Archive for January, 2011

Today’s Scalp Trades

Monday, January 31st, 2011

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Just a short post here today, as I got back into trading this week. The day seemed to be an easy read today as the market retraced back up from Friday’s sell-off. There was a small gap opening in the S&P which was quickly filled as the market started in with some early chop. If you tried to trade any of that for anything more than 3-4 ticks, you were coming up with losses most likely as the first 40 minutes we only saw “choppy action”.

As a scalp trader, money could still be made in that environment if you have precision entries like a “Sniper” getting in and out quickly. Around 45 minutes after the open, the market showed its first signs of a trend, of which I was in part of it.

There was another move up from higher levels as the market went to a trade to target that I called out well in advance while doing some training with my group. I put the training on pause and took the trade for +5,+7 and +12 ticks right to a predefined point at the top of the range.

All in all, I took 4 trades, with one of them flat for some nice gains on the session. I have a screen shot for a quick glance and I did do a video for those that want to see more of the potential trades that the market revealed.

Trade Safe !  Vince

Learn to Trade the Emini S&P

Saturday, January 29th, 2011

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In today’s economy, their is no shortage of traders wanting to learn to trade the emini S&P.  It offers everything someone could want.  An income, time freedom and a sense of accomplishment. Day trading the emini S&P is a task that needs to be taken seriously. It is not an easy undertaking for anyone involved. Traders usually learn things about themselves that they never new before. Some of it good, and to often, bad.

Most traders enter with the mindset that this is or should not be to hard !  Well, I would say that it is simple, but not easy. That is a good disclaimer for those looking on as they see themselves crushing this new market as they get started.

Any trader who wishes to learn to trade the emini S&P market, must have a written plan and follow it. Trading systems do not really work, because you are basing your trading decisions on the past and not every trading situation is the same. You need a solid trading method, combined with trading discretion. That way you can leave the bad, take the good and carry on.

Trading principals and a set methodology of how you will take action has been proven to be far superior than back testing trading systems that are designed to take all trades and leave out trading emotion. That is a nice thought, but traders need to have a lot of faith in a system like that as you never really know when you will take a large draw down, that can be painful.

Trying to recover from something like that, can strike a blow to your trading confidence and many do not recover. Being in control of your trading decisions based on a solid understanding of how the markets work is really the best approach. You are following a proven set of trading principals that have always been around but most traders never see it.

The markets consist of an ongoing struggle every session. Those that expect prices to rise and others who expect it to fall. Somewhere in there, are a lot of emotions floating around. No one likes to loose money and most traders will always buy insurance. That would be the famous “Stop Order”. When that trade order goes off, it signifies a certain threshold of risk that traders are willing to accept. What many fail to remember is most traders think alike and most have a herd mentality. What that means, you can expect the same thing to happen when a large group of traders are thinking alike.

If you trader where to think in the opposite direction of what they would normally do, most could make money. You will need good money management and control of personal greed, but that could actually happen.

Just think about how easy it is to loose money while trying to day trade for profit. It is much easier to be wrong and loose. The reason, most do not understand how traders almost universally think alike. Trade trigger points are area’s that we see traders taking action in mass. What would it take for you to not place a sell stop to get out, but place place a sell stop to get in. That would seem weird for many traders to follow the markets as no one likes to think of themselves as having this backwards thinking.

For those who want to learn to trade the emini S&P, you will need help to change your thinking around and start thinking differently. You are not born with that kind of thinking but it can be learned. You will have to pursue the hidden trading language that exists in the market.

The Sniper Day Trading Method, consists of using support and resistance in a very unique way, when combined with momentum. The method also many times will tell you exactly where prices could go, with the knowledge all known well in advance. The first priority is the “Sniper Entry”. That will set the stage for very little draw down and a move in the desired direction. Identifying trade to targets, can as well be seen before the entry, giving you a plan, a point at where you will take action and a target to trade too. This can be better than selling on weakness in extended moves.

You can learn this if you want it bad enough. It is all about desire, dedication and focus.  Many have desire, but lack dedication and focus. You need all three to first learn what it is you should be doing, then overcoming your own shortcomings. That is the hard part for most people. For the ones that know what to do, disciplining yourself to then do it and not be worries about the money, is hard. I do struggle with that at times myself, but it is often only short lived as I am aware of those feelings and emotions. They do me no good, so throw them out quickly.

Trading for 2-3 points a day in the S&P emini market, or 20-30 points in the Dow emini’s is not a lot. If you broke it down, that’s 2 one point trades for S&P to hit two points. If  looking at Friday’s market that was not hard to do by any means, as the market was really on the move. We had a trend day down. In that kind of environment, one could elect to trade for what the market gives them, which could have been very substantial.

Screen shot of Friday’s open showing a limited view of my T-1 scalp screen. This chart is tighter and used for short swings in direction. A strong move down, usually can signify more moves like it coming and usually will pay to trade in the strongest directional trend, but all of that is in the method. Enjoy the rest of week end.

Trading results for today

Wednesday, January 26th, 2011

1-26-11;

Just a short post here tonight to post my results from today’s trading. I took 4 trades three of them were profitable and one was somewhat flat. On my third trade, I meant to get out of all my position but did not change my size and exited when I saw things where not as they should be. I had a 1 tick profit on 2 and a 3 tick loss on 1 contract.

Overall, another easy session. No big struggle just exercising good method judgment, with very good timing. The market barely came back on me in all the trades again today. The first one, I had 2 ticks of heat, not to bad. Very good method entries, as they did happen to line up with my indicators as well.

The method is what told me to take action, the indicators are only an added tool to support my own findings. That is the way it should be. Daily goal met. That’s it for now, until tomorrow.

Timing your Scalp Trade Entries

Tuesday, January 25th, 2011

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Timing your scalp trade entries is the key to keeping your risk low while moving towards your target and goal. That sounds reasonable, acceptable, and the thing to do, but most traders have a real hard time doing this. The reason, they just do not know that the market has a built in language to it, that tells traders ahead of time where it wants to go.

How would you feel if on your next trade, the market only moved against you by one tick?  What if you could do that again and again. You would be doing pretty good. How about when you do take a loss, it is only then for two ticks with only on occasion 3 or 4 ? (ticks)  Now, some would say, that would be a dream come true, but impossible to do. It is only impossible by those who think it, with their limiting beliefs. If you don’t think something is possible, then for you it will never be possible.

Our subconscious minds will never allow us to attain something that we first do not believe ourselves. Read that line again, as it is a very big reason why many traders struggle. So, first thing. Tell yourself that this is possible and I will become a successful trader.

Next, you need to take the steps to help yourself get to the level you want to be at. It is not going to happen by itself. The same way learning a foreign language is just not going to jump into your mind on its own. You will have to do something about it.

Back to timing your scalp trades entries.   Every day, the market presents itself with opportunities. Those trading opportunities are present on multiple time frames across the board. Typically, the higher the time frame, the greater the risk associated with the trade. Finding the right balance that is tied to your trading personality is very important.

If your trading objective is to just pick up a few Emini points per session, than you need excellent trade timing. This can also be done while trading stocks and is no different in any way. Having a reasonable daily target, goal or objective, you can not allow the price  to move against you very much. If you find that is the case, your entries need work. You likely need to improve on finding “The Hole”, the trading hole. This is the area a trade has the least amount of trade risk associated with it.

A trader may be able to pick the bottoms and tops, catch a few now and then and see his trade selection move in his direction and make more on the move with this approach.  That is not “Sniper Day Trading”, as you will most certainly have to give the trade much more room to breath in order to account for this type of trading. You will see more stop outs and you will be trading against the momentum at that moment in time. I know some traders do this and it may work for them, but it leaves to much risk open for other traders to run the stops and take you out at your threshold only to then see the move go in your favor, but without you.

Their is another way, by leaving some of the trade on the table upon entry, but at times have the ability to sell into strength or cover into weakness, towards trade to targets. Here, with my method, you will at times see clear area’s that you may want to wait for. They could pay off big if you catch a couple of them.

If we take the “easy and obvious trades” we will not be putting ourselves at risk, but what is easy and obvious?  You just need to know how this game works. I don’t want to talk in riddles, but their is so much trade structure that happens every day I can not begin to tell you. Actually I can’t tell you, because I would be revealing my method. I have never seen anyone trade and put the market structure up on the screen as I do. I am not the only one in the world I am sure who trades the way I do, that would be a bit presumptuous on my part.

By and large, those to take my training see things they never saw or even knew existed, in the charts. The price tells all and the indicators can confirm. On most every trade, I always see it building first and getting into position. One thing I can say, the market is like a power plant, building up energy only to later be released. Knowing how to spot the energy and its likely path of release, will give you the edge to prepare and then take action when it all comes together.

Going back to an earlier statement that can help those struggling, “your believes about your ability to trade successfully and about money will determine your outcome”.  Traders need confidence and the only way to get it is do the right thing at the right time and you get rewarded. The opposite is true. Learn how to trade the price, learn how to limit your losses, learn how to enter with little or no draw down, learn to be patient, learn to be disciplined and you will build confidence and your trading account. It is possible, learn.

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In my trading today, I took 8 trades and had only one loss for 2 ticks. I played it very conservative with the following trades of / Flat / +9 ticks & +4 ticks / +4 ticks & +6 ticks / +2 ticks  / +4 ticks & flat / -2 ticks on smaller size / +3 ticks & +4 ticks / +4 ticks , +5 ticks , +9 ticks /

I could have traded for extended runs today, on a few trades, I certainly did have the room in the market for it, but just controlled myself for the smaller scalp trades. I thought to do a video today since the price swings were a lot better.

Risk management and Scalp Trading mindset

Monday, January 24th, 2011

1-24-11;   Just a short post here today to put up my results from today. I only had a few minutes to trade as I took off on a road trip. I will likely try and trade for a little bit on Tuesday, but we will see. Today, I took three trades and had very good timing as all were gains.  I measure that by the amount of heat I take on the trade after entry. Today, one trade had no heat and the other two had only one tick each. That means the price only went against me by one  tick after I entered the trade. I can not ask for better than that.

I had risk management in mind today. That is really a key ingredient for success, but with limited time to trade, hitting the hole as I call it, helps keep the draw downs shallow and profits quick. I had a scalp trading mindset, in quick, out quick, gone.

Today’s trades were no big deal, small size, small targets, but it counts. I did not have much time to scope out the big picture and could have done better, but I took what I knew I could get without risking the price coming against me.

The last trade I felt their was more, but took the easy chip and left. Tomorrow, I will try and continue with more insight into scalp trading and how better to overcome our barriers.

Scalp Trading as a Form of Income

Saturday, January 22nd, 2011

1-22-11;   Scalp trading, can be defined as picking off small price moves in any trading instrument for profit. It can be in day trading stocks, futures, or in my case the S&P emini futures market.

It is not difficult to participate in this venture, but doing it profitably is another thing. Most traders and or investors have a difficult time pulling money out of the markets on a regular basis. It is not that they don’t have desire, but being profitable on a regular basis has a few key components to those who can.

One of those being, trading discipline. One can only have this kind of discipline if he is informed on what to be disciplined towards. If a trader has no written plan, then he is just flying by the seat of his pants and could never expect to get consistent results based on how he or she feels. You can not trade by feelings. This is different from trader insight as I call it. That would be when after long hours of price analysis, you become tuned in to the markets behavior and get a feel for the rhythm of the market.

This is being in tune with what is, not trying to guess on the next market move. Most often, the market will tell you what it is going to do next. If you are in tune with the unspoken language that it throws off each day, you will be able to time these trading entries with precision.

So, you need a written trading plan first. I have written about this before and it is essential. Then and only then, you would be able to exercise discipline to follow that trading plan. So often, we are anxious about getting what the market has to offer, but that impatience is what clouds our judgment, which creates anxiety and we begin to make rash decisions that we can hardly understand. When we look back, we are in dismay, on how did we ever put that trade on there.

It happens to ever trader, whether they admit it or not. For some it happens all to often. Our job is to keep those times to a bare minimum if we want to become the consistent traders that we aspire.

Scalp trading is an awesome opportunity to profit from the stock market participation, only if we have the discipline to follow a plan, make a reasonable amount of profit and get out for the day. As you get more experience, trading for more or take all the markets gives, can be achieved, but that does take time.

Traders are all to willing to take everything they can right out of the gate, and end up getting nothing. It would be better to tell yourself that you are only going to make two trades today, if the market presents the opportunity. That way, you know you will not be over trading.

If the first one works out, you put yourself in a no loose situation for the session. If you exercise good discipline and wait for the best confirmed entry, you will only add to the days gains and end your session.

Over trading is a big problem for many traders especially the ones who are drawn to scalp trading, like I am. We often times are drawn to the action as day traders place trades, right, so, get in their and trade. That line of thinking will hurt the up and coming  trader and steal any confidence that he had, sending him back to the drawing board. Don’t let that be you. Take steps to prepare yourself and your mind for your challenges.

This part is not easy and is so overlooked it is not funny. Traders fail to plan for the mind challenges that are certain to face them. They only end up reacting to them after it is well under way, as they struggle to try and get even. This mindset ends up working against you. You are focused on the money and it now has a hold of you, to the degree that you often don’t know what to do.

If you plan on taking two trades, you limit all of those possibilities for yourself to blow up, get frustrated, get even, rack up huge commissions against your account and do a number of other destructive things. You could call it, “The One Two”.

If you have a losing trade, you may still be able to have a wining day with your next trade. If you exercise trading discipline and only take a good method trade setup, that has a 2:1 trade ratio or higher, you will still come out slightly ahead for the day.

Tomorrow becomes a new day and you get go again. This type of approach will take longer to achieve the returns of your dreams, but at least you have a chance to attain it. Most traders are going to blow up their account in 30 days or less. Don’t let that happen to you. Scalp trading as a form of income can become a reality, if you have support.

If you don’t know what makes for a great trade and have it crystal clear in your mind, you then are only guessing. I don’t need to tell you what you can expect with that approach. It then boarders on gambling and no one likes to have that label attached to them.

If you trade high percentage trades, you are not gambling. The odds are in your favor for profitable results, only if you stay in control of your trading emotions. Lose it, and you become a statistic. Maintain it, and you can make a living from the markets, which would you rather see.

Let the rush of trading go by you. Fulfill that part of your life some other way that will not affect your finances. Let Scalp trading be what you first thought it could be for you. A profitable way to bring in extra income.

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My trading results for Friday, Thursday, and Wednesday in that order. Wednesday I was sick and traded anyway, you can see I lost my concentration and took many non method trades. The indicators are not my method, by any means, but they are consistent with it. I get all my entries by price action rules of the Sniper Day Trading Method. I did recover that day nicely, but I put myself at great risk by increasing size on my last trade. All three days were profitable with Friday being my best day as far as timing and following method rules.

Enjoy the rest of the weekend to all and see you on Monday’s Post.

Todays price action in Emini S&P

Tuesday, January 18th, 2011

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A video of today’s S&P emini price action. The market gave the early traders a few good entries as shown in the video, but later slowly died. I was only able to pick up a few ticks on the day, as their was just limited opportunity. Just before the close, I had reversed directions but bailed out at break even.  If the trade went against me late in the session, I may have ended the day with a small loss. Trading on the open or much earlier, would fix that. Overall about a 1 point gain, I will take it.

We trade the price first, the trading indicators are second. I don’t show all of my screen, but just a small portion and have most of it hidden, but I can tell you it all fits together like a glove. I use multiple time frames and again, use price action, combined with a unique analysis of support, resistance and price projections not seem anywhere else, or non that I have seen.

If you missed yesterdays article, you may want to check it out. I give some interesting insight on what it takes to be successful at scalp trading the emini market or any market for that fact. If you are struggling with your trading, their is help that can really make a difference.

Scalp Trading Methods

Monday, January 17th, 2011

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In today’s world of day trading, their is no shortage of traders searching for a successful scalp trading method. To be apart of this group, takes more than most people are willing to invest. Success can mean different things to different people, but to someone who trades, emini futures like the S&P, Dow or NASDAQ, being able to take a few points out of that market on most days, would fit the bill. That is not to say that you won’t have loosing days, it happens, but those losses are small when compared to the overall gains made during the week and months past.

One of the big benefits to being able to trade this way is, limited risk, at all times. Limiting ones risk is really the long term key of making this work. A trader can not let him or herself have a “blow up trading day”. This is when a trader just looses his judgment and makes one mistake after another. The biggest problem is lack of self control. Loosing control is one of, if not the worst mistake a day trader can make, while he is carving out his claim on the investing public.

Loosing control while day trading can be a death blow for your account and for your trading dreams. Traders are forced to face many unseen trading issues far beyond the point of entry and exit. If you do not have a scalp trading method that is in writing, with rules to follow, you can never be assured if you will be able to duplicate your success if you were to ever find it, even if it is temporary success as described above. To often, short term trading success can be very misleading and damaging to the trader who hopes to day trade for a living, if he is not prepared and aware of the unseen dangers.

Short term trading success can give a trader a false sense of security, as they may think they have mastered their trading techniques.  Its only a matter of time, before they start spending the money they made from their trading in their mind. This right here is a real problem. To many traders dwell on the money they can make, writing down figures and sets of figures of all the combination’s and sizes. Their is a place and time for this, but to often, those thoughts turn into unfulfilled dreams. Those unfulfilled dreams then become a problem until itself, because as trading mistakes are made, it only exacerbates the reality that without a well written thought out trading method and accompanying scalp trading techniques, it is never going to happen.

I almost don’t even have to say the rest, because it only gets more painful. The harder you try in the flesh, the worst it gets. Taking action is not the problem, we have all done that, but stepping back and looking in objectively at what the real core issues are, is what is needed. This often never happens, because the work involved is again to steep a price to pay. We may not say that consciously, but subconsciously our minds are working hard, lining up with our dominant thoughts and thinking overall.

If you find yourself saying “I can’t believe I did it again”, you know you have a problem and you need to fix it before you go on. Most traders just ignore this, by trying to justify their actions in some form or another. This is not going to get fixed by itself. You will have to be your own trading coach and really dig deep inside yourself and examine basic thoughts about how you view money and or your lack of it. This gets deep right here, and I would need more time to get into that one, but for the  sake of time, I am will move on.

If you are under-capitalized, this can be adding to the list of issues. It is hard and or nearly impossible to day trade with money you cannot afford to loose. No one likes to think they are going to loose money and no one thinks that it is going to happen to them, until it does. Then, now again, are more issues. You say, “I thought I was ready, I don’t know what happened”.

As mentioned, you likely only had a rough idea in your mind of how you were going to execute your trading strategy, again, with no written plans. If you found success, how are you going to be able to duplicate it going forward, month after month with no blue print to follow. Scalp trading, can be simple, but it is never easy. It can be very rewarding, not only with money, but with time, the time you now have to do other things.

Being able to “Day Trade for a Living” using scalp trading techniques that are proven to be effective over time, no matter the market condition is yet another key. A trending market or a choppy market, it does not matter, because the trader who masters the art of scalp trading is trading a method, not a system.

A trading method allows for changing conditions and a trader can easily adjust for it. A trading system tries to remove the human element from the equation, which it almost rarely ever happens. You become vulnerable to large draw downs and are basically not in control. I could never trade that way. I would be putting my faith in a back tested program that has likely not accounted for all variables. Thus you become a dependent trader instead of a “Independent trader”.

Volumes could be said, just on a few of these topic’s, all of which are so important to making all your trading dreams a reality. In closing, keep your trading dream alive, only by making the hard choices that you know you must take to make it so.

I wish the best for my readers !

Friday’s trades:  Two sets, -1 tick / &  +3 ticks, +7 ticks, +11 ticks  /



Price Action Day Trading

Thursday, January 13th, 2011

January 13th, 2011;

Today the market came under pressure as the Dow was off -23 and the S&P-2.  A late rally in the emini futures cut the losses just before the bell.

I just checked the market sentiment for any weekly changes and after having backed off slightly to 54.6% we saw a jump back up to 57.3 and a drop in bearishness down to 19.1%. This is close to rival similar low readings at market tops over the last years. Very few people are bearish, only 19%, that is an extreme minority and one that won’t last forever. Currently, the market is definitely in an uptrend, that we can not argue. It is best not to try and pick the top, as I did try in a post some time back. One of the few times I would have to just say I was wrong. We may see a little more to the upside and the market sentiment may yet move to additional extremes before a correction sets in, but know this, we are historically in the danger zone. Until we see a good reason to say otherwise, who can argue the strength.

In today’s trading I had only two trades and they were both late in the session, for nice gains. A modest day, but a easy day in reading the market as it was at least moving, unlike the bulk of yesterdays action. Another Video of today’s market turns and continuation points.

“Price Action Day Trading”, is best described as traders reading the price structure or composite of support and resistance. You are trading the price of the instrument based on past data, but as it moves into and is creating new data.

The movement of these, which can be stocks, bonds, interest rates, ETF’s, Mutual Funds and yes, futures contracts on commodities and Index’s which we trade. The concept is the same, as all of these financial instruments are driven by “People”, who are lead in one direction to buy and or sell. Everyone of these traders that participate in moving the markets do so for different reasons, but collectively they are who make up any given market. Implied value would be what someone at that given point in time estimates its worth. Based on that, action is taken to keep the instrument in line with its perceived value. It may or may not be what the stock, index or what have you is truly worth, but it by and large is to those who see it that way. Here perception is greater than reality.

All of that said for one simple reason, its is people who make the price move and people are known for being very emotional and predictable.  They usually tend to overdo it, in various things, what ever it may be. As it relates to money, even more so. This can be seen in bull and bear markets across the board. Getting to know how people will react in a given price action scenario is one clue or “Tell” to what is coming next. How does one get to know these coming moves?  Well, we are not born with this knowledge, that is for sure. If it were so, more traders would be successful, but only at the expense of those who are not.

In the game of poker, which I do not play, but know, it is not the cards that someone is dealt which will determine the outcome of the game. It is the astute player who can “read the player” or discover his “tell” or sign as to his next move. The one in the know, is the one who can read the player, and it is he that has the advantage. He bases his decisions more on the clues or signs that is left behind which lends him the clear advantage.  Here, people are acting consistently predictable and to those who have the skills to read the people first and cards second are the ones who regularly come out on top.

Price action day trading using tick charts to uncover the more detailed plans and intentions of those across the globe is no different. Allowing the market to create a detailed map of where it has been, can lead you to where it likely will go.

If someone knows these signs and has the ability to uncover the clues left behind, when it is combined with a disciplined structure of entry, exit and trade management, consistency in results follows.

The price is always first, indicators follow. If you learn to read the price, the indicators can confirm.  If you learn to read the price you will build your confidence and be able to add to your market knowledge, establishing a solid foundation, success will follow.

We are in the business of redistributing wealth. Just transferring it to those who don’t know to those who do know, which end would you rather be on. “Be in The Know”.

Good Trading, to all  !

Major Index’s move to New Highs

Wednesday, January 12th, 2011

Today is Wednesday January 12th, as we saw the Dow Index +83 points and the S&P emini futures +12.

The volume came early on and very late in the session. From 8:30 to 12:30 West Coast, the market went to sleep. That was 4 hours of nothing. It can be hard to trade with no volume and movement as I saw today.

I have gotten off to a slow start this year, with a few points gain on Monday and 1 point gain yesterday. Both of those days I was only in the market a few minutes combined. I did not have the time to trade and was able to slip in a few trades. Today I had more time but hit that slow patch in the market, that is just how it goes. I was down about 1.50 points with a few small losses in the S&P, but decided to take a trade out of the Nasdaq Market. I don’t usually switch markets, but did today and hit a piece of that late market move for a few points.  I show it in the U-Tube video below towards the very end.

The second video under that is from Monday’s sessions which just shows more of the same, turning points and continuation entries.  I or any trader does not have to trade all of these area’s, but just a few will do and often times, just one to make a nice daily return. It is not to hard, but using good judgment and the method in full which is never really talked about, can help you get that done.  Being successful at day trading is a lot harder than most people make it, because they are acting from emotions. Having a solid method that looks to price structure, support and resistance in a very unique way and the nature momentum of the market to help get this done is key. The trade indicators are only a reflection of all of these things just mentioned. When you have both, it can be a powerful combination.

Monday’s Session

Good Trading to all !