Alpha New Trader Guide​ - w ​ ritten by yours truly … Alpha (6/1/2019: will update

with diagrams etc tonite for better visual understanding and add a little more
content)

Some things to know, rules to live by, and resources/terms to check out, these are just basic tips
I recommend for you to become a better trader, manage risk and make more money … I
finished this in a couple of hours and it is somewhat broad so if anyone wants me to add a
section just DM me and let me know and I will add it as soon as a can

INTRO (basic terms)

Terms​: Indicators I mention are generally the ones I use, some people use other indicators in
addition to these but just my preference I like to be simple … indicators can be used in addition
to your fundamental research, technical analysis, etc … use them as a confirmation instead of a
basis … all of these indicators mentioned can be set up on the HIGHLY recommended free
charting platform ​thinkorswim​.

Float: ​amount of shares able to be traded for the stock

Volume ​- the most IMPORTANT factor of all, you MUST trade on this … volume is the number
of shares traded in the stock during each period of time, 1 minute, 5m, 1d, etc one single
volume is one single transaction between a buyer and a seller, you MUST know that volume
confirms strength of the stock, and confirms price action aka up movement, increase in price
and down movement, decrease in price. You want the stock to make big moves on big volume
in the direction you want, If a stock is up BIG on shit volume, for example there were 30k shares
traded in a minute on a 1$ stock, and the stock jumped 30%, we know that move is likely not to
hold up well, everything is relative and you will learn eventually to recognize by eye how the
volume is in relativity to price action, volume confirms uptrends AND downtrends

Long / Short ​- long means you buy the stock and you want it to go up in hopes of selling for a
higher price than you bought, short means you borrow the stock at a HIGHER price, then you
buy it back at a lower price to make profit, our chat room is mostly long instead of short.

Resistance / Support ​ - Support is a level where the stock has a chance to bottom, if it
reverses from there, yes we can keep that level of support if it falls thru, it is no longer a support
and could become a resistance. Resistance is a level where the stock has a chance to topout, if
it reverses from there, it would be so to say rejected at resistance, if it breaks thru, it is no longer
a resistance and could become a support. Technical analysts use support and resistance levels
to identify price points on a chart where the probabilities favor a pause, or reversal, of a
prevailing trend.
Identifying resistance and support below
VWAP ​- Volume Weighted Average Price, it is a trend line indicator, the average price the stock
has traded at in relation to volume and is commonly used by traders to determine whether
bullish or bearish (above or below VWAP), stocks have common bounces and top outs there
aka it can also be used as resistance or support ​here we have stock $DMPI below as you can
see maintaining VWAP (the purple line) steadily as support for bullish moves and
breaking below VWAP for bearish moves
Simple moving average ​- a smoothed out indicator that shows avg price over periods of time,
most commonly used are the 50dma and the 200dma, or 50 day simple moving avg / 200 day
simple moving avg, if you change your ​thinkorswim c​ harts to yearly : 1 day, (daily charts) you
can see that these trend lines can be used to see if a breakout will continue or a breakout will
initiate, for example the stock $DMPI breaks over 50dma on the daily chart (1 yr 1 day) , we can
expect continuation if breakout holds over that line, or stock $ELTK is on a downtrend and upon
the touch of 50dma we see a bounce and a reversal, or if it falls through stock will have a hard
time coming back immediately
Here we see DGLY example from earlier falling thru support at the teal colored line (50
day moving avg) which caused a huge crash then bouncing small off the green colored
line (200 day moving avg) before falling thru the 200dma completely
MACD ​- Moving Average Convergence Divergence, compact indicator created by subtracting
the 26-period Exponential Moving Average (EMA) from the 12-period EMA, your money making
confirmations can often be MACD crossovers (simply MACD crossing from red to green) , or
coming from below to above the baseline of 0, I find MACD on the 1 minute chart to be a bit late
for regular stocks but more influential in mainly algo-traded stocks, 5 minute MACD shows
bigger moves very well, for example ​stock $DMPI 5 minute MACD crossed from green to red
today RIGHT as it fell thru VWAP indicator with decreasing buy volume and increasing
sell volume, and from then on the stock started to pull back
RSI ​- relative strength index, simply put shows whether the stock is OVERBOUGHT or
OVERSOLD … it is inaccurate sometimes like the MACD but generally you want to expect the
stock to pullback when it is OVERBOUGHT and the stock to rebound when it is OVERSOLD, or
such as a chart pattern double bottom or double top, there are RSI double bottoms and double
tops, but do not trade using this indicator just use it as a confirmation, a stock could be
downtrending and severely oversold because of bad news, etc and not rebound all day, just an
example why you cannot just rely on indicators ​here is an example of an RSI double bottom
before the biggest reversal in the day on the 5 minute chart

Bid / Ask​ - bid price represents the maximum price that a buyer is willing to pay for a security at
the moment. The ask price represents the minimum price that a seller is willing to receive at the
moment. Both the bid and ask prices show on the Level 2 …the SIZE of the bid and ask for
example TOS shows 30 as the bid that would be 3k shares, 1 would be 100 shares, 1000 would
be 100k, etc ... The difference between bid and ask prices, or the spread, is a key indicator of
the liquidity of the asset. In general, the smaller the spread, the BETTER! If for example the
stock $MLSS is trading at a 32c bid and 39c ask, would you buy the stock ? NO! That spread is
insanely huge and generally most buy orders fill near the ask and most sell orders fill near the
bid …so if you bought the 39c ask, you would immediately be at a 20% loss if you wanted to sell
out immediately … that being said bids and asks fluctuate constantly
Example of a bad spread
Example of a good spread

Level 2 ​- aka L2, it is LIVE access to the NASDAQ stock order book, displays market depth and
bid and ask orders, i’d like to say most of the orders show on the ​thinkorswim​ level 2 , but not
all. There are some hidden orders not shown because simply put the ​thinkorswim ​L2 is not
great. I recommend Etrade pro for a full level 2 but generally the TOS L2 is fine. Sometimes L2
is manipulated and people/market markers can pull away the bids and asks shown whenever
they want. Generally though on L2 if you are long, of course you want the bids to be stacked
not the ask. Learn level 2 it is VERY key to recognizing manipulation
Here is what the level 2 looks like for ​thinkorswim

Day trade / Scalp / Swing ​- day trade is a buy and sell on the same day, usually for a good
amount of percentage, a good 5-10% or 20% or more … Unlike the scalp ... scalping is just
selling for a few cents usually with a larger position for scalpers. Many small trades on the day
add up. When a stock is alerted as a swing it means per the idea the stock should be held
overnite up to a week or a month(s) … usually swings are meant to be low risk plays

Few tips:
- Sell on the way UP not on the way down. Our goal is to buy the dips and sell the pops,
not chase the pops and panic and sell on the way down.
- NEVER trade on emotions aka fear of missing out, or fear of losing DISCIPLINE is key
and it is imo 70% of trading the rest is experience / skill
- Manage risk, for example you never want your whole account in a stock or even HALF of
an account, if that play does not go well you lose a LOT of money, I never put more than
5-10% of my account in a stock if that stock goes to zero (which is not really possible) I
only lose that one position
- If you make a bad trade and lose your pants, do not revenge trade your way back by
hoping you’ll land a huge trade that will somehow recover all your losses on the day. If
some how you end up making 3 bad trades in a row, do NOT continue trading. Trust
me, you will lose more. Remember every day is a new day, and starting fresh is
TOTALLY different.
- Trade your own plan, know when you want to buy / sell and FOLLOW it not follow the
pumpers
- Scale out - personally I scale ¼ or ½ or ¾ every 5-10% but I can’t tell you when to buy
and sell , but TRUST me you will not regret booking your gains in case the stock tanks
- ALWAYS do DD (due diligence) before you buy and sell. Know upcoming catalysts,
news, stock history, check all chart timeframes including 1 minute, 5 minute,1hr, 1d, 1yr
etc so you know common supports and resistances and note them down
- NEVER CHASE A STOCK
- AGAIN NEVER CHASE!!!!!!! We buy them cheap and let the rest of the mkt chase us
- Most volume occurs here: 9:30am-10:30am EST opening hour, and 3pm-4pm EST is
power hour
- Lunch is from 12pm-1pm EST, expect stagnancy and dips
- Recently observed 11am-12pm EST has been a mini power hour of its own
- Never join a paid chat, they make them paid for a reason because they dont know how
to trade, who becomes a millionaire and still needs to charge people 2k a month for
“stock picks” and lessons? Our room is FOREVER FREE no matter if I am dead or
alive.
- Websites to use:
- http://www.thelion.com/​ to research stock history and to see what pumpers are on the
stock
- https://stockcharts.com/h-sc/ui​ for charts
- https://finviz.com/​ for charts and scanners and financials, useful data on the stock, news
too or you can use yahoo news for news also
- https://stocktwits.com/​ and ​https://twitter.com/​ to see what pumpers are on the stock
- http://shortsqueeze.com/​ to see how many people are short, delayed data (if there is an
upcoming ER or catalyst shorts tend to COVER!)
- https://www.nasdaqtrader.com/trader.aspx?id=shortsalecircuitbreaker​ stocks that are
harder for shorts to play with
- https://www.bamsec.com/​ to research recent filings on the stock, VERY useful site you
should always look at filings for your longs
- Unusual volume is the KEY to the market. Personal secret
- Mental numbers are resistances and supports, key levels for the stock such as .30 .50
1.00 1.25 etc or round numbers with ZEROES
- Assume all media are pumpers before you buy / sell and OBSERVE their plays to find
out before you buy / sell
- Use a stop loss or a mental stop loss where you sell all because the stock is gonna die
(hint low floaters you should NOT use stops on)
- Learn charts and patterns memorize what the indicators are and use them as
confirmations, common patterns are wedges, flags, and pennants
- STUDY! There are a few books in the education section of the discord and an
investopedia guide in case you are TOTALLY new to trading i recommend you read all of
it
- Know what kind of stock you are trading, what their product is, if it is approved or safe,
and what sector as similar stocks run together as ​sympathies​ of the same sector, or if
one is crashing the others may follow depending on the mkt and NEWS
 - CONSISTENCY IS KEY!
- Any questions please ask thru trading floor or questions section or if you want it to be
private just DM me, I am usually on during mkt hours and when the mkt is closed I or the
team can still reply just will be slower
- Take your profit when you can leaving green on the table is better than taking a loss
- Best charts - thinkorswim
- Best level 2 - etrade pro
- Best scanner (costs money though) Trade Ideas
- Best / fastest news - equityfeed
- Best broker imo - under 25k with PDT Webull
- Best broker imo - under 25k without PDT ustocktrade
- Best brokers imo over 25k - TD ameritrade, Etrade, lightspeed
- Never trade without charts. Phone trading never works and you will lose, get your self
some LIVE stock charts using thinkorswim which is free for your laptop / PC
- https://www.investopedia.com/university/stocks/​ if you are totally new and want to learn
all about stocks
- Sabby management any thing related = short , not good idea to go long
- Check recent offerings on the stock
- NEVER hold stocks into earnings or presentations or approvals unless you want a 50/50
chance gamble of doubling or destroying your account, play the runup

Alpha out .. BITCH