read charts. Technicals can also involve creating spreadsheets, analyzing overlapping patterns, and comparing moving averages over different periods of time. Fundamental Analysis To be honest, fundamental analysis doesnât matter much when it comes to penny stocks. You wonât be reading financial reports because they arenât available. The SEC doesnât regulate penny stocks like it does larger stocks. The fundamentals that do matter mostly revolve around news. If you hear new information about a penny stock company that could impact its price action, pay attention. Dig into the stockâs history to determine whether a similar event has occurred before. I also pay attention to promoters â not because I think they have good stock picks, but because I like to short them on the downside. Trading strategies can also involve buying earnings winners. These stocks experience big percent gains based on news. You donât want to ride the entire upswing, but take your small profits as they come. Youâre almost there⦠I have some of my key tips if your a beginner. These can be applied to any of the trading strategies weâve discussed. Iâll go over these with you in the next issue. Theyâre sure to increase your chances of success if used properly (Iâll explain everything tomorrowâ¦). Keep an eye out for my next issue. Talk to you tomorrow, Editor, Wall St. Warrior P.S. Only have a few thousands saved? No problem⦠this book can help. Tim Sykes went from about $12,000 to $7.3 MILLION over two decades before turning 40 by using this strategy⦠And he wants you to join his thousands of followers that are learning how to also. So he started a different venture and is now offering NOT ONLY this book, but a YEAR of instant access to his stock trading wisdom⦠FOR FREE* (just pay shipping) [Click here now to see this dirt cheap offer.]( K2 Financial 66 West Flagler Street STE 900 Miami, Florida 33130 United States This email was sent to {EMAIL}. Don't want to receive these emails anymore? [Unsubscribe]( [Privacy Policy]( | [Terms]( | [Risk Disclosure](