Is that stock really moving or its it just a setup?

I want to address something that sometimes newer or inexperienced traders miss. Just because a stock price is fluctuating doesnt mean it is moving. It is very important that you pay attention to the amount of stock being bought or sold. A purchase of 50 shares moves the price just the same as a purchase of 5000 shares.
When a stock moves up or down on very small purchases or sells, it is mostly likely a person or promotion trying to "paint" the chart to fill in gaps and make it look solid.

Most of your trading platforms have detailed quotes that will include buy and sell amounts even if they are 15 or 20 minute delays. You can also pay attention to the bid and ask share amounts in your trading platforms to see whats on deck.

Remember the predator promoters think we are stupid and wont notice a buy or sell of a stock at a meager 5 or 10 dollars and we will look at only the price change. As always dig deeper and dont give in to the hype they will create.

FREE Stock Trading Tools 101, my favorite busystock.com

I have been talking about FREE sites you can use to practice trading on and eventually use when you stop paper trading.  I will start with one of my favorite sites today.  It's called busy stocks.  The link you can check out is:  http://busystock.com/  It has a stock Screener, Top stocks running by percentages, Pivots, Industries runners in all indices, ETF's, Earnings, and Forex. It lists all tiers of trading, so what ever is your forte, you will find it there.  I have the top 100 market hour gainers and losers bookmarked on my browser for easy access and check it out frequently throughout the day.  I wanna know who is hot and who is not.

http://busystock.com/stocklist.php

This is what it lists on their site for FREE:

BusyStock.com is an emerging provider of financial service with a distinctive approach. BusyStock.com offers a fresh perspective beyond what traditional data can reveal.

You can even do an executive search.  Remember I always like to know who the CEO is of a specific company when I do my due diligence.

If you like looking at a heat map of stocks, they have a very user friendly one.  The colors are much easier to look at and figure out than some other sites I have seen recently.

• Stock Screener: Cover 28,000+ stocks with 100+ criteria to filter/sort. The best stock screener on the web.

• Earnings Research: Multiple filters on Earnings Calendar and 10+ years earnings history data for stocks;

• Pivot Points Calculator: One click Pivot Points Calculator with auto data entry and Grouping Feature;

• Cloud500: Track S&P500 real-time! Monitor sector rotation and strength at the minute it happens;

• Market Movers: Track pre-market, after-market never been easier;

• Day-trading Indicators: Some unique trading indicators, such as 5-day high/low, 20-day hig/low, open gap, change from open, various moving average comparison, ATR, RSI, Williams %R and MFI, all sortable and filterable.

Whether you are a novice trader or an amateur investor seeking to greatly improving your skills or a seasoned veteran needing more insight for your trades, BusyStock.com will provide those benefits for you.

It is a very cool FREE site tool, so check it out.  I can't stress enough how important finding Free tools is when they are available to you and seeking to greatly improve our skills.  Use them to the fullest and profit more.  That is the most important thing, always profit.  Whether it's 20%, 30% or 50% that you are looking for, figure in all the bottom line fee's and costs.  Figure out what kind of trader you are and stick to it.  STICK to a plan.

I will continue to pass on the FREE stuff to you so keep checking back.  Until tomorrow, Happy Trading!

1 way to tell if someone is front loading a particular stock

One way to tell if someone is front loading a particular stock is:

If someone is loading up on stock shares before news, a pump, a filing, etc...you'll see that volume on the chart. Now here is one of the ways of finding it.....

Volume trends. What does this mean? It means volume moves in up trends and down trends. If you look at the volume before the pump, there is hardly any at all.  In front loading it sort of looks like a stair case, where the volume increases/decreases slowly every day.

Here's an example; I googled AAPT compensation and found an alert the end of January. See where the volume started increasing before???

 

Now in this case, if you had gotten in before the breakout then that's great. But you need to know when to get out also.  Remember I watch the 50 day moving average.  By this chart you can see once the share price dropped below the 50 M/A the downtrend started.  

If you look at April someone tried to run it again for a second leg and gave a little of a gain, but again look at where the 50 M/A is.  Cuts right through and didn’t want to run anymore.  Hopefully you are out back on the first leg before the downtrend started and not a bag holder.  Learn to watch the moving averages and volume

Volume is probably the most important indicator with penny stocks. That's what all pumps are about, it's all about the volume. And most penny stocks are pumped at some point in time and very volitile.  So watching the volume is very, very important.

Stay tuned, do your due diligence and have a green day.

Paper trading and Getting out on a Friday.......

I mentioned paper trading and how it can help hone your trading skills in earlier entries, but today I wanted to  elaborate a little more on paper trading..  The number one thing paper trading does for me is gives me experience in trading without the pressure of using actual money. This gives me the ultimate environment to trade in, emotionally free. Often when we are trading with our money we get caught up in our want and desire to make money. This can cause us to make emotional and rash decisions and forget our game plan of limiting our losses or getting to a certain preset profit percentage on a stock. Fridays tend to be very erratic and unpredictable as other traders sell off to take either profits or losses for the week. Remember I usually dont hold a position through a weekend unless I know for sure a position I am holding is long term. I tend to like to try to sell by the end of day Thursday so as to avoid the mess that Fridays can become. If for some reason I am unable to sell on Thursday I will use the first hour of trading Friday and the increase in volume to move my stock. Make sense?  The more a stock moves the easier it is to buy or in this case sell it and start looking for my next ride. Setting stop losses allow me to limit the amount I lose and setting a specific profit percentage in my mind allows me to grow my money consistently rather than erratically. Give me 30% profit on my money on every trade and I will run all the way to the bank smiling my best smile. In conclusion I want to again say keep the emotions OUT of your trading and you will become a much better and more consistent trader and hopefully richer than if you trade on emotion. This weekend Ill be writing about the ways I read news on companies leading into next weeks topic...... In depth Due Diligence.

Active Trading

Becoming a savvy trader is a constant learning process. So many things affect the markets in very drastic ways. Humans are fearful animals and it doesnt take much to spook us especially when it comes to money. Learning to set aside your emotions so that you can think clearly when trading stocks is very essential to success as an active trader. The consistently most volatile time of the trading day is the first hour of trading, Stocks tend to what we call gap up prior to the open and with the flurry of everybody trying to get in, it is the most emotional time. I like to wait till a stock has settled down AFTER the first hour. Lets say for instance the prior day a stock closed at $1.00. During the overnight the company may have released news or earnings reports that spur traders to place orders prior to the open. Early premarket traders also place orders which can be higher than the stock closed at the end of the prior day. when the market opens lets say the stock opens at $1.25 per share. Thats a huge 25% gap up that once the market opens will cause a strong demand for the stock causing it to go up even higher until,those guys who bought in early or placed early orders at say $1.00 decide to take profits or sell entirely causing the price to come down sometimes even lower than the stock closed the day before. This is what we call filling the gap. Alot of times all of this activity happens quickly in say 10 or 15 minutes and lasts about that first hour. Alot of money is lost getting in too early. I wait until i see the gap down and catch the price on the way back up. Sometimes it is very difficult to wait but ill tell you its much more satisfying when on occasion the stock doesnt come back up and I still have all of my money. I also like to be out of a stock before the last hour of the day, unless Im holding my position long term. The same flurry that happens at the open alot of times also happens at the close as traders look to get out or those who missed the boat earlier try to get in so as to have a position for the next day. I rarely hold a stock longer than 2 to 3 days as i like to stay aggressive as a trader. This is why it is so so important to papertrade first and find out what kind of trader you are and to also continue to hone your trading skills. tommorrow I will talk more about paper trading and honing those skills. Until then..........