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Steps For Establishing your Trading Goals

Sunday, July 4th, 2010

This post is for Friday’s market as the Index’s pulled off Thursdays intra-day low of 1006.

The market had a negative bias to it on Friday after the open which lasted for several hours. We started to flatten out around mid session and then made a run for it. The market did a pretty good job, but just before the close, no one wanted to hold over the long weekend and things sold off quickly. Modest losses for the Dow and NASDAQ as well.

Where do we go from here? Well, everything is down except for the monthly charts right now. It is hard to say, but I would like this market to hold up for while before any major cracks take place, but the market is not going to listen to me. As the days go by, we will afford more of a move down, so as for the Dow to get to the 9500 area or so. The index’s are not exactly in sync and some backing and filling may have to be done to get things lined up with each other. The number S&P 1006 was significant last week, but as time passes, if will allow for the market to come down a little more.  We had a 20 S&P point advance off of the 1006 number but I do see that there could be more room for things to settle in here. It is all pretty close. There is a chance that we could hold on to the lows set on Thursday and by Wednesday move out higher. I will just have to see how things shape up on Tuesday first.

There is a lot of room for the market to drop if it wants to, but if we can contain any new selling to afford the Dow to get to 9500 + or -, we could see a good move off of that number.  The new sentiment numbers will come out on Wednesday morning and there could be new developments there. We were holding at 41% bullish and a reading of 35% or less should trigger a counter move up.  Since the markets will be closed on Monday, that gives us only one day to see what it will do. A 6% drop is kind of a lot to drop in one week, but I have seen it happen plenty of times before.

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Friday’s trading was bit tough for me. It all turned out OK in the end, but I came up to my daily loss limit (4 S&P points) and could have went slightly over it if my last trade did not work out. My judgment was off and it caused me to struggle. I saw something, a big move coming and was acting ahead of the move so as not to miss it. I had built a position with three entries just before my last trade and it did not work out. Only a small loss around 4-5 ticks but I really needed to wait on that move for a better entry. The move was just brewing in the hopper, waiting to jump out, but I needed more patients. The last trade made up for all the mistakes and I hit better than my daily goal. I have similar notes on my screen below if you click on it, once and then again to blow it up if you care to see.  Video of the last trade in U-Tube video gallery posted on Friday too.

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Steps for establishing your goals:

1) Start by doing what you know works, then experiment with new applications. When in doubt, try to do more of what your already doing that is already delivering the results you want.

2) Build the right back up scenario’s into your plan. What might go wrong? Anticipate the unexpected at every level of achievement and don’t let concern about your own status as others perceive it, keep you from making the right choices in the right situations.

3) Get feedback from the right people on the pros and cons of your trading plan. People who give constructive feedback want to see you grow and people who offer only negative thoughts want to see you stay the same. Don’t waste your time talking to people who want to make you feel bad about yourself or question your dream altogether.

4) Keep your eye on the goal, but don’t get tunnel vision as it relates to other obligations. You have to balance your goals as it relates to the big picture. Do something each day that takes you closer to reaching your trading goals and is a reminder to yourself that you are going forward and making progress. The key is balance all other things of importance so other things do not suffer at the expense of reaching your goal.

5) Keep learning and growing and remember no one does it all alone. If the problems down the road look too large to you while you are setting up your plan, remember, you will be a big person by the time you need to solve them. To often we hold off on growth because we worry, “How would I handle all these problems”. We assume that we will never be smarter than we are right now and that we will never run into anyone else who offers skills and experiences that complement your own.

If you are a struggling trader and want to bounce an idea or two off of me, feel free to send me an email and I will give you my constructive thoughts on it. Many times traders do not have anyone to talk to about what they are trying to accomplish and it can be frustrating, because they may be going in the wrong direction. I won’t be trying to get you signed up with my trading course unless you want to, but if you ask a legitimate trading question or questions, I will give you a professional answer, no more. It is up to you to ask. If you struggle with concentration and focus, ask me for a free copy of my E-Book on “The Power of Concentration”.  Again, no strings attached and I will not be hounding you with this or that. Just ask for it and its yours, that is it, and again, if you have questions, I will be happy to answer. So, think it through and send me any email. We are half way through the year, make the second half count in reaching your trading goals.

Good Trading,

Vince

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Reduce Stress Associated with Trading Gains & Losses, Part 2

Saturday, May 22nd, 2010

This post is for Fridays market May 21st where the selling continued, but reversed at days end to close much higher.

The selling continued in the night trading Thursday evening and carried over into Fridays session where it started to pick up steam to the downside.  Buyers did come in before it got out of hand and salvaged the day for the bulls.

My last post I put up a single screen shot showing the support that was coming in from a couple of angles. That support if broken on a closing basis with conviction will likely kick in the next wave of selling to the area’s marked on the screen, 864 is the lower number. I do not rule out the possibility that it will keep going at some point, but one thing at a time. There will have to be some economic or world crisis to trip it into gear, but its to much to think about right now.

In my trading Friday I had a great day hitting another one of those mega days. I have a screen shot of my last trades of the day here. In this shot, I have only a striped down view of my screen only showing one chart of my main screen with only one indicator below.

By following the complete trading method, the timing of the buy and sell signals are really generated by something completely different, but the indicators do line up with trading method.  By learning how I trade, you will know why and when to go long or short, not only because an indicator says so. I use different models with different time frames for each model depending on the trading movement. With just a hint of a trending market, I will and can trade out out my T-2 screen of which I have a tiny portion shown above. If in a choppy market my T-1 screen works like a charm. You still need to know how to handle yourself on the board. You can have the best tools and still mess it up, if you act irrationally and become overly emotional.

One more point that I have been wanting to show for some time now, is how my trading method will work with stock trading. The only thing that you need in any trading instrument is movement. If it moves, it will work. It works in any time frame, as well as with tick charts,volume charts, range charts, minute charts, hourly charts, daily charts, weekly and monthly charts. There, I covered all of them. Not all traders are alike and each trader needs to find what time frame is best for there personality. For the trader who feels good about holding a position for several hours and even days at a time, may not be best suited for scalp trading where you may be in the move for only minutes. I have tried them all over the years and it took me a long time to find where I am best suited and that is scalp trading with my own version of trend trading tied to it.

The video below is on a stock, symbol FAZ in a 150 tick chart. This is fast especially on the open where the market gaps higher by a lot. You can always slow it down by just increasing the time frame to say 250 tick chart or higher.  It is a financial bear index and works in the opposite direction as the general market. This stock tracks the financial and banking stocks but will go up as the financial stocks go down. As a day trader, it really does not matter, as long as it moves and this one sure does. The point is, I am just showing one timing tool tied to this and how if you knew the complete trading method, you would be certainly be able to get in at or near these turning points and have a very small stop, .10 to .15 cents.

Continuing with Thursdays lesson: “Reduce Stress Associated with Trading Gains & Losses”

Continuing where I left off, I discussed reducing stress associated with trading gains and gave a few idea’s on how to bring that about. Most traders struggle with this one, “the losses”. There is usually an increased amount of stress as losses start to mount. To often, traders are thinking about the money and not trading there plan and trading method.

Try not to think about the money. I know that is easier said than done, but if you resolve in your mind the worst thing that is going to happen to me today is a loss of 3 S&P points and if you are trading stocks, say 30 cents. If you are trading one contract on the S&P’s, that is a $150 dollar total loss for the day and with stocks, trading 500 shares -.30 cents you are looking at about the same, -$150 dollars.  The idea is, you are not planing on losing for the day, but the stress associated with trading loses only add to the pressure you are under, so focus on following your plan of action. Expect and see yourself doing the right thing as called for and see the trade moving in your favor just after you enter. Don’t wish it or hope it moves, but let the stock do all the work. You are not going to help it along with your added emotions.

Ever heard the adage, less is more and more is less. That would apply here. Day trading is a mind strategy that gets played out on your trading screen. Do the right thing at the right time and you won’t have to try and help it along. It will  already know where to go, right to your target area or running as though it were in a marathon. Go along for the ride as a passenger but be sure you get off before it stops and goes the other way.

You will be reducing stress if you can accept your daily loss limit for which you should have. A maximum amount you will risk in any one trading day, (mine is 4 S&P points).  Then, don’t think or worry about the money and just trade with the rhythm of the market and let it tell you if you should be long or short.

Your feedback and comments are welcomed and appreciated. Enjoy the rest of the weekend, Vince.

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Reversing Bad Trading Habits

Monday, May 17th, 2010

Today is Monday May 17th and the S&P hit the 1120 target exactly at  1120.25 in the pre-market.

I called for a reversal of the up-move last week as the market would hit the 1177 area and reverse for a minimum move down of 55 S&P points to 1120. We hit that in today’s pre-market action and reversed off of that number for a 20 S&P point move. The high was hit just after the open 1140 and then it was down from there yet again to new session lows at 1114.

I could see the 1120 area support for at least an initial bounce and safe target area to cover. The market really did what I thought it would. I did see the possibility for lower prices than the 1120 but not after a sizable bounce came in first. The 1120 was a conservative target area.

Today after the open, there were three good area’s to go short and they were at 7:41 am , 7:57 am and  8:47 am all West Coast time. After that, there were three good area’s to go long and they were at 10:15 am, 10:55 am and 11:40 am.

The market is making a good case for yet again another reversal back up with the current price at 12:50 p.m of 1135 and rising. This basically is what I expected and is what I pointed out last week, so far so good. I do see some follow through to today’s move, but it looks like it will be contained. It looks like 150 points or so on the Dow in the next day or two.

The market is in a very vulnerable position in general. We can not overall rule out that the previous lows of S&P 1055 will be taken out. I am bearish on the big picture right now and this move back up will only be setting the market up yet again for another drop. We will have to take it a day at a time, but caution is definitely in order. People should be looking at capital preservation at this point in the game.

As far as day trading is concerned I had a good day  today. I took 13 trades with 9 profitable and 4 not. The losses were very small  at -.50 -1.00 -.50 -.50. I had a 5.75 to one profit ratio. Anything at or above 2.00 to one is considered good.

The video is from the first two trades of the day. I had enough to get my daily goal with just those two small trades but while doing some training video’s I seen some good opportunities and kept trading. I don’t always trade this much as I mentioned, but today could be one of those real good days for me that I like to have to stay well ahead of myself.

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Reversing bad trading habits: Bad habits are one thing that plagues traders. I know that there are many who vow to change there ways but seem to repeat the same bad trading habits again and again. Is there hope for the struggling?

I say “Yes”. What do you say? That is where the question lies and where it needs to be answered. Each trader is different in that we are who we are as traders based on our past. This is also true when it comes to life in general as well. Our past directly effects the present and is a compilation of all our experiences good and bad. the good news is, that we do not have to stay in a condition that we no longer accept.

There is a comfort in repeating patterns, even if they are not to our benefit. The benefit is, that we are doing the same thing over and over again. The repeating of the pattern brings comfort and that is one reason why we do it. Fear of the unknown I believe is part of the reason for this. We are not use to doing things different and when we do them the same way, it is easy for our subconscious mind to accept it, even if it is wrong.

This is one of the reason’s why I think traders are making the same mistakes repeatedly. We need to ask ourselves, are we willing to change and do different, even if it means taking us into uncharted waters?  The answer is usually yes, but in reality it is only in our actions that we can see if this is true.

In order to reverse bad trading habits, we need to see what it is that is expected of us. Traders need to make a profit and if you are a day trader of stocks and or emini futures, your goal is to make a profit each day. A traders timing is key to his success, if your timing is wrong, early or late, you will suffer. If you wait to long because you want confirmation, then you will be entering as other traders are exiting. If you are in to early, you are vulnerable to getting stopped out as well because you may be afraid of missing the move.

Understanding what is expected of us is the first place to start. Is your plan to extract a profit from the markets sound? Do you know exactly what you are looking for without question and do you hesitate when faced with that decision? If you answer yes to first and yes to second you do not have enough confidence in your trading method to enter when you should and it is causing you problems. If you answer no to the first question (knowing exactly what you are looking for) and yes to second, (no hesitation pulling the trigger), than you are going to have problems as well. You can not pull the trading trigger on something that you do not have complete confidence in.

You need to be able to get both right and until that happens, it is going to be difficult to reverse bad trading habits.You have to know where to go and what to do in order to change something. Just knowing there is a problem is not going to make things better.  That is a start, but it requires an action trading plan with a solid footing. If you in need of such an action plan and trading method, I have answers and can help for stock and futures trading.  If you already have something that works, then strive on being disciplined not to go beyond it.

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Trader Coaching – Day Trading the “Easy & Obvious”

Tuesday, April 13th, 2010

Today is Tuesday, April 13th and volume picked up to move the market nicely today.

What a difference a day makes, a big difference from yesterday with the volume more than double what it was, with the volatility to go with it.

Today, the market started off lower as it was following through with the downside momentum started in late yesterdays session. At a touch past 7 am West Coast,  a very nice rally short took hold which I was in for about 6 S&P points with 7 contracts on board. I did not scale out as I usually do, but held on for the full move. I had been calling out 1186 as a target from the start. I had gotten in on this move at 1192, right at the top. I did have a bit of circumstances that lead me to place an order short at the high into resistance, which I don’t normally do. As it turned out, I was right on taking no heat and the market just dropped like a rock straight down.(you can see most of the trade in my U Tube  gallery) I covered right near the bottom at the 1186 area. It traded one point lower to 1185, but close enough. This was only the second trade of the day I took. The first trade, I did take the largest stop-out I have had on the year, two point loss on 5 contracts.  If I did not get my second trade right, I was going to call it a day. After I place my second order, I adjusted my stop to 3 ticks and it never came close.

I had to adjust a few things today, which is a little unconventional, but it worked out for me pretty nicely. If it didn’t, I was prepared to stop for the day. One thing I have found, if you make a mistake while trading, it is all to easy to make a second, third and forth. Pretty soon, your whole trading plan is out the window and you may find your self chasing your tail, just trying not to have a whip out day.

That is the ruin of so many traders. You can not have whip out days where you just get so frustrated, that you continue to make bad call after bad call. You are now thinking about the money and trying to get even. If the market price action is not co-operating, your frustration only builds and that brings on more mistakes and bad entries. Your confidence comes into question and you don’t want to be wrong again so you continue to move your stop and take even bigger losses.

This is no way to trade and if you even find a hint of this kind of behavior lurking around in your mind, stop it, say no to being impulsive, no to greed and no to fear and the fear of missing a big move, which can be just as bad. You need to maintain control, if you find that you are loosing control while trading, you need to stop for the day. Forget about trying to get it back today, cut your losses, which will still be small, and come back when you are focused and level headed. If you don’t you only risk making things worst and we all know where that can lead, a big hole in your trading account.

Being satisfied with modest gains, day after day is really fine, because you will have days, like today for me, that I was able to see clearly a strong move, where I held it for the full move. This adds nicely to any monthly return and makes up for days that you may quit early or come up short from hitting your daily goal. This is a marathon not a sprint. You always have to protect your capital, your life blood. Keep it in your account until the setups are strong. You don’t have to trade 5 or 10 times a day to make a nice income, 1,2 or 3 trades in the course of a morning session could be plenty. I at times do trade more than that but I have been at this for a long time and often times only take small scalp trades for 3-4 ticks.

With that being said, I only have 2-4 point daily goals on the S&P emini’s and it is really not to hard to hit, if you take your time and wait for what looks like the easy and obvious. If traders did that, it often times would be like walking over to the corner of the room and picking up money off the floor, not to hard.

It is kind of funny that way, what seems easy on the surface, is not really so. The way to make it so, is to wait for the “easy and obvious”. I think I am going to coin that term and even make it into a trading mantra. “Easy and Obvious”, I like it. I have been using this for at least 6 months hear and there, but if traders want to see immediate improvement in there results, fulfill this call, – Trade, the “Easy and Obvious” and you will be picking up money off the floor, with ease.

When you rush the trades because of fear and this is the fear of missing a move, that is what will cost you dearly. If fact, I will confess, I make this mistake today myself in my first loss and tried to cover my tracks, but could not conceive taking  more than a two point loss.

So, the point is, don’t be afraid of missing the move, if the setup is not right, don’t do it, just wait it out until it is clear, crystal clear and then jump on it and don’t worry. If you get stopped out, that is how it goes. Just have in your trading plan an exit strategy, at where you will stop trading if you are not doing well. For me it is 4 S&P points maximum. I have stopped trading at lesser points, but stick to this and it will reduce stress allowing you to better concentrate on good trades.

I hope this helps those following me and wish you all the very best. Feel free to request my Free Book on Concentration. I will send it to anyone interested and I won’t be pounding you to sign up for course to get it, so,  “No Fear”, just ask.

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Improving Day Trading Performance

Thursday, April 1st, 2010

Today is Thursday April 1st, and the market moved out of the consolidation zone today as mentioned in Tuesdays post.

We moved out side the inside range in the pre-market and continued that on the open for a couple of hours, only later to fall back inside the trading range. We had a gap on the major index’s as they jumped instantly up to the futures. Often times, we see the gap being filled and it happened today as well, but took a little while to come together. Around 10:45 am West Coast or 1:45 pm East Coast, the market came alive, with a move down for several points bringing the gap to a close.  We did see a nice rally at the end of the day bringing things back up to close positive on the session. The Dow was up 70 points + the S&P 7 points and the NASDAQ up only 4 points, clearly the laggard.

I have a video of the market action below. It is taken in my T-2 Trade Screen and shows the major turning points and add on trades for the day. I did the video before the market had closed and was just getting the last long signal which did end up much higher if you road it out. I took a few small losses inside the slow time of the day, kind of a bummer, but I knew what I was getting into. If I did not see or get what I was looking for, I got out. I could have waited for the afternoon session and would have made it easier for me, but it was still OK. I had a one point S&P loss, but did it on three trades. Then I came back with a three point gain on 1 additional contract.

I really liked the last trade. I thought it was coming earlier, but just as the market is about to make a big move, it usually gets a little tricky. That is a good point to remember because I see it happen all the time. It does not want to give you easy access to the big moves and will do what it has to in order to make you miss it. That is just how it is all to often. But if you know that ahead of time, you can keep an open mind as to what its intentions really are and be ready to take the appropriate action.

Today I am going to offer a way for traders to help there trading performance. That is by giving you something to first think about. Traders, especially scalp traders, need to have clear pictures of the trade setups in there minds. You need to know what makes up a good trade from a bad trade. What are the likely results of this setup vs another and which one is likely to outperform. The trade that you take will have an impact on your trading results. So, trade selection is going to be a very important part of being successful. How does a trader know which trade is better than others and what makes up a good trade? That is the 64,000 dollars question as it has been called. I won’t go into the details of that here, but will recommend that every trader clearly define what he is looking for and then to wait for just that. If you do, you will be rewarded.

One way to better help you train yourself is to get a clear picture of what you are looking for and try to identify it, again and again. I would say the more familiar you get with what a winning trade looks like, the easier it is going to be for you to identify it, when you are scalp trading the market. Seems simple enough, but that is not what usually happens.

Example: Fighter Pilots when engaged in battle do not have to think very much about what to do. It has become instinct for them to react as conditions change. A traders inability to change direction quickly enough will hold them back, because of fear and uncertainty. Those emotions only exist because the trader has not exposed himself to enough of those same conditions over time. If he has not seen that read before, how is he supposed to know how to handle the new developments. The result, under-performance. A fighter pilot has spend hundreds and hundreds, of hours in a simulator before he is taken up in the air for a real flight. Should learning traders to the same, that is for you to decide. If you have the risk capital, real money trading is the best. If you have a limited amount of resources, simulator trading is best until you have been exposed to the elements.

The same is true for a boxer. He does not have to think about how he is going to react when he is in ring. He knows, because of all the training, sparring and conditioning he has done to help get himself ready to fight. A professional boxer spends hundreds of hours in these various preparations to help him not have to waist time and think about what to do. He just knows. How is it that he just knows? Through the training.

Know we come to scalpers who day trade the market looking for price discrepancies where they can position themselves for profit. We need to have the same dedication to the cause. By first knowing what you are supposed to look for and how to position yourself so your risk is very limited and being able to do this hundreds of times, even thousands. That is a tall order, but ask yourself, how many successful day traders are able to take money out of the market virtually every day? Your answer, not many. It is the losses of the other 90% of traders that make up the profit for the 10% who can. How are you going to get on the side of the 10%. It is not easy, but is possible.

There are many factors, but getting to know for sure what you need to be looking for is the start and how to position yourself to take advantage of that is the key. I will continue with this line of reasoning in tomorrows post.

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Trading in line with your Personality and without Struggle

Sunday, March 28th, 2010

This post is for Fridays session and will be going over a few key trading points to help bring clarity for those who are searching.

To be successful at trading, each trader needs to trade in-line with his or her dominant personality. To trade counter to this, is only trying to swim upstream, it will be a struggle. There is no need to make day trading harder than it actually is. One way to ensure this, is again, trade in line with your personality.

What I mean by this is, every trader has a dominant trading personality, but many are not aware of it and do not trade in harmony with it. To be successful, you must find this information first. It is like putting a round peg into a square hole. You can try and try, but that does not mean that it is going to fit naturally. If you insist on forcing the issue, you can pound it in the hole, but this is only going to happen by exercising; 1) Force, 2) Effort, 3) Straining,  4) Struggling, 5) Trying.

Those are all the things that you do not want to do while you are trading. If you find that you are naturally drawn to short term trading and it fits your personality, because you seem to not have the patients to wait one or two hours for the setups that best fits that style of trading, you are better served to shorten your time frame and get many more market reads in front of you. This will keep your own personal struggle with patients down to a minimum. Rather than fighting the need to wait out the trade for the proper set up, by shortening your time frame, you make that decision  easier by getting more legitimate opportunities in front of you. The rewards are generally smaller because of the shortened time frame, but the benefit is more potential trades that line up with your dominant personality. This is just one example of this.

Since I mentioned the 5 things that you should not be doing above, I see the need to go over that again, but put a different way.

Successful trading should not have any of those 5 negative attributes associated with them. Let me spell it out for ya.

Trading should be without force when identifying your trade selections, without effort, without straining, struggle or trying. The same is true for your exits. This is a profound statement and is very important to examine yourself while you are going through the trade selection process.

This exercise, will make a big impact on your results if you are conscious of your emotions while you are engaged. Here is an exercise that will help you see where you are in this process. Get a recorder and just speak out what you are seeing and or feeling as the process is unfolding.  If you record how you are feeling and what you are seeing while it is happening you are that much better equipped to make changes and adjustments as your performance dictates.

Every trader needs to continue working on themselves, based on where they are at. Do, not waste the opportunity to learn and grow into the trader that you aspire to be. Each day brings valuable lessons to us and we should be taking advantage of them as unfolded. Money is only the rewards we see when we do the right things, so doing the right things are just as important as the money. In the future, if we know why we are doing what it is that we do, it can be repeated and that is of great value. It can be turned into an endless stream of income, but only if we are doing the right things often enough.

So, my two main points today are trading in line with your dominant personality and trading without struggle. If you find yourself struggling, you are doing something wrong. It is best to stop and find a few things out first. If you do, you will be preserving your capital, the life-blood of your trading venture and you will be providing yourself with the time to better know what it is you need to be doing. If that part is unclear, you need to take the time to make it clear. If you don’t, you will loose your capital and really hurt yourself by creating financial pressure when and if you start to trade again. This will only work against you overall and make the whole thing that much harder, in addition create bad habits and damage your confidence. It makes much more sense to get it right first.

So, many traders just want to get in there and do it already. That kind of thinking will only produce a costly trading exercise for you. Very expensive tuition. No one likes to think about it that way, but when all the dust settles, that is exactly what it is and how it has to be viewed. Any other view, is only seeing what you want to see and it will work against you. Facing facts and fears are a start to recovery. Protect your trading capital, be sure you have a solid trading plan and or method that will work in any trading environment and be sure that you have the discipline to follow it. If you have one of these missing, it will result in expensive tuition. The thing is, at the end of the expensive lesson, you will only be worst off, not better off than when you started. Give it some thought.

If you need help in figuring all of this out, send me an email and share your struggle. At a minimum, I will give you some specific steps you could take to straighten yourself out. If you want more than that, you can sign up for my trading course and mentoring program. I wish all my readers the very best in reaching your trading goals.

Good Trading !

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Become Your Own Trading Coach, maintain control

Wednesday, February 17th, 2010

Today is Tuesday February 16th and we saw what I wrote about on Sunday nights posts a nice rally +169 Dow and +19 S&P 500 cash.

Well, Tuesday was the on time day. I put a chart at the bottom of yesterdays post and showed the target area. The minimum target area was 2 points shy at +21 points. We got 19 of them all today and suspect that we will get the rest tomorrow. That was the minimum move I see, but there could be more. I also wrote about it last week and called out the numbers a couple of times.

I was not able to trade today, first time since the holidays. I was just to caught up doing other things. Last Friday, I almost missed the trading session but came in after 12 noon West Coast and still picked up my goal. I have been working on updating my website and it is coming along as well as putting together a newer version of my trading method. It’s all still the same, but with some new things added. I am doing it in Power Point which is easier to move things around. Any current members will get the new material for free once I am done with it. Also working on updating my back office with new content, video’s and training. It is all a lot of work and I am just recovering from being sick and a hard drive crash, one after the other. WOW. That was a lot to handle.

Next week I will schedule time with students to go over their performance and stay in touch.  So feel free to call and schedule a time. This venture is more than about me. Helping others is the best way I know how to help myself. So far so good.

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One Key to success, staying in control while trading: There is nothing worst than losing control. You feel helpless and hopeless when you find yourself there. What can we do to maintain control while trading? This is similar to what I have been talking about lately.

When you lose control, of your trading plans and take non method trades, you only hurt yourself in the long run, even if the trade works out. We always want to establish exactly why we do what it is we do and when to do it, so that the pattern of maintaining control can be repeated. In order to do that, we need to have power in our will and over our emotions. As mentioned in earlier posts, there are many good traders out there that know how to trade, but their inability to maintain control when a trigger point sends everything spinning out of control, seems to happen all to often.

If these traders were able to replace the 3 or 4 really bad days out of the month that keeps their equity at zero or less, they would replace doubt and fear, with hope and victory. So how is it that we are able to reverse those very bad days with gains and come out with positive equity for the month. The battle is won and fought in your mind. Exercising self-control over your action is key, but it first starts in your mind. The thoughts you think are so important to you as a trader. Don’t underestimate it but embrace it, by going on the offensive. Battles are not won in retreat, but on the offensive. So, don’t hold back and take charge.

Everyone does not have the luxury of having a trading coach and many times we need to be our own coach, but make no mistake about it, we all need a coach. So, if you are your own trading coach, what would you tell yourself to do right now. The first thing any coach would do, is find out where you currently stand. How are your trading funds. Are you capitalized well enough to continue the journey. Once that is established and checks out, you should find out what is holding you back from going forward. Identifying the reason why you took those 3 or 4 large losing days is imperative to your future success.

If you are in battle and you are shot, the first thing a medic will do is access the damage and stop the bleeding. He knows if you lose too much blood, you die. Then, he will get you to base where he can perform possibly surgery. That process is going to be painful, but it is painful lying on the field with little hope. So the point is don’t expect fixing your trading problems as a pleasant thing. You may go kicking and screaming, but you know if you don’t, you stand to lose much more.

We need to be ”Men” and cowboy up. No one likes change, but do you want to meet your trading goals and be financially independent or would you rather let that dream pass you by as only a distant memory. I think most people would choose the first one. So what are you going to do about it. If you don’t have outside help, you will have to perform the surgery yourself. In other words it is going to be hard to force yourself to do what you have to, in order to  meet your trading goals.

These are only a few of the reasons why most traders don’t make it. Traders never thing that it is them, its always the other guy. I know this may seem a bit brutal, but, this is exactly what I am talking about. Face your trading problems with an action plan. Get motivated to do the things that are going to produce change. If you identify something that is holding you back, but you find yourself saying to the solution, ”I don’t want to do that”, then you know exactly what it is that you MUST DO to slay that dragon.

Let me end it this way; Behavior is patterned, how we think, feel and act have a pattern to them and that patterning is what make us who we are. The sum total of our patterns is our personality.

The same is true as a trader. Our trading has patterns, some good and some not so good. What we think, feel and act while trading makes up our trading personality and some of us need a make-over. Find solutions to the things that hold you back and force yourself to change. I will have more specific solutions in the posts to come, until then,

GOOD TRADING !

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Traders Pre-Market Preparation, A Must !

Thursday, January 14th, 2010

Today is Wednesday January 13th, with the market closing towards the high of the day.

That is always a good sign, when the market can close at or near its high for the day, plus 53 on the Dow Jones and plus 9.50 on the S&P 500 futures. The day started off giving traders two good opportunities to go short. If you could have stayed with the move, you would have been rewarded nicely, as there was 4-5 points in that one move alone.

After that, support came in around the 1130 area and traders quickly moved the price up. Normally, you would see a little pull back after the first move up, but it was strong and did not want to give up any ground. As the prices got going again, it was up, up and away for the rest of the day. The market slowed down for about 2 hours and almost on que, it started to take off again at 11:30 West Coast time. That is the best time to start-up again after the morning trading session if you ask me, 11:30 a.m. to 12:45 p.m.

Many institutional traders look at 60 and 30 minute charts. After there return from lunch, they have 1 new bar to interpret. After that, they often will place orders to go long, short or get out. The point is, that is a time large volume is going to come back into the ring and that is what is going to move the market, one way or another. The last 15 minutes, everyone is trying to settle out there day and position traders are looking to do just that, position themselves for a move into the next trading day. 

So if anyone was wondering, the best times to day trade are the first 90 minutes and the times I mentioned above. That is where the volume is its highest and the moves their greatest. 

In todays trading, I started just after the good moves short, around 7:30 and was then looking for the bottom of the move, I did find it, but I was a little to hasty in putting the trade on. I got in to early and with only a 4 tick safety net stop, I got hit for -3 ticks and again -3 ticks. I did not get filled on a three tick target and quickly had my second small stop.

It did get better after that, as the next 10 trades we all gainers.

The blogs that I write often times are just as much for me to re-enforce what I already know, but we are all human and need reminding. Which reminds me, I need to work on my first trade of the day. I often do not give myself enough time to get set up before I start trading. That is something I need to work on. The days I do my pre-market preparation, I start out fine. But the days I tend to rush it, because I think I am going to miss something, is when I don’t give myself enough time to look at where we were, where we are and where we are likely going. (This is a form of Fear, fear of missing the trade). There is a progression that really should take place, getting your mind where it should be, is essential.

When writting about it, it exposes my weakness and now I can do something about it. This is and should be true for you. Look at your trading objectively and ask yourself, where are you the weakest and where are you the strongest. Continue to re-enforce the strong points of your trading, so that you don’t slip in that, but you will need to work on the weakest link first. How is your trade management after you put on an order?  That is just as important as your entry. How is your money management? If you trade multiple contracts, are you increasing your size if you are getting stopped out, to recover more quickly?  

There are answers to these questions and you will only be able to get the answers if you write down the questions. If you never write it out, guess what, nothing happens, because you are not  doing all that you can to meet your trading goals.

I wanted to continue yesterday where I left off, but I see time and room is short. Yesterday, we talked about Greed and how it can negatively affect your trading. There are other emotions that can hurt your efforts as well. You guessed it, FEAR. That is a killer. I will have to start earlier in the post to more adequately talk about these two, from my perspective.

Everyone has their own story and idea’s of what these two emotions are as it relates to trading, but I will give you mine. I promise, to make a special note to continue on these two topic’s. They are so important, to long-term trading success.  I can only talk about it, because of all of my own experiences. So, come back tomorrow to here, “The Rest of The Story”.

   http://www.youtube.com/watch?v=SOZr9tRpzi8  

http://www.youtube.com/watch?v=tmklqINxwR4

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“Day Trading S&P Emini By Exception”

Monday, December 14th, 2009

This post is for Fridays session December 11th where we saw slight gains across the board.

The market has been floundering for some time now and will break out of this range pretty soon. Which way is the question? The sentiment has gone a bit to the neutral side as far as bullish percent, which can give some additional room for a rally if it chooses and we have moved sideways for an extended period of time, which is and can be a way of correcting itself, by rotating from week hands to stronger hands. The problem at times with that is, the new buyers don’t have built-in profit like the previous owners did and will not be willing to take as much heat if things start selling off. That being said, the trend by all measures still remains solid and in-tack at this moment.

In the daily charts, the momentum is pointing down, with the weekly and monthly pointing up. With the momentum on the 120 minute chart pointing up, you will have to give the current edge to the weekly chart unless conditions change. So the current bias for the short-term is up, watching for the daily momentum to get in sync. We shall see.

My trading on Friday went well, it is not fresh in my mind right now, since I am writing this on Sunday evening, but I remember it was good. I think I only had one loss for two or three ticks but had several gains on the day. Many were in what I call scalp mode, since that was what the market gave me.

I remember looking at the open seeing that the first two hours of the day had more action and movement than the next 4 hours combined. The benefits and rewards for the early risers on the West Coast. I will get there.

I will be cutting my posts down in size for a little while because of the Christmas season. Maybe until after the New Year. The trading volume will be starting to slow pretty soon, sometime this week as well. It is standard operating procedure for this time of year. Anyone looking to get a few trades off and have the day pretty open, will need to trade the 1st hour of the day, after that, it is going to get slow. If you are not used to that and still working on trading discipline, take it easy. Trade early and leave, like everyone else. You will have more opportunities without putting your account at risk as a slow-moving market can do to you.

Traders will start to look for trades, never a good idea. You need to let the trades come to you. When in doubt, I always say, “Trade by exception”. That means don’t even think about taking a trade, just forget it, only and unless it is jumping out at you with a screaming “Buy or Sell”. That way, you will not have as many mind games to deal with, trying to make or will something to happen, where and when it does not exist.

That is good advise to those who can find it within themselves to take it. This is especially true if you find that you are struggling to get it together, maybe after a drawdown and you are looking to come back. Take a deep breath and relax. Then follow the above advise.

Well, that is it for now. I will be back on Monday with an early post. I will be doing some visiting this week and plan to hit it as early as I can and keep moving, stick and move. Well, thats the plan?

Good Trading !

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Do you have a Daily Trading Loss Limit ?

Wednesday, December 2nd, 2009

Today is Tuesday December 1st, and the market is showing strength.

This is a good example of the lesson I talked about a couple of weeks ago. Stay open-minded and let the market work.

I have been saying for the past 3 sessions,  that the market needed to stay above the 1085 level on a closing basis to stay alive and so far, through all the news good and bad it has. I would rather see it that way, because it is a barometer of future growth in the economy and the job picture. The market does not listen to me, so it really does not matter what I or anyone else wants, but is a collection of mass emotions reflecting the economic standing of our country.

With the new month now here, the monthly chart as far as my work is concerned has just turned up finally, the weekly charts are up, the daily charts are up and the 120 minute chart just turned back up today. So the monthly, weekly, daily, and 2 hour bar chart are now all up. That being said, be careful, but it is looking like market wants to break out. We have been here about 5 times now and every time it fails. If it can’t go down, it may just be building for a break out up. I was looking for it about a week ago and it did not come and am not making any more calls on major direction because it is all to conditional right now. The only thing I know is that if the support at 1085 gets broken, that will spell trouble and we will have lost momentum and lower prices may be inevitable. That has not happened yet, so we are really still good to go as of now. As I have said, things change fast, so be on your toes if daily price moves are that important to you.

Yesterday, in the night trading we broke above the 1101 resistance pretty easily and continued higher today to close to the high of the day, a good sign at 11o9. It is going to be pretty significant if this market breaks out to the upside. We will just wait and see how it all shapes up, but stay open-minded and let’s have the market decide for us, it’s easier that way. If it does break derisively up, a short covering rally will add fuel to the fire, so the move can easily be explosive.

Today I took a few trades, the first was for -1 point, +3 ticks, +13 ticks & +8 ticks on a split trade, followed by +1 tick and -1 tick.  I picked up my daily goal in a little more than an hour, but I was not to happy with how it went down. I talk about it in the video below.

It does go to show you, that if you do the right thing, the right things will happen. To me, the most important thing is to trade correctly and not so much about the money. If you trade correctly and follow your trading model, over time, you will come out on top, if you have a good formula, method, system or what ever or how ever you trade. If you take “Non-Method” trades, that actually work out for you, it can be to your overall detriment.

Successful trading should really be pretty boring. You keep doing the same thing over and over again. You also keep getting the same boring results week after week, month after month. That is just what the “Doctor Ordered”. If you do the wrong thing and get the right results, it can build negative reinforcement and create bad habits that you will soon be forced to deal with and break.  So the moral of the story is, stay with your trading plan and only take trades that meet your criteria.

Yesterday I was talking about having a limit on your losses. Have you given that some thought as of yet. Every trader trades differently and rarely do you find traders that trade exactly the same. That being said, if you trade the S&P’s and carry a larger stop, say 2 or 3 points, you will need to have targets that are at least close to that if not much more. That is not me, but it could be you and you may be successful at it?  The other thing with that is you will have to be more selective in the process and you may only find 2 or 3 trades for the day that meets your criteria. So, you have to wait and sit for hours for your set up to develop. Question. Do you have the patience to do that? Do you have the time to do that? If you get antsy and take a less than desirable trade, you are now underwater by say 3 points and you only put on one trade. Can you see where this leads. A struggling trader who gets frustrated with his or her results.

These are the reason’s why I trade with small stops and work on precision entries. My target are often small as well, but I do have on average a minimum one to one Risk/Reward ratio on my smallest of trades and much higher on my larger ones. The other benefit is, you have so many more trades that can be taken, without waiting for hours at times for conditions to come together. Your wait is usually only minutes for the next potential method trade.

I will talk more about this tomorrow or very soon. Until then, see you next time.

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