Top gainers and losers Flashcards
look at 5 core things
- support and resistance levels,
- volume,
- trend placements,
- how extended is a trend, that sort of thing,
- correction periods in the market, and
- also what the momentum is on a particular move. Because I find it leads a really good indication of ________________________________
where the reaction to that move is going to go, whether it’s going to be a strong pullback or it’s going to fall into a trading range
if something is moving very slowly higher compared to previous upside moves, then the chances are that when that corrects, it’s going to have a _______________________.
stronger correction
So, it has a higher probability of reversing quickly. That’s something you would see like on a trading range breakout where, let’s say, there was a stronger than average upside move and then the security fell into basically a trading range, falling, flat, going back and forth, up and down between support and resistance levels. Well, if it breaks out from that range at a slower momentum or a slower pace, then the upside move heading into that range, then there is a higher chance that it’s going to be a false breakout.
scanning in the mornings, I’m going through and I’m looking at pre-market gainers, pre-market losers, and basically what is the most active security showing that type of momentum. Often, I find that these will last for _________________________________
a couple of weeks to a couple months at a time and then other ones will start to come into favour, and you’ll start to see them pop up on the scan more and more often.
I think every trader could really learn from ____________________________. everybody says well you can say something, “hindsight is 20/20,” right? Well, as you’re seeing things over and over again, you’re starting to see them sooner and sooner before the pattern completes or before the series of events unfold.
their own journal, whether writing their own thoughts about the market and what they expect
it’s always easier to see the left side of the chart than it is the right side of the chart. So, the sooner you can see that right side forming, I guess the better
edge you have over all those traders that don’t see it.
Is there anything we can do to kind of jump-start that ability to see the right side of the chart forming quicker?
if you’re actually printing out charts of what you are trading that show your entries and your exit on the chart itself, then that’s the first step and you can take that farther and look for other examples where you have strategies that are very similar that played out and had better than expected results as well as those that failed. And, the more you compile those and the more you look at them, then the quicker you are going to be able to move to that next step where you are starting to see things sooner and sooner. But if you don’t take that first step to print it out and actually look at them, it’s going to take you many, many years before you reach that level. So, you can really jump start something where it might take you a year to see something if you don’t do a journal and it might only take you a couple of weeks if you’re printing it out and looking and studying your journal.
What are your recommendations there for somebody who wants to get on a great trend but may not be familiar with market?
Toni Hansen: Well, even when you’re looking at things like the next great thing or the next hottest thing, that’s kind of where I focus on with stocks is I am looking for where that strongest momentum is and that strongest activity. But I’m not focusing upon it just because it’s in the news.
Have you found that that’s kind of a fool’s game to trade those reversals or is it just that you have a better chance yourself that I’m making money with these,
Toni Hansen: Actually, that’s a good question because I don’t just trade continuation patterns. I do trade those reversal patterns as well. But I’m not looking at trying to catch a falling knife basically as they say. I’m looking for something that shows that there’s really exhaustion in that move. And oftentimes, I’m looking for momentums to shift at support levels where yeah, you have that strong initial drop in the market or a strong initial drop in the securities. But I’m not trying to buy that sharp drop. I’m looking for something where maybe it starts to make slightly lower lows. So, the overall channels start to shift and you’ll start to see like a slower descent and then I will take it from there. So, I’m looking at volume, the trend placement. Is the trend really extended on the downside support and resistance levels? What kind of upside resistance is there going to be in that sort of thing?
if I think that I’m kind of coming into that sweet spot where security is more likely to reverse but it might not quite be there, then I might ______________________________
take a small initial position and then start to add as there is confirmation of it.
higher the probability of a win the lower a _____________________ you can accept.
The lower the probability the higher a _______________ is required to justify the trade.
Risk Reward ratio
Risk Reward ratio