How to trade the market short term when there is volatility.
You think the Nasdaq is going to bounce. You buy the $TQQQ. You want to short you buy the $SQQQ.
Practice first until you understand how they work.
With the S&P you use the $UPRO and the $SPXU.
Right now it's a big cap game.
Big money moving.
Because it's Friday.
The big % winning small cap day trading stocks usually peak out around 10:00 am-11:00 am.
After that only a few with small floats or massive volume will go even higher.
What kind if Day stock trade is it?
Is it a banger that can go much higher?
Is it a penny stock? A small float? A bounce trade?
Also because some new traders on margin have limited trades. They should stick with only "Banger Day Trades)
Please #1.
In this kind of market a 10% mental stop loss is a Must!
If the day trdae goes down 10% then you lost on that one.
You should be putting no more than 5% of your portfolio in on day trades.
So if you have $20,000 in your account.
That's a $1000 trade.
2 trades I'll be looking for tomorrow.
1) Small floats with big news.
2) Small floats recently decimated where traders are now going in for the pump higher.
Friends ask how do I decide when the S&P is short term oversold and time to go in for a bounce trade.
There are a few things that are important.
1) What is the 50 sma doing? 2) has the S&P broke over the 10 sma. 3) What's the distance of the gap between the 50 and the price? etc
It's a Friday afternoon.
So that's why I went with $SGMA.
Because it had small float and big volume and came on late in the days off the news.
Those kinds of stocks is what you need on Friday after noon.
The formula for trading a normal stock trade.
Find a good stock at a good price. Have a 10% mental stop loss.
If it shoots up. You sell all of it if you think it's coming back down. Only 1/2 if you think it can go up more with a stop where you bought it and try to get more.
A stock CAN NOT go up on lighter volume after it Spikes on Extreme heavy volume.
Why?
Too much resistance.
Traders who bought at the top will sell if the stock bounces to cut their loss.
It's a scientific formula.
A new friend wrote me.
I watch your trades.
Over 90% winners how do you do it?
My trades don't go higher.
1) I'm day trading. I'm buying small stocks taking strong volume with strong uptrend and when they go higher I'm selling and taking profits.
A real key about trading is knowing your trade.
Getting in at right price, Knowing your price targets to sell, are you scalping? Day Trading? Swinging? Holding Longer Term?
What kind of stock and trade is it?
Know your trade!
This is were discipline comes in when trading.
1) Know your trade. Is it a Scalp, Day Trade, Swing, Long Term?
know your objective.
Know ahead of time when you plan on taking profits if the stock goes higher in that time period.
Well hopefully you dumped all those day trades on $DATS, $GROM, $SALM etc after they soared after the open.
It's FRIDAY and as you already know.
Day trading peaks out around 10:00 am.
All but a few stocks come down from highs.