One of our SMBU students visited our desk in NYC from Sweden today. Merritt, from SMBU Trading Conversations on Friday 1:30PM EST, joined us for lunch, as did this trader’s dad. This European trader is a graduate of SMB DNA and The Winning Trader and working on his game, after work hours from Europe.
There were two issues that arose during lunch that merit discussion:
1) What trades do I take with a limited ability to watch markets?
2) How do I settle on the best stocks to trade during Earnings Season?
What trades do I take with a limited ability to watch markets?
For this trader I like:
a) Changing Fundamentals Trade- Look for a news catalyst that is unusually positive or negative for the stock and follow the intraday trend.
b) Multiple Time Frame Gap and Go Holds- Look for a Gap and Go holding on multiple time frames, such as the 1m, 5m, 15m charts.
c) 2nd Day Trades- Find a stock that was In Play on Day 1 and look for follow through on Day 2.
These are three setups for which to practice in real-time. They best position the European student trader for success in our markets.
How do I settle on the best stocks to trade during Earnings Season?
As I wrote in One Good Trade, “You are only as good as the stocks you trade.” This is an important question above. See four quick ideas below.
a) I will host a webinar this Thursday to discuss this topic.
b) Consider this routine: SMB AM Sheet, SMB Scanner, SMB AM Meeting, Stocks gapping up or down 3%, stocks outside of technical ranges, stocks under $60 with tight spreads.
c) Remember the key is to improve your stock selection each day, not expect trade selection greatness tomorrow.
d) Spencer offers a generous look into his stock selection process.
Safe travels back to Sweden. And trade well!
Stock selection and game planning: My daily process
Stock selection and game planning
The SMB Stock Selection process
*no relevant positions