The StockTwits Edge: 40 Actionable Trade Set-Ups from Real Market Pros / Edition 1

by Howard Lindzon, Philip Pearlman, Ivaylo Ivanhoff

Overview

Profitable trade set-ups from StockTwits leading traders

One of the biggest secrets on Wall Street is that to become consistently profitable, you need to specialize in a distinct setup. That is, you need to know how to read the signals that can help you identify an opportunity to buy or sell. In The StockTwits Edge: 40 Actionable Trade Setups from Real Market Pros, both well-known professional masters of the market and lesser-known individual traders describe their highest probability setups to teach you about an assortment of time frame and asset class-related market methods along the way.

Drawing on the wisdom of some of the top minds at StockTwits, the leading stock market social networking site, this book has something for everyone, giving you exactly what you need to come up with profitable ideas and avoid financial risk, every day.

• Includes key trading insights from the experts at StockTwits
• Explains which factors of a setup are important, and why

While there are many factors involved in successful trading and investing, the ability to identify profitable situations is paramount, and The StockTwits Edge gives you everything you need to achieve that goal.

Product Details

ISBN-13:	9781118029053
Publisher:	Wiley
Publication date:	12/04/2017
Series:	Wiley Trading , #510
Pages:	360
Product dimensions:	7.40(w) x 10.00(h) x 1.20(d)

About the Author

HOWARD LINDZON is cofounder and CEO of StockTwits^®—an idea network for traders and investors known as the "Facebook of Finance"—recently named "one of the top 10 most innovative companies in web" by FastCompany and one of the "50 best websites" by Time magazine. He has over twenty years experience in the financial community acting in both an entrepreneurial and investing capacity; and is the Managing Partner of Social Leverage, a holding company that invests in early stage web businesses. Mr. Lindzon has tremendous insight into new media and is a very active angel investor in the financial and internet business sectors, invested and involved with over thirty companies. He created Wallstrip, and over 400 original web video shows, which was purchased by CBS Corp. in 2007. He has made many successful angel investments including: rent.com, golfnow.com, Lifelock, and Internet Brands. Mr. Lindzon's new media and internet business investments also include: Limos.com, Blogtalkradio.com, Buddy Media, TubeMogul, Bit.ly, and Tweetdeck, to name a few.

PHILIP PEARLMAN is the Executive Editor of StockTwits and an investor in the company. He is a partner at Social Leverage, LLC. Pearlman is obsessed with the psychosocial aspects of user experience and online community development. He ran a hedge fund that focused on behavioral strategies and currently runs a private account. Pearlman loves to buy fear and sell euphoria. He earned a doctorate in clinical psychology from Argosy University and a BA in English from the University of Maryland. Pearlman lives with his wife and two boys in Montebello, New York.

IVAYLO IVANHOFF has been trading stocks and derivatives for his own account on U.S. and European markets since 2003. He participated in the development of a proprietary algorithm that ranks momentum stocks. Ivanhoff writes daily market commentary on Stocktwits50.com. He earned his MBA and MS finance from Webster University in Saint Louis, Missouri.

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Table of Contents

Introduction xi

PART I TREND FOLLOWING

CHAPTER 1 Find Trends, Ride Them, and Get Off 3
Howard Lindzon

CHAPTER 2 Trade, Trend, Tail 13
Keith McCullough

CHAPTER 3 Don’t Quit 17
Michael K. Dawson

CHAPTER 4 Know Thyself 25
Chris Peruna

CHAPTER 5 Insider Information Is Reflected in the Charts 31
Keith Kern

PART II VALUE INVESTING

CHAPTER 6 Margin of Safety 37
Todd Sullivan

CHAPTER 7 The BeanScreen 43
Daniel Miller and Jason Robinson

CHAPTER 8 Fallen Angels 53
Michael Bigger

CHAPTER 9 Dividends Don’t Lie 59
Eddy Elfenbein

PART III DAY TRADING

CHAPTER 10 Only Price Pays 67
Brian Shannon

CHAPTER 11 Intraday Earnings Momentum Gap Trade 73
John Lee

CHAPTER 12 Trading the News 83
Mike Bellafiore

CHAPTER 13 Intraday Momentum 93
Steven Spencer

CHAPTER 14 The Underlying Psychology of Large Players 99
Gilbert Mendez

PART IV SWING TRADING

CHAPTER 15 Flags and Wedges 107
Joe Donohue

CHAPTER 16 Breakout from a Tight Base 113
chessNwine

CHAPTER 17 The Base Is Everything 119
HCPG

CHAPTER 18 Trading People, Not Stocks 127
Joey Fundora

CHAPTER 19 The Top-Down Technician 135
Greg Harmon

CHAPTER 20 Identifying Trend Shifts 141
Derek Hernquist

CHAPTER 21 A Chart Will Never Lie to You 149
Sunrise Trader

CHAPTER 22 The Short Squeeze Trade 159
Frank Zorrila

CHAPTER 23 The Price Tells the Story 165
Derald Muniz

CHAPTER 24 Force Confirmations, Not Trades 175
Nick Fenton

CHAPTER 25 The Birth of a New Trend 181
Ivaylo Ivanhoff

CHAPTER 26 The Trend Intensity Breakout Setup 187
Pradeep Bonde

PART V OPTIONS TRADING

CHAPTER 27 Unusual Options Activity 197
Joe Kunkle

CHAPTER 28 Put Ratio Spread 203
Jared Woodard

CHAPTER 29 Know What You Don’t Know 213
Adam Warner

CHAPTER 30 There Is Always an Option 217
Steven Place

CHAPTER 31 Selling Premium 225
Darren Miller

CHAPTER 32 The New High Dip 233
Chris Stauder

PART VI FOREX TRADING

CHAPTER 33 They Call Me Mrs. Cable 241
Lydia Idem

CHAPTER 34 The Mind of a Chartist 253
Raghee Horner

PART VII THE ART OF TRADING

CHAPTER 35 Trading Is an Art 263
The Fly

CHAPTER 36 Embrace the Tape 267
Quint Tatro

CHAPTER 37 Macro Setups at the Crest of Structural Change 275
Gregor Macdonald

CHAPTER 38 Broken Butterfly Formation 279
Anne-Marie Baiynd

CHAPTER 39 Always Happy, Never Satisfied 285
Joshua Brown

CHAPTER 40 One Step Ahead of the Herd 289
John Benedict

CHAPTER 41 Change Is the Only Constant 297
Steve Gomez and Andy Lindloff

CHAPTER 42 The Kirk Report 303
Charles E. Kirk

CHAPTER 43 Stick with Names You Know 311
Ronald Roll

CHAPTER 44 Massive Trends and the Trajectory of Noise 315
Phil Pearlman

CHAPTER 45 We Have Met the Enemy, and It Is Us 321
Abdel Ibrahim

CHAPTER 46 A Contrarian at Heart 329
John Welsh

Index 333

Interviews

Barnes and Noble Q&A for Howard Lindzon:
StockTwits is the largest social media site for investors and traders. How does StockTwits help people to improve their performance in the markets?
StockTwits is free, community powered idea generation and information network for traders and investors. It allows members to share and follow updates in real time including market commentary, actual trades and relevant links.
Members can customize their experience by choosing which other members and tickers of interest to follow. The information is conveniently pushed in real time to their home stream.
You could look at StockTwits as the "American Idol of Finance" as the social network easily allows for new trading and investing talent to be discovered. The extensive collaboration on the stream leverages the experience and the knowledge of thousands. It accelerates the learning curves of developing investors and traders, who have the opportunity to follow along with seasoned pros and learn indirectly by watching their comments - or directly by asking questions.
A common rule in trading is to avoid following rumors. What is the right way and wrong way to utilize all the information available on StockTwits every day?
Every source of information needs to be evaluated and StockTwits is no different. The community on StockTwits is always evaluating ideas, commenting, responding and identifying the best talent. There are tools that allow you to find investors to follow based on your style, time frame and personal experience - and once you find them you can look back and see what they have contributed in the past. While on StockTwits you can get more access to ideas, more help from the community and more transparency, don't forget that you cannot outsource risk management.
The book describes the investing methods of over 40 StockTwits contributors. What was your criteria for inviting contributors to participate in the book? How varied are their methods? And is there a common theme that runs throughout the contributions?
Thousands of market participants contribute to the StockTwits streams and add to the information flow. Over time, the best become evident as they express great ideas day in and day out and winning trades more often than not. The StockTwits curators and the community at large recognize these traders and acknowledge them for their greatness. They become the leaders of the community and develop large followings. They represent the pool of people we considered for the book.
Some of the featured traders have been trading for forty years, others for four, but they all believe that to succeed in the markets, you need to devote your efforts to one particular approach. The results are extraordinary for their intelligence, novelty and attention to detail and diversity.
There is not one right approach. The StockTwits Edge features setups from different time frames, asset classes and market styles. The common denominator of all chapters is risk management. It is the core of every strategy.
What is the future of social media in investing and trading?
In the financial world, social media is all about meritocracy, discovery, velocity, transparency and collaborative learning.
Trading and investing are skills that can be learned. Social media allows developing traders and investors to significantly reduce their learning curve and ultimately have much more fun in the process of proper skill building. For seasoned pros, it offers a platform to build a following and potentially monetize their expertise.
Social media has done for investing and trading what the Internet has done for information flow, content creation and entertainment. It has leveled the playing field. Instead of having only one or two channels as a source of information and ideas, social media offers thousands of channels and the opportunity to choose who to trust.
Social media equals freedom of choice. While some could argue that having too many choices might be a two-edged sword, it offers an array of incredible opportunities for those willing to learn how to use it
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