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The
basics of our strategy can be recognized from our name
– “Stock Next Day” which means that we select
stocks a few days before we believe they will begin to
move. Actually, we pick stocks today to trade them
tomorrow. That means most of the stocks from our list
have not moved yet in the desired direction, or not
moved yet significantly.
But! - different markets require different strategy!
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Advanced
technical analysis allows us to identify the best time
to open or close a position. Combining the proper money
management and the correct position management, this
will allow you to receive continuous profits no matter
which direction the market goes.
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Most
of the time price moves in waves that can last
anywhere from a few weeks to a few months. Waves
create a channel between two levels, the
resistance on the top and the support on the
bottom. When trend reaches one of those levels it
usually reverses and goes back. But those levels
are not permanent. They are changing all the time
and because of this they make a lot of trouble for
traders. We find the technical indicators we use
to be most accurate and consistent. They show us
when trend reaches some of the levels and the
current trend direction. Click on the index in our
“Market Overview” to see some of our
indicators on-line we've selected for your
reference. In the top window above the price chart
you can see one of the indicators that most
accurately shows the short-term cycles. Follow it
and when the indicator is reversing down from the
top – close the long position and open a short
position, and when it is reversing up from the
bottom – close the short position and open a
long position. To increase your chances of
profitability, search for the best opportunity and
try to open a position before the price moves
significantly.
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An
important part of our strategy is to follow the
flow of the markets. It means to open mostly long
positions on up-trending markets and short
positions on down trending markets. This increases
your chances for a profit by up to 4 times. When
the trend reverses it’s better to wait until the
reverse has been completed.
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The
next important thing in trading is proper money
management. Proper money management means to
spread your capital over different positions so
you’re protected. Expectable loss of one
position may never exceed 1-2% of your whole
trading capital. In other words your investment in
one position should not be more than approximately
10% of your entire portfolio.
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You
have to decide personally whether to use loss cut
stop orders or not. Most of the professional traders make
permanent profit because they cut losses quickly.
Learn from professionals, not from the always
losing mass. Free trading tips about loss cut
stop orders you can find here.
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You
can use limit orders, especially if you have access to
Level 2 quotes. If you see a good opportunity – it’s
better to use simple market orders instead. Never place
market orders before the market opens especially to open
a position.
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If
an earning release is coming out soon it’s
better
not to open a position before the release’s
contents are announced. You can access sites about
earning releases in our links section. |
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And
last: please remember - we are not giving any real
investment advice here. Here we just share our knowledge
and experience, and we suggest you to use all
information here for educational purposes only. This is not an easy business, you need to
invest a lot of time and effort to be successful, and
our free stock pick is going to be just a little help.
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The
Risk of Loss in Active Electronic Trading can be
substantial. Especially with the stocks with low
price
(Penny
Stocks) and low volume stocks. You
should carefully consider whether such trading is
suitable for you.
Please
read:
SEC's
Speech on Online Trading.
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