Trade Ideas Guide: How to Come Up With Smarter Trading Ideas

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With literally thousands of stocks available, where can you find better trade ideas?

This is a common question for day traders, whether they’re brand-new or long-established veterans, but my top trading challenge students and I know EXACTLY how to find them.

If you’re trying to make your way as a trader, chances are that it’s a subject that is frequently on your mind. If you’re wondering how to find the right stocks, including what criteria to use and what technology to employ, you’re in the right place.

I’ll give you a detailed primer on trade ideas and how to find them, then supply you with my seven best tips on finding smarter trading ideas.

What Are Trade Ideas?

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Trade ideas, simply put, are scenarios you play out in your mind before you execute them on the stock market. In other words, you’ve seen evidence that a particular stock will move in a particular direction, so you forecast not only how high or low it will go, but in what time frame.

Think of trading ideas as setups. In other words, you’ve seen them over and over again, so you can recognize them before they occur. Will you always be right? Of course not. However, with experience, you’ll likely increase your likelihood of profiting.**

Trade ideas evolve into complete stock market trading strategies. Over time, you become used to picking out the patterns that most often lead to profits, and that’s when your wealth can begin to grow faster.

Different Types of Trading Strategies

Day Trade Ideas

Day trading involves entering and exiting a position, whether you go long or short, during a single day. In other words, you enter the trade after the market opens and exit before it closes.

I’m a day trader. So are many of my students. I might hang on to shares in a stock for just a few minutes before taking small profits. On other occasions, I might hold them for a few hours or even overnight.

The important thing is to create rules for yourself. When will you buy into a position? When will you let an opportunity pass? What patterns do you trust most?

Forex Trade Ideas

Forex trading is often about spotting situations in which a trading pair (e.g. EURUSD) might crack support or break resistance. These are often the situations in which you stand to profit most.

I don’t trade Forex myself, but I know lots of people who do. They get ahead by paying close attention to how specific currency pairs behave over a long period of time. It could be days or weeks. They pay careful attention to how specific economies are faring all over the world so they can accurately predict how currency pairs will behave on the Forex market.

How to Come Up With Profitable Stock Trade Ideas

Every trade idea deserves your attention. You never know what will work for you and what won’t. I have lots of friends who trade stocks, and we all have different approaches even though our strategies can overlap.

Start with when you like to trade and in what conditions. What’s your risk tolerance level?

From there, move on to more specific trade ideas. Do you prefer technical or fundamental analysis? How in-tune are you with the latest news going on around the world?

Knowing these things about yourself will help you avoid potential pitfalls and become a better trader.

Tim’s Trade Ideas

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© 2018 Millionaire Media, LLC

If you’re interested in learning my best trade ideas, check out the list below. I’m sharing some of my best tips for finding your own trading ideas and putting them to use for your financial benefit.

1. Learn About Trading

Do you seriously think that you’re going to generate trade ideas without knowing how to trade? Think again. While you may have inklings about industries or companies that might yield lucrative trades, without the knowledge to back up your theories, you’ll just be gambling.

Learning the mechanics of trading before you begin spending your money, you can begin by reading this other free key guide from start to finish. I established the Tim Sykes Trading Challenge to help my students learn how to trade. This is because when I was first starting out as a day trader, I had plenty of ideas, but no guidance. As such, I had to learn a lot of things the hard way. I lost a lot of money that, in retrospect, I didn’t need to lose. This is part of why I established the challenge. Many people saw what I was doing and asked for guidance, and this is the way that I deliver it to them.

Learning all about day trading, learning how stock charts and setups work, and creating this strong foundation is the first step to being able to generate educated trade ideas.

2. Invest in Some Technology

When I first started trading, the technological landscape was much different than it is today. In fact, in retrospect, the resources that day traders had when I was first starting seem rudimentary.

Fancy technology alone will not make you a great trader (you need to learn how to trade first: refer back to tip number one). However, the incredible technology at our fingertips today can really help you generate trade ideas and gain insight on stocks.

Programs like StocksToTrade provide incredible resources for filtering stocks based on your chosen criteria. You can gain access to the top percent gainers and losers, quickly scan the highs and lows, and filter data for research.

Readers of this blog and people who have followed my career know that I’m all about studying stock charts. Truthfully, I consider it one of the secrets to my success. Investing in a program like this allows you to do it easily and efficiently — far more efficiently than I ever did in my first few years. Utilize it and make your life easier!

3. Listen To Podcasts

There are a myriad of amazing trading podcasts out there, and they can absolutely help you generate trade ideas.

Some podcasts, like The Steady Trade Podcast, offer interviews with successful traders during which they speak about their specific methods and tricks for generating trade ideas. This offers a lot of valuable information on successful practices and can be very inspiring.

However, there are many other podcasts out there. You can look at my blog archives to review podcasts I’ve been featured on, or search your favorite podcast directory for investing episodes.  Listen to them while you’re driving, taking a run, or cleaning your house. Always keep learning because it will help you expand as a trader.

4. Prioritize Scanning and Research

Study, study, study. That might as well be my mantra. I gained my millions by being obsessive about reading stock charts. This is a habit that I try to firmly instill in my millionaire students.

Studying stock charts is one of the best ways to begin to determine patterns. This is what will help you decide whether a stock is a good investment. However, it’s not just about looking at the stock charts. It’s about actually figuring out what they mean.

For many, the process will start by scanning the stock charts and filtering gainers or losers. Then, the trader might zero in on a few potential stocks to trade. But filtering the volume and percentages isn’t enough. The trader in question will need to do research to back up the information that they are finding.

Often, during the process of scanning and researching, you’ll find that you uncover trade ideas. Even if you never end up moving on the particular stock you’re researching at any given moment, it can inspire future success. For instance, if you notice that most of the gainers are in a particular sector or industry, this can inspire you to be proactive to look at other opportunities in the same arena. This can help you be a nimble and proactive trader.

5. Seek Out Catalysts

Catalysts can be a powerful predictor of a stock’s success. Or, they can be a predictor of a stock’s downfall, which can also lead to opportunities via short selling.

A catalyst is anything that happens to a company that might affect the value of its stock offering. And yes, a catalyst can be good or bad news — and it’s not just about the news; it’s more important to see how a stock reacts to the news.

Say Company X is offering a new product. They claim that this is going to be the next big thing. Or, they say that they’ve hired a new bigwig CEO. Things like this can potentially affect the value of their stock, causing it to go up.

Following the news and world events can clue you in on potential catalysts like this. Alternately, catalysts might be something that you seek out after you’ve scanned stocks in a particular arena. No matter when or how you are looking for catalysts, they often can help you generate trade ideas.

6. Look at the Market’s Past Performance

Look at the past to predict the future. No, I’m not turning into Yoda or anything. I’m just saying that, to give yourself trade ideas today, look at what was happening yesterday.

History repeats itself — not exactly, but closely enough to give you trade ideas.

So, as you are looking at stocks and beginning to notice patterns, be smart and look at the past stock behavior. Say that you notice a big gainer. Don’t just accept it. Look at how that stock, or a similar one, has performed in the past. Doing this kind of research can give you extremely helpful information on how the pattern might play out this time, and whether not you stand to profit or you might lose big.

Of course, you can never completely predict what will happen because the market is constantly evolving and changing. However, by looking really closely at the market’s past performance, you can make far more educated decisions.

The world of trading stocks, particularly penny stocks, can be very risky. Honestly, this will never change. So, as a trader, all you can do is research and study and do all you can to mitigate that risk.

7. Follow Other Traders

If everyone else is doing something, should you do it, too? Absolutely not. However, you may benefit from watching what they’re doing from a safe distance.

Keeping an eye on the “competition,” so to speak, can be a great way to generate trade ideas. Following successful traders like my millionaire student Tim Grittani can help give you ideas for setups and trading styles that are consistently successful.

It’s important to clarify that you’ll never become successful by trying to copy another trader. Even if all of their trades are public, you can’t know what goes on in their mind or the exact process by which they do their research. This means that you will never execute a trade exactly like them, so why bother? It’s an exercise in futility.

So instead of trying to emulate another person’s trades, try to take what you can from their overall approach and style. Follow their progress and use it to stimulate your own growth. Never forget that ultimately, you have to develop your own trading style to be successful.

Tips to Help You Get Started With Trading Ideas

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As a teacher, I don’t want to tell my students how they should trade. I want to offer them the information I’ve learned so that they can forge their own successful path.

It goes back to the idea of giving a man a fish versus teaching him how to fish. If I tell a student how to make a trade, they might gain success that one time. However, if I teach them how to approach trading in a broader way, they are setting themselves up with the building blocks for a long, successful career. They’ll be able to generate their own trade ideas and spread their own wings.

Here are a few of the golden nuggets I share with my students on a regular basis.

Choose High-Volume Stocks

Volume is critical. If nobody is trading a given stock, you don’t want to trade it, either, especially when it comes to penny stocks. Low volume makes it infinitely more difficult to exit a trade when you want to.

View Momentum Indicators

Momentum describes how quickly a stock’s price moves. In other words, is it going up and down like crazy, or do you see more of a straight line.

Think of it this way: a flat line isn’t good for your heart or your bank account. You want lots of momentum so you can take advantage of small increases or decreases in a stock’s price.

Trade Ideas Charts

Charts are nothing more than reflections of price movement. You can see the movement graphically, which helps you make faster, more accurate decisions. Trade based on ideas charts. In other words, what patterns have worked for you before?

Fundamental Analysis

Some people love fundamental analysis. Essentially, it’s all about reading financial documents and paying attention to the news. A catalyst, as I mentioned before, can be helpful both before and after it actually occurs. Similarly, a balance sheet can tell you myriad information about a company’s health.

Set Up Price Alerts

I might live and breathe the stock market, but that doesn’t mean I don’t have other interests. I’m always traveling, seeing the world, meeting new people, and catching up with family and old friends. Price alerts can help you take advantage of specific setups when you’re not tied to your computer.

Don’t Trust in Promoters

I say this almost daily — it’s that important. Promoters are interested in one thing only: Lining their pockets. They don’t care about yours.

The only time you should listen to promoters is when you’re hoping to short the stock and benefit from the inevitable price decrease. Otherwise, forget they exist.

Master Your Trading Skills

If you’re feeling overwhelmed by all this information, you’re not alone. It can take years to feel comfortable trading stocks, and even then, you won’t win every time.

One way to hasten the process of learning the stock market is to join an active trading community. My Trading Challenge offers the chance to learn not only from me, but also from my top students. I share my huge video library, host regular webinars, and provide feedback to my students on a regular basis.

You can also join social sites like Profit.ly. Share your trades with others and read about other investors’ experiences. It can be highly illuminating.

If you’re brand new to trading, paper trading can help you get more comfortable. Platforms like StocksToTrade let you trade “on paper” before you graduate to the real thing.

Trading Challenge

Are you ready to take the Trading Challenge? If so, I urge you to apply. I only accept people who are willing to study hard, learn as much as they can, and participate actively in the program. Perhaps you’re my next trading success story.

The Bottom Line

Trading stocks requires lots of knowledge. Without it, you’re not able to compete with those who know how to read charts, study fundamentals, react to catalysts, and otherwise spot potential winners.

I want to spare you that fate.

Figure out what trade ideas work best for you, then put them to the test. Use them over and over again until they stop working for you, then find new trade ideas to replace them.

What are your best trade ideas and why?

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