How much emphasis to you place on the overall trend of the market?
The overall trend is definitely important, but stocks often move on their own merits. I am extra vigilant trading long in a declining environment or short in a bullish environment.
Since the market is looking like it may take a turn lower, do you hesitate more on long positions regardless of the stocks trend based on the belief that “a low tide sinks all ships”?
Yes, I will take less long trades and when I do I am much quicker to recognize a gain which may appear to be about to deteriorate and even quicker to take a loss. I also reduce share size as risk levels increase in either direction.
I have also noticed that a lot of your stocks to watch are less than $20 a share. Do these lower priced stocks move differently, or is it just a coincidence?
These stocks do seem to move more “cleanly” than the larger cap stocks because they may not be large enough to included in program trades. Notice Sunday’s TRADE IDEAS to watch. Of the longs; 9 were under $20/share and 9 were greater than $20/share and all of the short candidates were above $20.
Lastly, would it be beneficial for a trader with less than a $25k pattern day trade account to trade larger time frames with longer swing trades due to the inability to get out of a position as quickly? Thanks!
The $25K is a problem for some traders. Stretching your estimated trading timeframe is one solution, but do not give your losers extra time to “fix themselves” you cannot use time as an excuse not to exit at the first signs the market may not agree with your position.
P.S. I’m a long-time fan of your blog and look forward to reading your book!
After books are shipped out on Saturday, I am going to post these types of questions in the BONUS tab at www.technicalanalysisbook.com The username and password to access that page are on the last page of the book. That site is the only place to purchase the book, you will not find it on Amazon or anywhere else.