Trade IdeasWelcome to Malibu Investment's Private Twitter
PRIVATE MALIBU TRADE IDEAS
In the world of the stock market, the active trader is presented with many opportunities to trade. There are thousands and thousands of stocks traded everyday on the US exchanges.
However, the number of “Optionable” stocks is closer to 3,000. Do we look at all of those? No. Our universe of stocks is typically less than 50. A significant number of those we like to call “Jumbotron” stocks, the likes of Google, Priceline, Amazon, Autozone, Regeneron, Chipotle, Tesla, etc… you get the idea. They are all very active, and all extremely liquid.
Remember, stocks move down, and stocks move up. Here we try to identify those stocks regularly, in order to capture a significant move in either direction, or perhaps even find one that does nothing where we can collect premium.
NOTE: Do you have a regular job, or just cant sit in front of your device during trading hours? Would you like the private tweets sent to your phone? If so, you need to set up your twitter Text/SMS properly here.
Catalysts move stocks
CATALYSTS? Yes, a catalyst is something that precedes an event. Catalysts move stocks in BOTH directions, down AND up.
If you are short term swing trading In the stock market, NEWS is an immediate catalyst and perhaps one of the most important ones of all.
There are many types catalysts, here are a few;
- Earnings reports, which include guidance, higher or lower, and board acceptance or denials of motions made by shareholders.
- FDA drug approvals or denials.
- Company manufacturing numbers or shortfalls.
- Government report #s, and guidance.
- Unusual Options Activity- When an equity has a small open interest in calls or puts, and then all of a SUDDEN there’s an avalanche of buying/selling at certain strikes, one must ask; what does someone know about this stocks future? Its no coincidence the “smart money” would rather go quietly into calls/puts knowing with high probability what may be coming shortly to move the underlying equity.
Position Size Rules
While each trader has his/her own unique approach in the market, it can be reasonably said that most of us are looking to engage a high-probability strategy that produces consistent positive returns. If that is the case, then it’s critical to be consistent in terms of position size when adding new exposures to your portfolio.
A lack of discipline in this area can lead to larger losses, which can derail confidence and put a big dent in available capital.For these reasons, the degree of “confidence” we have in any particular trade idea shouldn’t necessarily dictate position size. Instead, the risk should be spread equitably across the portfolio and match the profile and investment goals of the trader.
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