TheStockBandit.net

Happy Holidays from TheStockBandit.com!

You may be trading the holiday market this week, but I am not. It’s been a great time to get away from the screens and spend time with family and gear up for next year (next week I guess I could say). As you and I get ready for 2007 to begin, we’ve got a few things to keep in mind.

We need to set lofty trading goals because we’ll be starting over again. It’s also important to keep in mind that the market could very well shift gears and throw us a few curves, so anything could certainly happen once January arrives.

Whatever your plans are for trading in 2007, remember that small mistakes add up slowly, keep Goal Number 1 at the top of your list, and honor those stops at all times!

I’ll see you on the other side,

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

CyberTrader is running a pretty sweet promotion right now where any new account opened and funded will get you a free 17″ dual display. This is perfect if you’ve already done your holiday shopping but forgot to take care of yourself! The best part is that it doesn’t cost a thing, so you won’t feel a twinge of guilt. I already trade through CyberTrader for the best trading tools and executions out there, but maybe I need to open another account so I can get the free dual display!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Not long ago I noticed that buying dips and pullbacks within uptrends has been working much better for me than the breakout plays I generally prefer. This is largely a function of the market having run for so long without a meaningful rest, and fortunately my trading experience helped me to recognize that (along with, of course, a few failed breakout plays!). This has shifted my focus toward more of these types of plays in recent weeks, and my performance has improved substantially as a result of this minor and simple change.

The key to this change was when I took a closer look at my trades to see what was working well and what was costing me money (I do this regularly). It can be tough to admit the need for change if your ego is tied too closely with your trading, but remember that we’re in this to inflate our wallets, not our heads!

What aspects of your trading might need a little changing? Closely examine your process and the results you’re getting, and I’m confident that if something needs tweaking, it will stand out. Sometimes the smallest adjustments can make the biggest differences.

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

(Click for full size.) Secondary stocks can often make huge moves if you know what to look for.

Tuesday was a great trading day for us at TheStockBandit.com. You wouldn’t know it by glancing at the market. The NAZ was up 3 points, the S&P was up 5, and the RUT was up 1. In fact, you’d probably think that Monday was a big day and Tuesday was rather quiet.

It’s funny how that often works, but it’s just a function of the kinds of stocks we trade. We like to trade the names which are a little more obscure. Occasionally we’ll trade the biggies like AAPL and GOOG, but they are so dominated by the big funds that it’s harder to know what’s really going on with those stocks on a given day, not to mention they rarely make big percentage moves (which is the best measure of a move). Furthermore, options play a huge role in how the big names move, and you can never be sure if a lasting move is taking place or if it’s just part of the aftermath from the shifting or unloading of a large position held by institutions. They make for good day trading stocks, but they’re not ideal for swing trading.

A Different Breed

The stocks we tend to play are a little more secondary. Yes, they move well and have plenty of volume (our minimum volume cutoff is around 200k/day avg.), but the moves tend to be cleaner (and usually much larger) than the bigger names and that means a huge difference to the bottom line by the end of the month!

These secondary stocks often catch some nice follow through moves on days after the market averages make a jump, which means that some of our best days actually come after a big market move. When other traders are looking to play “follow the leader” the day after a big surge, it brings more activity into the stocks we are often already positioned in. This makes for some nice account growth on days when the broader market may be pulling back or just catching its breath.

So, the next time you feel like you’re missing out on a big market move, don’t discount the possibilities for the next session! There are a ton of stocks out there poised to move if you will do your homework and just find them. Believe me, they are out there!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Every now and then, that ideal trade comes along and you just can’t shake the urge to go big.

Now most of the time, I size my positions pretty consistently, only varying them when either (1) the market necessitates it, or (2) my recent performance necessitates it. But occasionally, I will see a culmination of several factors which leave me with that urge to “press the big button.”

Usually for me, this is an index-based trade done via ETF’s (like QQQQ, SPY, or IWM). That is by design, because I don’t want to jump out there with too much exposure to one particular name. Laying down the big trade in an ETF will greatly reduce and limit my gap risk, which is something that’s critical to do in order to manage risk.

Of course, there are times when going big is Read more »