Want to increase you probability of success when Day Trading? Follow these easy steps.
- Find a stock that has a solid technical set up
- Compare that stock to its respective indice ETF. For example; if you like the looks of AAPL, check QQQQ. If you like GE, check DIA. And so on.
- Judge how your stock is trading in relation to it's respective indice.
- If AAPL is +1.34% and QQQQ is +1.06%, then AAPL is trading relatively strong to QQQQ
- If GE is -0.75% and DIA is -0.50%, then GE is trading relatively weak to DIA
- If you want to go long your stock, ensure it is relatively strong to its respective indice
- If you want to go short your stock, ensure it is relatively weak to its respective indice
Incorporating these simple steps into your trade analysis will pay off big time. For me, this is automatic. Before I do any in depth analysis on a potential Day Trade, I check the stocks relative status.