Small-cap stocks are companies whose market value is anywhere between around 300 million dollars and 2 billion dollars. This category encapsulates most, if not all, the smaller companies that are still publicly tradable. Should traders take a chance on trading small caps? It really depends on their strategy and even the size of their account. 

Many novice traders gravitate towards small caps because their stock prices tend to be rather low. At times, they go for around 50 cents a share or less. This means that with a couple of hundred dollars, any trader can buy up a decent portion of the company. In some cases, even small traders could significantly affect the stock price. These low entry price points make small caps a rather appealing option. On top of the low stock prices, small caps tend to fluctuate in value quite a lot throughout the day.    

Day traders can take advantage of these price variations to make quick profits with small caps. Having said all this, why do some people shy away from these stocks? The speed at which the prices for small caps fluctuate can be too much for some traders. This can lead to big wins as well as big losses. At times, people who enter the market without the right strategy are just on this ride as passengers hoping for the best.

It’s essential to understand the tendencies in small caps to make price entries as a day trader, with a scalping strategy that can help you be effective when trading these stocks. When that’s not in place, trading small caps could be a bit like playing a game of chance. That’s where things can go south quickly. People who’ve experienced the downside to these low-priced stocks are afraid to go on that ride again.  

Who then really benefits from trading small caps? As mentioned, traders with a smaller budget can definitely benefit from trading small caps. Small caps have also been a great refuge for some of the smaller funds that invest in the market. The lower prices allow these funds to buy up a considerable amount of stock and affect the price very much in the way that larger funds do with some of the blue-chip stocks.      

There are plenty of other benefits to trading small caps that any trader can take advantage of. The quickness at which these prices move can teach a trader to read market tendencies in a way that they may never be able to if they stick to the blue-chip stocks. You could argue that there’s a higher risk involved in this process, but the good thing is that it’s a lower investment that you’ll have to make to get past the learning curve that all traders have to go through. Trading small caps can sometimes feel like being thrown into the deep end of the pool. With the right tools and strategies, though, there’s a better likelihood that you’ll eventually learn to swim that way!  

Ready to become a professional day trader? Get LIFETIME access to our LIVE 60-Day Trading Bootcamp right here: https://bullsonwallstreet.com/60-day-boot-camp

The post Should You Still be Trading Small Caps? appeared first on Bulls on Wall Street.

Understanding Options and Equity

Before we jump into their combination, let’s understand the basics of options and equity trading. Options give traders the right (but not the obligation) to buy or sell an underlying asset, like stocks, at a predetermined price within a specific timeframe. Equity trading involves buying or selling shares of a company’s stock, aiming to profit from price movements. By using both options and equity, we can create a powerful trading strategy that brings the best of both worlds.

Hedging with Options

Options can act as a form of insurance in equity trading, helping to protect against potential losses in volatile markets. For example, if you own a portfolio of stocks, you can buy put options as a way to safeguard your investments. If the market experiences a downturn, the put options increase in value, offsetting the losses incurred from falling stock prices. This approach allows you to protect your capital while still being exposed to potential gains.

Generating Income with Covered Calls

A covered call strategy combines equity ownership with options writing. Here, you simultaneously hold a stock and sell call options against it. By selling call options, you earn a premium and generate income. If the stock price stays below the strike price until expiration, you keep the premium and continue holding the stock. However, if the stock surpasses the strike price, you may have to sell the stock at that price, limiting potential gains. This strategy helps you earn income while benefiting from a stable or slightly rising market.

Leveraging Options for Better Returns

Another way to combine options and equity is through leveraged strategies that amplify your returns. For instance, you can use options to control a larger position in the underlying equity with less capital. Instead of buying 100 shares of a stock, you can buy call options on the same stock. If the stock price rises, the call options increase in value at a faster rate, resulting in significant gains relative to your initial investment. However, remember that leverage also increases risks, so use caution.

Synergistic Strategies: Straddles and Strangles

Straddles and strangles are options strategies that allow you to profit from significant price movements, regardless of the direction. A straddle involves buying both a call option and a put option with the same strike price and expiration date. A strangle, on the other hand, involves buying out-of-the-money call and put options. These strategies work well when you expect large price swings but are uncertain about the direction. By combining these options positions with an equity holding, you can create a winning strategy for volatile market conditions. These are one of the best options trading strategies you can adopt for risk mitigation and income generation.

Check out a visual breakdown of a straddle below:

Check out a visual breakdown of a strangle below:

Managing Risks and Diversification

While combining options and equity can boost your gains, it’s crucial to manage risks and diversify your trading. Options trading comes with its own set of risks, including the potential loss of the entire premium paid. Assess your risk tolerance carefully, use appropriate position sizes, and diversify your trading strategies and underlying assets to minimize potential losses. Stock and options trading is risky, but with the right stock and options trading strategies you can crush the markets in a safe and efficient manner!

If you want to watch a deeper breakdown of this concept and dive into some examples, Kunal dropped an awesome YouTube video explaining this all in detail that you can watch here: https://youtu.be/m-CNNAwlFmM

By combining options and equity in your trading, you can unlock a world of opportunities to maximize your profits. With a simple and straightforward approach, you can harness the benefits of options strategies while capitalizing on equity market movements. Remember to focus on understanding the basics, managing risks, and continuously learning. With practice and experience, you can master the art of combining options and equity, bringing you closer to your financial goals and trading success.

Ready to launch your stock trading career? Apply for our 60-day LIVE Bootcamp right here: https://bullsonwallstreet.com/register/christmas-60-day-bootcamp/

The post Stock & Options Trading Strategies – Combining Both For BIG Gains appeared first on Bulls on Wall Street.

You take a loss that you know should have been a win, and the next thing you know, you have taken three more losing trades in a row.

You feel a grudge against the stock, treating it like a person who has just wronged you.

At this point, you are angry, confused, anxious, and driven to make the lost money back immediately without question. Instead of walking away from the screens, you keep searching for opportunities. You keep trying to make something work. You keep trading. You keep losing. 

This spin cycle is called revenge trading, and it is a crucial mistake that can absolutely crush your account, and crush it quickly.

Today, we are going to shed light on the importance of avoiding revenge trading in the current market. As a day trader, it is essential to avoid impulsive actions that can lead to significant losses.

Today, we will explore practical strategies to protect ourselves from the pitfalls of revenge trading, ensuring a more steady and successful trading journey.

Understanding Revenge Trading

Revenge trading, driven by emotions like anger, frustration, or greed, lures traders into making impulsive decisions to recoup losses quickly. It is as simple as it sounds. It is the emotional pitfall we human traders fall into when we take one or several losses and want to make that lost capital back immediately, even though we are in a heightened, angry emotional state.

However, revenge trading often leads to further financial setbacks and crushes long-term success. Recognizing revenge trading as a detrimental pattern is the first step towards avoiding its detrimental effects.

Learn more from Kunal Desai, a veteran day trader with over 20 years of trading experience, how to identify revenge trading:

How To Resolve & Prevent Revenge Trading Issues

Embrace Discipline and Patience

Discipline and patience are the key pillars of successful trading. Resisting the urge to retaliate against the market’s fluctuations and patiently waiting for optimal opportunities are essential. By adhering to well-thought-out trading plans, we can avoid succumbing to revenge trading’s allure.

Prioritize Risk Management

Effective risk management is crucial in any market condition, and it serves as a shield against revenge trading. Utilize risk mitigation techniques such as setting stop-loss orders, focusing on proper position sizing, and making sure you are always respecting the 1:3 risk-to-reward ratio on all of your trades. These measures protect your account from excessive losses and maintain a balanced approach to trading.

If you prioritize risk management and ensure that every single trade follows these proper practices, you will avoid taking a bad setup with bad risk management out fo anger and anxiety when in a heightened emotional state, avoiding the recent trading detriment.  

Do NOT be this guy:

Maintain Emotional Detachment From Trading

Separating emotions from trading decisions is a skill that all traders must cultivate. Emotional detachment allows for objective analysis and rational decision-making. Celebrate wins modestly and accept losses as learning opportunities without letting them impact future trades. By staying emotionally detached, we can maintain a clear mindset and avoid falling into the trap of revenge trading. You are then trading the chart and the setup, not your emotions, allowing you to make clear decisions amidst a stressful environment/situation.

Stay Engaged in a Community

Participating in trading communities, joining chatrooms, and seeking mentorship provide invaluable opportunities to gain insights and learn from experienced traders. Engaging in knowledge sharing helps expand our understanding of market dynamics, trading strategies, and risk management techniques. Through collaboration, we can develop a well-rounded approach to trading, reducing the likelihood of succumbing to revenge trading tendencies.

Also, a community or trading partner can prevent you from overtrading or revenge trading simply by having another person ‘monitoring’ you. A trading partner is an amazing resource that many people find within our chatroom upon joining. By opening up to your partner and allowing them to see what you are doing on a day-to-day basis, they can stop you from revenge trading by pulling you out of an emotional state and helping you realize that you indeed are about to revenge trade and should completely walk away from the screens. Find a partner or a community, engage with it, and be open. 

Find out more about our chatroom by clicking here!

Cultivate a Growth Mindset & Accepting Losses

Adopting a growth mindset enables us to view setbacks as opportunities for growth and improvement. Embrace failures as stepping stones on the path to success. By continually learning from our mistakes and seeking ways to enhance our trading skills, we can build resilience and navigate the market with a growth-oriented mindset.If you understand that losses are just a part of the long-term game and journey that is trading, you will learn to accept the losses and move on, taking a valuable lesson with you each time. You won’t on the contrary get angry and try to make that money back immediately by forcing bad setups and revenge trading.

Rrevenge trading poses a significant threat to traders in today’s market. By adhering to discipline, patience, and effective risk management strategies, we can safeguard ourselves against impulsive actions and emotions. 

Only 8 Seats Left In Our Next Live Trading Boot Camp

Click here to apply for our next trading boot camp!

The post How to Overcome The Deadly Trading Sin of Revenge Trading appeared first on Bulls on Wall Street.

The best trading idea in the world won’t make you money if you cannot execute it. To succeed as a trader, you must be proficient in planning AND executing. 

Here are five actionable trade management tips to help you improve your trading that you can implement immediately to improve your results in the 2023 market conditions:

Size Down During Market Volatility

Every novice day trader thought they would become a millionaire when banks started failing a few weeks ago and volatility started hitting the markets. More range means more profits, right?

Wrong. During volatility, you can win big if the trade swings in your favor, but you will also LOSE big if the trade goes against you. As traders, we always respect risk. Any trade can turn into a loser.

Here are more reasons why you should size down during volatility:

Taking Partial Profits

As traders, our job is to take profits. We do NOT marry positions. Especially when the market is volatile and choppy like it has been recently, must take profits quickly.

Kunal, myself, and many other traders here at Bulls on Wall Street use a concept called scaling out of positions. This is where you take a partial profit on a position, and move your stop loss to breakeven to make a free trade.

If you are up $200 on a trade, sell half to lock in $100. Then moving your stop loss up to your buy price, or a higher level of support/resistance, allows you to lower your trade risk, while realizing a profit.

AVOID YOLO Options

The stock market is a place for traders not gamblers. On social media the phenomenon of turning $100 into $100,000 with options has become prevalent. It is less than 1% trading strategy. There is no edge to it.

You need strategies that can extract you consistent profits from the market to trade for part-time or full-time living.

Kunal shares with you a more sustainable options strategy in this video here:

Learn more about our new options trading service and our veteran options trading instructor Levi in this free training here.

Use Proven Trading Strategies

One of the worst things you can do for your trade management is to take trades with strategies you don’t know well. If you don’t know the probability of a trade playing out, your emotions will ruin your trade management.

Here are 3 powerful trading strategies you should look for every day in your watch list:

If you want to learn 15 more day trading and swing trading strategies and how to use them, join our next LIVE Trading Boot Camp starting in just a couple weeks!

Some of our boot camp students have been having their best trading years ever!

These students have been trading and studying for years with us to make these kinds of days happen. If you want to learn the strategies that allow you to capitalize in these market conditions, apply for our LIVE Trading Boot Camp below!

Early-Bird Pricing Ends SOON For Our Next Live Trading Boot Camp

Click here to apply for our next trading boot camp!

The post 5 Powerful Trade Management Concepts To Implement Right Now appeared first on Bulls on Wall Street.

As a newcomer to this industry, you will have tons of mixed emotions approaching your first day in action.

You don’t want to show up to your first day fearful and scared. If you prepare and get educated, you will come in as a trader, NOT a gambler. 

Today we wanted to make a guide that will help calm the nerves on your first day at the screens and will help you prepare for a successful jumpstart to your career.

Learn Before You Earn

Success is made through education and practice. A lot of new students come into our programs with no experience at all, watch one video, and BAM, start trading the next day. 99% of the time, those traders get wiped out and take a huge confidence hit. 

To prepare successfully for your first day means to study beforehand. Make sure you have completed a full study course, not skipped around any areas, have all of your boxes checked on the educational side of things, and know a core set of THREE strategies/patterns max you are going to look for.

Study for weeks before your first day, get a grip on your trading strategy and plan, and then you can hit the trading desk.

Just take it from one of our students here, Bobby, who realized that education comes FIRST, trading comes SECOND!

Practice on a Simulator

While it won’t accurately simulate the real emotions of trading, simulated trading will help you get the basic mechanics down. Learn how to trade your strategy in real-time. Learn how to execute orders, buy, sell, stop loss. There is no point in trading real money until you are at least profitable on a simulator.

Play What Is Moving

When you are a new trader it can be hard to gauge which stocks or setups have momentum. A lot of experienced traders just have that feeling that can help them feel when ‘mojo’ is coming into a stock at a given point. To avoid looking all day at dead setups that have no potential, as a new trader you want to focus your attention on stocks that have already traded over 1 million shares for the day, and trade consistent volume every day.

You don’t want to look to trade the stock on your first day that traded 7k shares yesterday and 50k today. Make sure your scanners are set to only show you stocks that have volume and activity so you don’t get caught in low liquidity traps. Watch this video below to learn more about how to scan for the best stocks to trade:

Set Your Platforms Up

Don’t do this at 9:25 AM. You’ll want to have your charting platform and order entry system all set up and on your screens the night before. Tomorrow is your first day remember, so you want to be as prepared as possible. Make sure your charts have all the indicators they need, look good, your level 2s are up, hotkeys ready and programmed (if you are using them), and all your windows are in the correct spots. This will save you tons of time and frustration the following morning by having everything already there and set for yourself. You want to be as clear-minded and sharp today as possible. Limit distractions.

Make a Watchlist

Take an hour the night before and create a watchlist. Get at least 3-5 stocks ready for the bell tomorrow so at least you have something to look for if the gappers and morning section is light. Doing this the night before when you are relaxed and your mind is clear will create a good habit and routine and also help you choose clearer setups. Watch this video below to learn how to build a successful watch list:

Get Your Mind Right

While we have been preparing for this huge day, you have to also take a step back and realize this is a long journey. It is a marathon, not a sprint. You don’t have to become a millionaire today. You have time to learn, grow, adapt, and scale your account steadily. Don’t rush things on your first day and have ridiculous expectations. Whether you are green or red on your first trading day does not determine the fate of your trading career!

Join Our Next 60-Day Live Trading Boot Camp

The post How To Prepare For Your First Day of Trading appeared first on Bulls on Wall Street.

$MDCO, XLNX Shorts

MDCO is not my typical short-selling setup. Usually I go for earnings breakdown plays, but MDCO was a first red day setup. It had a multi-day runup the last few days before I traded it, and my thesis was that it would have a quick pullback. Countertrend setups like these are NOT ones you want to marry. Nail and bail.

XLNX had a weak daily, and my thesis was that it would continue to roll over once it broke under the psychological $100 level. It didn’t end up following through so I took a small loss.

$SJM Short, $BITA Scratch

SJM reported an earnings miss and was gapping down during pre-market. It gave a great ORB set up at the open to get great risk vs reward, and I covered pieces out into weakness.

BITA was showing nice signs of a bottoming formation on its daily, just mistimed my entry bit and took a tiny loss when it didn’t end up following through on it’s a pullback to its intraday the MA’s.

$OLLI and $ENPH Nails 

You’re probably starting to see a pattern with my weekly trade recaps. Almost every day I’m trading earnings breakdown plays. OLLI is just the same thing different day. it didn’t follow through much but still gave me a small win.

Was stalking ENPH for a short for a while. After it rejected the $35 level on the daily chart the prior day, I figured that someone was trying to unload, and it had room to fall! We already started to fade off the day before, and my thesis was that we would have a day 2 of selling. Once it took out its opening range at $33, it was pure panic. Unfortunately, I missed the initial breakdown and settled for shorting into the first bounce.

$ULTA Short, $AOBC, $AMBA Scratches

$ULTA is another earnings breakdown short. It gave a textbook ORB (opening range breakdown) to make it high probability play right near at the open, which really brought some selling into the name. The earnings weren’t actually that bad on this name, and it was gapping down big pre-market. Once we took out the opening range at $250, my thesis was that it would continue to flush, so I got short and covered into the drop.

AMBA was an earnings winners, with a nice breakout gap over $52. I got long at the flag break near the open, and didn’t get any follow-through, and took a small loss. For some reason, I’m much better on the earnings shorts!

Biggest Lessons From the Week

1. If stock’s don’t confirm as you enter right at the open, get out. You can always get back in once the trend forms

2. Be patient with your winning trades, impatient with your losing ones. Many losing traders have this backward.

3. Know your A+ setups, trade big size on them, and stay small size on non-niche plays

4. The reaction to earnings reports is what matters, not the actual earnings themselves

Click here to learn more about our day trading chatroom. 

Click here to learn more about our swing trading chatroom. 

The post BOWS Day Trading Recap 8/26-8/30 appeared first on Bulls on Wall Street.

Shorting Stocks

Before we can get into the Short-Sale Rule, you need to understand short-selling. Short-selling is simply making money when stocks go down, instead of when they appreciate. You borrow shares from your broker, and then by them back at a lower price. If you are confused by short-selling, make sure to read this blog before continuing in this article.

What is the Short Sale Rule(SSR)

The short sale rule (SSR) is triggered when a stock goes down more than 10% from its prior close. SSR remains on a stock for the rest of the trading day when it’s triggered and remains on for the following trading day as well!  

The SEC made this rule to prevent short sellers causing a stock to tank. All it really does it make it difficult to short. The people who want to short are still going to short the stock. 

A stock having short sale restriction just does not always affect the probability of the stock going up and down. Do not buy a stock just because it has short-sale restrictions on.

The exception for that rule is in small-cap stocks, as these can be manipulated easier due to their lower float. It is much for a 3 million share $5 stock to drop 50 cents than it is for Netflix to drop $30-$40 a share. Strong, uptrending, low-float stocks + SSR can be the recipe for a big squeeze.

How to Tell if a Stock has SSR On

A stock will have an “SSR” on the Level 2 montage in the top right. See the example below:

Trading Stocks with Short Sale Restrictions

Stocks with short sale restrictions can be tricky to trade to the short-side. A lot of times stocks with bad news will gap down during pre-market and trigger SSR. They will often grind down slowly and then have big pops, and then continue to fade. They can provide great shorting opportunities, but you have to have good timing.

The number one rule for trading stocks with SSR: Don’t short them at lows. They will either flush and not fill you, or they will usually have a big pop, and you are stuck with a bad entry. You want to wait for a spike to get a good entry with better risk vs reward. 

Getting the Right Entry

One of the biggest difficulties with SSR is that if you want to short them, it can be hard to enter, cause you need the stock to an uptick in order to fill you. As a result, you need to wait for the stock to pop a bit in order to get filled. You have to be strategic about where you place your orders to get filled, especially if there is a spread.

Use the VWAP and moving averages to get filled on these names, or try to get filled when they are consolidating in a bear flag. When a stock is trading in a range, that can give you the uptick you need to get filled. I recently traded a few stocks last week with SSR. I did a market recap recently where I breakdown how I traded them in more detail (talk about it at 10:00):

Save Your Seat for Our Next 60-Day Live Trading Bootcamp (Seats are Almost Full)

We don’t sugar coat it. Becoming a consistently profitable stock trader isn’t easy, or an overnight process. That’s why our 60-day Live Trading Boot Camp is designed specifically to help struggling traders overcome their weaknesses, and expedite their path towards profitability.

Contact us ASAP to save your seat in our next trading boot camp!

Click here to save your seat for our next live-trading bootcamp.

The post How to Trade Stocks with Short Sale Restrictions (SSR) appeared first on Bulls on Wall Street.

Sign up for our day trading chatroom by clicking here.

Sign up for our swing trading chatroom by clicking here.

Free Chat Day 7/29: Watch Us Day Trade Live

Next Monday, July 29th, we are doing a free chat day with our day trading chatroom. During the free chat day, you get to watch Kunal day trade live on screen share. Watch all the day trading setups and trades we take in real-time, and see all the scans, charting layouts, and other gimmicks of our trading style!

Click Here to Sign Up For Our Free Chat Day

Follow me on Twitter for real time trading setups@szaman and on StockTwits @szaman

Next Monday, July 29th, we are doing a free chat day with our day trading chatroom. During the free chat day, you get to watch Kunal day trade live on screen share. Watch all the day trading setups and trades we take in real-time, and see all the scans, charting layouts, and other gimmicks of our trading style!

Click Here to Sign Up For Our Free Chat Day

The post Trading Watch List 07.29.2019 appeared first on Bulls on Wall Street.

Sign up for our day trading chatroom by clicking here.

Sign up for our swing trading chatroom by clicking here.

Follow me on Twitter for real time trading setups@szaman and on StockTwits @szaman

The post Trading Watch List 07.24.2019 appeared first on Bulls on Wall Street.

Sign up for our day trading chatroom by clicking here.

Sign up for our swing trading chatroom by clicking here.

Follow me on Twitter for real time trading setups@szaman and on StockTwits @szaman

The post Trading Watch List 07.22.2019 appeared first on Bulls on Wall Street.