1. The first thing I think about is the market. NOT THE NEWS. NEVER! Just the market. I want to know the one year trend, and the last 3 days trend. That is it. Currently one year trend is up. Currently last three days are up and flat. SO therefore I am long any stock I trade. With the occasional short. You may ask, Ben, what if the market tanks 1-2% tomorrow? OK then I am looking to sell my short term stocks that I am long (going up). I then start looking for short setups.
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2. The next thing I have is my old watchlist one that may have been built 3 trading days ago. Well that list is composed by using my video that I teach through here.
3. After the watchlist is built I then look to draw upper and lower ranges on the stock using trendlines. I use alot of drawing on my charts to understand where these ranges are and if a stock breaks above or below that range that is a trigger for me to enter. YOu may ask, Ben, what if the stock stays right in the middle of that range and creates a mini range and doesnt go out of that one. I draw support and resisitance around those as well and if it breaks above or below it, my next target are the original ranges I drew.
4. I then determine my stops and buys for each stock. Notice I said stops first. That is because the first thing I think about before getting in is the worst case scenario and how to deal with it if it happens. Then I envision the stock going up to my next target (this is taught in the courses that I mentor hundreds of students in). By envisioning my play before it happens I understand what to do before that moment hits where I am up 1-20% depending on the trade.
5. Money management and scrolling thru my watchlist constantly. Money management. Lets say a stock breaks above a range that I drew. My stopping point is that range break. So the risk is maybe a few cents and the reward is potentially infinite. However I just want 1-5% while trading short term. The best thing that I can tell you is that once you make a trade scroll through the watchlist constantly over and over until something shows up that you love. Stock trading penny stocks and any stock for that matter can be difficult but you have to understand that money management will keep you in trading for the long haul when you are not on a hot streak.
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