One Stock Trading Strategy: Simpler Trading For Max Gains

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Learn how to get rich from this one stock trading strategy by specializing in just one stock. This trading strategy will unlock the power of trading one stock and the advantages that come with a single-stock trading strategy. Stock investing is risky, but thoughtful investment selections of individual stocks can reduce that risk.

If this is your first time on our website, our team at Trading Strategy Guides welcomes you. Make sure you check out our TSG blog to find anything you need related to trading.

Also, if you are a beginner to trading, stop what you’re doing right now, bookmark this page, and read What Is Trading — The Most Comprehensive Guide to Understanding Financial Markets first, then come back and read this. You won’t regret it.

Now that we got that out of the way, let’s start learning the best one stock trading strategy.

Intro — One Stock Trading Strategy

How many stocks should you trade?

If you’re just getting started with stock trading, then specializing in one stock is probably going to be the best decision you can make.

Don’t be a “Jack of all trades, master of none.

Jumping from one stock to another stock, or from one trading signal to another trading signal. If you’re looking to be too perfect and capture the price movement in multiple stocks at the same time, you’ll fail.

Think about it, even the world’s best athletes thrive on repetition, repetition, and repetition. They practice their routine, by doing the same thing every day. This repletion of doing one thing ensures success. The same thing goes with mastering one single stock, it leads to success.

Let’s first start to go through the process of buying single stocks, and then show you why single-stock trading works bests with day trading strategies.

See below:

How to buy Single Stocks?

Single Stock Trading
Single stock strategy 1

The process of how to invest in single stocks is the same process you follow when you want to trade any other financial asset. Here is a step-by-step instruction on how to buy individual stocks:

  • Step 1: Open a stock trading account
  • Step 2: Screen and research the stock you want to buy
  • Step 3: Decide how much to invest in a single stock
  • Step 4: Choose what order type to use
  • Step 5: Active management of your stock trades

If are approaching stock trading with a trading plan, you’re focused on risk, and doing things the right way you can increase your chances of success.

Learn more about how to buy individual stocks trading beginner’s guide here: How to Make Money in the Stock Market.

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We’re going to reveal some of the advantages and disadvantages that come with trading only one stock.

See below:

Single Stock Trading Pros and Cons

Single Stock Trading
Single stock strategy 2

Every stock moves in different ways due to things like liquidity and inventory on the book. In this regard, no two stocks will move the same. This means that you need to trade each stock individually and apply different tools to gauge the stock price movement.

Maybe you found yourself in a position where most of your trades and subsequent profits come from one single stock.

If that’s the case you’re sitting on a gold mine.

Let me explain…

Your psychology plays a big role in your success as a stock trader. And, the most important things that our minds absorb are in our subconscious. So, these are the things that we’re not aware of consciously.

Our subconscious is much better at internalizing things than we think. So maybe our subconscious is better to identify trading opportunities in the Apple stock chart or Amazon or whichever the stock ticker may be.

So, if all your stock profits come from trading the share price of a single stock, ditch everything else and focus on that individual stock.

Milk that single stock until you become a stock millionaire!

Do you know how many stocks an NYSE specialist trade?

The answer is simple…

One single stock!

There is a reason why the New York Stock Specialists focus on one market. They rarely have a losing day, and they have been dominating the stock market for decades. I hope you see the correlation between single-stock trading and profitability.

When you trade one stock every single day of your life, inevitably you’ll master that thing. Now, investing all your money in one stock sounds more appealing.

You’ll begin to learn the ins and outs of that stock like no one else.

Other advantages of single-stock trading include:

  • Won’t waste time with screening stock and stock selection.
  • You will have a focused approach in your trading.

On the other side, the biggest disadvantage of trading only one stock is that inevitably you will miss major moves in other stocks. However, the same thing can happen even if you trade multiple stocks at the same time.

Moving on…

We’re going to outline how much to risk day trading a single stock.

See below:

How Much to Invest in a Single Stock?

Single Stock Trading Strategy
Single stock strategy 3

If you don’t know how much to invest in a single stock, you need to learn this fast.

First, you need to define what your goals are:

  • Are you looking to invest in stocks?
  • Or are you looking to actively trade in the stock market?

If you want to invest in stocks, investing too little or too much money in a single stock is the most common mistake stock investors make.

So, how many shares should you buy of a single stock?

The obvious reason is dependent on how much money you have available for stock investing. But, before you risk any of your hard-earned money, make sure you learn how to invest in single stocks.

Now, on the other hand, if you’re looking to actively trade single stocks risking 2% or less is ideal for day trading stocks.

If you have a small account under $25k, make sure you know the Pattern Day Trading Rules.

The 2% risk rule is the most popular investment strategy on Wall Street, used by the pros. By following the 2% risk rule, stock traders can accomplish two things:

  • Keeping losses to a minimum.
  • You can withstand a long string of losses.

Now…

We’re going to reveal our single stock trading strategy and the 3 trading principles that are behind this strategy.

See below:

Single Stock Trading Strategy

Now, before you even start using the single stock trading strategy, you must decide on the stock you trade. If you don’t have already a favorite stock to trade, you need a stock that can generate income streams on an intraday basis so you can make a profit.

The most important step for a stock day trader is knowing what stock to trade.

Now, you might be wondering…

How to select stocks for day trading and making money?

Simply use these three trading principles for picking stocks when day trading:

  • Pick a stock with high liquidity.
  • Choose a stock that has high volatility.
  • Master one trading setup.

If you could buy only one stock, ask yourself which one would be and, why that particular stock.

Once you figure that out, it’s time to start mastering the price action of that individual stock.

You need to learn your stock and know it like the back of your hand.

Without further ado, let’s start the ball rolling and outline how to day trade your favorite stock in less than one hour.

See below:

Opening Bell – How to Trade Like a Seasoned Pro

This single stock strategy revolves around the stock opening bell drive.

Did you know that the best time of the day to trade stock is:

  • The first hour after the opening, from 9:30 AM EST to 10:30 AM EST
  • The last trading hour before the close, from 3:00 PM EST to 4:00 PM EST

If that’s the case, to take advantage of the opening drive, we need a method to serve us as a guide.

See the Tesla chart below:

Single Stock Strategy
Single stock strategy 4

You might be wondering…

How can we frame the stock opening drive?

The idea behind this is that by trading the opening bell we’re following the institutional order flow and trading along with the smart money.

When the opening comes, the big orders that are coming into the market can dislocate the stock price. And, this can provide us with a price extension in one direction. So, we want to capitalize on that price movement.

If you want to learn how to trade the first hour of the stock opening bell, this is your chance.

Here are a series of trading filters to use to spot an opening drive potential coming up.

Note* that this is a discretionary day trading strategy. The more you practice it the better you’ll become at correctly reading the stock price action.

Step #1: Identify the Opening Drive – Directional Bias

The single stock trading strategy focal point is to capture that momentum move or the extension of the initial price move.

Here is how the single stock trade setup work:

First, the stock price must hoot up or down. This will be our filter to establish our directional bias. And, based on our directional bias, we establish whether we want to go long or short:

  • We go long if the stock price shoots up.
  • We go short if the stock price shoots down.

Note* If the stock price isn’t showing a clear bias and moves back and forth, we don’t have any trade setup. Don’t trade that day.

Single Stock Trading Strategy
Single stock strategy 5

The above Apple stock chart shows a strong opening drive on the back of a price gap.

So, the directional bias is UP.

Next…

Let’s define the filters for our stock entry.

See below:

Step #2: Wait for the Stock Price Stalling Out – Consolidate

The single-stock strategy uses two filters for our entry technique.

After the initial stock opening move, we wait for a brief consolidation. We define a consolidation when we have a sideways price action for at least three bars (3 minutes).

Note* we use the 1-minute time frame to gauge the stock price action.

Single Stocks Pros And Cons
Single stock strategy 6

For this single stock example, we use Apple shares.

Now, there is one more element that needs to be taken into consideration.

If the initial momentum drive is upward we want the consolidation to take place above the open price. On the other hand, if the initial momentum drive is to the downside, we want the consolidation to take place below the open price.

Now, there are some instances where we want to fade the opening momentum drive.

If the initial momentum drive is higher, oftentimes the market will drop above/below the open price. For example, if the initial opening drive is up, but the market pulls back and consolidates below the open we have to change our directional bias to down.

Here is a stock chart example, which outlines this price action:

Single Stocks Advantages
Single stock strategy 9

Next, let’s outline what is the trigger factor to buy single stocks.

See below:

Step #3: Buy if we break above the top of Consolidation

That consolidation is a good time to wait and see which way the stock wants to go.

If a breakout occurs to the upside that’s a good time to buy.

So, in essence, we use that consolidation as a guide for the entry.

Single Stocks Vs Mutual Funds
Single stock strategy 7

We also want to protect our bottom line, so as for the protective stop loss, we’re going to hide it 2 cents below the bottom of consolidation. At the same time, we use the %R indicator to spot overbought and oversold readings as a tool to take profit.

For example, if we bought a single stock, we take profits when the %R indicator turns down from the overbought reading.

Investing All Your Money In One Stock
Single stock strategy 8

This single stock trading strategy is discretionary and where I see a trading signal you might not see.

But, that’s the reason why, if you start mastering only one stock and get to know it intimately, this stock strategy can help you get rich.

Final Words – One Stock Trading Strategy

In summary, professional, skilled traders focus on only one thing and they master that thing. In other words, a big part of the success achieved by pro traders comes from specializing in mastering a one-stock trading strategy. The single-stock strategy will allow you to beat the market and only trade what you have mastered. Trading when you have an edge is what professional traders do.

The exciting price action and opportunities that come from trading the first hour after the opening bell offer everyone the chance to day trade the stock market without being glued to the screen all day long.

Here is a summary of what you have learned:

  • Mastering one single stock is better than being a jack of all trades.
  • Master a stock with high liquidity and volatility.
  • Focus on trading the momentum drive at the opening bell.

You can also check out our single Earnings Report Trading Strategy

Thank you for reading!

Feel free to leave any comments below, we do read them all and will respond.

Further Reading

If you like our one stock trading strategy guide then you’ll probably enjoy the following articles:

  1. What is Trading: A Comprehensive Beginner’s Guide
  2. What is Prop Trading: Understand what prop trading is and why it could help you earn financial stability.
  3. Forex For Beginners: Learn the basics of Forex Trading and how to become a pro Forex Trader.
  4. Crypto Beginner’s Guide: A Guide To Understanding the Crypto Market
  5. Futures Trading Strategies: A Complete Guide to Futures Trading
  6. Risk Management Formula: How to manage risk and make a plan that works for your finances.

Frequently Asked Questions

What is a single-stock trading strategy?

A single stock trading strategy is a method of buying and selling stocks based on specific analysis and criteria, with the goal of achieving profits. It involves analyzing individual stocks, identifying trends and candlestick patterns, and making trades based on those insights.

What are some common single-stock trading strategies?

Common stock trading strategies include trend following, value investing, growth investing, and momentum trading. Trend following involves identifying patterns and trends in stock prices and making trades based on those patterns. Value investing involves buying undervalued stocks to invest in speculating on their increase in value. Growth investors attempt to buy shares of companies with strong growth potential. Momentum traders buy/sell stocks based on technical analysis factors to try to buy when momentum is high.

How can I get started with single stock trading?

Research stock brokers start a trading account, research stocks that you are interested in trading, pick one, then trade that stock.

What factors should I consider when selecting individual stocks to trade?

Investors should consider a company’s financial health, competitive landscape, management team, and growth potential when selecting individual stocks to trade. Market trends and industry news can also impact a stock’s performance.

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Free eBook Download!Get A Simple 5-Step Momentum Trading Strategy

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  1. I have been struggling to accept this ‘idea’ of trading one stock. But as of late, that’s what I’ve been leaning towards. NVDA seems to be my go-to, tho, I haven’t made any real money with them. If you had to pick one, outside of APPL, which one would you recommend?

  2. I like your thesis of getting to know your single stock…it can be quite rewarding and you get intimate with it. Only problem is it’s nerve-wracking.

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