Online Trading Academy's Picks for Momentum

Stock market education is a critical part of your transformation into a successful trader!

If you've been banging your head on the keyboard or setting your keyboard on fire, or even if you're making money hand over fist, it never hurts to check in with the experts - the professionals who are making money in the markets.

Each day we will list 4 to 6 picks for that day's stock market. Each pick will have a strike buy price, a target profit price and stop sell price if there is no follow through.

Please remember, there is no guarantee of making money and each of these picks are risky. Always trade a share size that is comfortable to you.

Here is a set of rules that we recommend:

1. All of the trades are made in 1000 share lots. PLEASE, ONLY TRADE IN SHARE SIZE THAT IS COMFORTABLE TO YOU!! Even trading 100 shares can be profitable if you follow the rules. If you normally trade 500 shares, trade these picks with 500 shares as well. Do not break from your plan.

2. Never trade these picks the first 15 minutes of the trading day or the last 10 minutes of the day. Many times you will see the pick go through the strike price in the first 15 minutes. DO NOT MAKE THE TRADE. 19 out of 20 times, the stock that goes through the price in the first 15 minutes, or gaps up above the price at the open, will come down. Don't dwell on the one stock that goes up and continues its run. There will be plenty of other trades. Trading the last 10 minutes of the day can get you into trouble, because you might not have time to get out before the close. You do not want to carry these positions overnight. They are momentum moves and might not have any carryover the next day. GO HOME FLAT.

3. If a pick goes through the strike price within the first 15 minutes, continue to watch the stock to see if it pulls back immediately. Many times a stock will run up right at the open, pull back down below the price and around 10 AM EST, the pick will go back up and make its run. Look to buy the stock above the high it set within the first 15 minutes.

Here is an example:

MAXM Buy price is 9.40
Stock opens at 9.35 and runs to 9.49 within the first 5 minutes of the morning. The stock then comes back in and settles around 9.37. At 9:55 EST, the stock makes another run and goes back through the high set in the first few minutes. We would think about buying the stock at $9.50, looking for a bigger move.

4. You may not always get the exact buy price that I list. Many of these stocks will pick up volume and you might have to pay a few cents more. Don't let the price get away from you. A stock under $10.00, you don't want to miss the price by more then .03. $20.00 stock .07 would be as high as you want to go and a $30.00 stock should be about .11. There are times you won't be able to get the stock. That happens to all of us. Don't worry about it and start looking for other opportunities.

5. Use the stops on the downside!!! We list a price to sell the stock if it does not follow through on the buy. If you buy the stock and it fails to run and breaks below the sell price, SELL THE STOCK. Don't get stuck in a position hoping it comes back. If you like the stock, you can always buy it again when it makes another move up.

6. We do list a target price for where we think the stock is going to run, but it's only a target. Sometimes the stocks run more and sometimes they run less. This is your money, so take profits where you deem fit. We like to look for a 3-1 profit/risk ratio. If you are giving the stock .12 before you sell it, try to let it run .36 before you start to take profit. Sometimes that isn't possible, so try to get at least .24 out of the trade. If you feel the trade isn't working for you, sell it. It is your money and you must feel comfortable.

7. We don't list any short trades, but we do trade the short side. It is very hard to give a target short price that you can actually execute, so we will only be listing buy side trades.

8. When a stock hits its target, always look at its chart before making the trade. There are times when the market has a rally and a stock makes a big move to get to our price. What usually happens is the stock goes through by a few cents, and then breaks down. If a stock has made a big move, don't make the trade. Here is an example:

IWOV is trading at the $7.10 range and our target is $7.68. The market makes a big move and the stock runs through our target by $.02 and then sells off. The stock ran $.58, which is an 8% move.

Don't get caught in a trap like this. If a stock has made a big move, don't make the trade. There are always other trades to come.

9. Always check the volume of a stock before you make the trade. Many of our picks have heavy volume one day and are followed by low volume the next. We never trade a stock that has volume under 700,000 shares. If a stock has low volume, do not make that trade, even if it is going through our target. Many times they will take a low volume stock through the number, and then a seller comes in and sells the stock off. If it is low volume, you could lose money quickly, because you won't be able to get out quickly.

10. The final rule is to look at the market in general when making a trade. If you see the market starting a hard sell off and my pick goes through the strike price, hold off on the trade. Also, if you are in a pick that is in the money, and you see the sell off starting, sell the stock and pocket the profit. The market is very tricky and rumors, terrorism, world problems, can change the direction in seconds. Be careful and watch the whole market.