US stocks for beginners

[wasp]

Mornin all,

I am in pursuit of branching out into US Stock trading, mainly NASDAQ and mainly intraday. I know nothing whatsoever about trading US Stocks and all my experience lies in currencies so I am a complete novice.

I'm in no major rush to start, which is quite handy seeing as LII to me at the moment looks awful pretty but means absolute zilch and my knowledge of volume goes as far as the dial on the front of my laptop.

So the pursuit of the thread is for a couple of things;

Firstly, knowledge. Any knowledge, education, reading, advice, suggestions and thoughts on the difference between US stocks and other markets, and more depth behind the LII and volume aspects and how best to go about choosing stocks.

Secondly, live calls or even past tense with reasoning. The threads not for proving anything just for, hopefully, all to learn and understand stock trading. Any trades whether live, yesterday or last week with a bit of explanation would be great. Not asking for anyones edge, just basic whys and hows.

Coming from a FX background all I am used to and all I know is a blank bar chart, so in hope, we can build a comprehensive, independant thread for this as it is all new and fascinating and hopefully a great way for all newbies to learn and advance.

Looking forward to everyones input.

Chris

 

[wasp]

Goog

To kick it off, heres GOOG I watched yesterday.

Like I said, Everything but the chart means nothing to me and there are a few obvious oppportunities I see from the price action alone but I'm sure the rest of the screen helps somehow!?

 

[TheBramble]

Good idea for a thread Chris. I hope you get some useful responses.

I'd go even further and as you're new to US stocks, suggest you initiate a number of threads. Any one single thread tends to get lost even on the narrowest of topics.

Perhaps one for how to select from the thousands of stocks for which ones to look at on a regular basis. And how to narrow that down to a subset of real potentials on a daily basis. And then what to look for from them during the day.

If you're not used to trading intraday on stocks then it would be useful IMHO to consider going through the end-to-end process in a more relaxed timeframe. The selection, setups etc are all pretty much identical, but the ability for you to squeeze the maximum juice out of the process and experience will be far more possible than if you're also trying to get up to speed with LII as well and track them all on a faster timeframe.

A potential menu for this knowledge acquisition exercise could be something like the following:-

How to select those stocks from the thousands out there, that will suit my trading style, methods and profile.

How to whittle those stocks that meet my basic selection criteria down to a subset that I can focus on during my chosen timeframe given current market dynamics.

What I am looking for in those stocks to signal potential entry and exit criteria. Methods and strategies.

Volume and the interplay with Price Action.

Then, when you're happy with all of that and if you decide to go intraday - LII

(You already trade FX successfully so risk & money management are second nature).

There's already loads of stuff on these boards but even with the excellent search facility, you need to know what to search for before you can find it. Even something as simple as LII is Level II and Level 2 and L2. It can be a pian. Plus, who the hell ever searches...

There are also tons of books which wil get mentioned and cart loads of e-books available which members wil have their memories jogged by such threads and queries.

So kicking of discussions that have been had before is no bad thing, plus modes change and new ideas get brought into play so it's always worthwhile.

Go on Chris, kick off the threads and I'l pile in along, hopefully, with a few others.

 

[TheBramble]

To kick it off, heres GOOG I watched yesterday.

Like I said, Everything but the chart means nothing to me and there are a few obvious opportunities I see from the price action alone but I'm sure the rest of the screen helps somehow!?

But to address your post...

First, I don't trade GOOG. It doesn't meet my basic selection criteria. Any stock over $80 doesn't currently feature in my first-pass stock list.

It certainly meets the other basic criteria of daily volumes traded and daily range, but all criteria have to be met for me to consider a stock. This is just my position Chris, others make tons of moolah from trading GOOG. That's their story and I hope they share it with you.

Second, you've got a news feed at the top of your screen. I stay well away from the news. In the past when I've traded the news I've found my interpretation of what news 'means' is about 50/50 right in terms of subsequent moves on the market or specific sectors/stocks. Others will of course differ, but I'd be interested in just how accurately they can asses moves in stocks and sectors based on news. My position is that once anything is in the news, it's already in the price and only joe public trades news. But then I also believe the price leads fundamentals.

As per my post above I truly believe getting into LII on top of everything else would be a mistake given where you are and what you want to be doing right now, but what you're looking at is an 11c spread at the inside, relatively bullish, but with what appears to be diminishing depth on the bid. You'd be looking at depth on LII to factor your risk (get out cost). On GOOG, size isn't going to be a problem! But LII is a real field in its own right and deserves its own space.

You mention seeing some obvious opportunities - what were they to you and why? What part did the volume play in your assessment?

 

[wasp]

Google

The volume meant nothing to me at all. The news was just there, it came with the demo package and so I left it there. I have never used news for trading as like you say, price will do what it likes despite what the news release 'should' mean.

As for the opportunities I saw...

No. 1 - It opened lower and bounced off the open level twice. It then broke through the diagonal trend line so when it broke the next level at 377 I sold with a stop above the level. It bounced off it on the next candle then dropped down. The exit was on the candle after where circled due to the candle weakness.

No. 2 - After it broke up through the level, I waited to see if resistance became support which it did, so I bought as it bounced up. I exited pretty much where the screen shot finished.

Both were purely on the chart and the rest of the screen and volume didn't even come into it.

 

[wasp]

Yhoo

YHOO trade...

Another I just watched and demo traded....

After the double top I sold, watched it break through the diagonal trend line, rebound of it and drop down to the lower level. After the double bottom I jumped ship. It was only a small little profit but again, it was all just based on the chart as the screen flashed away and the volume did what it did.

Any suggestions on how volume and LII would have actually assisted?

 

[samtron]

Welcome to the NASDAQ chrisw and thanks for starting some fresh new threads on Nasdaq Trading. I hope we get some great input (hopefully advert free ) ( jokeing no offence meant to any one)

Yahoo
Interesting, I think if it had been me I would have waited to see if the neckline of the double top had been broken and would therefore probably been suckered into a bad trade On the positive side the double top was a bit to deep for my liking and would therefore probably not have taken a trade.

 

[wasp]

yahoo

The double top was deep and I was looking / hoping for the break through the diagonal too which it thankfully did and the pullback and bounce down again rested the heart a tad more.

I have gone long now on the break up with a stop below the level in hope of seeing the open ((?) white dotted line)) breached to move up the stop and let it run.

The issue I'm having is the relevance and importance with the LII and volume as I'm not used to it in the slightest.

 

[rols]

YHOO trade...

Another I just watched and demo traded....

After the double top I sold, watched it break through the diagonal trend line, rebound of it and drop down to the lower level. After the double bottom I jumped ship. It was only a small little profit but again, it was all just based on the chart as the screen flashed away and the volume did what it did.

Any suggestions on how volume and LII would have actually assisted?

Hi Chris

What Bramble has said is already worth more then reading 10 trading books.
Besides, who ever learnt to swim by reading a book? While I'm not suggesting taking to the high board and diving into RIMM, IMO I would mention that many of the heavily traded stocks eg. YHOO, BRCM, AMZN, AAPL etc. all have distinct personalities and worth spending a little time with each to learn their unique foibles. When I started trading I got shafted by YHOO many times while AAPL seemed to suit my personality better and yielded her fruits to me willingly. There again many wouldn't touch APPL with a bargepole. Try starting with a basket of stocks you fancy and see how you get on with them.....
Bit like life really.:cheesy:

best of luck

 

[wasp]

That YHOO trade would have worked nice if not for that pesky spike down!

 

[wasp]

Hi Chris

What Bramble has said is already worth more then reading 10 trading books.
Besides, who ever learnt to swim by reading a book? While I'm not suggesting taking to the high board and diving into RIMM, IMO I would mention that many of the heavily traded stocks eg. YHOO, BRCM, AMZN, AAPL etc. all have distinct personalities and worth spending a little time with each to learn their unique foibles. When I started trading I got shafted by YHOO many times while AAPL seemed to suit my personality better and yielded her fruits to me willingly. There again many wouldn't touch APPL with a bargepole. Try starting with a basket of stocks you fancy and see how you get on with them.....
Bit like life really.:cheesy:

best of luck

Cheers Rols,

Thats along the lines of what I was thinking to start. The markets I trade in Forex I have traded now for years and like you say, you get to know a market and how it behaves so picking a few choice stocks to watch and comprehend for now seems the best way, whilst I look into HOT (!) stocks and how to pick them.

 

[samtron]

Cheers Rols,

Thats along the lines of what I was thinking to start. The markets I trade in Forex I have traded now for years and like you say, you get to know a market and how it behaves so picking a few choice stocks to watch and comprehend for now seems the best way, whilst I look into HOT (!) stocks and how to pick them.

chrisw just of out interest (sorry for being a little off topic) why do you want to trade forex trading time for nasdaq trading time?

 

[wasp]

chrisw just of out interest (sorry for being a little off topic) why do you want to trade forex trading time for nasdaq trading time?

Ah but I'm not! I shall be trading both, just expanding my options. FX has become second nature and much easier this year. I usually finish by US open and a lot of my FX trading will soon be done via API so I'm looking for something for the afternoons and US stocks have always been one I've watched with fascination.

 

[wasp]

Let the games begin

After a few weeks of intensive study I shall start my escapade into the world of US stocks, only on paper/demo for a while, to see how I fair away from the world of currencies.

Looking forward to it as they do offer a whole new style of trading differing alot from FX and hopefully will offer great challenges, opportunities, education and eventually, just maybe, profits!

I don't wish to start a journal as I'd rather post randomly here, not just trades but thoughts, questions, ideas and suggestions and hopefully entice a few others to partake. This thread will be completely and totally impartial and not for posting how much I've made each day, more for the sharing of ideas and helping each other learn also, the only HOT thing nearby will be my coffee....

good weekend all...


EDIT: Putting the paper trading back a week to study this VWAP malarky, seems important!