Issue 154: Quick Gains: $FRO, $DGT, and $EURN - Masters In Trading

Quick Gains: $FRO, $DGT, and $EURN

For traders looking to capture quick gains, it pays to keep an eye on stocks that are closely correlated. When one stock breaks out of the correlation, it can be a prime opportunity for traders to get in and make significant returns quickly. Such was the case this week with $FRO, $DGT, and $EURN. Let’s take a closer look at what happened and how traders can benefit from similar opportunities in the future.

To understand why these three stocks moved as they did this week, let’s start by looking at their historical performance. Even just glancing at a three-year chart shows that all three stocks have been closely correlated over time. As one stock moves higher or lower, the other two tend to follow suit – usually within a few hours or days. This week though, something different happened – when $EURN dropped sharply early in the day, $FRO and $DGT both rallied instead of following suit. For traders who caught on before the move took hold, some significant gains were available.

Of course, there is no way of knowing ahead of time whether or not this type of break-in correlation will occur again in the future. Still, investors can increase their chances by carefully studying these three stocks (and others like them) for signs that one might be ready to break away from its peers. This includes looking for any news or rumors related to one stock that could cause it to move differently than usual as well as monitoring short-term technical indicators such as moving averages and support/resistance levels which may indicate a trend reversal is imminent.

When correlation breaks between two or more related stocks it can offer traders an excellent opportunity for quick gains if they are positioned correctly beforehand (or are able to enter positions during the move). By studying charts and keeping up with news/rumors related to individual stocks within these groups, investors can better anticipate when such occasions may arise, so they don't miss out on potential profits due to timing errors or bad luck! With proper risk management techniques and the careful analysis of relevant data points, trading correlated securities can help savvy investors maximize their returns while minimizing their risks!

If you're looking for quick gains, keep an eye on stocks that are closely correlated. When one stock breaks out of the correlation, it can be a prime opportunity for traders to get in and make big returns quickly. Such was the case this week with $FRO, $DGT, and $EURN. Watch the video to see the exact trade idea that was presented in Wednesday's Masters in Trading Community live session. You won't want to miss this!

Masters in Trading Digest - Issue 154

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Jonathan Rose

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