Trading Baskets II: The Crapolio, A Roll of the Dice in the Stock Market
In a previously written article, we expanded the use of the term "Trading Baskets" to include stocks from different sectors or industries. Now I want to share with you an approach to day trading or swing trading that I had some success with back in the wild and woolly, pinnacle days of day trading that may still work today. Unfortunately, this basket of stocks was dubbed "The Crapolilo", a name it just could not shake. You'll see why.The crucial element that traders are looking for in any stock, which makes it a good day trade or swing trade, is movement or momentum. There are any numbers of things that can cause movement in a stock.
Usually it is news of some sort, either positive or negative. It doesn't really matter. You are only looking for movement, up or down. However, for this particular strategy we are looking for positive news. Keep in mind that it is not your job as a trader to totally understand why or what is causing the movement in a stock, beyond what it takes to make a quick profit.If you spend enough time glued to a computer monitor with CNBC blaring in the background and are looking for a stock to make a quick buck on, sooner or later you will realize that there are some familiar names that just keep popping up over and over again.
From these repeating names you may want to consider building your own Crapolio.Start by tracking the stocks that keep coming up over and over again. In this scenario the stocks for which we are looking usually play out the same way every time one of the stocks has news of some sort. Traders will jump on the stock, causing a mad scramble to get in on the move, and the stock will run up in price for a nice gain. The challenge is to be as early as possible on the play, get into the money (profitable), and get out before the momentum turns and the stock retreats. Rest assured, they will retreat because that is one thing all of the stocks we are looking for have in common; they hardly ever hold their gains.
If you're late to get in and even later to get out, you won't make a dime and will maybe even lose money. It is this phenomenon that the now famous Floyd's 4-Gets are based upon: Get In, Get Profit, Get Out and Get Away! So here's what I did, but remember that this strategy may or may not be right for you. I set aside a percentage of my trading capital for a basket of stocks that became known as "The Crapolio". I picked a large number of the stocks I had been tracking, low cost stocks under $5-$10 for the most part, but not always. I charted every one of them as far back as I could, looking for the ones that were most likely to continue to repeat the scenario.
I came up with what I thought was a recent low that was going to hold for some time; and I bought half the normal lot of shares I usually traded. (See link below to DTM: Decisive Trade Management and Trading Stops for lot sizes.) Then I waited.The theory is that sooner or later these stocks will once again have some sort of news event that will move them to the upside. As soon as that news hit, I would be in an excellent position having already bought the stock at a recent low. I would then try to buy an additional half lot or a full lot once the new news event hit the street. Overall, I would be in the shares much earlier on average and be able to take advantage of the move and sell for a profit into the momentum.
Being in the stock gave me the ability to lock in a nice profit without having to scramble to get in and scramble to sell before the momentum ran out.Often, I would be in the stock and the news would hit over night, causing the stock to gap up significantly at the market opening in the morning.However, this is not called "The Crapolio" without a reason. High quality stocks do not usually behave this way to the same degree. Those that do are much more expensive, usually $35 or more, making it cost prohibitive for all but the wealthiest traders to use this plan. As previously mentioned, most, if not all, of these stocks were under $10 and for a reason. These were not high quality stocks; in fact, the opposite was the case.
Most were high-risk speculative tech stocks or bio-techs. Many were dot-coms; remember this was in the hay-days of the dot-com boom. As we all know now, there were a lot more dot-bombs than there were successes. Obviously, this was my own version of Swing Trading.IT IS IMPORTANT TO UNDERSTAND THESE WERE "NOT" BROKEN DAYTRADES. Each stock was chosen, charted and watched over a period of time before it was added to "The Crapolio".I believe this strategy could still work today.
However, it is to be considered extremely risky and should only be used with money you can afford to lose.When trading this or any day trading strategy one should know and use DTM: Decisive Trade Management (see story at http://www.traderaide.com/index.html).Happy trading!No permission is needed to reproduce an unedited copy of this article as long the About The Author tag is left in tact and included..
Floyd Snyder has been trading and investing in the stock market for three decades. He was on the forefront of the day trading craze that swept the nation back in the late 1990's both as a trader and as the moderator of one of the Internet's largest real time trading rooms (http://www.Daytraders.com). He is the owner of http://www.TraderAide.com, Strictly Business Magazine at http://www.sbmag.orgAnnouncing Enhanced Launch of www.chukar.com : The Year ?Round Cherry and Berry Company?
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Baskets > Announcing Enhanced Launch of www.chukar.com : The Year ?Round Cherry and Berry Company?
Sympathy Gift Baskets
Sympathy gift baskets are perfect for politely expressing your thoughts to a grieving family during their time of loss and suffering. Along with your words of comfort, sympathy gift baskets convey your condolences easily and with the utmost elegance.
Most sympathy gift baskets are thoughtfully designed to aid you in expressing your thoughts, and one can choose from an assortment of sympathy gift baskets packed with specialty gourmet foods, fresh fruit, books of encouragement and inspiration, coffee, tea, candles and other gifts.
Sympathy gifts not only deliver a message of compassion, but are also filled with meaningful items that provide lasting comfort and support for healing. One can pack a serene basket of sympathy gifts with a variety of shortbreads, butter wafers, fruit jams, soothing tea, crackers, cheese, remembrance candles, and a book of poems, verses, and comforting quotes.
During the most difficult hours of a grieving family, sympathy...
Baskets > Sympathy Gift Baskets
Gift Baskets Make a Great Gift
We have all been facing the situation one time or another when we need to get a gift for someone, but just don't know what to get them. Here's an idea for you ? a gift basket! Gift baskets make an excellent gift as each of them contains lots of smaller gifts. They are also great for you as you don't have to waste lots of time wondering around a store searching for that perfect gift.
If you know someone who doesn't feel well and needs a little TLC, a get well gift basket makes a great gift. Get well gift baskets should contain items to help them get over feeling under the weather.
They should contain items that you too would love to have to help you get through getting over an illness or healing after a major surgery such as some nice hot tea to help you relax and perhaps a few candles and something for a nice hot bubble bath. While they are at home getting better, they will be thinking of you as you have helped make them feel a bit better.
Do you...
Baskets > Gift Baskets Make a Great Gift
Bedroom Colors
A touch of color can transform the most subtle, plain
looking bedroom into a cozy, pleasing to the eye room.Colors on the walls and in the carpet can be carried through
with accessories like plants, throws, and chairs.
Colors on the walls and in the carpet can be carried through
with accessories like plants, throws, and chairs.
For a feeling of peace and calmness, the walls, ceiling and carpet should be pale, pastel colors complimented with brighter colors with dark trim for curtains and upholstery.
To make a room appear cooler, neutral shades can be used. Neutral colors can add to the freshness and lightness of the room as well. A soft and feminine feeling can be achieved by using soft colored fabrics for the walls.
Throw pillows of the same color can be added for a greater effect. The use of striking fruit and flower patterns on the walls and ceiling can give a bedroom a "garden-like" feeling and carpet, throws...
Bedroom Colors
Baskets > Bedroom Colors