When a new stock pops up to my attention, the first thing I look at is its daily trading range. On the right side of the chart in blue you can see CEG for example has had a $2 trading range so far. I don't waste my time on something that has a .30 trading range. I am unable to make anything out of a stock like that. Then I check daily volume, the more the better, and the spread, the less the better. These details can be gleaned in a second and that's all I need to make a decision. The fact that a stock is hitting new highs or lows means that it is in play and the probability is that it will produce a good trade.
Thursday, August 13, 2009
What makes a good trading stock in my eyes
When a new stock pops up to my attention, the first thing I look at is its daily trading range. On the right side of the chart in blue you can see CEG for example has had a $2 trading range so far. I don't waste my time on something that has a .30 trading range. I am unable to make anything out of a stock like that. Then I check daily volume, the more the better, and the spread, the less the better. These details can be gleaned in a second and that's all I need to make a decision. The fact that a stock is hitting new highs or lows means that it is in play and the probability is that it will produce a good trade.
Volume is important
LVS jumped up on my hitting new highs list so I bot some because of the huge volume. It then was halted... first time that happened to me.
It's open again now and rocketing up.
LVS before trading halt note volume bars
** note I mistakenly marked entry point .05 lower than actual**
After...
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