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stock trading: follow the money

When short term trading for a living it is imperative that you keep on top of the strongest and weakest sectors. Your objective is to be involved in the most recent order flow. A traders job is to identify accumulation or distribution by institutions and then trade the ensuing short term momentum. When you get good at spotting these footprints you should be able to ride those trends for easy profits for a few months.

A good example of this is money was flowing out of the financials, the downtrend was obvious and the shorts were a piece of cake. Since January however the industry has been a very difficult read while oil services and technology has been hot and order flow much easier to read.

Sometimes as a full time trader it is easy to get comfortable with a stock and a particular sector and that is good. You will know when to push your share size. However we recommend that you keep an open mind and follow the strongest and weakest sectors during the day and especially at the close every day. You will see a pattern emerging weekly as the same industries appear over and over. it may give your trading business a nice boost of potential opportunity. This is the same method we teach in our Keystone Platinum program.

  1. May 17, 2008 at 11:00 am

    Great post.

    Personally, I’m betting big in the solar sector. I believe it will be huge in the future, with rising oil prices. I’m currently holding ESLR, JASO, SOLF and WFR, and considering entering in either ASTI or DSTI.

    Stay safe, stops are in, emotions are out!

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