The New Day Trader Advantage features surefire techniques for profiting from this more measured, cunning method of active trading-techniques that will help busy professionals and individuals achieve their investing goals with minimum stress and maximum gain.
In this book, I will provide more than a dozen fresh, clear ideas to help you achieve your goals. All are proven techniques that do not require a degree in advanced financial engineering to exploit. And, most importantly, all have been proven to work in many different investment climates. I have arranged the book by day of the week to help you focus systematically on the dozens of opportunities that regularly arise. Without a programmatic approach, it’s easy for your trade research to deteriorate into a hodgepodge of methods picked up here and there, without rhyme or reason.
I encourage you to focus on one methodology per day, forcing yourself into the sort of routine witnessed among successful professionals and advanced amateurs of all disciplines. I want you to advance to a whole new level of understanding of the short-term forces at work in the market and to achieve your financial goals with fewer impediments.
- Timing. Possibly the most important determination you will ever make as an active investor is the direction of the intermediate-term market trend. If you get the three- to sixmonth direction of the market right, you know whether you should primarily take long positions or short positions.
- Cycles. I will explain the most important cycles at work in the equity marketplace, including the 20-week and 40-week cycles. I will present quantitative and anecdotal evidence of these cycles and show how they can be exploited by active investors.
- Multimonth momentum. I will explain why observations of stocks’ relationship with their 10-month simple moving average may be the simplest yet most effective weapon in our toolbox.
- Sector relative strength. You will learn a new way of exploiting the well-known insight that at least 60 percent of a stock’s movements come from the popularity of its sector.
- Swing trading. Throughout this book, I will use a wide variety of “swing trade” methodologies to explain how to take short-term advantage of long-term change.
- Earnings, event, and seasonal edges. You should trade stocks only when the probabilities are clearly in your favor: not because you think you can read a chart better than 10,000 professionals who have been at the game many years longer than you, but because the stock faces a price event, earnings date, or calendar day that has proved to be a successful directional predictor in the past.
- Spin-offs. Corporate orphans provide great opportunities for active traders, as they are typically overly hated and misunderstood, providing traders with highly exploitable price information asymmetries for many weeks and months.
- Initial public offerings. This is another very misunderstood corner of the market.
- Postbankruptcy stocks. Companies that declare bankruptcy very quickly become pariahs on Wall Street. They are seen as failures and are shunned by the crowd.
- StockScouter. In 2001, I invented and helped to develop a stock rating system at MSN Money called StockScouter that has been incredibly successful—trouncing the broad market by a wide margin since its inception.
- N power. One of the most powerful and least understood forces at work on stocks is what I call “N power,” which is the power of the “new.”
- Ecosystems. Another hidden force is at work on companies when they are participating in an industry that is undergoing secular change in the way its value is weighed by the marketplace.
The New Day Trader Advantage By Jon D. Markman pdf