Attached are some member comments, which I would like to address:
Theses first two questions are similar and reflect many questions/comments I get.
“In all honesty I’m down 34% following you. I can’t pick every stock pick you make but I seem to be picking all the bad ones. I’m not blaming you at all. Just bad picks on my part. But when I buy and it tanks so fast, it hurts.”
“I never seem to get filled close to your calls, and I’m either filling at a higher price or not getting filled at all and missing out on some of your great calls.”
The best advice I can give new traders to my room is take at least a week and only paper trade. My trading style and the calls I make happen very fast and if you are not ready these stocks can leave without you or leave you with losses. I understand your issue and that is why I stress you paper trade and watch. You will quickly learn by simply watching and not having to manage a position.
Here are some ideas to achieve success that other traders who follow me have adapted and been successful.
1) Watch only my feed during the two hours we are live. You see my success rate, trust that I will make the right calls and be ready. If you are watching another stock, or a TV show, or checking your phone and I make a call, by the time you get to a chart, call up the symbol, find the buy button, you may already be late. Give it try watching only my calls and feed.
2) Have a chart up or two up and ready, have order entry preset with a quantity and ready to hit the button.
3) Set the preset quantity to either 500 or 1000 shares. Just start small until you learn my method. This will take pressure off and allow you to lose small but still win as well. I had a member only trade 1000 shares and he made over $500 his first day.
By watching only my feed and calls and having the charts up with the buy order ready with preset quantity will absolutely have you prepared to move quickly. Try it. I think it will help.
As a follow up to the above questions I wanted to briefly explain my thought process and actions I take in making a trade. I hope this helps and acts as a guide or checklist when entering a trade. Of course the more you do it the quick and better you will become.
With respect to alerts let me just say I am trying to do a better job posting what I’m watching by either saying ABCD ww (worth watching), ABCD waking up, or ABCD volume. This should give the room a signal to switch to that chart/L2 immediately to see if it has the potential that I might be seeing. Let me give you an example of how my trade plays out from the time I see something to the time I get filled. Again, I use ETrade Pro which I highly recommend.
When I see a potential opportunity, I click on the symbol and that immediately populates my level 2 box, my 5 minute chart and my daily chart.
The daily chart gives me a quick picture of where the stock is today compared to the past 50 days and the most important thing I look for is the volume. What is the volume today compared to the last 50 days. The higher the volume the better.
The five minute chart shows me where the stock is in relation to the past 5 minute candlesticks including pre-market, and L2, (Level 2) tells me if the bid is stacked with orders and if the ask looks light on orders for upward appreciation.
If I decide to enter a trade I either right click on the chart at the price I want and an order box appears with the price already filled in. It is already set for a limit order and I enter my shares and it’s off to be filled, within seconds. Or I have hot keys set up as well that allow me to buy and sell at the touch of a button.
In addition, a lot of the problems I hear in the room are the tools some are using. Many are using cheap discount brokers like Robin Hood, Loyal 3, Speedtrader or SureTrader which probably aren’t giving you fast fills or could have internet interruptions. Or the software they provide isn’t sophisticated enough to let you catch the action quick enough. And one person mentioned that he was trading on his phone, which is a big no-no. If you’re not sitting in front of a computer with the correct tools, you will get burned.
We joke in the room that day trading is fast and that you need to be Jimmy John’s fast but nothing is further from the truth. Just a few seconds can make all the difference in getting filled at the price you want vs. chasing a stock or losing out because you couldn’t get filled. If you seriously want to be good and make serious money, spend a few extra dollars to get the right tools.
“I missed your call on GBR which was outstanding by the way, but how did you know to hold it so long for a double?”
Cut your losers quick and let your winners run! It is something successful traders learn over time and what less successful traders struggle with. GBR, which ran from $1.80 to $4.18 (Fri, 6/10/16) is the whale trade we are all looking for. I noticed the stock and clicked the symbol which populated my charts and L2 in seconds. The first thing I noticed on the daily chart was that Thursday’s range was $1.29 to $2.37. On Wednesday, the stock range was .87 to $2.88. Before that, the stock had traded between .77 and $1.05 with roughly 2000 shares in daily volume. So right away, I knew this stock had a lot of interest with huge volume. Remember, volume precludes price. I called GBR in the room at 10:10a at $2.02 buying 2500 shares. We had discussed GBR in the room as I called it Thursday as well. The biggest factor I pointed out in the chatroom about GBR was the float. Less than 1 million shares. If you find a stock that trades 924M on Wednesday, 1M on Thursday and know that the float is less than 1 million, you better be ready because this has the potential to fly. That’s exactly what it did. Stocks like that are going to run and run big. There was only one red volume candlestick between 10:10a and 10:47a when the stock hit the high. I know some of the members panic thinking that the stock is going up 10 cents and then coming right back down, but if you know the background of the daily chart, the float, and you’re glued to the 5 minute chart and your L2, you sit back and watch your position go from a +14% to a +131% without a worry in the world. Yes, the stock pulled back several times but buyers kept stepping in to move it higher. When I’m in a position, as long as I’m positive, I will let a stock run which does involve some pullbacks to lower prices. This is something you will learn through experience and learning to be patient and trusting your live charts and L2. In addition everyone should know the basic chart patterns and recognize such patterns as bull and bear flags as well as how to read L2 . This knowledge will help you know when to hold and when to fold.
“Why don’t you short stocks?”
Shorting involves borrowing which is just something I don’t do….including margin. I’ve seen way too many traders get burned by shorting and using margin to fund their accounts. Am I missing opportunities? Absolutely. But there are plenty of safe new opportunities around the corner. Rules I have set and will always follow.
“Can you let members know of your specific exits, especially on losing trades?”
As you know, my goal is to take less than a $100 loss on any trade. I’m pretty good at doing that, but there are times when I do take bigger losses. I do give my trades more wiggle room, but I can afford to do that. As a newbie or someone with limited capital…YOU CAN’T LET THIS HAPPEN. If it kills you to take a $100 loss, day trading isn’t for you. You must learn discipline and learn to take small losses. If you follow this principle you will make money as there will be more winners than losers. There a many times I buy something and it goes up 6-10 cents and stops, then heads back down. I don’t sit there and watch it fall below my entry price. I’m out even as the trade didn’t work. IF THE TRADE ISN’T WORKING – GET OUT! And in regards to alerting the chat room, I do my best but I’m watching so many things it’s hard to execute trades and alert everyone to my every move. Set your own personal rules and stick to them.
Fast rising stocks like GBR do not fill on limit buys. Do you recommend market buys in certain scenarios?
Absolutely not. If you have the right tools in place, there should be no reason you can’t fill a limit order within 2-5 cents of my call. Most of the time I’m buying higher than some members in the room. If you don’t get filled, wait patiently for another opportunity instead of chasing it. Again, my rules for orders.
Limit orders on buys as you want a specific price. Market orders on sells as you just want out, quickly.
Hope the above helps answer some questions and helps you become a better trader!