Charles Poliacof has been a trader for more than 12 years. He’s trained hundreds of traders. manages between $10 and $20 million, and is considered one of the top traders on the Street. This week, he talked to market coach Doug Hirschhorn about his approach.
Finding Trading Opportunities
“So much depends on your time horizons, your approach, what you believe,” says Poliacof. Right now, he adds, he’s investing with a far more short-term perspective.
Poliacof looks for the best indicators by deciphering risk and reward, and using a host of quantitative and technical indicators, breadth indicators, and volume indicators.
Even though Poliacof focuses on equities, he still believes that right now, that’s where the best opportunities are.
When investing, he finds himself looking for some sort of catalyst—an earnings-driven event, more of a macro event. For example, JPMorgan and Goldman Sachs have been talking about paying back the TARP. That’s caused him to look at the price action on a lot of these banks.
Poliacof says he noticed the volume on these stocks was weak, and that means there’s some buying, but more a lack of selling or, potentially, some short covering. He also noticed the banks, which would normally be providing some leadership, were acting poorly.
“I’m a big fan of using levels and a confluence of events,” he says. One of his key levels is 914 on the S&P. “So I’m looking at 914 and I’m trying to determine how these positions are acting relative to what’s happening in the market. When you get these kinds of divergences,” he says, “that’s when there’s an opportunity.”
Tags: Charles Poliacof, Doug Hirschhorn, dr doug, economy (global), economy (u.s.), Investment Strategy, Stock Market, Stock Options, trading strategy, Trends & Fads
