Important Stock Trading Q & A (First Hour Trading Tips)

Important Stock Trading Q & A

How much profit can I expect to generate by leveraging ‘First Hour’?

SolutionFirst of all, please note that Past Results are no guarantee of future performance.

Our Past Results since 2004 show an average daily gain of 0.84% or $176.53 a day on a $25,000 account (as on January 22nd, 2006). This last figure reflects earnings AFTER broker commissions. No compound interest is considered. If it were considered, the $ gain would be mugh higher. There are days in which we execute no trades at all (thus, no gains are achieved), and others that allow us to lock-in up to 3% returns.


Which stocks do you target and focus on for the ‘First Hour’ Day Trading System?

SolutionAmong the dozens of stock that gap up and down during pre-market hours, less than half of them reverse at some point in the bull trap. A small fraction of these stocks will reverse in a predictable manner, making them qualified candidates for that day’s trading activity. As a result, we’ll divert all our attention to those specific stocks, and make them the focal point of our trading efforts for that particular day.


How do you determine & know when to enter and exit a trade?

SolutionWe have developed a proprietary analysis tool that empowers us to predict the precise moment at which the targeted stock is going to reverse, with an 83% accuracy rate. This is the moment in which we want to enter a position. As a First Hour member, you would receive an Instant Message from Manuel informing you at which moment & price to enter a position for that stock, ultimately giving you the opportunity to secure that stock in the same timely fashion.

Unlike many other day trading systems, you will also receive an Instant Message from Manuel detailing the exact minute at which you are to exit the position, thus maximizing your profits.

What tools and/or resources must I have access to in order to leverage the First Hour Day Trading Alert Service?

SolutionIn order to effectively leverage First Hour, you will need the following:

Hardware:
A reliable computer with a high-speed internet connection.

Software:
We use TC2000 ( www.tc2000.com ) and Power Etrade Pro, as well as real-time quotes & charting software from www.Money.net.

Discount Broker:
We suggest to use a discount broker such as www.etrade.com or www.interactivebrokers.com.

Recommendation:

We suggest that you gain access to Level II quotes and learn how to read them, as they will give you greater trading insight.

21 Mar 2007





Support Center » Knowledgebase » FirstHourTrading.com » What news source do you use to you conduct your analysis?



What news source do you use to you conduct your analysis?

SolutionWe prefer www.briefing.com and www.marketwatch.com, as they provide granular insight into the day’s public announcements & corresponding market activity.


In relation to First Hour, how do you determine when to exit the final position?

SolutionOur strategy for the first half of the stock is to exit when we’ve achieved net gains of 1% or more. Once this is accomplished, we will exit the second half of the stock based upon its momentum. Typically, the stocks that we target will trade within a fixed range during the first 10-15 minutes, but later break support/resistance levels and spike in our favor. We’ll exit and take the profits from the second half of the position when the stock starts to lose momentum.




Which orders do you recommend – market or limit?

SolutionWe recommend that you always use a limit order. When you use market orders, there is a high probability that your broker will provide you with the least favorable fill.





Is the 1% stop loss based on our fill, or your entry point?

SolutionThe datum for your exit/entry should be your fill, so the 1% stop loss is based on that.



What is the most effective way(s) to leverage your ‘First Hour’ Day Trading Alert Service?

SolutionAll our members tend to open positions within the first 2 minutes of trading based on the Instant Message that we distribute during pre-market hours. However, our more experienced members will leverage our pre-market alert to determine exactly which stocks to focus on, but rely upon their own personal trading intuition to enter a position well in advance of receiving our actual trade alert.

The majority of our other members attempt to enter a position as fast as possible immediately after receiving our alert. They pre-fill their trading windows with the stock symbol and number of shares well in advance, ultimately allowing them to make the trade in an efficient & streamlined manner. With minor practice, it shouldn’t take you any more than 15 seconds to execute.




How should we set our limit order upon entering a position?

SolutionTo ensure that your order is filled, you should set a limit order within 5-10 cents of the suggested entry price. If the stock has moved against us during the time in which you place your limit order, your fill will be more favorable than ours. If the stock moves in our direction by a few cents, then your order will still contain some slippage. Therefore, there will be times in which you will lock-in better fills than us, and visa versa. Overall, the slippage should average out.


Why do you use mental stops/targets?

SolutionWe prefer to use a mental stop or mental target because they provide a greater level of flexibility. By using them, our positions will not seize automatically if the stock reaches the stop price for a brief moment before bouncing back. If we witness the stock reach our mental stop and determined that it’s indeed not a "fake" move, then we’ll close the position immediately.

However, it’s important to note that this requires a great amount of discipline, and may not be suitable for you is you are just starting out. If this is the case, then we recommend that you use ‘hard’ stops instead.


Do ‘shorts’ have greater accuracy & profit potential than ‘longs’?

SolutionOur time-tested and profitable trading experience has led us to believe that shorts are slightly more accurate than longs. This is the reason why approximately 70% of our stock picks are shorts.

Why do you sometimes skip stocks that you previously highlighted in your ‘watch’ list?

SolutionBelow are a few reasons why we may skip one of the stocks mentioned in our ‘watch’ list.

1) There is a large spread between the bid and ask price (i.e. a $15.50 stock may have a bid price of $15.50 and an ask price of 15.65).

2) If the stock breaks through support/resistance levels within the first couple of minutes of trading, then we’re forced to set a new entry price - which many times the stock never reaches. As a result, we end up missing the trade.

3) There are times in which we are overly focused on one particular trade, ultimately causing us to bypass the other stock candidate.




What factors do you take into consideration when selecting a stock?

SolutionWe consider the following factors:

1) The reasons for the price increase/decrease. Two stocks gap up, one because of an upgrade and the second because the company has received a buy-out offer - the first case is better for our purposes.

2) The % of increase/decrease of the stock during pre-market hours. We identify & focus on stocks that gap up/down anywhere between 5% and 20% during pre-market activity. Stocks fluctuating beyond this range are less reliable.

3) Average daily volume. If the stock has a low average volume (i.e. less than 500,000 shares per day), then we pass on it. The reason being it will likely have a larger spread.

4) Charts and technical analysis are the last set of filters. It is during this phase that we determine which 2 stocks (of the original 20-30 pre-selected) will pass our rigorous screening procedures and be our focus for that given day’s trading activity.


The ‘First Hour’ Day Trading Alert Service is a time-tested system based on extensive in-house research and proprietary analytical tools. The service consists of two phases:

1) Stock Selection Process:

After scanning the markets, we identify and select a series of stocks that are likely to be overbought/oversold at the opening bell. Using our proprietary analytical tools we run this list through yet another filtration process to further narrow the selections. Manuel identifies the two stocks that exemplify the most promise and profit potential. An alert is then posted in the Trading Chat Room between 9:15 am and 9:25 am EST. This message will disclose the name of the 2 selected stocks, as well as rate them on a scale of 1 to 10 based upon their eligibility.

2) Day Trading Activity

The goal here is to choose an appropriate time to buy/short-sell, and then sell/cover when you’ve locked-in at least a 1% gain. Let the other half ride until you’ve secured a return of 2-4%. If the position should unfavorably move against you by 1%, then be sure to close it out immediately.

In most cases, Manuel will enter the positions within the first 2 minutes of trading, as the targeted stocks tend to reach their peak (for short-selling) or bottom (for longs) during this period. He will exit these positions typically between 9:35 am and 9:50 am EST.

First Hour’s trade performance has yielded positive gains 83% of the time since its inception in early 2004. Our goal is to gain at least 1% of our trading funds per session, but some days we surpass that mark and lock-in returns of over 3%.

The ‘First Hour’ Day Trading Alert Service is a time-tested system based on extensive in-house research and proprietary analytical tools. The service consists of two phases:

1) Stock Selection Process:

After scanning the markets, we identify and select a series of stocks that are likely to be overbought/oversold at the opening bell. Using our proprietary analytical tools we run this list through yet another filtration process to further narrow the selections. Manuel identifies the two stocks that exemplify the most promise and profit potential. An alert is then posted in the Trading Chat Room between 9:15 am and 9:25 am EST. This message will disclose the name of the 2 selected stocks, as well as rate them on a scale of 1 to 10 based upon their eligibility.

2) Day Trading Activity

The goal here is to choose an appropriate time to buy/short-sell, and then sell/cover when you’ve locked-in at least a 1% gain. Let the other half ride until you’ve secured a return of 2-4%. If the position should unfavorably move against you by 1%, then be sure to close it out immediately.

In most cases, Manuel will enter the positions within the first 2 minutes of trading, as the targeted stocks tend to reach their peak (for short-selling) or bottom (for longs) during this period. He will exit these positions typically between 9:35 am and 9:50 am EST.

First Hour’s trade performance has yielded positive gains 83% of the time since its inception in early 2004. Our goal is to gain at least 1% of our trading funds per session, but some days we surpass that mark and lock-in returns of over 3%.

A couple of years ago, we set a goal of developing a day-trading system with a high and consistent success rate. This was to meet the incessant demand by clients who wanted a competent day trading system - one that they could use along with Portfolio Crafter Model Portfolio - that required less time at the computer, and one that would produce even more profits.

Between 9:15 am and 9:25 am EST, an Instant Message (IM) is sent with the name of 2 stocks and a rating from 1 to 10, based on the eligibility of the stock. 95% of the time, we enter the positions within the first 2 minutes of trading. It has been seen that these kind of stocks reach their peak (in the case of short sales) or reach its bottom (for longs) right in the beginning. The exit time, is usually between 9:35 am and 9:50 am. A second window of opportunity generally opens between 9:45 am and 10:00 am.

We aim to gain at least 1% of our trading money per session. Some good days have also yielded over 3% overall gains.

Which stocks do you target and focus on for the ‘First Hour’ Day Trading System?

SolutionAmong the dozens of stock that gap up and down during pre-market hours, less than half of them reverse at some point in the bull trap. A small fraction of these stocks will reverse in a predictable manner, making them qualified candidates for that day’s trading activity. As a result, we’ll divert all our attention to those specific stocks, and make them the focal point of our trading efforts for that particular day.