Filter THIS! …a pre-open missive

Filter THIS! …a pre-open missive that tells you one thing, the most important thing, if you had to filter your view of today”s marijuana stocks price action through just one thing — okay, sometimes two — what would that one thing be?

Today”s one thing is…Rotation.

Capital is not infinite. Except for the Federal Reserve, of course, the rest of us can”t buy every bit as much of every single company that we would want. We must be selective in those opportunities we chase with our limited capital, that money we have allocated to trading.

Everyone is selective in which opportunities they chase. And in which ones they stop chasing. It is not just news stories and press releases that account for some stocks in a sector rising while others are falling. Different companies are more or less attractive at different times, inspiring us to sell a stock that may have surged recently so we can buy a stock that we believe is starting a similar move.

This is rotation. Understanding the concept is important to being a trader. It”s not too difficult. But traders should also always be cognizant of where money is rotating into and out of at any given time, which can change often. Like the wheel of an unstoppable truck, its rotation can lift you up if you catch it at the right time — and at the wrong time, its rotation can roll right over you.