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Stockhaven’s classroom 4/17/12

Topics include: what intraday charts to use for day trading, how to use time and sales, preparing yourself for the dump, how to short a stock and what it means… tickers covered: ZNGA/LUXR/SEFE/MWWC/DNAD/COIN/OREO/ASYI/TFER/FMCC/RSRS

Here is a text copy of the submitted questions (italics represent Stockhaven’s comments)

1.) Which minute (3,5,10,15 ect.) along with 1 day, few day, or intraday chart is the most beneficial to use when day trading? Also when using these charts intra day do the longer term daily charts supports and resistances have much more strength and significance than intra day supports?  Also when looking at the charts, I have noticed that sometimes even with high green volume the price of the stock hardly moves and then other times on low volume the price goes up quite a bit, is there a reason for this when volume is the key to price?

when you fall on low volume it’s simply a matter of low supply, but even lower demand

when you rise on low volume it’s simply a matter of low demand, but even lower supply

2.) I would like to know when looking at time and sales and there’s a yellow transaction printed how to determine if it’s a buy or sell.

3.) A question I’m sure a lot of new players are thinking. So it it hasn’t done it yet but SNPK will dump. A stop-loss can protect you from the dump correct. Is there the possibility you stop doesn’t get filled. How do you go about protecting yourself from dumps besides stop-losses and keep from being bordeline suicidal like that one guy from the first SNPK dump.

if you’re gonna play a stock like SNPK — DO NOT LEAVE THE COMPUTER SCREEN

4.) How do you short a stock?

ex.

SCSS — short 1,000 shares @ $34.75 for total proceeds of $34,750

obligation — buy back and return the 1,000 shares that I borrowed to short

i make money — cover 1,000 @ $32.75 for total proceeds $32,750

I return the 1,000 shares (like i’m obligated to do)… but it cost me $2,000 less to buy them back so I get to pocket that difference 

i lose money — cover 1,000 @ $36.75 for total of $36,750

I return the 1,000 shares (like i’m obligated to do)… but it cost me $2,000 more to buy them so I have to shell out that difference 

how much time you have in this trade is completely up to your broker (or whoever you borrowed the shares from to short)

5.) I noticed in class the other day that you had Time & Sales window open on a stock.  Do you use this to help you make decisions on entries/exits?  How could someone use the Time & Sales window to help them in their analysis?

6.) I would like to know what is the best way to enter a trade. I find a stock i like which has broken out of its base and previous resistance, and the next day i decide I want to play it. Now should I enter immediately after it has broken its previous days high or wait for a pull back during that day or does it depend on if i plan on holding the stock or day trading?

is your plan to enter as soon it breaks the previous day’s high?

is your plan to wait for a pullback to previous days open after a subsequent break above that days high?

7.) Can you please explain when I should buy many shares of a certain stock and when I shouldn’t. Sometimes I feel Iam more likely gonna get rid of 100,000 shares(for sure) then get rid of 500’000 shares (and be stuck). Please explain.

http://www.stockhaven.com/stockhavens-classroom-41112/

  1. ZNGA
  2. LUXR**
  3. SEFE**
  4. MWWC
  5. DNAD**
  6. COIN*
  7. OREO**
  8. ASYI
  9. TFER
  10. FMCC
  11. RSRS

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