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Trading Stocks

 

Now that you have selected the stocks you want to trade, and have found the appropriate volume settings for the stock you will need a strategy to trade.

The most common strategy would be to have the corresponding futures contract open next to the stock chart. As you saw in the previous example of IBM and the ES futures, the futures turned before the stock. If you are shorting a stock, this is very important, as it will allow you to get short on the up tick.

The strategy would then be, when the futures contract is in a bullish trend and has retraced into a intermediate support buy zone, you make the purchase of the stocks you have rated as strong and trade accordingly. You could hold the position until a reversal, either typical or strong trend, occurs and sell. You would then short the stock that you have rated as weak and wait until the next reversal.

As noted earlier the stock probably will not be trading at the same zone that the futures are at, and you will have to watch the stock over time to how how it responds to the ZoneTraderPro zones.

MarketDelta will also work on a stock chart, so just as you would use MarketDelta to time the entry into a futures trade, you could time your entry into a stock trade.

If you were to trade weak or strong sectors the strategy would be similar. However the chart of the sector might respond more closely to conventional ZoneTraderPro patterns, as it represents several stocks and has more depth.

 

Click here to view a short video on setting up your charts to trade stocks and sector ETF's.

 

We will now look at trading a sector and ETF.

 

 

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