Learn how to find stocks that will typically move $1 - $5!
Three Steps for consistently making money trading stocks
Step One) Determine which way the market will move and trade stocks in that same direction.
This will reduce your risk and give you a higher percentage of winning trades and reduce the loss on your losing trades. Most stocks follow the market. On up days most stocks have far less selling and more buying which causes them to go up. The reverse goes on down days. Our software has many tools for helping you gauge market direction.
Rules of Thumb
Rule 1) If above the pivot go long, if below go
short. (Pivot point is horizontal white line).
Example: In the example below you can see the S&P 500 futures. This is one of the best overall market indexes and most stocks tend to follow its direction. In this example we have a few of our predictive tools - Balance Point Sectors, Pivot Points, Statistical Range, Squat Bar and Trend Reversal indicators.
First look at the pivot points, the white line is the average price of the previous day and the rule of thumb is to buy if the market is above and look for shorts below. The next step is to look at our Balance Point Line which is the average price that traders hold positions. This is one of the most useful tools and is a fantastic support/resistance level. If above the yellow line you should be long and below the yellow line short. If above the pivot point and balance point line your odds of success buying are dramatically increased. During times where the market is under the balance point and above the pivot use caution buying. Reverse for shorts.
Let's see how the above and our other tools worked in the chart below. The market was above the pivot all day and on three occasions pulled back to it and reversed. There were low risk stock buying opportunities at 9:45 am, 10:45 am, and 1:15 pm EST when the market pulled back and found support at the Pivot. This happens usually at least once each day and is a source of the lowest risk trades. Buy stocks when the market finds support at the pivot. If the market is below the pivot and rallys up to the pivot short stocks when the market finds resistance there. Using these TRADING ZONES can dramatically improve your trading results and end the confusion about which direction to trade.
Our hourly statistical tool shows you how far the S&P normally moves each hour. As you can see it gave three low risk buying points (10:45am EST, 11:45 am EST, and 1:15 pm EST). You could buy stocks at these levels with a very high probability of making money. Our squat bar indicator (Green and Red arrows) works on all trading instruments. Since the market is above the pivot and we want to look mostly for longs, go long whenever you see a green buy arrow. It gave you 3 signals, all of which worked.
Knowing when uptrends are likely to end also gives you a huge advantage in trading stocks. If you were long with nice profits our Trend Reversal tool alerted you at 12:45pm EST that the market was likely to reverse which it later did. The second Trend Reversal signal was almost the end of that trend and the market went sideways. When you see a Trend Reversal signal you should either exit longs or tighten stops and watch carefully for a market reversal. When you see this signal it is not wise to initiate new long positions.
The MOST useful market prediction tool we have is our Balance Point Sector tool on the bottom of the chart. In this example we are watching all the stocks in the major sectors to predict which way the market will go. We suggest using the sectors Semi, Tech, Biotech, Drugs, Banks. If 3 of the 5 sectors are green then you should be buying stocks, if 3 or more sectors are red you should short. This tool really gives you a clear picture of what the market is most likely to do and is often a leading indicator, showing market reversals 3 to 15 minutes early and letting you know ahead of time if big up or down trends are likely to develop. As you can see on this chart Semis and Tech sector are very strong and they tend to lead the market. Unfortunately Drugs, Banks, and Biotech were mixed and sometimes up and sometimes down. This is a clue that the market is unlikely to make a big move up and as you can see in the chart the overall odds were up but the market found lots of resistance. As you use these tools you will see over time that when 4 or 5 of the sectors are strongly up huge uptrends develop and the opposite is true when the sectors are weak. It's very helpful for traders to know when the market will be choppy as it is the majority of the time. Knowing this ahead of time lets you trade stocks both long and short and to know not to try to hold for super huge profits as these days are less likely to provide you market trends and huge profits.
Step Two) Trade Where the Action Is - Scan the market and find the absolute best stocks to trade.
TopGun Software's scanning is second to none. Not only do we give you the ability to setup hundreds of combinations of scans but you do not need to learn a complicated programming language to use it. You can setup complex scans in seconds and then automatically link the scan results to your charts! Just sit back and wait for the highest probability, lowest risk trades to come to you and then enter. We take a lot of the stress out of trading, leaving you in a more relaxed and focused state of mind. Expert traders often say knowing how to trade is only part of the equation, you also must not risk too much capital on any given trade and control the emotions that often sabotage most traders.
Knowing which way the market is most likely to trade and then finding the best trading stocks will greatly improve your odds of becoming a successful and profitable trader. The last step is to know when to buy/short, where to put your stop loss order, and when to exit your trade for a profit. TopGun Software gives you many original timing tools and low risk buy and sell areas and one of the most profitable trailing stop systems in existence.
Different trading systems have different rules. Breakout systems typically buy when the market goes over the previous swing high point. Another system may wait for the market to settle down and trade after the first 15, 30 or 60 minutes have occurred. That system may buy the first 15, 30, 60 min high breakout.
Entry / Exit Tools - In Trading TIMING is Everything!
Many traders like to take gap trades, here is one of the highest winning percentage gap trading systems in existence. Our software lets you find these trades almost every day and take very low risk entries. You first scan for stocks that gap up $1+ and then the stock has to pull back under the yellow Balance Point indicator. This price is where most traders hold a position and is the absolute BEST support/resistance tool. It is REAL support / resistance unlike moving averages and other tools which are math derived. You buy when stock breaks out above Balance Point Tool. The examples below show trades our software finds and also how it can prevent you from taking bad trades and reduce your losses.
Wouldn't it be nice to know how far your stock normally moves every 15 minutes, half hour, hour?
We thought the same thing and created our Range Projection indicator. You select how many days to average and what time frame you want to see and we do the rest. We plot the statistical high and low on any time frame. On the examples below you will see 5 min charts with various statistical ranges. Notice how the stocks bounce off the statistical low and sell off of the statistical high. These are very low risk areas to buy and short and take profits. It is most often wise to take profits at these levels and then if you feel the trend will continue re-enter on a pullback
Other Tools That Will Greatly Improve Your Trading Results
1) Volume Profile Charts - Advanced Charting that shows you the Open / High / Low / Close but more importantly where all the trading activity takes place. This shows you REAL support and resistance areas to buy and short and exit trades. Why do so many traders lose money trading? Human emotion! Here's what often happens. Many traders enter positions in a certain direction, they are wrong and it goes against them. They sit and wait and sweat as they are losing money, sometimes a LOT of money. Many exit with losses. Others hold on tight and hope the market reverses. When it often does and comes back to the area they placed their trades they are so relieved to get out with a small loss or breakeven they almost always exit. This causes the market to stall at this level at the least and usually reverse. These areas are often the lowest risk and highest probability trades! Without Volume Profile charts you are really trading blind.
Example: In the chart below you can clearly see not only the open, high, low and close of each bar but where all the trading activity took place. This works on all intraday time frames, Daily, and Weekly. Notice on the first day the HUGE amount of trading activity at $84.00. It is not a coincidence that on the following day the stock can not get above this level. In fact three and 6 days later it fails at this level. As you can clearly see, those who bought at $84.00 were thrilled they could get out at break even at or near this level. This caused selling and the market stalls at this level. This is the most REAL support/resistance tool you will ever find and is fantastic for all traders - Intraday Scalpers, Intraday Swing Traders, Multi Day Swing Traders, and Investors to help perfectly time their trades.
2) Buy/Sell Pressure - Wouldn't it be nice to see in real time how much buying and selling is going on in the stocks you trade?
TopGun Software's Buy/Sell pressure tool lets you see just that. Real time buying and selling and the ability to watch what the world's largest traders are doing. You can set this tool to show Institutional buying and selling.
3) Multi Size Time & Sales Window- Watching trades in real time is a secret of the world's best traders. "Reading The Tape" is what this is often called. Our software gives you the best Time and Sales window you will ever find. We let you watch 3 Different Size Traders buying and selling, and show you the Ratio of Buying vs. Selling. This tool will give you CONFIDENCE!
In this example you can see our Time & Sales Window for EBAY. The left window shows trade size less than 400 shares, the middle pane shows trades greater than 400 and less than 2,000 shares. You can set these values to whatever you like but we've found this works great for most stocks. The far right window shows what the largest traders are doing.
Example - If you had bought EBAY you would feel comfortable holding as there was 270% more buying by small traders, 380% more buying in the mid size traders and 340% more buying by the largest traders. There's no reason to exit this trade.