How to Know What You’re Going to Trade

I’ve gotten a lot of mail recently from people saying that they’re changing their strategy and are starting to day-trade alongside me.

To all of you just starting out, I say congratulations on taking the first step on a long journey ahead.

There will be boring days. There will be bad days. And there will be days that you just want to quit altogether.

So, let’s get you off on the right foot, so you’re prepared as much as possible and have a trading strategy set.

Obviously we only trade around the VWAP, but you need to know what exact stocks you are trading to get a feel for your strategy.

There’s really only three categories when it comes down to it: indexes, earnings / news reversals, and junk companies that no one’s ever heard of.

Our first grouping of indexes you can never go wrong with.

There’s plenty of index funds out there, but my favorite is what I refer to as “the Q’s” — Invesco QQQ Trust Series 1 (QQQ).

This is a market ETF that mimics the movement of the top 100 companies in the NASDAQ.

If you’re just getting started, I highly suggest trading this stock to get a feel for the movement of the markets.

And if QQQ is too expensive for your tastes, you can always trade its sister ETFs for TQQQ and SQQQ.

While QQQ is sitting at around $304 a share right now, TQQQ is only $25. TQQQ is the bullish fund and SQQQ is the bearish fund.

An alternative to the Q’s is to trade SPY which mimics the movement of the S&P 500.

And if you want to get even more granular you can choose a sector ETF to trade — my favorite being Direxion Daily Semiconductor Bull 3X Shares (SOXL). SOXL mimics the movement of semiconductor companies out there, and because it’s leveraged, you get wilder, more volatile movements.

Our second grouping of stocks is earnings reversals and news reversals.

Remember, we never buy a stock before they announce earnings.

But after they do, we pounce, like you could have done today with ON Semiconductor (ON)…

The company announced earnings, gapped down, broke VWAP at the open and shot off to positive territory.

We’re in the thick of earnings right now, so note the big movers this week and be ready to trade them after they announce.

Our last category is one that you want to be careful about…

These are your stocks that are trading below ten dollars and have a slew of different circumstances.

We’re talking tiny biotech companies that announce drug results, worthless Chinese shell companies that supposedly cured cancer, meme stocks, and companies that have announced they are going out of business.

Recently this includes names like Buzzfeed (BZFD), Carvana (CVNA), Genius Group (GNS), Summit Therapeutics (SMMT) and AMC (AMC) just to name a few.

Bed Bath and Beyond (BBBY) announced that they were going out of business for instance.

And today it’s up 60% in one day.

This stock is going to $0.00, I guarantee that.

But in the meantime it’ll go back and forth from people trading it.

With stocks like BBBY, you need to be quick and pay close attention to it’s movement.

Stocks like these often get halted, and that’s extremely dangerous.

BUT, you can make fantastic money trading them.

So pick one, or all of these categories of stocks to trade.

And test the waters to see which one is right for your style.

As always, feel free to send me your questions and comments to KennyGlick@MoneyMapPress.com. And I’ll see you tomorrow morning.

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