Editor's Note: Jeff Cooper writes daily market commentary for RealMoney.com , and he creates The Trading Reports, a premium subscription service, every trading day for subscribers. This column is intended to give new users insight into Jeff's unique approach to trading and creating his newsletter. Please click here for a free trial to The Trading Reports.


The majority of time, stocks and the market go sideways. Statistics show that stocks advance strongly about 15% of the time and decline strongly about 15% of the time. The balance of the time, stocks drift or go sideways. My Hit and Run Methodology revolves around price action and the notion that a stock in motion will remain in motion -- at least in the short term.

But not all momentum is created equal. Furthermore, the personalities of individual stocks differ, and that is the reason I designed two different approaches for short-term trading: The Day Trading Report and The Swing Trading Report. Subscriptions to The Trading Reports include both of these reports and my daily market commentary.

The goal of The Trading Reports is to teach traders how to get into my head, and to offer a handful of short-term, low-risk setups based on my Hit and Run strategies. These patterns will allow you to avoid the dangers associated with "buy-and-hold" and give you insight into the market and how I apply my techniques. Hopefully, this will help you profit from the stock market for the rest of your life.

Because the broad market tide tends to lift the majority of stock boats, the commentary included in The Trading Reports concentrates on identifying major, intermediate and minor market-turning points using the tools of Time, Price and Pattern.

Because all indicators are derived from price and/or price and volume, I believe that all indicators are of second-degree magnitude to those tools. Consequently, I go right to the horse's mouth: using price as the final arbiter. The two key tools that drive my day-by-day reading of the market are the Principle of Squares (the Gann Square of Nine Chart) and the behavior of the Trendline, or true swing chart analysis.

Along with my daily commentary, The Trading Reports consists of The Day Trading Report and The Swing Report. In The Day Trading Report, I typically pick two to four names (long or short) that appear poised for immediate continuation. These picks are based on the strategies and patterns that appear in my bestselling books Hit and Run Trading, The Short Term Stock Traders Bible and Hit and Run Trading II. Entry points and stops are spelled out on each setup.

During the trading week, I often show an intraday chart on one of my daytrade picks and give an analysis of how to best benefit and capture intraday moves. Any daytrade candidate should be considered to be closed out by the end of the session.

In The Swing Report, I pick stocks that appear poised for gains over the following three to seven sessions. In each edition of The Swing Report, there is a section of observations that covers trailing stops and exits on past suggestions. Typically, I scale in and out of positions. Consequently, every pick in The Swing Report has an initial target at which one-half the position should be sold (or covered). The observation section also details where to place trailing stops on the balance of shares.

Additionally, The Trading Reports frequently includes a chart showing S&P Pivot Points of support and resistance for the next trading session.

Each Friday, The Trading Reports includes a weekly Hit List of the (approximately) 20 strongly trending stocks that are best poised for continuation the following week.

I use the daily commentary to note the recent activity in the market and to tell readers what the market is telling me. I use the tools of Time, Price and Pattern to discern future market moves in this space, as the April 23 issue included here can attest.

Please click here for a free trial to The Trading Reports.

Jeff Cooper is the creator of the Hit and Run Methodology and the author of the best-selling books Hit and Run Trading (The Short-Term Stock Traders' Bible), Hit and Run II (Capturing Explosive Short-Term Moves in Stocks), as well as a video course, Jeff Cooper on Dominating the Day Trading Market. He also created the Hit and Run Nightly Reports and co-founded a trading markets Internet site.

Mr. Cooper is also a principal at Mutual MoneyFlow Management, a money management firm that is a registered investment adviser. MMM and its affiliates may, from time to time, have long or short positions in and/or buy or sell the securities or derivatives thereof, of companies mentioned in Mr. Cooper's columns. In such event, appropriate disclosure will be made. None of the information contained in Mr. Cooper's columns constitutes a recommendation by Mr. Cooper that any particular security, portfolio of securities, transaction or investment or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. While Mr. Cooper cannot provide personalized investment advice or recommendations, he welcomes your feedback at jeff.cooper@thestreet.com.

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