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6 Warning Signs of a Weak Trade


Now, I’m all about finding you the strong trades to make each week.

And yesterday, I presented three new surge stocks for the Watchlist of Traders Daily Direction that are already providing strong trade signals.

They are setting up for some potential great quick surging returns.

And each of them has great scores according to my Stock Surge Indicator (SSI) system.

For those of you that have recently joined us, I strongly recommend making sure that you are up to speed on my SSI system.

You don’t need to know the math or to do the calculations – but you do need to understand how it works and why.

This will empower you to be able to buy into the surge stocks with more confidence.

To get up to speed on my SSI – please download for free and read my special report: The Magic of the Stock Surge Indicator.

And for the full rundown on all of this week’s stocks, check out the Watchlist right here.

Our Current Surge Stocks

As of this writing, Regeneron (REGN) is up by $10.92, or 1.65%.

Regeneron Intraday Price — Source: Bloomberg

J.B. Hunt Transport Services (JBHT) is up by $2.33, or 1.29%.

JB Hunt Transportation Services Intraday — Source: Bloomberg

And Builders FirstSource (BLDR) is up by $0.43, or 0.80%.

Builders FirstSource Intraday Price — Source: Bloomberg

Weak Trades & How to Avoid Them

Last week, we looked at good signs that show a trade is working well and the situations when you want to hold for a larger move.

In the Aug. 25 update, How to Trade Like a Predator, I discussed how to trade better like a predator hunting its prey.

And in the Aug. 27 update, Here’s What Makes For a Strong Stock, I discussed five winning stock characteristics.

But as we know, things don’t always work out. So, in the Aug. 24 update, I discussed How to Control a Loss.

Today, I want to give you my outline of how to spot a weak trade before you have to deal with controlling losses.

Because sometimes trades do not follow through.

And there comes a point where we have to admit we were wrong.

The Warning Signs

Below are my six warning signs of a weak trade… 

The more “violations” you have, the more you should consider taking a small gain or exiting at a small loss… before it turns into a big one.

  1. Low volume on the breakout and high volume on the move back inside
  2. Lower lows in a row without supportive buying
  3. More down days than up days
  4. A close below the 20-day moving average
  5. A close below the 50-day moving average
  6. Full retracement back down after an up move of 12% or more

One of these isn’t the end of the world…

But if they start stacking up, it may be time to get out!

Embrace the Surge,

Ross GivensEditor, Traders Daily Direction

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