Day Trade Like a Pro - Part 4

There are so many good things to buy, how do I choose? In my years as a financial consultant with Merrill Lynch, I traded, stocks, options, commodities, mutual funds and individual bonds. I prefer stocks, I just find it easier and less complicated when day trading. The question was always, what makes a good candidate? – I believe action and access. Action/Liquidity is needed to quickly execute a transaction in the market. Capitalization, volume, number of market makers, and breath of ownership drive most often liquidity. Therefore I don’t trade penny stocks, hunches, touts, rumors, unsolicited email alerts, friend recommendations, anything some TV commentator has recommended. I want to save you the hard lessons that I have learned from falling for all of these experts, only later to find they know nothing!
An excellent way to start shopping what to trade is with a Yahoo’s Financial free service. This is a great tool for beginners. Just type in the symbol and a chart pops up, then click graph and look at the one-day and 5-day. If the chart is flat like a straight line or flat like a Nevada desert, look elsewhere. On the other hand if the chart looks like the Rocky Mountains, with peaks and valleys, you have a candidate.
I have known traders over the years that have been extremely successful by following only one chart pattern. You don’t have to know every rule, trading system, chart pattern or theory. Please beginners learn this well, master only one or two pattern, no more! When you become a master of recognizing a pattern you will start making more money that you loose. You may not trade every day but when you do trade you’ll have a high degree of success. Build you confidence with your style. -bb

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