8 Daily Routines to Dominate the Market

(As seen in The Trader Times, October 11, 2024 issue)

Investing is not about chance but about making informed decisions through careful observation and strategy. In a recent edition of The Trader Times , an article lays out eight daily routines that seasoned traders use to multiply their portfolios. These routines have been honed over years and have helped one investor multiply their trading portfolio tenfold over a 14-year period. Here’s a breakdown of the eight key routines:

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1. Identify Stocks Climbing to New 52-Week Highs
Stocks reaching new 52-week highs are of special interest to traders. Why? When a stock doesn't complete its price movement within a few days but shows consistent growth over months or years, it signals strength. Paying attention to these stocks puts you ahead in spotting major movers early.

2. Watch the Strongest Winners and Losers Over the Last 4 Weeks
The most significant price movements in the last four weeks often set the stage for future market activity. Traders closely monitor these stocks to understand what’s causing the shifts, preparing to capitalize on significant gains before others catch on.

3. Study Rising Trading Volumes
When a stock experiences increasing volume, it is known as accumulation. This shows that market participants are taking positions in the stock, possibly due to insider information or significant upcoming news. Understanding these volume patterns helps you stay ahead of institutional moves.

4. Watch for Signs of Pivotal News Points
Jesse Livermore, a legendary stock trader, emphasized buying stocks at their pivotal points—the early stages of a breakout. By tracking news related to a company and its stock price movements, you can identify these pivotal moments and ride the stock’s upward trajectory from the start.

5. Keep Tabs on Industries with Strong Cyclical Trends
Certain industries perform in cycles—shipping, solar, and freight industries, for example, have recently surged due to global factors like supply chain challenges and geopolitical tensions. Understanding these cyclical trends allows you to align your trades with broader market forces.

6. Look for Stocks with Potential Gap-Ups After a Pivotal Point
When a stock breaks through significant resistance with a gap-up, it often signals a fresh perspective from investors. Jesse Livermore’s “Pivotal Point” theory suggests that a company’s stock gap-up, especially following an earnings report, could mean estimates for future earnings have significantly improved.

7. Watch for All-Time Highs and Darvas Box Formations
A breakout to an all-time high is often a signal of significant price movement. Nicolas Darvas, a well-known trader, developed a strategy of tracking stocks that form “boxes” as they climb higher and break out. These patterns often mark the beginning of dramatic upward movement.

8. Track the Fastest Growing Wall Street Companies
Some companies grow faster than others. Small startups can expand into giant corporations seemingly overnight, with many increasing their share values by hundreds of percent within a few years. Keeping an eye on these high-growth companies helps you stay ahead of the market and predict where the next big opportunities lie.