Gap  Ups

Buy  High  and  Sell  Higher

If you turn over 10 stones, you might find 1 attractive investment idea but if you turn over 100 stones, you might find 10.

By Peter Lynch (Manager of Magellan Fund 1977 - 1990)

We shall be heading into the 4th quarter earnings report with 10% of the $SPY components slated to come to the earnings confessional booth in about 2 weeks.  Stocks exhibit volatility and surprises during the earnings report.  Quite often, the leading stocks of high institutional quality will gap up in price and attain an all time high overnight.  Institutions like hedge funds, pension funds, mutual funds and other professional money mangers are the reason for these gap ups in price overnight.  They have the strength of $$$ power to propel these stocks higher.  Quite often some of the leading stocks will attain a gain of  +20%  or higher within days and start consolidating the gains for the next several days or weeks. 

IBD (Investors Business Daily) has an  '8 Weeks Hold Rule'  for stocks that show strong institutional demand.  The rule suggests that if the stock attains a  +20%  gain or higher from its proper buy point in less than 3 weeks, one should hold it for 8 weeks and evaluate the stock at that point.  Mr. William J. O'Neil (founder of IBD) found that quite often such stocks continue to make higher gains after attaining the explosive gains of over  +20%  within a short period of time.  Demand from the institutions is so great that the stock gets propelled higher from the sheer size of the demand from the institutions.  Institutions often curb their enthusiasm for the stock after attaining high price so quickly just so as not to exhibit their intentions of wanting to acquire more of the stock.  

As a Growth Stock investor and a trader that follows IBD (Investors Business Daily) style of investing, one must:

  "Buy High and Sell Higher"

It seems counterintuitive but that's how one attains double digits and triple digits gains in a Growth Stock.  As a standard practice, I always prepare a separate watch list of stocks that have gapped up in volume during earnings report.  Sometimes stocks will gap up from mergers and acquisition as the  $PTON  did last week.  I had mentioned this stock in my blog post of Sunday December 20th.  Initial stock position was established at it's buy point of $139.75 on Monday December 21st.  It gapped up the next day and is currently +14%  in 3 days.  Currently it's trading above the upper Bollinger bands and will likely retrace in the coming days to consolidate the gains.  

Performance of Stocks That Gapped Up

To illustrate the power of gap ups, here are the results of some of the stocks that were on my Gap Up Watch List.  April 3rd was the  "Follow Thru"   day after the brutal downtrend we experienced with the March 23rd lows on the  $SPY  and  $QQQ.  These results are year to date from the  April 3rd  "Follow Thru"  day.  Stocks that are bold faced are the stocks currently in my portfolio.  Some of these stocks could possibly provide an opportunity to scale up if they retrace to the 50 day sma (simple moving average) and the institutions support them at that level.  Concentrating your portfolio to just a few leading stocks is the true way to attain out size gains with the Growth Stocks.

1. $AMZN   ... +66% (Mentioned Blog post 6/28 and 9/13)
2. $CELH    ... +1071%
3. $NIO       ... +1807% (Mentioned Blog post 10/29)
4. $PDD      ... +119%
5. $PINS     ... +414%
6. $PYPL     ... +158%
7. $PTON     ... +469% (Mentioned Blog post 12/21)
8. $RH         ... +458% (Mentioned Blog post 10/22)
9. $SNAP    ... +353%
10. $TTD      ... +480%
11. $ZG        ... +295%

Happy Trading!

Amin

 

 

Stay    FOCUSED 

Merry    Christmas 

"Obstacles are those frightful things you see when you take your eyes off your goal."

Henry Ford, car producer

There is a lot of noise (political tweets) and fear (Virus and the vaccines) out there in the market.  Listening to the news media and watching tv all day long is not going to get everyone a stimulus cheque or cure the effects of a virus with a vaccine.  We are traders and investors.  Our job is to increase the size of our portfolios and hold all our opinions to ourselves.  Don't engage in conversations on social media about the pandemic or the stock markets.  It's going to depress you and compromise your immune system.  Use your time wisely and instead:

• Get a good night sleep.  You now have an opportunity to catch up on your sleep.
• Start your day performing stretches and light exercises.  You always wanted to get in shape and now you can actually follow your New Year's resolution since we are all working from home now.
• Eat a healthy breakfast to start your day.  It will help you kick start your day without the pressures of having to run out the door to your job and be stressed commuting.
• Get dressed up as if you are going to work or school.  Now is a perfect time to polish up your trading skills and look over your weaknesses.  
• Take an online class on trading and investment.  Watch some utube videos of some of the professional money mangers.  Learn what traits and discipline they possess that makes them successful.  
• Communicate with friends, relatives and acquaintances that motivate you and keep you energized.
• Learn to read stock charts and back test your system of trading and investing.
• Polish your system of trading and write it down.  Identify your rules of when you will buy stocks, when you will sell them for a profit or a loss and how long will you hold on to that stock.  This will be your system of rules that will help you develop a Trade Plan for every stock you initiate a position on.
• Prepare and update your stock watch list everyday.  Do lots of  "Virtual Trades"   (utilizing your brokers platform on your virtual account) and back test your system.  

This will be a short week in the market.  For the month of Dec so far, $QQQ  is  +3.89%  and has stayed above the 21 day sma (simple moving average) for the last 6 weeks.  We do have a high count of 7 total distribution days between the  $SPY  and the  $NASDAQ.  This will be a light volume week in the market.  One of the stocks to watch this week is  $PTON.  It has a history of hugging the upper Bollinger bands for 17 to 20 days during its most recent run up.  Currently it's above the faster moving 8 day sma and has been hugging the upper Bollinger bands for the last 5 sessions.

Good luck trading this week.

Happy Trading!

Amin

Santa  Claus  Rally

Ryan Detrick, CMT, Chief Market Strategist and Senior Vice President of LPL Financial tweeted 3 days ago:

"December is usually a strong month for stock, but Santa doesn't show until the second half of the month"

There are no guarantees that the market will be predictable precisely for a rally in later half of December.  Market actually severely corrected from October through December in 2018.  In 2019 on the other hand, the market roared from October all the way through middle of February before it went into correction.  Last week there was a major distribution day on Wednesday the 9th when institutions sold off the technology stocks that were propelling the indexes higher.  $QQQ  dropped  -1.25%  while the  $SPY  dropped  -0.96%  that day.

As a retail trader and an investor, one ought to be prepared for sudden changes in the market.  I often react to market conditions and plan accordingly looking over the data of price and volume. 

"If  THIS  happens  than  I  do  THAT"
"If  THAT  happens  than  I  do  THIS"

It's very hard sometimes when we are constantly bombarded in the media by all the self proclaimed market  GURUS  and stock analysts sharing their opinions.  We also have to fight back our own personal biases and analysis of the stocks.  Every week it's a roller coaster with Mr. Trump tweeting creating uncertainty.  There is also virus to contend with and possible lockdowns.  Trucks are already rolling in as I write this post to distribute the vaccine that have been approved by the FDA. 

 

"Market   fools   the   majority"

DATA  doesn't lie and I find it best to let the data be the driver of our decisions.  Supreme courts have already ruled and on Monday December 14th, electoral college will cast their ballots declaring Mr Biden as our next president effective January 20th.  Market hates uncertainty and the uncertainty of our elections will be put to rest.  Market really doesn't care of anybody's opinions, religion or political bias.  As a retail trader and an investor, we are here to increase the size of our portfolio and mitigate risks in the market.

Scrutinize  Your  Process

We are at the tail end of the 3rd quarter earnings season.  That removes one of the risk factors going forward for the next 4 weeks.  One of the things to do over this week is:

• Harvest some profits if the stock has attained profits of +20% to +25%.
• Watch stocks that have fallen below the 21 day sma (simple moving average).
• Monitor stocks on your watch list that are doing better than the  $QQQ  or  $SPY.
• Have some  CASH  in your account to scale up in stock positions that are supported by the institutions at the 21 day sma.
• Mitigate risk if the market skips a beat and goes into correction.
• Always reduce your position prior to earnings report to avoid a nasty surprise.
• Have the discipline to follow your trade plan and cut your losses at  7%  or less.  

Performance  of  Stocks  On  My  Watchlist  

There were 10 stocks out of the 58 that I had published on Nov 4th  'Follow Thru'  day that I had highlighted.  They were showing signs of accumulation by the institutions.  One of the discipline that retail traders and investors ought to perform every week is to compare the performance of stocks on watch list against the performance of the  $QQQ  and  $SPY.  This way you are holding yourself accountable and fine tuning your process.  Here are the results:

1. $APPS   ... +17%
2. $FSLR   ... +8% (held up at 21 day sma)
3. $NIO     ...  +11% (Oct 29th post - made sizable gains. Took starter position $42.47 Dec 4th).
4. $PLTR   ... +155%
5. $PLUG   ... +61%
6. $ROKU   ... +53%
7. $SQ       ... +26%
8. $TTD      ... +46%
9. $U        ... +45%
10. $ZG      ... +29%
11. $SPY   ... +6.6% (General Market Performance)
12. $QQQ   ... +5.2% (Growth Stock Performance)

Average performance of my 10 strongest stocks is  +45%.   

 This amounts to 6.8 times better than the General Market and 8.6 times better than the Growth Stock performance. 

 I know I have a very strict process and criteria that enables me to identify the true leaders in the market.  Should the market correct like it did in 2018, I know there is plenty of cushion for me to ride out and scale down the positions.  On the other hand, should market consolidate and propel higher, I have a process in place to scale up in stocks that have earned me substantial profits.  $NIO is one of those stocks that I began accumulating once again last week.

Good luck trading this week

Happy Trading!

Amin

 

Simple    Moving    Average    Lines

"We've all heard the saying, 'timing is everything'. This is just as true in the stock market as it is in life. Knowing the optimal time to buy or sell a stock is a valuable skill anyone can and should learn" 

By Willian J O'Neil (Founder of Investors Business Daily)

Simple moving average (sma) lines are very simple tools to use for taking a position in a stock but also to exit a position for profit as well as exiting the position to mitigate loss.  Institutions account for more than 70% of the trading volume in the stock market.  Ultimately it is them that determine what the stock price is going to be.  If they  decide to enter a stock position, it may take them several weeks to accumulate the entire position.  Stocks will show that by having the price of the stock staying close to the faster moving 10 day and 21 day sma.  Conversely, if they decide to exit the position, it will show up as high volume of stock trading and the price will begin to get depressed lower.  It will show up as the  faster 10 day and the 20 day sma heading lower towards the  slower moving 50 day sma.


50 day moving average line is one of the most closely watched lines by the institutional investors.  Once the stock approaches this line after trading above the 20 day sma, retail investors ought to pay attention to see if the stock gets supported by the institutions at this level.  Institutional buyers will come in with huge volume buying to pick up these shares when they are committed to the stock.  One of the clues to look for during  'distribution days'  is to determine if your stock is being supported or disposed of by the institutions.  If your stock is supported and it bounces off the 50 day sma in volume considerably higher than the average daily trading volume, one might want to consider initiating a new position or adding on a second position in the stock.

How  Did  My  Stock  Perform?

We had a  "Folllow Thru"  day declared by IBD (Investors Business Daily) on November 5th.  $RH  stock was scaled up with a 7th additional position on November 6th @387.50.  Currently the stock is trading at $468 as of Friday December 5th. That's a return of  +20.77%  in just 4 weeks for this position.  Look over the charts and notice how the stock has been hovering above the 21 day sma.  Original position on $RH was initiated on April 8th at  $110.56.  Additional positions were added and scaled up as follows.  I have indicated in parenthesis the  %  profits for each of those positions as of Friday Dec 4th market close:

1. April 8  ... $110.56(323.30%)
2. June 8  ... $250.00(87.20%)
3. July 1   ... $250.29(86.98%)
4. Aug 26 ... $320.00(46.25%)
5. Oct 5    ... $375.00(24.80%)
6. Oct 15  ... $382.50(22.35%)
7. Nov 6   ... $387.50(20.77%)
8. Nov 13 ... $397.00(17.88%)

 

1st position at $110.56 initiated on Apr 8th after a  "Follow Thru"  day was the largest position, followed by smaller scaled up position at every step of the way.  When it comes time to harvest the profits, the last positions taken will have their stop limit orders triggered to mitigate losses.  It helps to understand the simple moving average lines of 10 day, 21 day and 50 day.  These are the lines that institutions follow and as retail traders and investors, we need to be in synch with the institutional investors.

   

It's a good idea always to plan for the worst and hope for the best.  Weekend is a good time to look over the stock charts and scrutinize all your positions.  Check the performance of your stocks to see if they are being supported by the institutions.  Get rid of the ones that are dropping off below the 21 day sma in higher volume than an average trading volume.  Compare the performance of your stocks against the  $SPY   and  the  $QQQ.  As a growth stock investor, you want your stock to outperform these 2 indexes.

I am hoping my analysis and the exercise with  $RH leading  stock helps you fine tune:

• Your selection of stocks to put on your watch list.
• Monitoring the performance of the indexes and the stocks utilizing simple moving average lines.
• Looking for clues of institutional support and resistance lines with the aid of simple moving average lines on the chart.
• Respecting losses in a stock of -7% to -8% and immediately cutting your losses.
• Monitoring the 50 day sma and the performance of the indexes and your stock in relation to this line.

I encourage comments and suggestions from my readers about the nuances of the moving averages that I may not have fully covered.  This post is to help guide you to maintain the profitability utilizing a very simple indicator of simple moving average lines plotted on your stock charts.

Happy Trading!

Amin

MARKET  COULD  BE  TAKING  OFF

As a retail trader and an investor, one ought to be prepared for sudden changes in the market.  I often react to market conditions and plan accordingly looking over the data of price and volume.

"If THIS happens than I do THAT"

"If THAT happens than I do THIS"

It's very hard sometimes when we are constantly bombarded in the media by all the self proclaimed market  GURUS  and stock analysts sharing their opinions.  We also have to fight back our own personal biases and analysis of the stocks.  Last week was a roller coaster with the uncertainty of who the President of US is going to be.  The whole world has been scrutinizing as to how our election system works.    

"Market  fools  the  majority"

DATA  doesn't lie and I find it best to let the data be the driver of our decisions.  We finally have declared Mr Biden as our next president as of this weekend.   Market hates uncertainty and now the uncertainty of our elections has been put to rest - atleast until Mr. Trump elegantly transfers the powers of the presidency onto the next president.  Market really doesn't care of anybody's opinions.  As a retail trader and an investor, we are here to increase the size of our portfolio and mitigate risks in the market.

Best  Performers  of  My  Stock  Watch  List

Our  "Follow Thru Day"   of Nov 5th has performed very well for us so far.  Lots of stocks have surged in price with decent supportive volume behind it.  Institutions have begun to increase their portfolio risks with their investments.  At this writing, the markets in Asia  are already  +2.41% in Japan and the Heng Seng is  +1.62%.  Growth stocks can quickly rise to  +20%  within days sometimes when you identify a leading stock in the leading sector.

Here are the top 10 performing stocks from the 58 stocks that I had listed in my post on Nov 4th:

1. $PLTR  ... +31.44%
2. $TTD   ... +29.50%
3. $ZG      ... +18.29%
4. $ROKU... +17.14% 
5. $SQ     ...  +15.59% 
6. $PLUG ... +15.35%
7. $APPS  ... +13.94%
8. $U        ...  +11.78
9. $FSLR  ... +10.68%
10. $NIO    ... +10.32%

My $NIO positions were closed off @ $41.75  on Friday November 6th for a gain of  +96.93%  in the last 6 weeks.  It has advanced rapidly and is too extended from the 50 day sma (simple moving average).  It's likely to retrace to digest these massive gains.  Left a small position to ride through the earnings later this month.  It's one of the strategies to utilize to raise some  CASH  for follow up buys on successful stocks.  It's prudent now to be ready to start scaling up in stock positions initiated during the  "Follow Thru Day"  that are making gains.

Good Luck trading this week.

Happy Trading!

Amin

ps: I shall be offering a new and an enhanced live Trading Service in 2021.  Stay tuned for more information in my blog posts later in Dec.  Let me know if you are seriously considering spicing up your portfolio and ready to commit to learning to trade profitably.

 

FOLLOW  THRU  DAY

 "The first step in learning to pick market winners is for you to examine leading winners of the past to learn all the characteristics of the most successful stocks"

By William J O'Neil (Founder of Investors Business Daily) 

Market does repeat and it tends to act in a very predictable manner.  In 2016 November, the market just took off the day after elections.  It happened again to day - and we still don't have a clear winner declared yet.  As a retail trader, one thing we all need to learn is to hold our political biases aside and instead look at the  DATA  to drive our decisions.  Mr Warren Buffett (greatest stock investor of our times), often has remarked that lots of times in his life, he has encountered a President that he did not vote for.

IBD (Investors Business Daily) declared a  "Follow Thru"  day at the close of the market to-day.  We had a powerful rally the last 2 days.  $QQQ  was up  +4.97%  today and lots of growth stocks were breaking out in high volume.  It's critical to start acting on taking small starter positions in several leading stocks now.  "Follow Thru"  days are a powerful  TIMING  signal for growth stock investors.  It's a signal that let's us know that the institutions are on board and they are initiating positions in stocks of their  choice.  As retail investors and traders, we just have to follow the institutions since they account for over 75%  of the daily trading volume in the stock market.

Stock  Watch  List

Many growth stocks broke out today from their resistance levels.  Some bounced off their 21 day or 50 day sma (simple moving average).  Some of the stocks that had triggered the  "8 Week Hold Rule" (Look at my post on $NIO +81.53% since Oct 13th), once again surged higher today.  List below I have highlighted the resistance/support levels in parenthesis.  The ones that are bold faced are the ones that have broken out with the surge in price at their earlier or appropriate buy points.  These are not recommendations but identified to help you in learning to read the stock charts.  You must do your own due diligence to make the decisions that reflects your own individual risk tolerance.

1. $APPS    ... (35.35)
2. $ASML   ... (374.88)
3. $BABA   ... (299.00)
4. $BBY      ... (116.74)
5. $BIDU    ... (138.98)
6. CPRT     ... (118.56)
7. $CRSR    ... (24.70)
8. $DADA  ... (32.52)
9. $DG        ... (211.98)
10. $DGX     ... (122.86)
11. $DHR     ... (235.60)
12. $DOCU  ... (236.37)
13. $DIOD    ... (59.70)
14. $DNKN  ... (92.46)
15. $EDU     ... (164.75)
16. $ENPH   ... (100.40)
17. $FCX      ... (17.34)
18. $FDX     ... (275.0)
19. $FIVE    ... (140.14)
20. $FORM ... (29.32)
21. $FSLR   ... (81.87)
22. $GH       ... (105.75)
23. $GNRC  ... (208.26)
24. $HD       ... (286.70)
25. $HZNP   ... (77.45)
26. $IDXX   ... (453.20)
27. $JD        ... (86.58)
28. $JMIA   ... (14.96)
29. $LH      ... (202.36)
30. $LOW   ... (171.72)
31. $LOGI   ... (81.74)
32. $LSCC   ... (35.16)
33. $MLM   ... (257.52)
34. $MPWR  ... (317.97)
35. $NIO     ... (29.40)
36. $NOW   ... (501.82)
37. $NTRA  ... (73.99)
38. $NVDA  ... (537.71)
39. $PDD    ... (98.96)
40. $PINS   ... (53.87)
41. $PLTR   ... (9.97)
42. $PLUG   ... (15.96)
43. $PTON    ... (118.44)
44. $PWR   ... (61.68)
45. $PYPL   ... (195.78)
46. $ROKU  ... (214.26)
47. $RH      ... (372.93)
48. $SNAP   ... (34.52)
49. $STNE   ... (56.57)
50. $SQ       ...  (170.61)
51. $TAN    ... (70.55)
52. $TMO   ... (473.84)
53. $TSLA   ... (425.80)
54. $TTD     ... (597.50)
55. $U         ... (102.63)
56. $ZG      ... (97.69) 
57. $ZM      ... (478.0)
58. $ZS       ... (140.51)

BTW   ... As a retail trader, the most influential person in the market right now is the Chairman of our Central Bank  Mr. Jeremy Powell.  

Good luck trading this week.

Look over my posts on $RCUS, $MRNA, $DOCU, $AMZN, $RH, $PYPL, $QQQ and $NIO.  Just a handful of stocks can double your portfolio if you follow the rules that I  have explained in my posts the last few months on the stocks mentioned.  As a growth stock investor, you need to:

• Buy High and Sell Higher.
• Scale up in positions as the stock progresses higher.
• Concentrate your portfolio into the few stocks that are outperforming the market.
• Get rid of the laggards immediately and use the money to invest in stocks that are leading in your portfolio.
• Cut your losses when the stock loses  -6%  to -7%  from your buy point.
• Harvest partial profits once the stock attains +20% to +25% gains from your buy point.

Happy Trading!

Amin

$NIO

It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.

William O'Neil 

Some of the basic rules to observe to be successful and profitable trading Growth Stocks are:

1. Buy Leading Stocks in the Leading Sector.
2. Buy High and Sell Higher.
3. Concentrate your portfolio into the leading stock that continues to attain higher highs.
4. Scale in to position once the stock continues to make gains and trending along the 10 day sma (simple moving average)
5. Allow the stock some breathing room.  Quite often they will retrace to digest the gains and allow one an opportunity to get into the stock again.
6. Observe the   '8 Week Hold Rule'.  Successful Growth Stocks will often gap up and attain  +20% gains within a week to 3 weeks.

$NIO was a stock trading for less than $4.00 in 2019.  Most institutions don't get involved with stocks that are trading at less than $10.00.  IBD (Investors Business Daily) type of traders and investors usually look for stocks that are trading over $100 million (Share price X total average daily volume of shares traded).  Following is a brief summary of how one could have attained  +52.52%  gains in October.

• 6/3/20 ... Stock broke out from $4.87 resistance level in volume that was 200 million shares.  It quickly rose +20% within days invoking an  '8 Week Hold Rule'.    
• 7/2/20 ...  Stock broke out from  $7.90 resistance level in volume that was  200 million share.  Stock rose +20% within days with increasing volume of 400 million shares changing hands.  Once again it invoked the  '8 Week Hod Rule'.   It's a  $16.00  stock now and an institutional quality stock.  Retail traders should have picked up on the rising stock price and rising volume of shares changing hands daily.
• 8/25/20  ... Stock broke out from  $16.44  and rose  20%  the next day and once again invoking an  '8 Week Hold Rule'.
• Stock has a history of consolidating for 4 weeks before rising again.  This is what institutions usually do to allow the volatility to subside before making their next purchases in the stock.  
• 9/29/20  ... Stock broke out from  $20.25 resistance level in volume that was 2 times the daily average volume (165 million shares).
• 9/30/20   ... Initiated a position at  $20.85.  10 day sma was moving up and away from the 21 day sma.  
• 10/02/20   ... Scaled into another position at $21.20 since the stock had advance  +1.7%.
• 10/14/20   ... Stock breaks out from  $22.59.  Trading volume has surpassed 400 million shares per day for 2 days in a row.  Once again the stock has moved  +20%  within days and invoked an  '8 Week Rule.'   Plan on holding onto the stock till early December. Stock seems to continue in a stair step advance since July 2020.
• 10/27/20   ... Stock breaks out from  $26.96  while the market is correcting.
• 10/28/20   ... Scaled into another position at  $26.96.  Market is correcting but the stock is held up by the institutions and is trending along the 10 day sma.
• 10/29/20   ...  Stock has advanced  +15.66%  within a day now. 

 

As of writing this post at 2.30 pm on 10/29/20, stock is trading at $31.85.   The 3 positions taken since 4 weeks ago, the results are as follows:

1. $20.85 position on 9/30 is  +52.52% (4 weeks)
2. $21.20 position on 10/2 is  +50% (4 weeks)
3. $26.96 position on 10/29 is +17.95% (1 day)

Stock is currently  +50%  above the 50 day sma.  Its trading at the upper range of its channel line.  It's prudent to harvest some profits and lock in some gains since there is a high likelihood of the stock to retrace to  $27 to  $29  level.  I had locked in some gains of  +43.89%  earlier in the day at  $30.  Rest of the position should be held through beginning of Dec since it has invoked an   '8Week Hold Rule'.    

Good Luck Trading.

Be sure to harvest some profits and lock in gains if your Growth Stock has attained profits of  +20%  to  +25%.  Market tune has changed to  "Market under pressure"   as of yesterday.  It's time to raise some  CASH  right now to deploy when the market tune changes back to  "Confirmed Uptrend".

Happy Trading!

Amin

How  Good  is  Your  Stock  Watch  List ?

"We've all heard the saying "timing is everything".  This is just as true in the stock market as it is in life.  Knowing the optimal time to buy or sell a stock is a valuable skill anyone can and should learn"

By William J O'Neil (Founder of Investors Business Daily)

I had published a Stock Watch List of 40 stocks in my post on September 27th.  These were the leading stocks in the leading sectors at that time.  As a retail trader, it's always a good idea to compare the performance of the stocks in your portfolio as well as stocks that one is monitoring against the major indexes of  $SPY  (General Market Performance) as well as  $QQQ  (Growth Stock Performance).  It takes a lot of time and thorough analysis to do that but that's the only way I know how to develop a list of stocks that are true leaders in the market.  It's best to be driven by data instead of our own opinions and biases about the stocks.

Here are the results of the performance of those 40 stocks in the last 4 weeks.  Market has been trending sideways in the last 4 weeks.  In 10 days the uncertainty of presidential elections will be out of the way.  In 2016 November, we had a  "Follow Thru"  day soon after the elections and lots of stocks that were trending sideways just took off and never looked back.  There is no guarantee that it will happen again but one must prepare for such an eventuality.  As a retail trader and an investor, one must prepare to have some  CASH  available right now to be able to take advantage of  such an opportunity.

I have highlighted the stocks that have continued to Out Perform the Market and are building bases to make the next move higher,  once the uncertainty of presidential elections is out of the way.  These stocks are also trending along or above the 21 day ema (exponential moving average).  Stocks that are highlighted in red are the ones that I have removed from my watch list.  They have maxed out and are trading below the 50 day sma (simple moving average).

1. $APPS   ... +14.45%
2. $AVGO   ... +4.74%
3. $BBY    ... +12.16%
4. $BIG    ... +7.09%
5. $CPRT    ...+9.62%
6. $DG   ... +3.38%
7. $DHI   ... +2.05%
8. $DKS   ... +6.60%
9. $DOCU   ... +3.52%
10. $FDX   ... +11.30%
11. $FIVE  ... +6.22%
12. $FVRR   ... +17.80%
13. $GSX   ... -31.90%
14. $HIBB   ... +17.53%
15. $HZNP   ... -0.83%
16. $LEN   ... +1.83%
17. $LOGI   ... +20.35%
18. $MTH    ... -1.76%
19. $NVDA   ... +5.64%
20. $NKE    ... +3.44%
21. $NIO    ... +48.20%
22. $NTRA   ... +3.75%
23. $PTON   ... +25.38%
24. $RH     ... +11.34%
25. $ROKU   ... +22.60%
26. $SHAK   ... +13.03%
27. $SNAP   ... +78.94%
28. $SQ     ... +12.41%
29. $STNE   ... +11.76%
30. $TGT    ... +3.78%
31. $TTD    ... +31.24%
32. $TTGT   ... +11.02%
33. $TWTR   ... +15.74%
34. $VEEV   ... +8.39%
35. $W      ... -9.78%
36. $WMT    ... +4.73%
37. $YNDX   ... -6.38%
38. $ZG      ... -5.14%
39. $ZM     ... +2.97%
40. $ZS     ... +6.35%

Analysis :

6 losing positions average loss -9.30%

34 Winning positions +13.09%

40 stocks on the list average +9.73%

26 stocks highlighted average +15.99%

$SPY performance same period +5.19%

$QQQ performance same period +4.95%

Stocks in my portfolio (performance same period) :

$AMZN ... +3.87% (read my blog post Sept 13th)

$NVDA ... +5.64%

$NIO    ... +48.20% (will post a blog on it)

$PYPL   ... +8.43% (will post a blog on it)

$RH      ... +11.14% (read my blog post Oct 22nd)

Average performance of these 5 stocks is  +15.46%  since Sept 25

Average performance of  $SPY  and  $QQQ  is  +5.07%  since Sept 25 

My 5 stocks have Out Performed the Market by 3.05 times.

26 stocks highlighted above have Out Performed the Market by 3.15 times.

This sort of analysis and evaluation of portfolio is the best way to know if you are in synch with the market.  As a Growth Stock investor and a trader, one must remove the emotions of greed, fear, hope and ego in evaluating the stocks.  Being data driven helps one remove biases that we are all exposed to in the print and television media.

Good luck trading and be sure to exercise your vote on Nov 3rd.  

Happy Trading!

Amin

   

Jesse Cook - "On Walks The Night" (Live)

 Restoration  Hardware ($RH)

Growth Stock investing is one of the best ways to Out Perform the overall market as measured by the performance of the $SPY. 

 It requires one to:

• Invest in the leading stock in the leading sector.
• Buy correctly at its ideal buy point.
• Scale into the stock as the stock continues to attain higher price.
• Concentrate the portfolio by getting rid of the laggards and invest into the leading stock that continues to attain higher highs.
• Mitigate risk by taking partial profits when the stock attains gains of +20 to +25%.
• Reduce the position size prior to earnings to mitigate the risk of a downside reversal in a stock from a nasty surprise during earnings.

$RH was one of the leading stocks in late 2019.  I had highlighted this stock in the summer of 2019 with my published stock watch list in my blog post.  It was also highlighted in details at one of my IBD (Investors Business Daily) Meetup groups in the Tampa Bay area.  Here are the details of the stock to illustrate how one could have successfully handled such a stock to attain profits of +242.77% in the last 72 weeks.  $SPY  on the other hand has gained +19% in the same time frame.

• 6/12/19 Stock gapped up +16% with 9 times the daily average volume during earnings.  This was a confirmation that institutions were accumulating a position in this leading stock.
• 6/14//19 Friday initial position taken at $109.82
• 9/10/19 Mitigate risk by taking the position off at $152.89 (+39.22% gains) a day before the earnings announcement.

• 11/18/19 New position taken at $188.43.
• 11/22/19 Scaled in a new position at 199.52. Stock trading above the 10 day sma (simple moving average) indicating institutional support.
• 12/4/19 Hold the position through the earnings on Thursday and close out the position Monday morning at $240.02 (+25% gains) after earnings volatility subsided on previous on Friday.   

• 4/7/20 We had a  "Follow Thru"  day. Initiated a position at $110.56.
• 6/3/2020 Mitigate risk by taking the position off at $251.56 (+127% gains) a day before the earnings.
• 6/8/20 Reenter a new position on Monday at $250 once the volatility subsided on Friday - the day after the earnings announcement.
• 7/1/20 Scaled in with a new position at $250.29.
• Tried but was unsuccessful in getting entry orders for 270/280/310/315 while the stock was trending along the 10 day sma.  It never retraced to the 21 day sma which would have been ideal entry points technically.
• 8/26/20 Scaled in at $320 a very small position just few days prior to earnings report.  Exited the position on 9/9/20 a day prior to earnings anouncement for a loss of -1.83%, since the market tune had changed to "Market Under Pressure".  
• 9/10/20 Held onto the position of $250/$250.29 through the earnings report (average price for 2 positions is $250.15).  Stock was behaving very well with institutional support.  It had bounced off the 50 day sma on 9/4/2020. 
• 9/10/2020 Stock gapped up +22.79% with earnings announcement.  Trading volume was 7 times the daily average trading volume.  The 2 positions is now +53.97%.   It will take a couple of weeks to digest this high volume before the stock can resume it's upward trend along the 10 day sma.
• 10/5/20 Scaled in a small position at $375.  10 day sma and 21 day sma are now merging and the stock is building a flat base for the last4 weeks.  Have a stop order at $356.25 to mitigate risk since the market is treading sideways with indecision. 
• 10/15 Scaled in a small position at $382.50.  Have a stop loss order at $359.55 to mitigate risk since the market is treading sideways with indecision

All time high attained was on 9/10/20 at $410.49 while the market was  under pressure.  General market performance - utilizing the $SPY  as a proxy - had sliced below the 34 day ema (exponential moving average) and very close to undercutting the 50 day sma.   If the market conditions improve and the stock continues to show a strong institutional support, the next scale up in position would be at the $385 level.

Good luck trading!

Amin

Timing  the  Market 

We had the market making another attempt to rally to day as a follow thru action from Friday.  Once again the biggest negative was the volume.  We need the institutions to give us a signal with their high purchasing power.  They account for over 70% of the the daily trading volume in the market.  This is a critical time for retail investors and traders to monitor their stock list.  I published a list of 40 stocks in my blog post yesterday that were showing signs of institutional support.  25 of those stocks out performed the  $QQQ  today.  This brings out the conviction that I have a list of successful leading stocks that institutions are investing in.  Increased volume from today with the indexes $SPY  and  $QQQ  rising convincingly later this week would produce a  "Follow Thru"  day.  That is the timing signal that we look for to start initiating small starter positions in the leading stocks.

Here is a partial of the post that was published on May 3rd, describing the importance of acting decisively on a  "Follow Thru"  day.  The last successful  "Follow Thru"  day of April 2nd allowed the  $QQQ  to attain over +60%  within 21 weeks.  Be prepared to take advantage of such timing signal.

Passive   Investing   With   $QQQ

(Partial repost of the blog post of May 3rd)

"Write down exactly how you want to see your world, and visualize it. You have power in your thoughts. "

Bob Proctor (Expert in Law of Attraction)

"Freedom to be your best means nothing unless you're willing to do your best".

Colin Powell (Secretary of State)

We are experiencing a very successful  "Follow Thru"  day  that we had with the  $SPY  on April 2nd, followed by another one with the  $NASDAQ  on April 6th.  March was a horrible month.  We were bombarded with the news in the media about the pandemic.  If you paid attention to the news, you would have thought that the world was coming to an end.  Those that distanced themselves from interacting on social media with every post on the pandemic, were most likely alert when the market took a hold within 10 days of reaching an all time low on March 23rd.  We were all under lock down at that time and afraid to step out the door.  Market in the mean time was flashing an opportunity for the retail traders to start stepping in gradually in the market.

Did you miss this opportunity ?

Fast forward 10 days from the low of March 23rd and suddenly we had a successful rally attempt by the 2 indexes - $SPY  and $NASDAQ.  Lot of retail investors were caught off guard and couldn't believe that the market was taking off again.  Leading growth stock index  $QQQ  had fallen off almost  -35% (1% on an average every day for 35 days).  This was a fast and furious waterfall decline of these 2 indexes.  Lot of investors doubted the  "Follow Thru"  day  - including myself.  Mr. William O'Neil (Founder of Investors Business Daily) has a rule which says:

You must buy something on a Follow Thru day  

When in doubt, it would be a good idea to perhaps start out with a passive investment style of investing in  $QQQ  on  "Follow Thru"  day.  It's a simple strategy as explained below:

• Invest in  $QQQ  at market open the very next day that IBD (Investor's Business Daily) declares a  "Follow Thru"  day.
• Reduce it to 1/2 position when IBD declares  'Market Under Pressure'
• Close out the entire position when IBD declares  'Market in Correction'

 This strategy is explained in details on page  A14  of the current May 4th  edition of IBD print and digital newspaper. 

If You had followed this strategy, the performance results to date from the  April 3rd are:

1. $SPY    ... +12.77% (General Market Performance)
2. $QQQ   ... +12.99% (Growth Stock Index Performance)
3. $XLK    ... +13.98% (Leading Sector Performance)

Happy Trading!

AMIN

  

 Don't  Be  Bearish  Now

Labour day weekend got off to a bad start after the market attained its peak on Wednesday Sept 2nd.  Within 3 trading sessions, $QQQ (proxy for Growth Stocks) dropped precipitously from the 5 day simple moving average (sma) down to the 50 day sma.  That was a -10% drop.

Ouch !  Ouch!  Ouch! 

I know a lot of retail traders and investors were just blind sided and no one expected for the market to drop so fast and furious.  Rate of drop was twice as fast as the one we experienced after attaining all time high on Feb 19th.  $QQQ    went on to correct almost  -35% within 5 weeks.  Market began to rally soon after March 23rd lows and we attained a gain of +63.34% in the next 21 weeks.  That's a phenomenal performance for $QQQ.  

Currently  "Market is in Correction"  as of Wednesday Sept 23rd according to IBD (Investors Business Daily).  Surprisingly, market has attempted to rally in the last 2 days but volume has been lack luster.  Institutions have to come in and lift $SPY as well as $QQQ in volume that is above average daily trading volume.  We have history on our side.  October through April traditionally are the best months in the market.  During the second term Presidential election period, incumbents tend to do what ever they can to stimulate the economy.  Central banks have sent a very clear message to the politicians that interest rates are going to remain low for the next 2 years or more.  Instead of being consumed with the media on the news of the virus or politics of the elections, it's best to use the time wisely and instead develop a stock watch list.  This may be the most critical week in case the market attempts to rally and we get a  "Follow Thru"  day established.

No one can predict what the stocks or the market will do next week.  It's prudent to plan for all possible scenarios and not have an opinion on what the market will do on any given day.

"If  THIS  happens than I do  THAT"

"If  THAT happens than I do THIS"

It's what profitable traders and investors do when they develope a TRADE PLAN for every stock they buy or sell - either for profit or for a small loss.

Stock  Watch  List

I have thrown a wide net  to identify stocks that are:

• Held up closer to the 21 day sma and away from the 50 day sma.
• Trading tightly and orderly with very little give back since Sept 2nd.
• Stocks that are supported by the institutions and show signs of accumulation.

I have indicated in parenthesis areas of support or resistance.  Those numbers will change daily as the market makes progress.  These numbers are just a guide post for me and its not to be construed as recommended areas of buy points.

1. $AAPS  (27.92)
2. $AVGO (362.07)
3. $BBY   (108.44)
4. $BIG    (49.10)
5. $CPRT (104.28)
6. $DG     (201.28)
7. $DHI    (71.83)
8. $DKS   (54.85)
9. $DOCU (217)
10. $FDX    (233.67)
11. $FIVE   (115.17)
12. $FVRR  (123.61)
13. $GSX   (92.0)
14. $HIBB  (36.96)
15. $HZNP (74.97
16. $LEN   (76.69)
17. $LOGI  (71.79)
18. $MTH  (99.24)
19. $NVDA (512.35)
20. $NKE   (113.75) 
21. $NIO    (18.56)
22. $NTRA  (65.66)
23. $PTON (84.63)
24. $RH     (328.74)
25. $ROKU (166.18)
26. $SHAK  (67.81)
27. $SNAP  (23.96)
28. $SQ      (151.98)
29. $STNE  (52.21) 
30. $TGT     (154.69)
31. $TTD    (471.12)
32. $TTGT  (40.26)
33. $TWTR  (40.80)
34. $VEEV  (270.98)
35. $W        (61.60)
36. $WMT   (134.13)
37. $YNDX  (61.40)
38. $ZG      (92.65)
39. $ZM     (478)
40. $ZS     (137.03)

Happy Trading !

AMIN

The Most Beautiful Spanish Chillout - Spanish Nights Market is going thru a correction period n a great time to raise CASH and build a stock watch list of new Growth Stock Leaders. Enjoying this music Sunday afternoon preparing my portfolio from further damage. New bases will form and give us all another opportunity to take advantage of the Nov/Dec/Jan (the most profitable months of the year historically)

New Money: The Greatest Wealth Creation Event in History (2019) - Full D...

 

Principles  of  SCALIN (pyramiding)  in  Leading  Stock

(originally published on June 28th)

"When they came on the scene, Kmart was one of them, when in 1962 it only averaged about 2,000 shares traded each day. Jack Eckerd was another, which in April 1967 also averaged just 2,000 shares of trading each day. Both of these stocks went on to become huge winners. Even though the institutions at first would not pick up Pic'N Save, O'Neil did for his own personal account. He actually kept purchasing this stock on the way up, buying more shares every one or two points when the stock would rise. He did this for several years. In fact, he made 285 different buys on this stock in a span of 7 n 1/2 years. This is probably one of the most masterful examples ever of how to pyramid a winning position. At one point he actually owned 4.99% of the total stock outstanding (if you own more than 5%, you must register with the SEC). This stock would turn out to be one of his biggest winners ever, with some of his initial positions up 20 fold when he finally sold out and his profits were a main source for starting the newspaper Investors's Business Daily a few years later".

Mr. John Boik, the author of his book:

"How Legendary Traders made Millions"

tweeted this passage from page 148 of his book a week ago.  I shared this excellent content on my tweeter account for the benefit of retail traders and investors.  I would highly recommend that you pick up a copy of this book for your library.  He highlights some of the principles that some of the greatest and most profitable traders utilize to accumulate a 7 figure portfolio.

$AMZN   Scaling   In

$AMZN stock is an ideal one to study if you are a student and a follower of IBD(Investor's Business Daily)  CANSLIM methodolgy.    

• Don't buy  CHEAP  stocks.
• Buy  HIGH  and  Sell  HIGHER.
• CONCENTRATE  your portfolio to a few stocks.
• Always buy several  LEADING STOCKS  in  LEADING INDUSTRY  group on a  "FOLLOW THRU"  day.
• SCALE IN (Pyramiding)  when the stock begins to quickly advance to  +5%  from your initial purchase.
• Have a  PLAN  in place to  SCALE OUT  to mitigate the risk of earnings nasty surprise.
• Follow the rules of exiting a position when losses mount to  -7%  to  -8%  from your initial purchase.
• HARVEST  profits when the stock gains  +20%  to  +25%.

$AMZN  became a $1,000 stock on Oct 27th 2017.  16 million shares (4.5 times the daily average trading volume) traded that day.  This was a very clear signal that institutions were on their way to accumulating this stock.  This year on Jan 31st (just 2 years n 3 months after becoming a $1,000 stock), it became a 2,000 stock.  Once again it traded 16 million shares (4 times the daily average trading volume) that day.  Following is classic way one would scale in with the winning stock such as  $AMZN.  

1. Friday April 3rd, initial small starter test position at  $1911.15 when the  $SPY  had a  "FOLLOW THRU"  day.  Stock had been trading tightly and orderly for 3 weeks.
2. Tuesday April 7th, a second starter test position at  $2017.11  when  $QQQ  had a   "FOLLOW THRU"  day.  Initial purchase was already  +5.5%  within 2 days. 
3. April 13th, within one week of trading, stock is  +10.91%  on average of the 2 positions initiated.  Faster moving 10 day simple moving average (sma) and the 21 day exponential moving average is surging up and away from the slower moving 50 day sma.  $QQQ  is still below the 50 day sma.  Stock is clearly the out performer of the growth index.
4. April 24th, scale in at  $2185.95.  Stock cleared the  $2150 resistance just the day before.
5. April 29th, just a day before earnings report is due, harvested the profits from 2 original starter positions for average gains of  +18.72%.
6. May 1st, renter at  $2336.80.  Earnings reported the day before bounced the stock up  +4.5%.  There was some profit taking the day after earnings were reported with a surge in selling volume.  The stock barely budged 90 points.
7. May 5th, scaled in at  $2340.  Technically the faster moving 10 day sma as well as the 21 day ema are smoothing out and running parallel to each other and rising slowly and methodically.
8. May 19th, stock has been consolidating for the last 5 weeks.  Institutions are fully supporting the stock at  2400  level.  Institutions tend to look at the round numbers from which to propel higher.  Scale in at  $2429.83.
9. May 27th, the stock bounces off the 21 day ema.  Slower moving 50 day sma is catching up to the rising 10 day sma and 21 day ema.
10. May 28th, scale in at  $2384.33.
11. Stock is hovering tightly around the  2500  mark for the last 2.5 weeks.  Initial trailing stop for the stock is monitored around the  2300  level which is closer to the  34 day ema.
12. June 15th thru June 19th week, the stock is trading tightly like it hasn't done in the last 4 months.
13. June 22nd, scaled in once again at  $2684.50.  
14. June 26th (last Friday) we had a major reversal and a  "distribution day"  on both the  $SPY  as well as  $QQQ.  Stock barely budged 18 points.  It is held up at the 10 day sma while the leading growth stock index  $QQQ  plummeted down to the 21 day ema (that's really not bad for the index that is  +12.79%  year to date.  $AMZN  on the other hand is  +45.55%  year to date.  It clearly is out performing the market.

Update

Added position:

1. July 1st at $2757.99
2. July 2nd at $2912.01

Currently the average for 8 positions is $2543.17.  It's +22% as of Friday Sept 11 close.  On April 29th, +18.72% profits were harvested prior to earnings report.  Market is under pressure right now and it's time to be defensive.  One must never give up the profits of  +20%  to  +25%  made in a stock.  $QQQ  the leading Growth Index has dropped  -10.92%  since the market top it reached on Sept 2nd.  $AMZN  on the other hand has dropped  -11.75% and it's now trading below the 50 day simple moving average.  Institutions usually support the stock at 50 day sma.  It needs to consolidate and hold at 3250 to give me confirmation that institutions are going to support this stock.  Starting Monday morning Sept 14th, it will be prudent to protect the profits made since  April 29th by scaling down.  The last time when market dived after Feb 19th all time highs, $AMZN   dived  -25%.  

Good luck trading this coming week.

Build your watch list and start raising CASH now.

It may take several weeks for the market to get it's footing.

Take a breather now and polish your trading skills instead.

Learn from the mistakes we made during market correction from Feb 19th to March 23rd.

Amin

Timing  the  Market

Utilizing a simple tool

Simple    Moving    Average    Lines

"We've all heard the saying, 'timing is everything'. This is just as true in the stock market as it is in life. Knowing the optimal time to buy or sell a stock is a valuable skill anyone can and should learn" 

By Willian J O'Neil (Founder of Investors Business Daily)

Simple moving average (sma) lines are very simple tools to use for taking a position in a stock but also to exit a position for profit as well as exiting the position to mitigate loss.  Institutions account for more than 70% of the trading volume in the stock market.  Ultimately it is them that determine what the stock price is going to be.  If they  decide to enter a stock position, it may take them several weeks to accumulate the entire position.  Stocks will show that by having the price of the stock staying close to the faster moving 10 day and 21 day sma.  Conversely, if they decide to exit the position, it will show up as high volume of stock trading and the price will begin to get depressed lower.  It will show up as the  faster 10 day and the 20 day sma heading lower towards the  slower moving 50 day sma.


Last Thursday and Friday, market took a turn for the worse.  I fielded a lot of calls from my readers wondering what to make of it.  It was their carnal instincts of FEAR, GREED, PRIDE and HOPE being displayed.  Suddenly their profits in $TSLA, $NIO, $AAPL, $NVDA, $CRM and other growth stocks were evaporating.  They feared that we may be facing a downturn in the market like we experienced from the Feb 19th all time high to the all time lows achieved on March 23rd.  We all need to use our carnal instincts to our advantage by shifting our attention from our emotions to the data.  It's best to allow data to drive our decisions under such circumstances.


Currently the  $SPY(General Market Performance) and the  $QQQ (Growth Stock Performance) are hovering right around the 21 day sma.  Both these indexes were trading above the 5 day sma for the last 14 sessions.  This was unsustainable and was bound to retrace.  We had a very similar action taking place in February when both these indexes traded above the 5 day sma for 11 days.  Are we going to experience a similar bearish move in the market this time around?

No  one  can  predict  that

50 day moving average line is one of the most closely watched lines by the institutional investors.  Once the stock approaches this line after trading above the 20 day sma, retail investors ought to pay attention to see if the stock gets supported by the institutions at this level.  Institutional buyers will come in with huge volume buying to pick up these shares when they are committed to the stock.  One of the clues to look for during  'distribution days'  is to determine if your stock is being supported or disposed of by the institutions.  If your stock is supported and it bounces off the 50 day sma in volume considerably higher than the average daily trading volume, one might want to consider initiating a new position or adding on a second position in the stock.  Conversely, if your stock has lost 7% from it's entry or the stock is beginning to approach the 50 day sma, consider scaling down and start raising  CASH  instead. 

  Would we have a follow thru action in the coming week from the institutions to support these indexes above the 21 day sma or are we going to experience the sharp drop off with the indexes like the one we had in mid February?  

It's a good idea always to plan for the worst and hope for the best.  Weekend is a good time to look over the stock charts and scrutinize all your positions.  Check the performance of your stocks to see if they are being supported by the institutions.  Get rid of the ones that are dropping off below the 21 day sma in higher volume than an average trading volume.  Compare the performance of your stocks against the  $SPY   and  the  $QQQ.  As a growth stock investor, you want your stock to outperform these 2 indexes.


Happy Trading!

Amin

Tango Azul Labour Day Weekend ... Enjoying the music while I analyze 150 stock charts. Market took a tumble and it's time to be defensive with your stocks. Don't ever allow + 20% to +25% gain in a stock evaporate. Start scaling down and raise some CASH now.

 Lessons Every Stock Trader Must Learn

Lesson 1: Penny Stocks Will Ruin You

Yesterday I came across a post  that I thought was quite insightful and well written.  What really jumped out at me was the opinion of penny stocks because it's one that resonates with me.  There are lots of ways to make money investing but I am convinced that penny stocks will never get me to my financial goals.  I prefer to manage my risk by working only with true growth stocks.  The sooner you learn to steer clear of penny stocks the better as far as I'm concerned.

Lesson 2: Know Your Trading 

Personality

In my role as a Meetup coordinator for IBD (Investors Business Daily) I am constantly exposed to people who employ all kinds of different investing methods.  For the last 25 years I've thought of myself as an investor but recently it occurred to me that I've actually become a trader.  If you're wondering what the difference is, it really boils down to your time frame. 

I simply don't have the stomach to sustain the types of double digit losses that investors might see over the life of their positions.  Also, I don't have the patience to sit in a position for more than 8 weeks at a time so long term involvement doesn't really interest me.  Knowing that, I've committed myself to planning all of my positions from the perspectives of a trader instead of as an investor.

Lesson 3: Have A Process

My trading process has been methodically put together through years of classroom training as well as trial and error.  I am a Growth Stock trader and the core system I follow is the IBD style of investing in Growth Stocks.    

No matter what process you decide to use, it's only going to work if you stick with it.  The moment you start to stray or take liberties, you've increased your risk along with your chances of losing money.

Lesson 4: Have The Right Tools

If you have the same trading personality as me then the core tools I use should prove effective.  Here are just a few that have enabled me to Out Perform the Genaral Market as measured by $SPY

Investors Business Daily - Pay no attention to the dated website.  IBD is perhaps the best data company in the business.  If you work with growth stocks in any capacity whatsoever, they are a must have.  

Toms Trading Tools - Tom is one of the few people in the investment industry that I would consider a mentor.  I first met Tom when he was with Optionetics and I was instantly impressed with his market knowledge.  What impressed me even more was how he put his knowledge into an actionable process.  Switching from analysis to action is perhaps one of the most important lessons I learned from him.  

Value Line - I look to Value Line to help me get beyond what the daily and weekly charts are showing me.  Typically I keep my process as data centric as possible so that I can stop my emotions from influencing me.  Once I get to analyse my evolving Watch List of Stocks, I do a side by side comparison of the greatest growth stocks out there.  I dig deeper on their fundamentals.  Value Line gives me the objective analysis I need to verify the under currents.    

Lesson 5: Remain Disciplined And Organized

This lesson is easily overlooked which is why I think it's so important to mention it.  There's a common denominator among masters of a profession.  Whether you consider; athletes, business people, artists, crane operators, journalists, or any other profession for that matter, the best performers always bring a high level of commitment to the table.  At this point in my career, trading stocks is my profession so I make every effort to produce with an equal level of commitment.

In an effort to help others stay organized, I put together a handy little spreadsheet that includes formulas for my core criteria. It can be easily updated as the health of a stock changes too.  

Happy trading!

AMIN

Here is an inspirational 30 mins video of Kobe Bryant and his " Mamba Mentality ".

Applying his Principles and Mind set will help you become a profitable trader consistently.

https://youtu.be/Da-v4--Qn0U