The stock market is crashing and selling off the entire gains of 2019 and now for and retesting
2018 lows.
There's lots of fear and panic in the market.
But at the time, this is the perfect profit opportunity for us day traders!
So i'm sure everyones aware now of this pandemic that’s been going on since late January,
that's causing a lot of fear in the public.
Everyones making grocery store runs stocking on non perishable foods.
And there's a massive shortage of masks, sanitizers… and for the first time ever, toilet papers
are worth way more, than a Lamborghini.
Okay maybe just a lambo hat.
All this unprecedented spread of fear and emotions is causing stock market investors
to panic sell and as you can see, some of the biggest sectors that've been hit are the
travel sectors such as the airlines and cruise lines.
Just as everyone’s thinking these cruise line stocks can’t go any lower, it tanks
even further.
No pun intended.
But its exactly times like these when 90% of the world is fearful and panic selling,
that it presents the best opportunities for us short term day traders.
So thats what i’ll be covering today in this video.
My thoughts on how to take advantage of the current volatility both as a buyer and a short
seller, thats right, you don’t have to be a bear all the time to profit from a market
panic.
As long as you remember to drop a like on this video.
Hey its completely free and safe to do, and you can do so while chilling in the comfort
of your own home, while maintaining social distancing.
The only danger you’d be exposed to catching… is some really bad jokes.
So lets talk about how to profit in this volatile market as a day trader.
Day trading means you are buying and selling positions in the same day.
No you’re not holding the position for weeks months or years, we’ll talk more about that
later.
As a day trader this kind of market volatility has been amazing.
Because it provides us a lot of range both to the upside or the downside.
One of my focuses has been the travel sector in the last few weeks.
These are companies that have been selling off to 52 week lows because of the travel
bans by various world governments.
Specifically the cruise line stocks like Royal carribean, norwegian cruise, and carnival
corporation.
They are suspending operations due to the outbreak and travel bans.
So in the big picture, these stocks are likely going to miss earnings the next few quarters,
because of course..
They have no revenue coming in.
Analysts are cutting guidance and the bottom is most likely not in yet on these stocks.
So if I was holding these stocks long term as an investmentm, i might see these stocks
tanking a lot fruther down.
But as a short term trader perspective, there's tons of opportunities for long set ups.
Many of these stocks are included in my free wekened watchlist.
These stocks have been on SSR consecutively for multiple days over the last few weeks
during the market sell off.
And thats my tip #1 for day trading in this volatile market.
Watch for volume and trend reversal on SSR triggered stocks.
SSR stands for short sale restriction.
Thats a restriction for short selling, if SSR on on, short sellers cannot sell on the
bid, so they have to short on the ask.
And SSR is triggered when a stock has fell 10% from its previous day close.
Now why does that matter if you’re looking for long set ups.
Well it does, if there is buying volume coming in.
On beaten down stocks like CCL, RCL, NCLH, you bet there are many short sellers piled
in, and swinging these stocks short.
Since short sellers can only short on strength, on the uptick, instead of breakdown on the
downtick, that means if volume comes in and stock start to reverse without a pull back…
short sellers have to buy to cover.
Which in turn adds to the buying volume and allows stocks like RCL and CCL to really bounce
when volume starts to come in.
Its important to note that SSR does not directly lead to a short a squeeze.
Im just saying it could contribute to it.
Which leads us to tip #2, do not be too biased long or short, during intraday trading.
Just because we are overall downtrending on the market, does not mean every pop intraday
is a short.
Especially when many of these beaten down stocks have a high short interest and on SSR
like we just talked about.
Keep in mind I'm talking about day trading at the moment, not swing trading and definitely
not investing.
As traders we profit from these intraday volatility.
It's extremely important to stay on teh right side of the intraday trend, and as you can
see from these charts…
When these beaten down stocks bounce, they can squeeze for dollars.
But once they top out at higher resistance levels, they start selling off and many times,
retrace 50% of the gains or more… selling off the entire gap up.
Whether you like to play the long trend to the upside or short trend on the downside,
theres plenty of range for both sides.
In my opinion, one of the most important qualities to have as a day trader in this volatile market,
is to be able to flip bias long or short by understanding the psychology behind all the
players long or short, and identifying who is in pain.
Which fortunately, is something I’m good at.
Its okay to be wrong, but don’t stay wrong.
cut your losers when the trend is reversing, and either flip the other side, or be patient
and keep observing, and re-attack when stock tops out at higher resistance levels, or go
long again when the stock start consolidating at even lower level support.
There is no reason to be bagholding anything in this market right now.
Now the next important tip I have for you, is to smash the like button and subscribe
on this channel.
With all the social distancing thats being implemented in the US, Canada and many other
parts of the world, neither you or I are going anywhere.
So you may as well stay for the bad jokes.
The Canadian government has now officially warned us to cancel all non essential travel,
stay indoors, and do not go out to bars or restaurants, and basically stay away from
seeing any other human beings.
So in other words… my life really hasn't changed all that much.
Glamorous life of a day trader here.
No lambos, just the reality, my trusty 1998 civic and two toilets.
#3 In all seriousness, the next tip is extremely important in this volatile market, get your
hands on instant news resources.
Because we are in a headline driven market.
Yes there are definitely free resources for news such as Finviz, stock market watch and
yahoo finance.
But they are not the fastest news provider…
I mean it's free afterall.
I personally use Briefing for text and email updates on news headlines for large caps,
and Benzinga pro, for instant audio news alert, and news headline posting on their platform.
Knowing the name drops and tickers of companies from president Trump’s public speech, and
the intraday company updates when they are cutting guidance or halting operations etc.
Its with resources like these that give us traders the speed and early entry in this
kind of market.
Now tip #4… may seem liek a no brainer.
But you’d be surprised that most traders do not do this.
That is… to prepare a detailed trading plan for the stocks you are observing to trade.
And no, just a list of 10 tickers and a headline is not enough.
Your trading plan should at least include your bias long or short, all the important
price levels over and under, potential entries, exits, and stop losses if you are proven wrong.
Yes that’s right, part of a trading plan especially in this volatile market is planning
for your loss.
And keeping that loss under control.
Again, planning your trades is 90% of the work in day trading.
And once the plans are done premarket, I just spend the rest 10% of the work executing my
plans.
There are other details such as float, SEC filings, and news analysis, and I go over
them in detail in my watchlist videos.
And yes, I do spend about 1.5 to 2 hours each morning before the makret opens preparing
my trading plan.
You can now sign up to receive my daily stock picks watchlist sent straight to your email.
Alternatively you can also trade with me daily in my discord chat and access more exclusive
trading video lessons and webinars.
You can see links to all of these premium services in the description below.
If you’re not ready for that, no worries, you can receive for FREE my weekend watchlist,
in which I list out 3 to 4 stocks im watching for momentum follow through every Sunday.
And usually those plays last a few days and provide great ranges to trade for both day
traders and swing traders.
Now tip #5 for trading in stock market sell off.
Keep your trading and investing seperate.
Its too often I get comments from people saying that I should not be buying stocks and the
bottom is not set in yet on the overall market.
And that we shouldn't touch stocks at all because its too volatile.
Btu thats why we are day trading it, and not looking to hold these positions long term
for investing.
Volatility is what we want as day traders, it’s how we make money long or short.
If you are scared of the volatility then day trading isn’t for you, and especially not
in the current market.
Day trading is a day to day business activity.
It’s very different from investing where you just buy and hold for the long term.
Which is why its best to keep those accounts seperate.
Yes of course for tax purposes, but also to keep emotional sanity.
When im trading, I don’t want to see my long term investments in the corner of my
eye, and make short term emotional selling or buying on these positions that are meant
to be held for 5, 10.
20 years.
And by the way, i haven’t checked my investments, it’s probably down like 10-20% year to date.
But in the mean time, i’m keeping an eye out to accumulate more stocks that I think
are trading at a huge discount.
And the plan is buy these stocks to keep thse stocks long term until I turn 50 in 5 years.
We talk about mostly short term trading strategies and set ups on this channel, but there are
definitely lots of discount opportunity right now and coming up soon in a few months in
the market for long term investors to buy.
especially while the pandemic has caused the entire market to sell off
Theres a very good saying that goes something like, “fortunes is made in a recession”.
Im sure somebody said it because that wasn’t me.
But if you’re interested in some long term investing ideas and videos, let me know in
the comments section below.
If you want to sign up for the free weekend watchlist or the daily watchlist.
Theres a link to sign up below.
And I hope to trade with you guys in my Discord room.