Stock trading education-trading tactics-examples

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Stock trading education-trading tactics-examplesStock Trading Education - Trading tactics examples

Market technicians claim a good indication that a stock will move up is when price and volume increase together - when they make a tandem move. The Price Volume Tandem Move (PVTM) is a great play to track because it indicates the stock has upward pressure.

Charting Patterns for PVTM Plays

As mentioned previously, some striking trends develop as you back test and track PVTM plays. Some of the most noteworthy trends include: surge in volume, 10-day moving average line crossovers, breakouts, number of days required to achieve a 25% gain, and the returns from the various holding periods.

Stocks reaching the 25% gain threshold in one day tend to have a higher failure rate than those taking 2-4 days. Slightly slower and more consistent moves up have shown to help buttress a stock as it climbs.

Stock Trading Education - Trading tactics examples

The Slam screen looks for stocks experiencing a significant drop in price. Playing Slams requires constant vigilance and quick response time. There are a number of ways Slams can be played: Short Term Bounce, Continuation, Pullback with Support, and Recovery. All Slam plays have more than average risk, but the Pullback with Support and Continuation plays are less risky.

The common screening criteria among the four plays are a price drop. For all but the Pullback play, you'll want to screen for at least an 8% drop. Slam days also have abnormally high volume. To ensure that you're looking at stocks with good liquidity, screen for more than your normal volume requirement.