There have been other articles on proven strategies and tactics for trading profits on www.smallcapnetwork.com
, including profiting from high volume leaders
, inverse relationships
, mean reversion trading
, and picks from The Rhino Report
. Below is an interview with Josh DiPietro for the readers of www.smallcapnetwork.com
* What strategies do you recommend for small cap traders?
My system is great for small cap traders…the article maps the general framework to my intra-day trading methodology *Are there any small cap stocks you like now?
I only trade $100-$200 stocks. My system is based on trading intra-day volatility. Stocks in this price range tend to have the most consistent swings. (Note to Readers: small cap stocks in that price range include Alexander's Inc (NYSE: ALX), Biglari Holdings (NYSE: BH) and Microstrategy (NASDAQ: MSTR), among others).
*Where do you see the stock markets headed in the near future?
I never speculate past intra-day, it doesn't’matter what the markets are doing, I still place trades. Some days I have
more shorts, and some days I have more LONG positions…either way there are profits to be made. *With major institutions, high frequency trading, etc... the market seems stacked against the individual. What advantages do you see for individual traders?
You obviously must have a consistent system in place, or you can very easily get wiped out on a highly volatile day. In my opinion, the best way to beat the markets is to NEVER hold overnight.*Could you please explain more about the five consecutive candles rule that you cite in your article?
I use the 1-minute candle sticks for intra-day support and resistance levels…newly forming intra-day levels. Its hard to explain without showing on the charts, but basically, if a s/r levels holds for five candle sticks then you can trade the breakout. Keep in mind, my system is counter-trend reversal trading. For instance, I wait for resistance to break, and go 25 cents past initially, then I short.*Is there any other technical analysis you recommend?
Not in conjunction with my system, no.*Studies show that the great majority of day traders lose money. What do you recommend to our readers to keep them from being in that group when they trade small cap stocks?
Simple….only trade in 100 share blocks until you prove to be a consistantly profitable trader…baby steps. This is the focus of my published book, "The Truth About Day Trading Stocks."*What time of the trading day are you most active?
Definitely the first two hours (9:30-11:30), and certainly the first 15 minutes.*Is there a brokerage firm you consider to be particularly supportive of day traders? Why?
Any active intra-day trader should be using a Pay-per-share brokerage, I use LIGHTSPEED trading.Thanks, Josh. We look forward to reading more about your activities in day trading!