How to use $ scan to make $

Swing Trading Watch List April 26, 2017

How to make money trading

First step if you want to make money trading is to learn the language of setups.

In your trading journey you will have significant breakthroughs once you learn the language of setups. Profitable traders think in setup language while novices think in individual stock term.
Novices dream about holding stocks forever. Novices think in terms of killing it in market without knowing how. Novices are suckers for stock picks.
In a day you will see several posts by members about individual stocks. Something catches their fancy and or they know about a particular stock and they are enamored by it and want to know whether it is good buy or not.That thinking is not much of help.
Setup oriented thinking is about finding a basic strategy with significant edge. Setup oriented thinking is about timeframes, holding periods, size, risk management.
Setup oriented thinking is process based thinking. It is how do I find this kind of stock again and again kind of thinking. It is about ways to catch fish.
Setup selection is key to successful trading. Setup selection allows you to condition your behavior. It allows you to develop your procedural memory. It allows you to automate your thinking. Setup selection will bring clarity to your thinking
When it comes to setup selection your time frame is very critical. A setup that is good for day trader may not be good for swing trader. A swing trading setup may be extended setup for position trader.
First step in setup selection is to decide your timeframe and then look for setups in that timeframes. If you want to be position trader , then study position trading setups.


How to use the 4% and $b/o scan :April25, 2017

What to look for in earnings

We are in the middle of earnings season and here are some of the things to look for in earnings:

  • During the earnings season hundreds of companies announce earnings.
  • Most of those earnings are of no use.
  • What you need to look for is a game changing earnings.
  • Only 1 or 2% of the companies will have earnings which are really worth jumping into immediately.
  • Also you must look at where the earning is in its earnings cycle.
  • Your primary objective to is to find stocks in early phase of their earnings acceleration cycle.
  • In the stock has been rallying and this is the third or fourth earning acceleration then it has been already priced into the stock.
  • Prior price neglect is extremely critical when looking at earnings.
  • Ideally you should be looking for stocks with 3 to 4 months or more of neglect.
  • When you look at the company earnings look at the magnitude of the earning surprise.
  • On a day-to-day basis, many companies beat earnings by one or two cents.
  • Those companies are not worth a second look.
  • Also when looking at the earning look at it whether there is the analyst estimate on it.
  • Primary look for companies with no analyst estimate or only 1 or 2 analyst covering the stock.
  • If the company doesn't have analyst estimate it tells you that it is a neglected company.
  • If the company has analyst estimate then you should look for consensus earning numbers or Whisper numbers.
  • If a company beats consensus earnings estimate by a wide margin then it is attractive candidate.
  • You also made to look at whether company preannounced earnings or guided higher.
  • In such cases, the real earnings announcement does not move the stock.
  • How you look at earnings also depends on your trading style.
  • If you're primarily a daytrader, then any earnings beat is worth looking at.
  • But if you're looking for a longer duration move then you need to concentrate on extreme earnings. Extreme earnings growth of 100% plus from a big base.
  • Companies over the years have become better at managing their earnings.
  • So, they skillfully manage investors expectations.
  • They preannounce or guide higher or lower the guidance ahead of the earnings so that there is no earnings shock.
  • In spite of such earnings expectation management, earnings surprises happen.
  • That is where the opportunity is