Cornerstone Quiz 3

TG Day Trading Stock And Options Course

Choose the best answer from the available choices. One response must be selected for each question.

1) Review the 100 Group 1+2+3 trades you've logged. When is the ideal time to trade?

The best time to trade is when I've followed my rules without exception, ensuring that the indicators that comprise my rules clearly support trading a put or call, respectively.

When the risk is the lowest is the best time to trade.

When I enter a trade during the first half of a time window, there is less of a chance that the trend will reverse on me, making that the best time to trade.

All of the above are ideal times to trade.

2) How can you use Group 3 rules to define your trades before they happen?

If the power and volume indicators are strong, then it's always a fresh trend, and by definition fresh trends must have market support and be breakouts so therefore I always make good trades.

I can assess the strength of a breakout before it materializes, and I can complement that by profit planning with the time and resistance/support rules - I set price and time targets for when I'll ideally have already exited my trade.

I can guess as to which breakouts are strongest, and I can check the time and resistance/support rules for a clear path to trade, but I can't get good enough to execute such a trading process without at least a decade of experience in the stock market. I'll just have to wait for my time.

None of the above are correct.

3) How do time windows help with volume interpretation?

Time and volume are closely related because when I'm watching cable financial news and it's time for the token loudmouth analyst to come on air, I have to remember to turn the volume down so my ear drums don't burst.

Often, a stock will experience a volume spike to mark the beginning or end of a trend. Bear and bull trends also frequently begin and end right at the opening or closing of a 15-, 30-, or 60-minute time window. When the two occur simultaneously, I'm able to better recognize trends ending and beginning and manage my entries/exits accordingly.

When a 15-, 30-, or 60-minute time window opens or closes, there has to be a volume spike so that all of the traders in the stock market have fair warning that a bear or bull trend is reversing.

Time windows often mark the beginning or end of a trend, and trends often originate and culminate with a volume spike, but these two patterns can only happen simultaneously if that stock has reported earnings within the last 72 hours.

4) What defines the strength of a breakout?

Breakouts can only occur when a stock is establishing an all-time-high share price, so every breakout is of equal strength.

The board of directors of a company has to give quarterly guidance on the date and time the company's stock prices will breakout to reach new highs and lows.

The time scale of the breakout defines its relative strength. For example, a breakout from a stock's 20-day previous low price is most likely a stronger breakout than a stock breaking out from its 4-day low price.

A desire to make this trade work, no matter what the overall market and individual stock indicators are telling me.

Cornerstone Quiz 3

TG Day Trading Stock And Options Course

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