Category Archives for Sami Abusaad
9 Tips for Picking the Right Stocks for Swing Trading in 2022
As a swing trader, one of the most important decisions you’ll make is choosing which stocks to trade. You can learn all the winning swing setups in the world, but if you trade the wrong stocks, you’re going to lose money. So we’ve put together 9 simple tips that can help you steer clear of the ticking time bombs, and keep you focused on the winners. (if you’d like to learn about our swing trading program, click the green button) Click to Learn About Sami’s Strategic Swing Trader Program! 1) Don’t Get Hyped Over Hype. Price Action Is What Really Matters to Swing Traders.Many swing traders focus exclusive on companies that are always in the news with product announcements, press releases, and CEO interviews. That’s great for entertainment purposes, but we make our money on price action. For example, IBM (IBM) puts out a lot of news, but its stock doesn’t move all that much. IBM has a beta of 0.95, meaning that if the market moves 1%, IBM will move just 0.95%. So why trade it? Focus on stocks that make significant moves on multi-day to multi-month time frames. So if you want to trade a stock that moves faster than an IBM, you could look at high-beta names like Beyond Meat (BYND), Uber (UBER), Snap (SNAP), Amazon (AMZN), Advanced Micro Devices (AMD), or Netflix (NFLX). According to swing trading expert Sami Abusaad, “momentum is important. I look for high-momentum stocks that I believe are set to move in the next day or two.” Sami’s also not afraid of international stocks from regions like India and China. “It’s all about the chart, as long as the stock fits my volume requirements” says Sami.”2) Watch the Calendar for Trading OpportunitiesWhile price action is more important than news, news can drive price action. So if you’re long or short a stock, know what’s on the calendar. It’s good to know if your names are reporting earnings, appearing at conferences, have executives appearing on TV, unveiling new products, or can be impacted by economic news. For example, if you’re long Apple, you better know when it’s reporting earnings and when it’s showing new products. As you can see in this chart, Apple gapped up big on earnings (the circle), and it had a wide-range bar on the iPhone 8 release. Being aware of the calendar would have kept you on alert for big moves: And these days, more and more corporate executives are getting chatty on Twitter (TWTR) — perhaps most notably Tesla’s (TSLA) Elon Musk — so you should be monitoring their Tweets too! In August 2018, Elon Musk sent Tesla’s stock pricing skyrocketing after saying he was considering taking the company private.Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018 3) You Can Swing Trade Penny Stocks, But Be CarefulMany traders, particularly beginners, are attracted to penny stocks and small caps. While these kinds of stocks can give us the volatility we need to make real profits, they offer less liquidity than better-known large-cap stocks. They may also subject to manipulation and negative one-time events like secondary offerings. However, the fact that they can move so much so fast may make the potential reward worth the risk, particularly for advanced traders. Sami will trade any stock with a price above $1 with average daily volume around 500K shares a day, so long as there is a quality pattern. Keep in mind that Sami is a highly-experienced trader with a disciplined approach to risk management. Sami recently produced a video about swing trading penny stocks which you may find interesting:4) Be Aware of Your Typical Holding TimePick stocks to trade that match up with your intended holding time. We recommend going through your trading history to see the time frames of your most profitable trades. If you tend to make the most money on a 1-month time frame, then focus on stocks that make large moves on that time frame. The same goes for 1-week trades… and 1-year trades.5) Follow the Leading Stocks… and the LosersQuite often, the best-performing stocks in the market can go a lot farther and move a lot faster than the critics claim. Therefore, always know which stocks are crushing the market on an extended basis, because they’ll give you regular trading opportunities on both pullbacks and breakouts. Chipmaker Nvidia (NVDA) has been one of the best performing stocks of the post-crisis bull market. It has regularly led both the technology sector and broader markets, so it has been a go-to stock for swing traders: And on the flip side, track the worst names in the worst sectors. The laggards that look “cheap” often get cheaper since they typically suffer from bad earnings and negative news. According to Sami, “stocks showing relative weakness to the market and multiple time frame alignment (bearish daily/weekly/monthly charts) work best on the short side.”6) It’s Okay to Be Late to the PartyYou don’t have to arrive at the party perfectly on schedule. You can be a little late and still capture most of the fun. Don’t try to time exact bottoms (or tops if you’re going short). When a stock makes a major move, you can miss the first 20% and still make a lot of money. Take a look at this weekly chart of Facebook: In an ideal world, you would have bought it under $20 in late 2012: But you could have bought it much higher — at $40, $50, or $60 — and still made money. It’s better to wait for a setup to fully complete and give you a strong signal than rush in early, trying to catch the absolute lowest price.7) Be Careful with Falling KnivesOne of the single biggest reasons traders blow up their accounts is that they rush to catch falling knives. They’ll see a leading stock gap down 20% after earnings, and buy it right on the open. Then, the stock will drop another 20% in a week, and the trader is left asking “what now?” Resist the urge to throw your money at stocks posting big declines. Commonly, these names need to settle a bit before offering a fresh buy setup. Taking a look at Twitter, you can see how many times the stock gapped down huge,
Continue Reading -->Sami Abusaad Interview: Getting to Know a Top Trader
To help you get to know T3 Live’s growing bench of trading talent, we’ve launched a series called “Meet the Traders” so you can get an inside look at how our team operates. Today, we are proud to introduce you to Sami Abusaad, T3 Live’s Director of Education, and creator of our Strategic Swing Trader and Strategic Day Trader programs. 1) How did you first get involved with the markets? In 2005, I had $20,000 saved from an accounting job and I didn’t know what to do with it. I then found out that the second richest man in the world made all of his money from investing. That man was Warren Buffett, and I immediately became fascinated by the markets. I also read about a 21 year old kid from New York who made $1 million in less than a year. That provided a sense of hope to me. I thought “if he can do it, I can do it too!” I opened a brokerage account and funded it with $16,000. In six months, I made about $10,000. In a year, I was at $50,000. I did this by playing swing longs in a bullish market. My brother was as amazed by my results as I was, and he gave me the following words of wisdom: “If you can make that kind of money through “Buy and Hold”, imagine how much you could make trading actively!” He was referring to stocks on the“Highest Gainers/Losers” list for the day. I listened to his advice. I started trading actively every morning. Within a few months, I lost all my profits… and another $15,000. That’s when I realized that I didn’t know quite as much as I thought I did. A few months later, while scouring the Internet for trading resources, I came across Zacks.com, a financial website similar to Yahoo! Finance. Zacks.com was running a one-year trading challenge and the winner of that contest would receive a $100,000 job offer. I participated in that contest, and guess what? No, I didn’t win. But I did receive something better than winning the challenge — I became friends with the winner: he had turned $100,000 into $2 million in less than a year. He told me he had been a full time professional trader for 15 years – and that he learned it all from a small company called Pristine. He encouraged me to read their book Tools and Tactics for the Master Day Trader. Not only did I read it immediately, I registered for all of the free workshops available at the time and then went on to take Trading the Pristine Method (TPM) and Advanced Technical Strategies (ATS), which was known as TPM II. The rest, as they say, is history. (Editor’s Note: T3 Live acquired Pristine in 2014) 2) So what are you doing now? I am an active day and swing trader, averaging seven trades per day. I focus on stocks in my trading, but my trading style can be applied to all markets, including futures, commodities, options, forex, and more I am also an educator for T3 Live and serve as Lead Moderator for the T3 Live Strategic Day Trader room. As much as I enjoy trading, I think teaching is my calling. I run several education programs, including our Earnings Engine course. And in 2017, we launched a new swing trade coaching program called Strategic Swing Trader. 3) Do you use a specific trading methodology? Yes, I trade primarily 3 proprietary strategies in day trading. Gaps: I focus on professional gaps that break long-term trends and ignite new trends. Climactics: Stocks that experience a parabolic price acceleration to the point of exhaustion. 15-Minute Chart Plays: These are afternoon plays that trigger off the rising or declining 20 ma on the 15 min chart. It could be a pullback-type entry or a breakout/breakdown. In Strategic Swing Trader, I primarily focus on catching stocks during their bottoming/topping period, or later while they are transitioning. I use various patterns and advanced tactics to enter into those plays, and I try to catch them early on. Trading earnings is also very important to me. 4) How do you unwind from the ups and downs of trading? I like to take evening walks and play sports, including basketball and soccer. 5) Do you believe in setting stop losses? Yes, absolutely. But often, traders wrongly think of a stop as an exact point on a chart. I use an area, rather than an exact number. 6) Are you concerned about high-frequency and algorithmic trading? Yes I am, because they make the market more efficient. A more efficient market means fewer opportunities. However, smart traders can still find plenty of opportunities to make money each day if they put the work in. 7) What is 1 thing traders can do today to start getting better results? Trade in samples and evaluate each sample dispassionately like a scientist. This way, you can figure out what you’re doing right and what you’re doing wrong. Don’t let emotions or pride get in the way of improving. 8) What would you be doing if you weren’t a trader? I would dedicate more time to the outdoors. But in the meantime, I’m having a lot of fun teaching and trading. P.S. Looking for a more effective and consistent approach to trading? Check out Strategic Swing Trader and Strategic Day Trader.
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