Monday, June 25, 2012

Review of last night's watch list and a few thoughts on the markets

As I stated before, I was unable to trade today due to the cursed PDT rule and had to just watch from the sidelines. In the video below I go over the watches from last night. There were some nice movers in there today...Enjoy!

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If you want to see what I'll be looking at tomorrow and how I plan to play them in detail; click on the "Current Watch List" tab above. Apart from the watches, I wanted to shares a few notes that I made for myself from observing the past few days price action:

1. The US markets are trend less at the moment. They are stuck in ranges similar to the summer of 2011. So if you're a swing trader like me who looks for 2 - 5 day moves, I recommend keeping high cash and being very selective with trades. In addition, cut your usual per trade risk in half (I have cut mine from 1% to 0.5%). Look to hit singles in stead of home runs, that is, set conservative profit targets and as soon as your profit target is hit book all profits, don't hold partials. Be prepared to hold through steep intra-day pull backs.

2. The health sector is currently leading the market (check out a chart of $XLV). If you look to take any long exposure, make sure most of it is here granted you've done the necessary due diligence before hand of course. DO NOT attempt to short these bio-techs that look over extended! That's a recipe for disaster!

Hope you found this post useful. Be sure to subscribe for updates via email above at the top right.

Good luck and good trading!

2 comments:

  1. Do you ever use options with this strategy? If so, I think it would be interesting to hear how you've used them.

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  2. No I don't use options. For my style of trading; one needs to be able to get in and out fast with precision and options don't really allow for that especially with the lower priced and generally thinner stocks that I trade.

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