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Trader Blog: October Volatility Brings More Opportunities

Ross Cameron - Warrior Trading

Another week and another streak. As of this writing, I am 10 green days strong and posting over $23,000. Between that and the tail end of my September/October rally, I’ve logged just about $40,000 in profits on the month with only two red days.

Even though it’s more hopeful thinking than anything else, I’m feeling good about what October’s success portends going into November, December, and January. Those have historically been my best trading months, with last January being my best month ever at $117,000 in profit, and these recent streaks are making me eager to see what opportunities are ahead.

In spite of this confidence boost, I’ve actually approached this past week somewhat cautiously because of some of the crazy moves I’ve seen in some of my leading gap and momentum candidates on the open.

I say cautious, but really I’m just following my own rules and walking away from any tickers that just don’t pass my smell test. Early in the week, that meant a lot stocks moving on headlines. Monday, which was admittedly one of my smaller days at about $530, had me pass on all of the stocks moving +20 percent on my morning gap scanner just to take one trade in Globus Maritime Ltd. (NASDAQ: GLBS), which was moving alongside another shipping name that was on my scanner on some industry news.

News catalysts like this or what I saw in Net Element Inc. (NASDAQ: NETE), which moved on a cannabis-related headline, pose a really interesting dynamic for traders to flex their own sense of opportunity, creativity or discretion.

Because, while day traders should still rely on technical signals and patterns to cue them on potential price moves, headlines introduce kind of an X-factor to approaching a stock.

Take JetPay Corp. (NASDAQ: JTPY) as an example. It was another gapping stock I passed up on Monday that was up 140 percent from Friday, but that was because it was being bought out. Obviously, at that point, the price was settled so I knew there wasn’t going to be any volatility. However, If I were eager to make a trade I might do something similar with what I did with GLBS and look for other small fintech companies with the potential for a buyout that might be moving in sympathy.

At the same time, getting a feel for headline moves can also prepare a trader on how to approach future trades that might crop up under similar circumstances. Like, in the case of NETE, I wasn’t confident the news was going to sustain the huge move the stock made in premarket. As I kept an eye on it, It just didn’t show enough support to the upside and I eventually just moved on with my day.

More than anything, what headlines provide is a sense of context to the market. For me, in doing my daily trade recaps and generally dedicating my life to trading, I give myself the opportunity to reflect on my trading decisions. Most traders don’t have that luxury, but exercising your memory and drawing connections between your trades and the news and concrete catalysts that make them will help you become more prepared if and when those catalysts crop up again.

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