Estimated Duration: 1 Day

Notes: Please have a general understanding of our strategy before you begin your tutorial.

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Stock Traders daily was founded with the intention of helping the self-directed Traders, Hedge Funds, and Money Managers gain a firm understanding of current Markets trends and to, in turn, be able to profit from trading opportunities when they arise. Over the years, the methods used to achieve our success in the Markets have been adapted slightly, but the underlying concepts are the same.

The goal of most Traders is to identify profitable trades in a timely manner, and then to profit from said opportunities. The key word here though is TRADE. Aside from Longer Term Investments, we are only TRADING the stocks in which we find opportunities. Therefore, aside from immediate news, we should be unconcerned with the fundamentals of the companies in which we trade.

2 exceptions:

An exception lies in the longer term trades, which only happen a few times a year. In these longer term trades we must apply fundamental research to our decision making process. (Details will be discussed in a later tutorial)

A second exception exists in the stocks that we choose to incorporate in the universe of stocks which we monitor for trading ideas. When making the decisions to include stocks in this list, we should only include stocks with solid businesses, with ample liquidity, and with share prices which allow for reasonable profits from trading activities. (Details will be discussed in a later tutorial)

Again, the majority of the trades we make are day trades or swing trades and we should not be concerned with fundamentals of the companies we trade because we will not hold the positions for more than a few days in almost all circumstances.

With that, if we do not use fundamental research to find opportunities, what can we use?

Stock Traders Daily has implored the concept of Market Timing into this approach. Specifically, by finding the right time to trade the Markets clear opportunities arise.

Identifying exact times to enter the Markets is a detailed science, but it is one that Stock Traders Daily has excelled at providing. With a refined accuracy, Stock Traders Daily has been able to identify turning points in the Markets consistently which in turn have allowed our clients to find profitable opportunities accordingly. (An understanding of Market Timing will be discussed in a later tutorial).

This, in turn, brings to light another important question: what stocks should be traded when the Market is at a turning point?

In order to achieve accurate Market Timing Stock Traders Daily applies a 3-Tier Technical Analysis to the Markets. So, in order to find the stocks that are most likely to provide profits from the turning points in the Market, Stock Traders Daily applies the same 3-Tier Technical Analysis to a universe of 1300 stocks which meet our trading criteria every day.

The concept here is to find stocks which are trading in line with the market, so, when the Market turns, we are able to immediately find stocks which are most likely to turn with it as well. In other words, if the market is trading within a range, we want to find stocks which have similar trading patterns during the same timeframe (stocks which correlate) because by doing so we are able to buy or sell stocks in line with the Market's trends.

This concept correlates accurate Market Timing with the same analysis in our Focus List (an excerpt from the 1300 stock universe), and what is left is a refined list of stocks which are correlating with the market, and in turn, which are best suited to trade given the identified turning point in the Market. Using this analysis we know when to trade and what to trade, and our ability to profit from our trades increases considerably.

This correlation-concept is critical to achieving success in Market Timing, and the system that Stock Traders Daily has developed for you provides all of these features to you automatically through our alerts viewers.

I the next lessons your will be shown our automated alerts viewers and you will see how this concept is applied to real time trading.

Please take a moment to re-read this introductory lesson, because it encompasses the theory in which Stock Traders Daily encourages its clients to follow: If we are able to pinpoint turning points in the market, and then if we are able to find stocks that are correlating with the Market, we should be able to find profitable trades on a consistent basis.