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Trading Hot Stocks

Investors and traders can profit from picking stocks that are hot. But, how does one go about trading hot stocks? One problem in long term investing is that by the time a stock is hot it has commonly risen to a high price to earnings ratio or price to sales ratio or fallen dramatically. A hot stock rises in price as the stock market discounts its intrinsic stock value or falls on poor earnings reports. Good stock picks in long term investing are overlooked stocks. The smart long term investor or the day trader picks these stocks and sells them when they become hot stocks. Trading hot stocks is a different matter. Trading hot stocks has to do with stocks that are currently popular, falling or rising in stock price, and which often present with high trading volume and stock volatility. Candlestick stock charts are the tool of choice of many who trade hot stocks. Technical analysis of stocks with Candlestick analysis gives traders an objective view of market sentiment and easy to read signals up which to act.

Hot stocks recently include Boeing with increased sales, Amazon with earnings that did not fall as much as anticipated, and Allegheny Technologies whose earnings went up 70% while the stock fell 3% because analysts had expected better. In these types of situations traders buy stock or sell stock based upon their expectations of adjustments in stock prices. There is typically a short period of market inefficiency as traders and investors decide how to price a stock based upon both new information, and more importantly, new expectations. In trading hot stocks with Candlestick patterns a trader reacts to signals that predict the next movements of stock prices. Easy to read Candlestick signals give traders an objective appraisal of what the market as a whole is thinking about an individual stock or stock index. Candlestick signals work for trading hot stocks directly and for options trading and futures trading of hot stocks as well.

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  • 1. www.CandlestickForums.comwww.CandlestickForums.com Trading Hot StocksTrading Hot Stocks
  • 2. www.CandlestickForums.comwww.CandlestickForums.com Investors and traders can profit from pickingInvestors and traders can profit from picking stocks that are hot.stocks that are hot.
  • 3. www.CandlestickForums.comwww.CandlestickForums.com But, how does one go about trading hotBut, how does one go about trading hot stocks?stocks?
  • 4. Before We Continue…Before We Continue… Click the links below to get yourClick the links below to get your FREE training materials.FREE training materials. Free Weekly Investing WebinarsFree Weekly Investing Webinars Don’t miss these free training events!Don’t miss these free training events! http://http://www.profitableinvestingtips.comwww.profitableinvestingtips.com /free-webinar/free-webinar Forex Conspiracy ReportForex Conspiracy Report Read every word of this report!Read every word of this report! http://http://www.forexconspiracyreport.comwww.forexconspiracyreport.com
  • 5. www.CandlestickForums.comwww.CandlestickForums.com One problem in long term investing is thatOne problem in long term investing is that by the time a stock is hot it has commonlyby the time a stock is hot it has commonly risen to a high price to earnings ratio orrisen to a high price to earnings ratio or price to sales ratio or fallen dramatically.price to sales ratio or fallen dramatically.
  • 6. www.CandlestickForums.comwww.CandlestickForums.com A hot stock rises in price as the stockA hot stock rises in price as the stock market discounts its intrinsic stock valuemarket discounts its intrinsic stock value or falls on poor earnings reports.or falls on poor earnings reports.
  • 7. www.CandlestickForums.comwww.CandlestickForums.com Good stock picks in long term investing areGood stock picks in long term investing are overlooked stocks.overlooked stocks.
  • 8. www.CandlestickForums.comwww.CandlestickForums.com The smart long term investor or the dayThe smart long term investor or the day trader picks these stocks and sells themtrader picks these stocks and sells them when they become hot stocks.when they become hot stocks.
  • 9. www.CandlestickForums.comwww.CandlestickForums.com Trading hot stocks is a different matter.Trading hot stocks is a different matter.
  • 10. www.CandlestickForums.comwww.CandlestickForums.com Trading hot stocks has to do with stocks thatTrading hot stocks has to do with stocks that are currently popular, falling or rising inare currently popular, falling or rising in stock price, and which often present withstock price, and which often present with high trading volume and stock volatility.high trading volume and stock volatility.
  • 11. www.CandlestickForums.comwww.CandlestickForums.com Candlestick stock charts are the tool ofCandlestick stock charts are the tool of choice of many who trade hot stocks.choice of many who trade hot stocks.
  • 12. www.CandlestickForums.comwww.CandlestickForums.com Technical analysis of stocks withTechnical analysis of stocks with Candlestick analysis gives traders anCandlestick analysis gives traders an objective view of market sentiment andobjective view of market sentiment and easy to read signals up which to act.easy to read signals up which to act.
  • 13. www.CandlestickForums.comwww.CandlestickForums.com Hot stocks recently include Boeing withHot stocks recently include Boeing with increased sales, Amazon with earningsincreased sales, Amazon with earnings that did not fall as much as anticipated,that did not fall as much as anticipated, and Allegheny Technologies whoseand Allegheny Technologies whose earnings went up 70% while the stock fellearnings went up 70% while the stock fell 3% because analysts had expected better.3% because analysts had expected better.
  • 14. www.CandlestickForums.comwww.CandlestickForums.com In these types of situations traders buy stockIn these types of situations traders buy stock or sell stock based upon theiror sell stock based upon their expectations of adjustments in stockexpectations of adjustments in stock prices.prices.
  • 15. www.CandlestickForums.comwww.CandlestickForums.com There is typically a short period of marketThere is typically a short period of market inefficiency as traders and investorsinefficiency as traders and investors decide how to price a stock based upondecide how to price a stock based upon both new information, and moreboth new information, and more importantly, new expectations.importantly, new expectations.
  • 16. www.CandlestickForums.comwww.CandlestickForums.com In trading hot stocks with CandlestickIn trading hot stocks with Candlestick patterns a trader reacts to signals thatpatterns a trader reacts to signals that predict the next movements of stockpredict the next movements of stock prices.prices.
  • 17. www.CandlestickForums.comwww.CandlestickForums.com Easy to read Candlestick signals giveEasy to read Candlestick signals give traders an objective appraisal of what thetraders an objective appraisal of what the market as a whole is thinking about anmarket as a whole is thinking about an individual stock or stock index.individual stock or stock index.
  • 18. www.CandlestickForums.comwww.CandlestickForums.com Candlestick signals work for trading hotCandlestick signals work for trading hot stocks directly and for options trading andstocks directly and for options trading and futures trading of hot stocks as well.futures trading of hot stocks as well.
  • 19. www.CandlestickForums.comwww.CandlestickForums.com Depending upon what made a stock hot, itsDepending upon what made a stock hot, its period of high trading volume, high stockperiod of high trading volume, high stock volatility, and stock trading opportunityvolatility, and stock trading opportunity may by just a few hours or may last formay by just a few hours or may last for days, weeks, or months.days, weeks, or months.
  • 20. www.CandlestickForums.comwww.CandlestickForums.com It will depend upon how long it takes for theIt will depend upon how long it takes for the market to reach a consensus on the valuemarket to reach a consensus on the value of the stock in question.of the stock in question.
  • 21. www.CandlestickForums.comwww.CandlestickForums.com In all stock trading it is important for theIn all stock trading it is important for the trader to have a clear idea about thetrader to have a clear idea about the fundamentals that drive a stock price.fundamentals that drive a stock price.
  • 22. www.CandlestickForums.comwww.CandlestickForums.com Then the trader knows the general range inThen the trader knows the general range in which a stock will trade and the generalwhich a stock will trade and the general factors that will affect price.factors that will affect price.
  • 23. www.CandlestickForums.comwww.CandlestickForums.com However, it is with technical analysis toolsHowever, it is with technical analysis tools such as Candlestick patterns that traderssuch as Candlestick patterns that traders can profit most from trading hot stocks.can profit most from trading hot stocks.
  • 24. www.CandlestickForums.comwww.CandlestickForums.com These stocks can change price rapidly andThese stocks can change price rapidly and reverse in price quickly.reverse in price quickly.
  • 25. www.CandlestickForums.comwww.CandlestickForums.com With the use of Candlestick signals a traderWith the use of Candlestick signals a trader can successfully and profitably anticipatecan successfully and profitably anticipate price changes.price changes.
  • 26. www.CandlestickForums.comwww.CandlestickForums.com In the very short term the Candlestick traderIn the very short term the Candlestick trader is able to objectively read the market andis able to objectively read the market and avoid the mistakes of getting carried awayavoid the mistakes of getting carried away with market enthusiasm orwith market enthusiasm or disappointment.disappointment.
  • 27. www.CandlestickForums.comwww.CandlestickForums.com No matter what the market is doing it hasNo matter what the market is doing it has done it before. Price patterns repeatdone it before. Price patterns repeat themselves and Candlestick signals allowthemselves and Candlestick signals allow traders to profit from that fact when tradingtraders to profit from that fact when trading hot stocks.hot stocks.