9 Dec

AMA: What’s the fastest way to get better at trading?

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I looked through the queue of all the questions the RagingBull community asked… and I came across one that so many traders are asking… What’s the fastest way to get better at trading?

Well, I’m going to tell you there really isn’t a short cut. However, there are some tips and tricks for you to use to do just that.

The way the amateurs turn into elite is by finding an edge in the market and sticking to it. That way, you aren’t bombarded by all the noise in the market… clouding your judgment. How do I know that?

That’s how I got my start as a trader and took myself out of my negative net worth of $250K. For the most part, you could attack the market with just a few patterns… and as you get better, you add more weapons to your arsenal.

Today, I want to provide you with a few techniques to use, as well as show you that you could get better at trading and stack up with just one trade a week.

 

All it really takes is one or two patterns

 

I’ve come up with an easy-to-use strategy — designed to find the hottest stocks on the street BEFORE they run higher. Basically, I look for two of my favorite patterns and pair it with any potential catalysts.

As we all know, there are thousands of stocks out there… and it’s pretty much impossible for us to trade them unless we have a special algorithm. Heck, even if you traded 10-20 names, it’d be tough to manage — when you’re starting out, it’s easy to get caught up and just throw on random trades.

I’ll tell you one thing: if you don’t go into a trade with a thesis and a plan… it’s the quickest way to ruin your account.

If you’re looking for a system that allows you to consistently find winners in the market… let me show you how it works.

When I find stocks to trade, I filter down through all the stocks out there and find the one with the highest probability of success. It’s really that simple.

For example, one of my recent trade ideas was in ZAGG Inc. (ZAGG). My thesis was the company was just coming off the largest shopping holiday… and since it’s one of the nation’s largest accessory maker of screen protectors, I figured it could run higher in December.

So my thesis was in place… all I needed to do was find areas of value.

Check out the daily chart in ZAGG.

 


The stock had a bull flag setup  (one pattern I love to use), and a potential bullish catalyst in the cards. Not only could the stock pop off the coattails of holiday shopping revenues… but there have been talks of a takeover.

If you look at the chart above, the buy zone was between $7.40 and $8.00. Basically, you could look to buy anywhere in that area. The closer it is to $7.40… the lower your risk, because the stop loss was below $7.

So you could’ve put a limit order to buy at $7.60. For me, I was looking at a $10 price target. But remember, this is trading… just because someone has a specific price they’re looking to sell, it doesn’t mean you have to do the same.

For example, if you’re comfortable with taking profits near 10%… then you could put a limit order to sell half at say $8.25… and let the rest ride, and move your stop-loss up.

With ZAGG… you could’ve sold at $8.25, and locked in an 8.6% winner… and just leave the rest on the table for a potential move higher.

Sounds simple right?

If you want to learn more about how my trading system works and why it could cure all your trading woes, click below to get all the details.

 

Disclosure: I have no position in ZAGG as of this alert but may buy at anytime after.

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