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Low Market Volatility

Wednesday, January 11th, 2012

Today is Wednesday January 11th 2012, where we just keep seeing low market volatility day after day. During the Christmas Holiday’s it was understandable, but now into the new year, the amount of trading opportunities has gone down.

Day trading in a low market volatility conditions, will test the skills of all traders, as the moves are smaller and trading opportunities fewer. In addition, your level of patients will be tested as well, which brings me to today’s trades.

I was tested a few times with being patient, but I don’t fault myself for playing it safe.  I come to expect the market to react when conditions are right and when it takes to long, that can be a sign for caution ahead. Being conservative can keep your losses small, but if doubt is present, my view is to step aside until stronger conviction is present. The day’s trades below.

The trading method is separate from the trading indicators as they are there to confirm what is already present. That is very important and cannot be over-repeated.

Not every trading signal as shown is a low risk entry and would have passed on some of the previous signals. Using the mind and method to screen out which turning points are best and which are to left behind can keep your balance sheet healthy.

I have been on a little kick about this in my last few post, but it can be misunderstood as I just post the charts and such. I look to capture 2-4 S&P points for most sessions and call that my “Daily Goal”. When the market is really moving and opportunities are present for more, I will go far beyond that goal to help make up for any short falls in the previous days so I can keep pace with that average. It is a good way to approach the management side of your account as this will keep your stress levels down, not having to swing for the fences every day.

Which all reminds me of some trading advice I gave a member today. We don’t have to take every trade we see and we don’t even have to take “Any” trades. If we don’t like it or not sure, don’t feel like to you have to take it. We are not under any obligation to trade and so we should be free to pass. This will allow you to see the hidden gems when they come up. The perfect trades will just show up, without you having to hunt for them.

In market conditions as this, it is very important I feel to be able to “snip” or pick off a point or so on some clear trades. Doing so correctly can add up just the same as one good trade. If the bigger moves are not present, what you are left with is small moves. If you can not find a way to take points out of that kind of a market, then you are now at a disadvantage and subject to market conditions.

For some, this is no problem as I mentioned above, we don’t have to trade conditions that don’t meet our expectations, but I have seen market conditions last for months like this. If you can not make a profit because your conditions are not right, then you are out of business.

That is why being well rounded to be able to take a 1 point out of the market while not risking more than that, is of value. You can always trade the 3-5 point trades or more when they are present, but you are in greater control. Having the ability, even if you don’t need to use it often, will add a greater sense of confidence to any trader.

That is why I have different models setup for different conditions. The one I use mostly, is you could say the all purpose model. I have a higher time frame chart that fits in with the one I show (that is not seen) and they act as a team giving you a full picture as they are interlocked in my own unique way. There is one series of this below and one series of these above the middle one mentioned. All three of these can be used for insight and or trade opportunities to give you results based on market conditions

More on this in my next post….

Good Trading to All, Vince

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Each Trading Day is New Beginning

Tuesday, November 8th, 2011

See bottom of the article for last weeks trades: I have been having computer virus issues on my desktop and lap tops and had to resort to a third computer. Hope to get back on track with daily postings very soon. Thanks for your patients.  Below is an article I did last week and could not get it posted until today. Hope you enjoy it. Vince

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As a trader, each day is a new beginning. If we have the ability to separate the past from the present and then remain neutral on into the future, than that is a great statement. That is usually not that easy for most people, no matter the profession, but is it possible?

The answer to that is a big “Yes”.  It may not be that way for most people and thus traders, but it still remains a very strong possibility for those who can find within them the ability they need in order to do just that.

This is internal strength of mind to follow through with what YOU KNOW to be true. We may think many things but when we know something is true, that is were conviction comes from and when it is found.

The reason that is so, you act without hesitation and act knowing that the likely future outcome will take place as foresaw. That is a gift for those who get that far, but its not going to automatically take you where you want to end up.

Getting to where you want to go as a trader takes a little more. You need to act on only that which you KNOW TO BE TRUE and just leave the rest for the speculators. That is then what they do, but not us. The stock market is not random as some would suggest. It is a living and breathing entity and is made up of the collective minds of millions of people across the entire globe.

If you were to catch a closer look inside and see what they were thinking and planing well in advance, would that not be worth the price of admission. Traders leave a trail behind them as they make there way through the arena. Those worthy of interest, will rise to the top of the list. Where some gather, more are drawn and then you have a fully invested market filled with a multitude of idea’s.  Those idea’s that rise to the top are the ones that control the field.

Trading is a very interesting world. It has a strong allure, but its rewards are reserved for those that can go beyond the masses. What does it take to arrive at a place that sets you apart from the rest of the world?  It takes the ability to see things not as they are, but as they will be. You need to be a bit of a visionary in that, seeing where the price is likely to go, based on very similar conditions from the past. The past will always lend insight into the future. Those who fail to learn from the past are doomed to repeat it. Where have we heard that line before?

This can all be summed up with what is called a trading method. If you don’t have one, you need one. You can not leave your action up to random events, as they will only influence you to and fro, leaving you lost and confused. If you are new to trading and have not found that place yet, it may be coming soon. No one gets untouched from the sting of the markets as you learn.

Maintaining mental control as it relates to ones trading plan is the key for continual trading profits. If you are not sure, and have doubts, don’t trade. You should practice longer and apply the continual trading lessons that are sure to come your way. In time, your exposure can give insight, but not having the mental fortitude to follow through will just as well leave you as helpless as the one who does not know.

Get with the mental side of the game and gird up yourself to be worthy of the challenge, as not doing so will only leave you morally defeated. It all starts with a thought. You have the power to control your mind and make it follow your lead. If you leave yourself open to every inviting suggestion, then you will be sunk.

We as humans are predictable just the same as successful traders who are collectively able to move the markets, we have the ability to think as the masses think and look to do the opposite. Those results are often very duplicatable and what successful traders look for, thus giving them the undeniable trading edge.

Look for the trading edge as a large part of it is within you.  Trade well, trade committed !

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Below is last weeks trades missed and today’s late trades, no trading yesterday.

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Traders do not attract that which they want, but what they are!

Tuesday, October 18th, 2011

Today is Tuesday October 18th, 2011 and we saw more of the same as I have been pointing out for over two weeks. The market continues to defy those who are expecting this thing to drop and today a very nice reversal from yesterdays pull back on to yet again new highs. S&P 1245-1250 is an area of some resistance, but that too may just be temporary.

We are almost out of the September/October danger zone and now soon looking at November/December which are traditionally good months for the market. One day at a time here for now.

Let me post a still shot of just the one trade I took today that was good for 2, 3 and 4 points. I could have traded more and looking back at it, would have been a good day to do that, but I said  I was done early on and I want to stick with what I say as a discipline for myself. The last two trading sessions were for over 2 hours and wanted to not do that again today. Below the still shot will be a U-Tube video of the whole day pointing out all the turning points as shown on the screen. The indicators will most often line up with the method, not the other way around, so keep that in mind if you watch it.  We trade a complete method with rules to follow and that will tell us what to do and when to do it, with the indicators confirming the method.

In continuing from where I left off last week on addressing the power of the mind as it relates to your thinking and thus trading, it is always a good idea to watch what you think about and change those thoughts that are not supportive of your goals.

Doing so, will most often enhance your trading results, because every trade starts first with a thought. If you are listening to competing forces, you will be confused at best and suffer unwanted losses.

I will continue to quote a writer from the early 1900’s James Allen who wrote a piece called “As a Man Thinkith” and will just get right into it below.

“Men do not attract that which they want, but that which they are”.

“Not what he wishes and prays for does a man get, but what he justly earns. His wishes and prayers are only gratified and answered when they harmonize with his thoughts and actions. In light of this truth, what then is the meaning of fighting against circumstances?  It means that a man is continually revolting against an effect without, while he is nourishing and preserving its cause in his heart. Men are willing to improve there circumstances but unwilling to improve themselves.”

OK, I pieced a couple lines together but want to point out, a few things as it relates to our trading. If we have bad trading habits, that we just seem unable to shake, what are you going to do about. It has a root, somewhere in your mind that causes you to keep doing that which you don’t want to do and again, I say, what are you “willing” to do about it. Those that are willing to take action and get to the root of that problem, will start to overcome the setbacks that derail you again and again.

Go to the beginning, your mind, where all your thoughts, feelings and emotions are housed. There you need to see what is causing repeated mistakes and limiting beliefs about yourself to succeed. Remember, James said, that men do not attract that which they want, but what they are. So, what are you, within?  Only you can answer that, but it starts with how you see yourself in its basic form. If you see yourself as always getting it wrong, you will do just exactly that, get the trade, timing, entry all wrong without you even being aware of it.

You can want to be succeful as a trader all day long, but that is not going to change anything. What will change things, is what you do about changing your limiting beliefs to empowering beliefs about yourself.  You will need to re-program your mind to support new success. That is not always easy as many don’t have a clue on what that looks like.

I touched on this a little in a previous post, and will just give you a quick idea of what you can do to change that. Make a list of all the things you would like to do as ” a professional trader”, not as you currently are but as you see yourself becoming.

As a suggestion, write it down and speak in the first person.

1) I will always set a stop at the point of entry on every trade.

2) I will never move my stop down, but only in the positive direction of the move.

3) I will take my losses and live with them and improve where I can as losses are apart of trading.

4) I will always protect my trading account in a professional manner and take only the trades that are within my trading method.

5) I am a wise and disciplined trader and I only do the things that a wise and disciplined trader does.

These are only a few suggestions and again, they are in the first person, for you to increase the ability for your mind to accept them as for you. “I Will” is a powerful statement about that which you will do, not hope to or would like to, but “Will Do”. Come up with your own and write them out, repeating them before and during the trading session.

Don’t wish and pray that a trade works out while in it, that is sending the wrong signals and will be seen as coming from a position of weakness. Put your trade on and expect positive results as you have come to expect them from doing the right thing at the right time. If you don’t know what that is, then you need to first get your trading method clearly defined. If you need a method, then you can always contact me, but lets assume you have it.

When you are up in your trading account, you earned that. Don’t ever think that it is free money and you can afford to give it back or take unwarranted risk with it, because it came easy. Again, wrong thinking and that will create a clear path for you to only reverse the process as you will find a way to give it back, knowingly or unknowingly.

OK, I need to end it here, but will pick it up in my next post. Trade well, trade committed. Vince

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The Committed Day Trader !

Thursday, July 21st, 2011

Today, July 23rd we saw a strong market from the open once again, +22 on the S&P and +150 on the Dow. With the August 2nd budget deadline fast approaching, for some reason I see things shaping up for a surprise. There is a good chance that we will break out to new highs as this market is flirting with such.

Currently the market is sitting in front of some strong resistance, but that could easily be overcome if the news of a deal on the budget is struck. In fact, there was talk of that today and the market took off. Then it was neutralized with statements of dismissal, so the truth is not yet known. Don’t be surprised to see the market move to new highs in the days to come. Leave that possibility open, you don’t want to be surprised. Like walking across the street, you always look both ways and that is good advise here with this market.

Let me post my trades for today with other signals as marked. There were 4 series of trades all with net gains. One add on trade was a loss of 2 ticks but only on 1 add on contract.

My method is very solidly based on price action, but that action is consistent with some modified indicators I have shown. These will most often confirm or deny my entries but again based on my method interpretation of price action. This is all very sound and it works. So today’s trades below.

I again missed the early rallies, so I was left with taking small scalp trades or waiting until the afternoon session and I did not want to do that. Just a little more than an hour of trading today with another solid daily goal in hand.

A trader can trade like he is right or wrong. If you trade like you are right, you will hold out for the high of any given move. If you trade like you are or could be wrong, you can scale out along the way locking some profit and taking your risk down little by little.

The first way is an aggressive style and the second is a conservative approach. You can change up those approaches as conditions change. It can be the previous price action that reveals the markets hand to you, or you can just elect to play it safe and bag your profits little by little.

Either way, market timing is very critical and can only come to those who know how time, energy and space all work together to produce those moves.

In the chart above and like the hundreds of previous charts shown, some indicator signals are stronger than others and some I would pass on all together. With that said, the way I set up my charts to project and reflect a completely separate trading market philosophy is amazing, as the two still reflect the price action driven part of the method, very cool.

Again, it is in the timing, but understanding that timing, so you are not reacting to the indicators but the price and the likely path of price based on what I mentioned above, time, energy and space.

The market moves into each of those dimensions as things come together to produce a trade. If larger time frames are used, larger rewards are had but the risk are also increased, still proportionate to good risk reward ratio’s. The market is fractal in nature and the reason why you will see the same types of proportionate moves in different segments of time. That is another reason why you can adjust this method to the trader and get the same results. Even if a position trader holding overnight, the components are still all the same as time frames are increased.

Day trading for an hour or so a day is really all I want to invest, because I want to reclaim time and leverage that into things that are meaningful and important to me.

When you can harness this skill, you have the ability to open doors and close others, a very empowering experience.

Don’t let go of your dream as there are so many forces out there to tear them down away from you.

Getting your life in balance is your first objective, because you can not hold onto to lasting success unless you are grounded in mind and body. Knowing who you are as a trader and why you do what you do is essential. Being physically fit with good health getting the rest you need to be and stay alert is also key. Keeping your finances in a healthy shape so they don’t overly crowd your trading with fear of loss is yet another.

This is all apart of getting and keeping your life in balance and very much overlooked. So, do an inventory and adjust to bring yourself into alignment, so you will have every advantage as you make your mark on Wall Street.

Hold on to your trading dreams and take the necessary action to ensure that you do.

Trade Well, Trade Committed !

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Mental Stuggles Facing Traders

Wednesday, July 6th, 2011

I will first post my trades for the day in the S&P emini futures (July 6th, 2011 ) and get into a lesson we can all benefit from below.

Mental struggles facing traders has been going on since day one. Keeping our minds sharp and objective is key. Not seeing what we want from the markets, but only the reality of what is happening before us. Your mind needs to be sharp and alert to accomplish that. Always keeping your emotions in check is essential. Greed will wreck your day, if you let it. Revenge trading is just as bad. Most traders who have been at this, know exactly what I mean.

Seeing your trading as you wish it be is a start. You need to get a vision of the perfect day in your mind and allow yourself to exercise it to make it become reality. If you have fear on your mind of not wanting to make a mistake, you are going to knot yourself up to the point you will loose the edge. Our mindset is key to our success and those who are willing to challenge themselves to change and get in sync with the market are the ones who overcome.The mental struggles facing traders are real and overcoming them is where real victory is found.

Rehearsing your trades over and over again in your mind is a good exercise. See yourself entering at your low risk entry point, what ever that is for you, and take what your method is calling for. I prefer many times short term trades, as there are many of those in each session to choose from. If you miss one, another is coming. If you want the home-run trades, be willing to wait and sit through a lot of market data for that to come together, as they come much less frequently.

As traders we are drawn to the markets for what it can offer, financial freedom, but what about time freedom. That to is often mentioned but those that site that as a major benefit, usually don’t take advantage of it as they are on there journey. Time is something you never get back and for me is a high ranking value that I cherish. With it, I can do the things that have and bring true meaning to my life. Things that can make a difference in the lives of others and so on. That only happens when you have a clear vision of what you see and want your life and trading career to be. That is why I prefer short term trading as I mentioned, because it allows me to spend a limited amount of time in front of the screen and get my bread so to speak for the day. This is done by design and it can happen for you as well.

Again, see the perfect trading day. You wait for your method setup to come together, you enter, you wait and you exit as the market dictates. If enough profit is reached, you walk away. If the trade is modest, you wait and wait, enter, wait- then exit. At that point, you can be done for the session and enjoy the time freedom you dreamed of when trading for living was given birth.

To sit and try and trade all day, everyday, you will become tired and make mistakes. Your patients will slow and you will see things that are not there to try and line up with what you want. Trading for a living is not about being right all day long. You only need be right for a trade, two or three and that’s it. If you are trading for income, then you need to trade like you are trading for income, not to feed your ego. There are other things you can do to satisfy that if you feel the need, but over-trading should not be one of them.

If you don’t know, I am speaking to myself just as much as speaking to those who follow me. That is one of the benefits I receive while writing my blogs. To help hold myself accountable is a very good thing. Which reminds me, all traders should have a trading journal to help hold themselves accountable for there trades. If you go outside your method, you will have to account for why you did that. If you don’t like the pain of having to write about that, then wait and only take the trades you understand.

Don’t be afraid of missing a trade. Notice I said, afraid.  That word has its roots in the word, “Fear”.  Fear can make you do some crazy things. Fear of loss is just as powerful as the desire for more, greed. Don’t be afraid of waiting, as many times the trade will come together a little better, but when its time to pull the trigger, just do it.

Another fear can creep in, fear of loosing and that will hold you back from entering at all. By the time you get the courage to enter the market after having missed many trades already, you will be setting yourself up for a loss and that is no way to trade.

Hope all of this helped someone out there. Trading for living is very possible, but you need the right mind set to allow yourself to bring it about. It all starts with a vision, do you have yours?

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Trading Attitude Determines Altitude

Saturday, June 18th, 2011

Your trading attitude will determine your altitude as today’s title states. The way you think and feel are so important and directly tied to your trading results. We are emotional by nature and at times that emotion can over-ride reason. When that happens you will find yourself taking non method trades and not even realize it. If that is you, there is help.

The first step is realize that there is a problem. If you do go down that road, it is so easy to make a second bad trade and then a third and so on. Traders often face an attitude of REVENGE TRADING and it can be devastating to your goals and plans to trade for a living. Maintaining control is such a key element, if you are ever going to make headway towards those goals, but how can traders do that?  Just like anything else, you need to change the way you think by taking charge of your thoughts and becoming responsible for them.

By reprogramming your mind with what you will do when you find yourself in a situation where things did not work out the way you planned. That takes work and thought ahead of time, not just reacting to it as it comes up. If you wait until then, it will be to late and your fate will be up in the air for the session.

Write down your biggest mistakes and shortcomings as a trader. The things you do as a trader that you really want to change. You are identifying the problem, a must. Then, think through how you would love to react when you have taken a loss or gone outside your trading plan and write it down. Go over several scenario’s and write out your preplanned reaction to your trading mishaps. See yourself following through with your perfect reaction and rehearse it again and again in your mind.

Speak in the first person, “I will keep my composure when I have taken a loss”,  “I will only take another trade if it is in line with my trading plan or method” , I will be disciplined in my trading”.  YOU WILL.

When you speak like this, it is focusing on the solution of what you will do and that is first step in changing things. See yourself as you wish to be and it will be so. If you only focus on why you did it again, what ever IT is, you are pulling yourself closer to your problem not farther away from it. This has deep psychological issues at hand here and you will need to combat that with a proactive solution to cut it off. If you are not aware of it at all, you will be cooked, as you just seem to keep making the same trading mistakes over and over again and not even know why you are doing it. That is very destructive behavior and will need to stop.

Many and or most of you know what I am talking about, as it is very common but not talked about. No one likes to reveal there weaknesses as a trader, how fun it that, but it is in exposing your trading weaknesses that you will ever hope to overcome them. It only makes sence and it will make dollars once you get serious about doing what you have to to change your thinking and trading attitude.

This will have a direct impact on your trading results, something you may be pursuing for years. If you put in 50% of your energy into the mental side of your trading, you will see an exponential return on your results. It is a lot easier and more glamorous to focus on the method and give the mental side little attention. Why do you think that is?  Well, I believe the reason is, it is harder to be honest with yourself and do the personal assessment necessary to change.

One reason for that is our trading attitude and how we see ourselves. We may want to see ourselves as professional traders, but if we are not thinking and acting like it, it will not line up with our actions and our subconscious mind will know that we are lying to ourselves and revert back to the destructive patterns of the past.

See yourself as a student of the market always learning everyday and willing to change what needs to be changed to conform your actions to what is going on within the markets. You will never project your will on the markets, but you can ride the will of the people collectively, by getting in sync with the market energy displayed for that day. Every day is different, but there are things that never change when trading.

Find your place within the session and don’t be greedy. Trade your plan and maintain control at all times. Don’t allow yourself to trade down in equity past your cut off point for the session. That is maintaining control when you can stop as you hit your DAILY LOSS LIMIT. It is not a bad thing to loose for the session, but it is a terrible thing to get a whip out day for the session. That wont’ help your cause, so don’t do it. Just say No and come back tomorrow when you have settled down.No revenge trading.

I hope some of this helps those who may be struggling to find there way. You need Method, Mind and Money-Management to be successful. Think about it!

Below are my trades for Fridays session. I picked up 4 points in about 45 minutes of trading the S&P emini futures just after the open. Good Trading to all.

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A Few Day Trading Things to Remember

Sunday, June 12th, 2011

Friday’s market we saw more selling, taking those who established longs out as the market closed at its lows for the session and the past several weeks.

The market sentiment is building now to the negative side aggressively. It may be too early just yet to point to an extreme, but a little more time may be all the market needs. The put/call ratio is suggesting retail investors are building up short positions for they believe will be a significant market drop. Investors intellegence is currently with a bullish reading of 41%, close but not the reading needed to spark a large rally just yet. We should see something closer to 35 or less.

The cash positions held by insititutions is at one of its highest readings in recent memory. At the market low in March 09, and one other time has it been this low, both instances, we saw powerful rallies to follow.

Small investors in general are feeling very bearish towards the market and many are out completely with no interest on returning. This all does make for a good case that we will not see the crash that many are calling for. To this point we have seen a fairly orderly pull back. In looking at the daily and weekly charts of the S&P, a pull back to 1176 would not be out of the question, but when I see the sentiment views shifting so strongly, it may be more than the market is willing to give up.

In Friday’s trading I was able to squeeze in an hour of trading and glad to pick up a few points. I have the turning points identified also pointing out those turns. Some entries are better than others, but have them marked as such. We are now in the new contract month September, on the S&P, esu11.  Everyone should now be on the new contract month as this is the new front month. The volume will be the highest here as the previous contract will expire by this coming Friday. I had a long term position in the previous contract month that got stopped out with a gain of just two points. There was a lot more, but could not whether the pull back, but that is fine.

I don’t really care which way the market moves but just that it does. With that, we can read it and trade it.

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A few points for traders to remember;  *Don’t have an agenda on direction while day trading. If your market opinion on direction is to strong, you will blind yourself from the easy and obvious trades the market is willing to give you.

*Respect the markets and never let you guard down. *Commit to yourself that you will use good trade management decisions and not become greedy so as to loose built up equity. *Commit to yourself that you will not hunt for a trade, but let it come to you, there is less effort expelled and you can use that energy towards trade management.

*Commit to yourself that you will exercise patients while waiting for the trade and if within the trade and your method for that trade that you will give it time to work for you.

*Don’t try and pick tops and or bottoms, it will leave you frustrated and with losses most often and lastly, *commit to you yourself that you will be disiplined in your trading as you read what you see and trade what you know, leaving the rest.

Those are some quick points that could be turned into real points for your bottom line. Give it some thought, you will be glad you did.

Good Trading to all.

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Trader Coaching

Saturday, May 7th, 2011

This post is for Friday’s session where we saw just the opposite of what I thought might happen for the session, with the results in reverse. This is not uncommon, but it can happen and is somewhat predictable based upon the first move. Since the market did not go down first in the night session and follow through higher into the regular session open, I would be looking for just the opposite as stated. The move was strong on the upside into the open and remained that way for a few hours until the reverse happened and a move lower took hold.

If the market had moved lower into the first hour, then the scenario I laid out would have taken hold. Some over night developments could have influence the outcome, I really don’t know, but the key is the first move here. When it is all said and done, I did get that move wrong, but the play after that was just the same but in reverse based upon the first move.

I adjusted my game plane accordingly as I really only play short term swings within the market anyway. It does not matter which way the market moves as long as it moves and Friday’s session was a double play from Thursday’s market with over 2.5 million contracts traded for the session, very nice increase. My trades for the session below.

I hit better than double daily goal for two days in a row and had very little downside. I did trade longer than I usually do, but the increased volume lured me in. I had intentions to stop trading just before 10 a.m. West Coast, but in the New York after noon session, I did get called back.

A little after 10 a.m. I made a nice call in a video training session I was doing for a solid 4 points to a trade to target, but one I did not trade. Still it was nice to be able to see and call out the markets next move with only a 4 tick (1 S&P point) stop.

In all the analysis I was doing, I could not help but see that another move was building for the final low of the session and a completion of the wave down. That is one I came back for and it was for 4 and 5 points in the S&P emini futures catching the exact low withing one tick. There were other trades withing the session, early and later on, but I can hardly trade for the full day. The longer I trade the possibility does exist to make mistakes. That is why it is very important to take breaks along the way, even if it means missing opportunities. When one trade opportunity passes you by, another one comes behind it. No need to stress over it or bring anxiety into the arena, as that will only trip you up on your next trade.

All traders need to keep this in mind, that you are the one who is in control. No one is going to pull the trigger for you except for you. You have total freedom to do as you see fit. With that said, you have the total freedom to mess it up as well. Who is going to control you?  There is no one except you and we all need to remember that.

We need to exercise self control in only taking those trades that meet our criteria and remember not to risk any more than what we have planed on. We all need to have a point for each individual trade, as far as loss, but that limit needs to be extended into the session as well. Who or what is going to stop you from taking your account down farther than you planned on. Again, it is no one else but you.

We are all human, and we to often don’t like to be wrong, but when that time comes, you will hear voices. They may say things like this; “you can come back, you know you can, just get in there and do it, you can’t be wrong again”.  Or it may sound something like this. ” The market has fallen so far so fast, it can’t fall any more than this, hang on, it will come back”.

We have all heard these voices coming from within ourselves, but what are those voices really saying? Are they the voice of reason or is it coming from somewhere else?  Again, we likely know the answer, but are we big enough to slow down and face the facts?  Not many traders are willing and or even able to go this far, as it would mean that they would have to be wrong and that just can’t be.

Well, we had all better get over ourselves early on, because we will be wrong at times and we should not struggle with accepting that fact. Doing anything else will only set us up for future troubles as our ego’s will get in the way.

We all have trading ego’s, that is the plan simple truth. I have a trading ego and it does not like to be wrong. The truth is, I have come to accept the fact that I will be wrong at times and that is OK. It has to be OK, because if it is not, I only will create more troubles for myself down the line. I could end up with a huge loss one day, all because I did not want to be wrong. Is it worth it?  We all have to ask ourselves that question, but the easy and obvious answer is, no it is not.

We as traders have to accept that we will at times be wrong, but lets be wrong small. We don’t have to be wrong big and when we are, it can be devastating to our trading self confidence. Accept the fact now that you at times be wrong.  Be willing to admit it and be OK with that. Don’t make excuses for it and try and explain it away. You can identify what happened, but realize that it always stops with us as traders. We are responcible for our trades and what we do as traders. Lets make ourselves proud and do the right thing, even when it seems hard. You and I can do it, if we continue to act on what we know to be true about the markets and leave the rest behind.

Just a little trader coaching to help us spot what we need to see and do. Open your eyes and see things as the are and then we can set out to change what it is, to what it will be.

Good trading to all, Vince !

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Trading Discipline and Self Control- do you have it?

Saturday, April 16th, 2011

4-15-11;  Friday’s trading, was met with little struggle and little draw down after the entries. I only took three trades all gains and plenty for meeting my daily trading goal. I know I always repeat this, but it bears repeating. The trading indicators are not the trading method. There is a complete trading method built around price structure, a unique form of support and resistance and the use of momentum as it all relates to keeping draw downs small and getting the price to move out in my favor right after entry. The trading indicators I show here do very closely mimic or copy my trading method and I do find it very helpful at times to confirm what I am doing with the trading method.

It is still amazing to me that it all comes together the way it does and all I can say is that I am very thankful that I have come to learn all of this over my long trading career since the early 1980’s. I have seen a lot and have make every mistake know to man as it relates to trading, so I write and speak from experience and all I can say is that this stuff works, straight up. We are the ones at times that don’t work and that is where trading discipline and the controlling of our emotions is vital to our success. I will pick this up down below, so keep reading.

Friday’s trades below, which marks two weeks of daily gains in a row, and all of which is posted here daily for all to see.

Friday’s market was filled with good trading opportunities as we saw mostly upside buying pressure, to close on a positive note. We are likely to see a little more follow through come Monday’s market, but do believe that later in the week, we could see selling pressure come back in and take the market down to very key support at 1290 in the cash S&P. That is going to be a very important area. We may see one more bounce up off that area and that will tell us more of what the next move will be. Going forward just another move, if a bounce then comes back in off the 1290 area and then we break that, to the downside, that is going to be the turning point for a big sell off.

There is a lot of forward projecting here, but we first have to see how it shapes up. Recap; Monday’s early morning move to 1325-26 area, then bigger move back down during the week to 1290 area, then bounce up slightly off that and then we will see. A break of the 1290 area on a closing basis, is going to send the S&P into a sell off of a minimum of 100 S&P points or more in pretty quick fashion, 1290 to 1190 at a minimum with 1155 very reasonable as a destination area for that drop.

If the market holds the 1290 area and try’s to mount a continuation rally, we will just have to wait and see for that. With a massive shift in market sentiment, I am lead to believe that the break is going to take place and we are now only getting into position for a drop but I will update this as we go forward to confirm.  This is all my own opinion and not considered investment advise. Consult your own financial people before you make any trading decisions.

I look at market structure and that pretty much tells me, what is coming next. I have been doing this in small times frames with a great deal of accuracy and it is no different with large time frames. The stock market is fractal in nature and what that means is, that the same types of formations exist at all levels, whether it be in weekly charts, daily charts, hourly charts, minute charts or tick charts. Fractal, the same at all levels. The exact market flow exists at all these levels and is a reflection of the masses that drive them. Since people are basically the same in their make up, emotions of fear, greed, self-control and the lack of it, you can come to expect the same type of market behavior at every level.

Day Trading is achievable for those who want it, but there is a price to pay and that price is dedication, trading discipline and self control. If you don’t have those qualities, you can acquire them. I believe everyone has the ability to change. If you don’t see those qualities in your daily life in general, you won’t all of the sudden be able to muster them up when wanting to trade the markets, you will loose. On the other hand, if you have the dedication to learn a solid trading method and the discipline to stay close to it, followed by the self control to wait when you need to wait and pull the trigger when you are supposed to pull the trigger, you could do it.

Following our dreams is a great thing and I encourage everyone to do that, where ever they are at, but you need to be realistic and have a plan on how you are going to change and do what is expected of you to make any of this a reality.

Every trader starts out with the best intentions, but it is what we actually do that will make the difference, not what we want. You need a solid trading method to start. Then, you can start changing yourself and your attitudes to line up with success.

If you trade from a fear based approach, you won’t make it. You will sabotage yourself and your efforts for what seems like no apparent reason. Getting control of your emotions and removing trading fear to be replaced with confidence will take time. It is not going to happen overnight. If you expect that, you again will be disappointed. That is where dedication comes back in, trading dedication to the trading method that you are learning. Your confidence will grow as you see and experience market reactions being played out again and again. It is like exercising a muscle. The more you train, the bigger and more confident you become.

Give it some thought, if have a good trading method that works, then the only thing holding you back is yourself. Change that and you will change your trading destiny. Good Trading to all. Vince

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Winning Day Traders Mindset

Thursday, March 17th, 2011

3-17-11;  Today we saw the market start the day off with a large gap opening across the board. The Dow was up +161 and the S&P +14 points. There was good trades on both sides of the market through out the day, though after the open the range was a bit narrow.

In today’s trading, I made a few good trades and a few not so good. I took 8 trades in total with 5 profitable and three losses. My first and third trades were less than desirable, especially the third trade of the day. You can see from the screen shot below that according to the trade indicators, which are only a reflection of the method, I wasn’t even close. I can’t tell you what I was thinking, but it was just a “Bad Trade” with the timing way off. The other trades were OK and what I somewhat expected. My trading grade today, between a C+ and B-, probably closer to the C+.

The end result, I came up a little shy of my daily goal for one last reason. I forgot to change my contract size on my last trade and that made the difference. I left it alone with that and still have tomorrow.

So far, with tomorrow, being a positive day, I will have 5 weeks in a row of daily gains (all trades posted) and for that, I would have to give myself a solid “A”.  Today’s trades below.

I will start today with a little continuation of where I left off.  The winning day trader’s mindset. That term just came and jumped out at me right now, as it is the first thing I thought of when seeing what is it that traders need to bring themselves around to profitability, a winning mindset.

I actually don’t really like the term “winning”, because it equates itself with win/loose, and thus a possible gamble. For many, day trading is a form of gambling. I don’t like to even think or say that, but it is true no matter how hard some try and work around that, but let me explain first before you jump to conclusions.

If a trader is unprepared with no solid written trading plan, and no solid mental foundation to execute that plan, that is going to have to fall in the field of gambling. The reason is, you have not spent the time or energy needed to turn the odds in your favor and thus, you are left to chance for your results.

On the other hand, for the trader who does his due diligence and has a written plan that has been tested and has shown itself to be profitable, that is the trader who has the odds tilted in his favor. You can not expect to go up against professional traders and beat them out with little preparation and no trading plan.

I never feel like that, as I know I have the trading odds in my favor and thus it is no gamble, not up for chance overall.

Back to the point.  A winning day trader’s mindset is all about being confident first in your ability to execute the trades and expect the right outcome. If you have uncertainty, or doubt, that is not going to work. You need to see and feel comfortable with what you are doing.

Trading is a very conditional effort. You will only take action when certain events or strong conclusions take place. Before that, you wait and wait, until it is time to strike, just like a “Sniper”.  A trader working in the emini market does not have to hit home runs every trading session. You can hit singles and doubles (one or two points) and come out just fine, you just need to know what you are doing. If you are guessing, you are going to have troubles. No guessing. Get the right thinking working for you as well and practice.

You need to see a picture of the trade coming together and wait for it. Don’t be married to your idea’s of exactly which direction the move will go, because things change and you need to change with it. If you get stubborn and or your ego gets in the way, watch out. It is said, “Pride” comes before the fall, and that is not short, it means you are out of balance with the markets.

You need to approach the trading day, with little overall opinion and need to just interpret what you see. If you see a long trade coming together, get ready to take action, but don’t do it to soon, or to late. How do you do that?  You need to have rules and a written plan to follow that will and or can give you the similar consistent results when you do the same things over and over again.

Without a clear picture, you won’t know what trade or setup is better than another or how much risk this trade has in it verse another. You need to see and know what you are going to trade ahead of time and then wait for it to come you, which could be long or short. Don’t go looking for it like a dear in hunting season. Often, if you let the dear come to you, you are going to spend less energy on the hunt and likely find the dear (trade) effortlessly.

Just try and relax and let the trades come to you and you will see the opportunities and make the trades. I would say, don’t even think about taking any trade is best. Saying to yourself, I will not take a trade today unless it is clear and what I am looking for in a good trade setup. If you can say that and wait, you will be making progress.

By waiting you are making a trade.  Let me say that again, as many traders don’t really think about it that way. By waiting, you are making a trade. You can only do three things, “Long, Short, or Wait”.

You just took the pressure off of yourself to perform. Without that trading pressure, you will do better and again put the odds more favorably on your side. Trading can be simple, but it is rarely easy.

Much more to say and cover. I will likely continue with this in my next post. Good Trading to all.

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