Coordinate this page with the Chart Checklist and
the Stock Research
page. Regarding the use of this page, don't even
think that all you have to do is memorize the tons of material here and
then start trading.
This is not all that trading is about. As informative as this is,
it is precisely the reason you need a coach to walk you through
this
AND everything else that goes into trading. If you rely on the
material herein only... you're on your own.
YOU WILL NEED A TRADING COACH TO SORT IT ALL OUT!
Looking
At Items Not On The
Chart That Will Affect Your Trade
Put
the trading odds in your favor. 772-228-8022 or
email
or Enroll
Now
Is this trade worth doing based on the risk/reward ratio? Is the stop a reasonable distance away from the entry? Are
you willing to lose that amount if
the trade goes against you?
You
need a minimum 2:1 Risk to Reward Ratio.
Do
this first before going too far, you may not even have a potentially
profitable trade.
For the ideal trade, we look for stocks in
up or down trends because the price action tells us
the stock is in or out of favor. You have a higher probability trade if
the stock, the sector and the broad markets are
all trending in the same direction.
What's is the news?
Check news headlines going back 30-45 days. Any unresolved issues
that could or would be resolved while you may own the stock, i.e., court
or regulatory rulings yet to be announced? Is the news generally
positive or negative? Is there a headline
mentioning some sort of pending action, i.e. court decision,
regulatory decision, analyst upgrade or downgrade..etc. Is there a split
announcement?
This is part of the stock's
environment, just like the trend. You don't trade the news,
you trade the reaction to the news.
News will trump any chart pattern.
When will
earnings be announced?
When will earnings be announced? Is their a "powerhouse" in the stock's sector that is about
to
announce?
You don't want to own the
stock on the announcement date and you may not want to own it if a
"powerhouse" in its sector is due to announce soon either.
What
government economic announcements
are due this week and next? When you use Yahoo link and click
on the Statistic of the day it will rate it from A to F in terms
of significance.
Are any of the
coming economic announcements rated as an "A" or "B" ?
The government's
weekly announcements every week can and do affect the markets, sometimes
in a very big way. "A" or "B" ratings on the
announcement can be very powerful in consequences.
Are company earnings going up or down from quarter to quarter? Verified the relative strength of the company compared to its sector? Does it lead the pack? Checked the last quarterly
earnings announcement in the news for comments regarding the company's
expectation for the next quarter?
These items, when verified,
have more to do with giving you added confidence in your trade and
position. Positive chart with positive fundamentals with positive
trends lend themselves to profitable trades.
Decide on a strategy?
Go Long the stock? Go Short the stock? Buy the call
option? Short the call
option? Use an option spread,
straddle, collar, etc.? Buy the put option? Short the put
option? Hedge with an option
or a futures contract? Go long a futures contract? Go short a futures
contract?
You
have to have an entry and exit strategy. What will you do if the trade goes against you?
Is the trade going against you based on company specific news?
Sector news? Broad market's news?
Are you keeping notes,
a
journal, on your trade? What are you learning from
your
trade journal?
What specifically did you see in the
chart's indicators?
How is the sector doing?
What are the broad market conditions?
Any other research you did that pushed you to act?
What off-chart events were you reacting to, if any?
Note, if there is a
negative sign or two that you observed, you need to make note
of that as well.
<<< IF YOU DON'T KEEP NOTES, HOW CAN YOU POSSIBLY IMPROVE IF YOU DON'T KNOW WHAT WENT RIGHT OR WRONG?
