These are the Basics for Successful Stock Trading
Stockscores Foundation for the week ending September 2, 2025
In this week's issue:
In This Week’s Issue:
- Market Outlook – Markets Are Strong, But …
- This Week’s Market Minutes video – Will the Stock Market Crash in September?
- Trader Training – These are the Basics for Successful Stock Trading
- Strategy – Stockscores Simple Market Scan
Market Outlook – Markets Are Strong, But …
Stocks continue to trend higher on relatively light volume but there is the September factor looming. This makes it best to focus on Alpha stocks which will have less correlation to the overall market. With the prospect of an interest rate cut in the US improving, interest rate sensitive small cap stocks may be able to catch up to the overall market. While September is usually a weak month, take comfort in knowing that the strongest time of the year for the market is November till May so view weakness as a possible buying opportunity.
This Week’s Market Minutes Video – Will the Stock Market Crash in September?
Market leader NVDA went down on good earnings and September is the weakest month of the year for stocks so does that mean we are due for a stock market crash? This week, I discuss what to watch for, provide my analysis of the markets and look at the trade of the week on IPDN.
CLICK HERE TO WATCH THIS WEEK'S VIDEO ON YOUTUBE
https://youtu.be/uvtQC31TpIk
Commentary – These are the Basics for Successful Stock Trading
Over 30 years of trading, thousands and thousands of trades and many 10s of thousands of hours looking at stock charts. You might think that this has lead me to extremely sophisticated or complex analysis, difficult for most people to understand. Instead, it is quite the opposite. I find that the simple things continue to work the best, here is a breakdown of the Basics.
Focus on Abnormal Activity – to beat the market, you have to trade Alpha stocks. Alpha stocks are those that come alive with abnormal price and volume activity and strong liquidity. Find the stocks that are just starting to attract a crowd but before everyone knows about the stock.
Practice Good Risk Management – losing is part of successful trading. Good traders don’t take big losses. This means sizing your positions to reflect the risk and planning to lose at the price point where the market will have proven you wrong.
Be Patient with Winners – since we are all going to take some losses, we must also ensure that our winners pay for our losers. Don’t sell a winning trade because it feels good or because of a fear that the winner is going to turn into a loser. Practice good exit strategy and hold on to the winners as long as they are trending higher. Exit when the trend is broken and an exit signal is triggered. Remember that up trends start slowly and end quickly so be patient with a stock when it is just starting to gather momentum.
Don’t Listen to What People Say – I never read news, listen to stock tips, trust the advice of others. The only thing that matters to me is what people are DOING with their money, not what they are saying. If the stock is going down, there is something wrong, no matter how good the story sounds. Buy stocks that the market is optimistic about, not those that are in the control of the sellers.
Avoid FOMO – the Fear of Missing Out is one of the biggest reasons aspiring traders fail. We must not chase strength, even when our emotions are telling us to buy because the stock is going up so quickly. Buy breaks from low volatility or breaks of pullbacks in longer term upward trends. Don’t chase parabolic trends.
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This week, I ran the Stockscores Simple Market Scan in search of stocks with Sentiment Stockscores of 60 or higher. I then inspected their charts for promising long-term patterns to find some stocks that are worth considering for longer term traders. Here are two stocks to consider.
1. T.IPOT.IPO recently broke its 3-year downward trend after the build of a rising bottom. Energy stocks are starting to get more buyer interest and I like this stock's longer-term pattern. Nice historical yield of 9.5% and looks like it can rise to the $15 - $16 level near term. Support at $9.
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2. SVVSVV is breaking up from a head and shoulder bottoming pattern, through resistance at $12. Good long term turnaround chart with support at $9.50.
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