Education Center
Regarding stop orders, I have been told that if I place a sell stop order, the market makers may “dip” down and take me out of my position even though the bid may be higher. Because of this, I haven’t placed official sell stop orders, yet because I haven’t I have lost more money on some trades than if I had placed the orders. Also when do you use sell “stop orders” vs. sell “stop limit orders”?
Your concern is well-founded, but your second statement is proof that even though you can lose out on some profits, if you cannot watch the market, stops may be the only friend you have. We have been the victim of a market maker running a price down and taking out a position where we were […]
How do you identify when a stock has started back up after a fall?
When a stock is falling, the first thing we look for are support levels-is there an up trendline to bounce off of, is it using its short term moving averages as support, are there other consolidation levels that may act as support? In a downtrending market as we have had the past few months, we […]
When a stock you are following meets your buy criteria, what kind of order do you place with your broker, limit or market?
We have discussed in the past that we do not use market orders-we usually end up with poor trades. Indeed, I cannot recall when I ever received a ‘good’ trade on a market order. That is why we always limit our orders. If the market is moving fast and we really want the position, we […]
I’ve noticed this month you have referred to the 20 day moving average a lot and have not referred to the 18 day moving average that much. Are you replacing the 18 to the 20 or are there certain market conditions now that lead you to look more at the 20 day moving average?
No, we are not replacing the 18 day moving average with the 20, but some stocks tend to use that level as support more often than the other averages. Moreover, at certain times, even stocks that normally use the 18 day moving average (the majority of stocks) will start using the 20 day. When we […]
Could you give some guidelines as to which stocks an individual should focus on? Do you agree with the school of thought that an individual should become familiar with a handful of stocks and focus his/her trading on those stocks?
We cover many potentially profitable plays in our reports. There are always many different plays that fit each investor’s goals, and we try to give a wide range of plays that we think are money makers so we can have plays that appeal to as wide a range of our subscribers as possible. Many subscribers […]
I read the [your service] for advice everyday, but it seems that it only helps out with the people who play options. I unfortunately do not play options. I just play the individual stocks, and as your newsletter helps with the options and when to buy and sell those options, it does not get that specific with your feelings on individual stocks and when you are positive or negative at certain prices. I am not looking for the newsletter to get specific it just seems that the options people get more heads up.
We do play a lot of options as it allows us to leverage our trading capital to get the most out of a play and to allow us to make more plays. Options are, however, a wasting asset and are therefore much riskier. Moreover, with volatility and other factors at play, options require an understanding […]
What are the sites for intraday volume, etc. for the major averages?
http://quote.yahoo.com/m0?u
In a recent report you stated “just minutes after that we saw the first green bar on our realtime NASDAQ chart appear.” What program are you running that gives you this signal?
We use eSignal. We have tried many realtime services, some are cheaper, but we like eSignal because, of all things, it is easy to see the trades at a glance as they occur. Moreover, if you make 5 or so trades with some brokerages they have alliances with, you can get the service basically for […]
At times you refer to overhead supply. What is it?
Overhead supply refers to those buyers who bought a stock at its recent highs before it sold down. After the early year rally in the NASDAQ, there are many investors holding stocks at a cost basis higher than the current stock price. The problem with overhead supply is that those holders tend to sell into […]
With respect to playing puts, I am interested if there are good signs to look for to see tops and movement down.
Individual stocks give signs that they are topping. When playing pre-split stocks, we keep a keen eye for telltale signs when a stock may have ended its momentum-based run into its split. These are useful for looking at any stock to determine if a top is approaching. One thing to look for is a surge […]
