Wednesday, September 14, 2011

Money Show, A. J. Monte

A. J. Monte talk was called “Maximizing Profits in a Volatile Market”. He is from Scotia iTrades.

AJ says that volatility will continue and it will rise. He is a trader and he buys on strength and sells on weakness. Strength is when the market is going up and weakness is when it is going down. We should buy high and sell higher. We need to put money when the money is going. Charts give you a snap shot of where the money is going.

He goes say that when there are gaps in charts, 80% of the time the gap will be filled in. Says a stock gaps down because it opens at a lower price that it closed the previous trading day. Future stock prices will fill in between the prices of the 1st and 2nd trading days. So if a stock gaps down, wait until the stock is starting to rise and then buy.

AJ is from the Market Guys and they have a site at The Market Guys. On this site they have weekly and educations videos that anyone can view. The above information on market gaps is included in their educational videos.

Someone asked if you sell a stock that gaps down in price. He said to do so only if the stock goes below its support level. He also said we should have price targets on our stocks. Lots of analysts show price targets. If the stock hits the price target, we should sell, unless the price target has been moved up.

AJ says that people tend to accumulate stocks that have good fundamentals, but are moving down. We should be better off to buy stocks that have bad fundamentals, but are moving up. He also says that we should all have a watch list of stock to buy. We need these we when sell a stock that we currently hold.

He says if a stock is moving up, but trade volumes are moving down it means that buyer’s motivations are dropping. The stock will probably fall back to its support level. He thinks that trade volumes are critical. We should only buy stocks that have at least 50,000 shares that trade daily. If a stock does not, it does not have enough liquidity.

One of the things that he thinks will happen is that we will have hyper-inflation just like the 1970’s. What will save us is Corn ETFs. What is driving inflation in foods is our growing population.

He feels that new traders could benefit from paper trading. What this will do is give you education on the mechanics of trading and you need this. This will not help with the emotions of trading, which always makes real trading more complex. However, if you cannot make money in paper trading, you will certainly not make money in real trading.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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