PROPPAPICKS
Daily stock trading guidance

Everything on this page is what my picks are actually built from. If you've ever looked at one of my entries and wondered why that price, this explains it — and where each idea shows up in what I publish every morning.

01 What a stock actually is

And why the price moves at all.

A share is a slice of ownership in a company. Buy one share of a business with a billion shares and you own a billionth of it — its profits, its debts, its future.

The price is not the company's worth. It's the last price at which one person agreed to sell and another agreed to buy. That's all. It moves because that agreement keeps getting renegotiated, thousands of times a second, by people with different information and different needs.

Which leads to the only thing that really matters day to day: price moves when buyers and sellers disagree about what it's worth. More willing buyers than sellers, it rises. More sellers, it falls. Every chart pattern is a picture of that disagreement.

How this shows up in my picks I only trade large, heavily traded companies — the JNJs and XOMs. Not because they're exciting, but because thousands of people are trading them constantly, so the price I see is a real one and my order fills near it. In a thinly traded stock the price on the screen can be a fiction.

02 Reading a candle

One candle is one slice of time. It holds four numbers.

BUYERS WON high close open low SELLERS WON high open close low BODY = OPEN→CLOSE WICK = REJECTED PRICE
The body is where price opened and closed. The thin wicks are how far it got before being pushed back. Green closed above where it opened; red closed below.

A long upper wick means price ran up and got sold back down — buyers tried, sellers won. A long lower wick is the opposite: it dropped, and buyers stepped in hard enough to push it back up before the close.

That lower wick is the single most useful shape on a chart, because it's evidence that someone was waiting to buy at that price.

How this shows up in my picks My platform doesn't buy a stock that's falling — it waits for a candle that closes green off the low, above where the last one closed. That shape is the whole difference between catching a bounce and catching a knife.

03 Timeframes & volume

The same stock tells different stories depending on how far back you stand.

A candle can cover a minute, a day, or a week. A one-minute chart is noise you could trade all day. A daily chart is the story of weeks. Neither is more correct — they answer different questions, and most losing trades come from making a decision on one timeframe using a reason from another.

Volume is how many shares changed hands. It's the conviction behind a move. A 3% rise on quiet volume is a few people trading with each other. A 3% rise on triple the usual volume means something happened and a lot of people acted on it.

1-min
What's happening now. Mostly noise unless you're day trading.
Daily
What I trade. One candle per day, held for days.
Weekly
The bigger trend — is this thing going up over months or not?
How this shows up in my picks My picks are built on daily candles and held for days, not minutes. That's a deliberate choice: it means a bad hour doesn't matter, and I'm not paying spread and fees dozens of times a day.

04 Support, resistance, trend

Prices where buyers or sellers have shown up before.

RESISTANCE — SELLERS APPEAR HERE SUPPORT — BUYERS APPEAR HERE HIGHER LOW BREAKOUT
Support and resistance aren't magic lines — they're prices where enough people decided to act last time that they're likely to again. When the lows start rising, the balance is shifting.

Support is a price where buyers have stepped in before. Resistance is where sellers have. They work because people remember: someone who missed the bounce at $250 puts an order there next time.

A rising series of higher lows means buyers are getting more eager — they're no longer waiting for the old price. That's an uptrend, and it's the only condition I'll buy in.

How this shows up in my picks Every buy limit I publish sits at a support level — usually the 20-day average price, which is where this kind of stock has repeatedly found buyers. That's why my order rests below the market: I'm not predicting a fall, I'm waiting at the place buyers have shown up before.

05 The indicators I use

Four, and only because each answers a question I can't answer by eye.

Moving average — where the middle is

The average closing price over the last N days, redrawn each day. The 20-day average is a decent proxy for "the current fair price." Price above it and rising is an uptrend; price far below it is either a bargain or a breakdown, and that distinction is the hard part.

VWAP — where the money actually traded

Volume-weighted average price. A plain average treats a 100-share trade the same as a 100,000-share trade; VWAP doesn't. It's where the money changed hands, not just where the price went.

Bollinger Bands — is this move unusual?

A band drawn a couple of standard deviations either side of the moving average. It answers "is this move big for this stock?" A 2% drop is nothing in one name and a serious event in another.

ATR — how much this one normally moves

Average True Range: the typical daily distance a stock travels. It's how you set a stop that isn't absurd — a 2% stop on a stock that routinely swings 4% a day will be hit by ordinary noise.

How this shows up in my picks My stop isn't a flat percentage. For each name my platform measures how deep that stock's dips normally go before it recovers, and puts the stop below that. So a jumpy name gets a wider stop and a steady one a tighter stop — because being shaken out by a normal wobble is its own kind of loss.

06 Risk — the part that matters

You can be right less than half the time and still make money. The reverse is also true.

target my entry my stop WHAT I CAN MAKE WHAT I CAN LOSE IF THE TOP BLOCK IS BIGGER THAN THE BOTTOM, THE TRADE IS WORTH TAKING
Reward:risk is just those two distances divided. Nothing about it predicts anything — it only says what the trade pays if it works versus costs if it doesn't.

Say you risk $1 to make $1.55 and you're right only half the time. Ten trades: five lose $1, five make $1.55. You're up $2.75. Being right isn't the goal — being paid more when right than you lose when wrong is.

The stop is the whole discipline

A stop is the price where you admit you were wrong. Decide it before you buy, when you're calm and have no money on the line. Every trader who blows up does the same thing: moves the stop down because the loss feels temporary.

Position size, not conviction

How much you buy should come from arithmetic, not from how good the setup feels. Decide what a wrong answer may cost — say 0.25% of the account. Divide that by the distance to your stop. That's how many shares. A wider stop means fewer shares, so every trade risks the same amount whether you're confident or not.

How this shows up in my picks Every pick shows its reward:risk before you act on it, because it's just arithmetic on three published prices — you can check mine. And my own size is set the way above: risk budget divided by stop distance. That's why I sometimes skip a name I like. If I can't size it sensibly, I don't take it.