stockbee

1/15/2020

How to become a profitable trader Part 2

In part 1 of this post we looked at how you can become profitable by using some of the structural tendencies of stocks to extract money from the market. Specifically we looked at momentum and volatility cycles to make money. Today we will look at another very powerful structural tendency of stocks.

Surprising news leads to big moves.  Any surprise that leads to change in market participants views about the stock leads to big moves.
Let us look at ICHR from yesterday. It made a 28% plus move yesterday. It was possible to identify this stock ahead of time and buy at open.


These kind of news based moves happen daily. You will see FLNT today was up almost 30% plus . again stock had a surprising news last night. Based on that buying at open was easy money.

These kind of surprising news can lead to stocks making very big one day moves. And in most cases you can find these stocks before market open.

After studying thousands of such moves over the years I have figured out which kind of news has potential to make big moves in stocks. Earnings surprises is the most likely culprit. In biotech stocks it is the release of drug studies.

Based on our studies I use a methodology called NTRT and MTRT for finding such explosive moves stocks and enter them with market on open orders. NTRT and MTRT involves just 15 minutes of work after the close and before the open.

If you want to make lots of money trading stocks master these structural tendencies of stocks and you will find it easy to make money.

In part 3 we will look at some more structural tendencies of stocks.

1/13/2020

Member feedback

Hi Pradeep,
I just wanted to than you quickly for offering this service. I’ve been trading a long time and your methods are the clearest and simplest ones I’ve come across.I’ve been trading exclusively simple anticipation setups and 4% breakouts with daily trail stops . I’m up over 25k since I signed up.

Parag

How to become a profitable trader Part1

The stock market offers big opportunity for profit for the informed speculator. But not everyone who tries trading is successful and many traders are stuck in low returns or negative returns territory.

How can they become profitable?

The key to profitability in the stock market is to find structural edges in the market. Structural edges are inherent to the nature of the market moves. They exist in the market , you just need tools and techniques to extract profit from those structural edges.

What are some of the structural edges in the market?

Momentum is inherent nature of stock moves. Stocks move in short term momentum bursts of 3 to 5 days and in some rare cases 10 to 20 days. Momentum burst exist in all stock market across the world.

LX is an example of momentum burst trade. In 3 days stock made 17% move.


Like LX and KRNT you can find 1000 plus trades in a year. In order to profit from this structural tendency you need to scan for these and enter them on first day and  exit them by 3rd or 5th day based on your profit goal.

Volatility cycles is another structural tendency of stocks. A period of low volatility is followed by a breakout in either direction. By targeting low volatility periods for entries you can get a very low risk entry in to stock.


DXCM is a recent example of that. From a period of 10 day low volatility , it had a breakout and made 10% in 4 days. This kind of setup allows you to enter in anticipation.


You can find 1000 setups like NTES and DXCM in a year. All you need to do is to scan for low volatility phases or narrow range bars to find these setups.

In Part2 we will look at 2 more structural tendencies of market and how to profit from them. 

1/10/2020

Volatility Avoidance

Yesterday I did a one and half hour webinar on volatility in trading and how to avoid volatility.

The key to profitability as swing trader is to understand the role of volatility and find strategies to reduce volatility of your trading . Volatility of stocks results in volatility of your results. As a result the equity curve has roller coaster ride.

The ups and downs in equity curve results in emotional up and down as a result trading becomes painful and frustrating exercise for many. Many give up after trying it for few months or years.

If you understand how volatility can be avoided then you can make lot of money while controlling risk. This is the essence of many well designed swing trading approaches.


My  How Avoid Volatility Webinar Notes

Investors make money by taking volatility risk. If you do buy and hold or any sort of long term holds then you are willing to live with volatility of that instrument. You get rewarded for taking that volatility risk. Investors use diversification, asset allocation strategies, hedging or other techniques to reduce volatility. But essentially unless you are willing to take volatility risk you are not going to have good returns and if you want higher returns you have to be willing to take higher volatility risks.

Asset classes like small caps, emerging markets , frontier markets,  and  commodities have higher returns but volatility is high. As a result the compound returns on them over period is low.

Obviously if you are a trader you are not like investors . Essence of being good trader is to make lots of money with smoothest possible equity curve. Which means your trading has to be organized around avoiding volatility.

To many it might look like impossible task but for hundreds of years the essence of swing trading has been to try and avoid or reduce volatility. All good swing trading setups have that as their underlying motivation.

How can you lower or avoid volatility: 


  • select setups that are designed for volatility reduction
  •  select stocks that will help avoid volatility (use momentum, efficiency ratio ,  persistence values, linearity, TI65 , Top 25 using different time frames) 
  • select time frames that will allow lower volatility
  • use entry techniques like OPG, LOO, BSLO , MOC, that can give you early entries.
  • use exit techniques to lower volatility (trail, target stops, partial profits)
  • select low volatility zones to trigger trades
  • use lower time frames to time entries and exits
  • market timing

These are some of the things which can help you avoid volatility. A conscious effort must be made to reduce volatility and well designed swing trading approaches do that. 

Make money with least amount of drawdowns possible. Avoid Volatility. 

1/07/2020

A peek at last night newsletter



01/06/2020


Bootcamp Schedule 2020



January 18th and 19th Online Boot camp (fully booked)
February 22 and 23 Online Bootcamp
April 4 and 5 New Brunswick NJ $589
Email: easyguru@gmail.com

Situational Awareness

Very good market for breakouts. 


401 k update
401 k 100% invested 11/1/2019




9 million volume
PLUG SDC CRWD FB ROKU 
Top 25
PLUG FLXN SPWH OSTK ROKU
TQQQ SOXL LABU 3x

4% $ LTB
NFLX DDOG DT OSTK INSG SPLK SPOT VRTX RL TDOC FLXN DXCM PODD CDXC  CLMT CABA GLMD
IPO
DDOG DT CABA
Anticipation/Pullbacks/Reversals

Watchlist
DG AUPH CHWY HZNP DOCU BIIB GBT JAZZ



9 million volume
UAA 
4% $ LTB Weak structure

Anticipation





1/06/2020

How to profit from news plays


SAVA news of big insider buy triggered this move. 

Stocks that release news pre market can often make one day big moves. Many of them start with gap up open. Some of them are up in post market or pre market session.

Stocks release news post and pre market. Analyst upgrades tend to happen in the morning. In earnings season lot of news is released post and pre market.

Such news often leads to one day move on day of news. Sometime if the news is significant it can lead to multi week or multi month rally.

For day traders and short term swing traders news catalyst can offer a range of opportunities.

Such stocks with fresh news are called stocks in play or story stocks.

News that can affect price: Earnings

upgrades/downgrades

govt policy change

FDA decision

Natural disaster

Political instability

Insider buys

CEO/CFO change

New product launch

New order

There are many free sources of news. If you want to catch intraday moves you need to build process loop for tracking news ...

At first you will feel every news is important , but soon you will figure out what is consequential news and what should be ignored... This kind of skill building requires months of regular practice....


To become good at this do this day in and day out and also after close find out the big movers and news behind them .....

Many of these kinds of news catalyst lead to just few hours rally , some lead to longer term trends.

Those stocks tend to be neglected and then have significant catalyst.

1/03/2020

Making money using anticipation :SRPT




Low range bars tend to be followed with range expansion.

Due to market conditions closed early at profit . 

1/02/2020

Top and Bottom 100 stocks and ETF of 2019

TOP 100 stocks and ETF for 2019

AXSM CNST SSI KOD PRVB EVER RCEL DRRX ISEE HEBT SAVA MBOT OESX REKR CDLX WKHS NLTX ENPH ARWR ROKU DBD ARDX FLGT EPZM APPS ARAV NOVN ACHN AVP XBIT ADVM RETA CCXI SE SBGL MTEM PFNX CUE SEAC SOXL NK TLRA TNK ARVN CVM IOVA ATEC ZYME FRTA MRTX NVRO ITCI BLDP AUPH APTO DCPH SNAP AVDL PAYS SHOP TECL CVNA EGO UCTT LSCC CGEN SEDG TGTX SVM ZYXI LPG MODN ACAD ONCY NNA BOOT EVRI AUDC CZZ VIPS JNCE REPH PLUG ZIOP NVCR FTSV EHTH SPAR QURE AMD CRUS DRD NAT NTRA VERU PERI AVLR YETI TQQQ BLDR

Bottom 100 Stocks and ETF for 2019

SLS TVIX NVAX IFRX ASNA UVXY SOXS SLDB KZR CANF UGAZ WVE JDST LQDA APTX OILD DWT MNK EDN STIM TLRY DUST ANAB TECS APDN TUP HEPA KLXE LABD GDOT HOME DPLO BTU OBSV TLRD CASA BPT VXX VIXY BOIL WLL I SMLP RUSS SQQQ NINE AMRX RYAM AFI XRF QUAD GASL MMLP CNSL KNSA FLDM FAZ EROS XERS SCO SPPI LJPC DLTH CDEV ARLO SUPV BCRX PBYI SPXU SPXS QRTEA EXTN UBX ADMS EVH SRTY CSU CEIX PCG ABEO VAL TZA UGP LTRPA GPOR WES GUSH ATRA CTSO TGS TEN GTT BNFT GME TWOU BBAR FPRX QID SDOW TH

12/30/2019

Profiting from high volume breakout :NIO

NIO was one of the first stocks to show up in 4% b/o and had 9 million plus volume in first 15 minutes or so. It also had earnings news so was showing up in earnings scan in TI (Trade Ideas Software) 


Typically I do not buy very low priced stocks , but today there was not much showing up in $ b/o scans early , so I bought it. Stop was 20 cents from entry.

Stock kept going up . I sold once it had 800 dollars profit, which on whiskey scale is one 30 year whiskey.

It kept going up after that also .

Here is handy guide to our whiskey scale used on members site.

What is whiskey scale

you will see whiskey multiples mentioned a lot on this site . Here is your handy guide to whiskey scale
Voss water case 200 dollars
half whiskey (30 year bottle)=400 dollar
full whiskey =800 dollar plus . 🥃
Case of whiskey = 10000 dollar 🥃🥃🥃🥃🥃🥃🥃🥃🥃🥃
my risk tolerance is 40 cents on trade with 1000 share size. The way I look at it if I lose 400 dollars on trade I lose half whiskey bottle
So if someone says made a whiskey he has 800 plus profit on trade. 🥃

12/27/2019

Member feedback

Thanks for helping us achieve our trading goals. This was the best year I ever had. I am up triple digits for years and very confident I can do it again next year.

Best part is I did not buy any pick from anyone. Thanks to your site I learned how to setup scans  and run my own scans and take trades. I am now fully in charge of my process. Thanks for introducing me to trailing stops. That has done wonder for my results.

I have learned so much from the boot camp and looking forward to attending another one next year.

And before I forget , please continue the daily zoom calls, they are extremely helpful in quickly fixing trading issues. I have used the calls to improve my process and look forward to them everyday.

Lee