{"id":2769,"date":"2020-05-05T10:13:51","date_gmt":"2020-05-05T17:13:51","guid":{"rendered":"https:\/\/www.steadytrade.com\/?p=2769"},"modified":"2020-05-05T15:29:52","modified_gmt":"2020-05-05T22:29:52","slug":"ep-146-essential-day-trading-variables-part-3-hot-sectors","status":"publish","type":"post","link":"https:\/\/www.steadytrade.com\/ep-146-essential-day-trading-variables-part-3-hot-sectors\/","title":{"rendered":"Ep 146: Essential Day Trading Variables Part 3: Hot Sectors"},"content":{"rendered":"<div id=\"backtracks-player\" style=\"max-width: 100%;\" data-bt-embed=\"https:\/\/player.backtracks.fm\/st\/steadytrade-com\/m\/ep-146-essential-day-trading-variables-part-3-coronavirus-sector-momentum\" data-bt-theme=\"dark\" data-bt-show-description=\"false\" data-bt-show-comments=\"false\" data-bt-show-art-cover=\"true\"><\/div>\n<p><script>(function(p,l,a,y,e,r,s){if(p[y]) return;if(p[e]) return p[e]();s=l.createElement(a);l.head.appendChild((s.async=p[y]=true,s.src=r,s))}(window,document,\"script\",\"__btL\",\"__btR\",\"https:\/\/player.backtracks.fm\/embedder.js\"))<\/script><\/p>\n<p><span style=\"font-weight: 400;\">Some like it hot! And by \u2018some\u2019 we mean traders, and by \u2018hot\u2019 we mean sectors. Not sure what a hot sector is, exactly?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is the episode for you. In our continuing series on essential day trading variables, Stephen Johnson schools newbie trader and co-host Kim Ann Curtin on vital things to know before making ANY trade.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This review of fundamentals is awesome new traders, but even established traders can get a refresher on the essentials.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Psst:<\/span><\/i><span style=\"font-weight: 400;\"> Miss the first few Essential Day Trading Variables episodes? Catch up now! <\/span><a href=\"https:\/\/www.steadytrade.com\/float-volume\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Episode 136<\/span><\/a><span style=\"font-weight: 400;\"> covers float and daily volume. <\/span><a href=\"https:\/\/www.steadytrade.com\/ep-139-time-frames\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Episode 139<\/span><\/a><span style=\"font-weight: 400;\"> is about trading time frames and support and resistance.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">What\u2019s a Hot Sector?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Just as fashion trends like skinny jeans or cargo pants come and go, the stock market has its own areas of popularity. That could be a single stock or an entire sector.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Kim came to the meeting with notes. As she sees it, \u201csectors\u201d in the stock market can be narrowed down to the following:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Energy<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Basic Materials\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Industrials\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Consumer Discretionary\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Consumer Staples\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Health Care<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Financial\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Information Technology<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Communications<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Utilities<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Real Estate\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">But according to Stephen, that\u2019s not quite how it works in low-priced stocks &#8230; Sectors are often less established. <\/span><b>It\u2019s more about what captures the public eye. <\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">They\u2019ll also be more specific. For instance, at the time of this airing, the hottest stocks are all related to the coronavirus. But within recent memory, we\u2019ve had plenty of hot sectors: green energy, biotechs, marijuana stocks \u2026 the list goes on.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These are sectors that get VERY hot for a relatively short time and experience a ton of volatility. From a trader\u2019s perspective, this creates opportunities to ride the trend as these stocks experience rapid growth.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Oh, and in case you\u2019re wondering: yes, there are still hot sectors during a market crash! Coronavirus stocks and related plays are perfect examples. Even while the market\u2019s down, some stocks are going sky-high.\u00a0\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">What Makes a Sector Hot?\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It all starts with some people believing in a stock \u2026 Then they buy it. Other people see that, and they buy in, too. Other people might see the stock and realize it\u2019s not a good company. But they see that OTHER people are buying \u2026 so they buy too.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After a while, it becomes a domino effect. It\u2019s a huge game of buying, even if the stock is rubbish. And it\u2019s all because traders think it could run because it\u2019s a sector with volume.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to Stephen, it\u2019s a kind of mass-crowd hysteria: it makes people \u201cso irrational it\u2019s unbelievable.\u201d<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">How Long Does a Sector Stay Hot?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If a sector\u2019s hot, that implies that it was once at least warm or possibly cold. And it could get that way again. A hot sector won\u2019t last forever, so how long WILL it last?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Short answer? You can\u2019t ever totally know.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the episode, Stephen schools Kim on what informs a sector\u2019s hotness. That includes the news, world events, a compelling story \u2026 and how its heat plays out in the market.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">The Age-Old Hot Sector Story<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Hot sectors are often as predictable as rom-coms. First, there\u2019s a sector leader. This is a pioneering company that generally leads the way. It might be in an exciting new industry, or it might be a company with totally sexy news.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is the one that has the strongest chance of doing well. So you look for sympathy plays or other potential stocks that will follow this trajectory.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When the leader runs other stocks will run too. But if the leader fails they\u2019ll all fail too. Stephen offers some key tips on how to handle this scenario and how to find the best trading opportunities!<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Can You Predict a Hot Sector?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Kim wants to know if she should try to predict the next hot sector&#8230;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Sadly, for Stephen, that\u2019s a hard no. He explains why trying to predict a hot sector is often a waste of time. But there is a much smarter approach&#8230;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Tune in for his helpful tips on how to recognize a hot sector and approach potential trades.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Love these episodes about variables? The topic of SEC filings is coming up soon &#8230; and co-host Tim Bohen will be in on the action!\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Curious About Something?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Got a question about these variables \u2026 Or something else about trading? Hit us up!\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Remember: if your question is chosen as an on-air topic, you could win a SteadyTrade mystery gift box. Leave a comment below or on <\/span><a href=\"https:\/\/www.youtube.com\/channel\/UC5pPaJfbfRHQ1msJ4bSj_dQ\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">YouTube<\/span><\/a><span style=\"font-weight: 400;\">!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thanks for tuning in to the SteadyTrade podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders.<\/span><\/p>\n<p><b>Into this episode? Please leave a review on <\/b><a href=\"https:\/\/itunes.apple.com\/us\/podcast\/steady-trade-the-profitable-side-of-trading\/id1275946076?mt=2\" target=\"_blank\" rel=\"noopener noreferrer\"><b>iTunes<\/b><\/a><b>.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Some like it hot! And by \u2018some\u2019 we mean traders, and by \u2018hot\u2019 we mean sectors. Not sure what a hot sector is, exactly?\u00a0 This is the episode for you. In our continuing series on essential day trading variables, Stephen Johnson schools newbie trader and co-host Kim Ann Curtin on vital things to know before [&hellip;]<\/p>\n","protected":false},"author":2283,"featured_media":2770,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":""},"categories":[3],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ep 146: Essential Day Trading Variables Part 3: Hot Sectors - SteadyTrade.com<\/title>\n<meta name=\"description\" content=\"In our continuing series on essential day trading variables, like hot sectors.Tune in to learn about vital things to know before making ANY trade.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.steadytrade.com\/ep-146-essential-day-trading-variables-part-3-hot-sectors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ep 146: Essential Day Trading Variables Part 3: Hot Sectors - 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