Sunday, October 31, 2021

How to find the BEST STOCKS to trade using DreamTai: A 7 Step Process

 

Here is an 7 step process for finding the Best Stocks to trade at any given time

It is very important to select the stocks which have  best chances of moving up.

 You do not want to select just any stock which popped up on any day.

 

 

STEP 1. Check the overall market

 

Check the following ticker symbols in DreamTai

  • SPY
  • QQQ

 

These two symbols are the symbols for ETFs which track the overall market.

SPY tracks the Standard and Poors 500 Index

QQQ tracks the Nasdaq index

If both of these are showing GREEN bars, the overall market is bullish.

So, it is a good time to buy. 

You can risk two percent ( 2.00 %) of your total capital in any stock trade in good bullish markets

 If the chart of any one of these two ETFs show RED bars in DreamTai, it means that markets are bearish.

Now, the overall market is not suitable to buy.

If you still feel like buying, just risk 1 percent (1 % ) of your total capital in any trade.




 As of October 11, 2021, the SPY is RED. That means the current market situation is bearish.

So, if I buy any stock, I will NOT risk 1%  of total capital. I will just risk 0.5 percent of the total capital.

 

STEP 2. Search for Trending stocks and stocks making 52 week highs and make a [TO BUY] Stock List

The following links can be useful

Top 100 Trending stocks

https://www.barchart.com/stocks/top-100-stocks?orderBy=weightedAlpha&orderDir=desc

 

52 week high stocks

 https://www.barchart.com/stocks/highs-lows


 Let us suppose you find two stocks, which based on your research looks to be trending up. Also, the news for these stocks are good and the analyst ratings are good/

These two stocks are [AR] and [PALT]

We need to  filter these stocks so that we can ONLY BUY THE BEST STOCKS


STEP 3. Check Weekly Charts and remove the weak stocks from the [TO BUY] Stock List


You can use BigCharts.com to check weekly charts


http://www.bigcharts.com


1. AR weekly chart


The weekly chart for AR is good and uptrending. Which is a good sign




2. Weekly PALT


The weekly PALT is not so good. It does not go up steadily.
It went up in a jerky manner may be because of news.
I do not prefer to buy this stock. It looks to be volatile.
i do not want drama..just predictable smooth uptrend.
Remember, we just want the best, nothing but the best.
 
 
 
 
 
 
 
Based on our analyis, we have decdded to remove PALT from our list and just focus on AR stock.
 

STEP 4. Check the Power Ranking of the two stocks in DreamTai 

 
 
 
 
 
 
 Both stocks have Power Ranking above 3. That means that the buyers are serious in entering this stocks and there is a large buyer volume.



STEP 5: Create a Trading Plan based on your analysis


 

Stock Name:

We had decided to buy AR stock and are going to risk only 1 percent of total capital as per step 1
 

 Total Capital:

Assume, that you have $100,000 as your total capital.
Put that value in the Total Capital text box.
If your total capital is something else, put that value in this box.

Risk Percentage:

We had decided to buy AR stock and are going to risk only 1 percent of total capital as per step 1
So, enter 1 

Entry Price:

Stop Price:

 You can get the Entry Price and Stop Price values from DreamTai chart



 

 

 Click on the Calculate button.

You will get the complete Trading Plan.


Step 6: Put Buy Order Trade and put Stop Loss Orders

Go to your brokerage website and put your buy order. After stock purchase, add a stop loss order as shown in the Trading Plan.


Step 7: Manage your Trade

Every day, keep check of the blue stop loss line.
As time passes, the blue line will slowly move up.
As the blue stoploss line moves up, keep moving your stoploss up,
so, you are slowly reducting your risk as  time passes.
 
Also, take profits on part of your stock quantity when the stock treaches the Target Price.
 

* If you do not see the Blue Line on DreamTai stock chart, just RIGHT CLICK on the stock chart and
 
 select [Show Stop Line] from the menu



 
 
Refer the following webpages




 
 
 






 

 

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