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Day Trading — The “One-Share Scout”
Trading is very tricky and you want to be right about your trades most of the time. You want your profits to be high and you want your losses to be tiny. When a trade looks good and moving up fast, the instinct would be to go all in and let the trade ride, however, in many cases… this is a trap. I’ve seen trades (and have gotten into trades) where the price spiked up significantly just to drop down precipitously within the next few candles.
The solution to this is sending out a share that can test the validity of the stock within that moment. When the stock price is rising, you can buy one share of stock. If the stock holds momentum and keeps climbing, you can stay in the trade and possibly add another share. If the trade dropped precipitously, you can sell your “scouter share” with a small loss. Shout out to the Jesse Livermore videos who talked about using “scouts” to make sure the trade is worth going all in or taking that small insignificant loss when you find out the trade is no good. You can watch his AI-generated videos on YouTube.
Sometimes a stock may be a good stock to get into but the timing is off. If a stock price is at the highest for the day, there is a bigger chance the price will fall than keep climbing. If you go all in at the top, you waste your resources and may suffer a huge loss because most traders (myself included too many times)…
