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.This means that if he has to take a stop, theamount of money he is wiling to lose will be no more than 2% ofhis capital.2% is the absolute maximum.You should attempt torisk less than that.The reason why this is so important is thateven if you are right 99% of the time you can still lose 10 timesin a row.Every once in a while this might happen to you.Only ifyou risk little money you will be able to survive such a drawdown.91How to find trades:Let me give you a quick insight into how I go about finding my trading candidates.There are several advanced software scanners available, which can scan aboutevery financial instrument available for potential trades.This software is rathercomplicated to operate and I would not recommend it to beginners.I would liketo go over a few easy to use tools and tips a beginner can use.Keep in mind thatcomplex analysis and scanning tools don t make you a good trader.Too muchinformation rather complicates trading unnecessarily and it can easily becometoo confusing.First lets go about a few ways on how to find stocks that have an interesting dailychart pattern.Each charting/trading software has so called  hot lists build in.Let s assume you are looking for stock that is in an up trend and that has pulledback over the last couple of days.You could simply bring up a  hot list thatshows you which stocks have had the biggest percentage gains over the lastmonth.If you look thru the individual stocks within this list I am sure you will findstocks that match your criteria of a pullback pattern (i.e.basic swing tradingpatterns).Bring all of those stocks in separate watch list and do some furtheranalysis.Do the stocks fit you trading criteria? Do they have enough volume?What is your risk reward ratio? It is very important not to over-analyze and to onlyconsider stocks that match your criteria.On some days you will simply don t findany interesting candidates.Beginners often don t understand this fact and end upmaking trades they shouldn t t have considered in the first place.This is one ofthe main reasons new traders fail! I tend to not look at a stock for more than 10seconds when I look at it in my hot list at the start of my scanning process.Thisallows me to stay more objective and gives me less room for false interpretation.The longer you look at a stock the more things you see that are not really there.The second step in my  scanning process are newsletters.Newsletters andother publications can actually be a tremendous help in order to find the  perfecttrade.Think about how difficult it is to sort thru the endless lists of stocks everyday by yourself.Chances are that you miss some great opportunities.By lookingat other tips you can vastly expand your horizon and it also takes away some ofthe work from you.It is extremely important though to only consider those tradingtips that you completely understand and that match your personal criteria.Youmust know exactly why you are entering a trade, what to expect and mostimportantly what your risk is.92Here is a list of newsletters and services that are interesting:http://www.hardrightedge.com/trader.htm (at the bottom of the page there areseveral newsletters)http://www.tradingfrommainstreet.com (check out the free trial)http://www.millennium-traders.comhttp://www.chartsmarts.comI want to urge you to only consider trading tips that are based on technicalanalysis.Don t even make an attempt to trade stocks based on newsinterpretation.You simply have no idea what influence a news story might have orif it is already priced into the stock.I have to say though that some individuals arequite good at interpreting news.If you absolutely want to trade news please havea technical stop level to limit your risks.Anything else is a recipe for disaster!I also find many interesting daily charts (also weekly etc.) while I am searching forday trading candidates.Even if I am looking for a pure day trade I want to makesure that the  big picture (trend) is in my favor.When I look at these daily charts Ioften find interesting patterns and simply keep those stocks on my list for thenext day(s).Scanning for day trades:Scanning for day trades is a little more difficult because there is less time toprepare for the actual trade.Just as with scanning the daily charts I use hot liststo find candidates.Please refer to your software in order to find out whichparticular list is interesting and available.I also like to use  remote scanningprograms.These scanners deliver a number of pre defined and partiallyadjustable scans directly to your desktop without having to install complexsoftware that takes up a lot of resources.They can be used for day trades aswell as swing trades.Here is some good scanning software:http://www.pristine.com/esp_product/index.htmlhttp://www.sortwizard.com/neopages/sortwiz1.htmhttp://www.ozscanner.comhttp://www.realitytrader.com/iscan.htmhttp://dynamic.nasdaq.com/dynamic/afterhourma [ Pobierz całość w formacie PDF ]