Posts Tagged ‘aspiring day trader’

The Key To Living Your Day Trading Dreams !

Wednesday, February 3rd, 2010

Today is Tuesday February 2nd and the market showed some nice upside follow through from yesterdays rally.

The market did react like I thought it would today, which is always nice to see. I hold any opinions about direction very lightly. The market can always do something different, so I can not make my trading plans around what I think will happen in the future. If I do, I run the risk of trying to force my will on the market and that is never a good idea. For fun, I will put up yesterdays comment.

Yesterdays Blog comments: I do see some pretty strong over-head resistance just a couple of points higher from todays close. We very well may see a slight rise on the open, followed by a pull back down inside the range one more time, before we make another attempt to break out of the downtrend. We will see what tomorrow brings, it should be good. I think the price action is going to get better, with good swings in both directions.

The cash market closed yesterday at 1089.30 and we pushed ahead a couple of points to 1092 and then fell back inside the resent range back down to 1088. The resent range was 1084 low, to 1092 high and back into the middle range at 1088. Then the breakout occurred and with conviction closing at the highs of the day +14 points on the S&P and +111 on the Dow Jones. We could see 10-15 points plus more before this reaction rally runs out of gas. We may struggle here a bit first, there is some overhead resistance near by, but over the next few days it would seem that the short-term momentum is up. Cash S&P 1007  to 1017 should be the destination point. The daily momentum is pointing down pretty decisively, but it is normal price action for the market to recover some here first, before its next move unfolds.

Today I took only three trades and it was in the afternoon session. They were for -1 tick first trade / +5 ticks, +8 ticks/ and +10 ticks second trade / and the last trade was for +3 tick and +5 ticks. I traded for 35 minutes and wrapped it up. I have a video of the trades below.

Yesterday, I started to share something with you and did not have enough time to finish, so I will get right into it here.

I was saying, that I know there are many traders who know how to trade well, but it seems that there are some unseen things that just keep holding them back from getting to the profit column. This will apply to traders who are just starting out and want to live the dream as well. Both people in these groups need something that goes beyond trading the charts. They need a solid mental foundation to build upon.

If you try to build a skyscraper and do not do a ground survey, you don’t know how the weight of the building is going to impact your foundation. If the proper work is not done, the building could be in jeopardy some time down the road. Well, that is exactly where many traders find themselves. Their building is going up and something is wrong, but they don’t know what it is. It is starting to lean-to the left and you realize there is a problem. The foundation may be shored up after a survey is now finally done, but there are times that the best decision is to bring the building down and start over.

So, if you are not to far along in your trading career and can learn this point, you will save money and potentially be on the road to financial freedom. If you have many years into it and have not discovered some of the essential things that will complement your trading career, now is the time, before the decision to bring the building down has to be made.

I do some mental exercises and physical exercises to help keep my mind and body fit. I have put up on my website a couple of these audio scripts that I listen too. It is in my voice, but I don’t think about that, I just try and let the message sink deep into my mind and see it as so. I am allowing myself to think the right thoughts to help me line up where I want to go and what I want to accomplish. I have 10 more of these audio’s in my trading program, but chose to put up two of them for visitors of Sniper Day Trading.

This is not really my complete point, this is only part of it. Rather than re-invent the wheel, I have found a guy named Ralph Marston who does some things like this. A little different, but it is great stuff. As I said yesterday, I have heard of a few traders you listen to some of the material from Ralph and they said that it has turned their trading career around. I to, enjoy his writings and his attitude. That is what you are going to need long-term, the right mind-set to establish the mental foundation that will take you straight to the top, no looking back. If you skip this point, I believe, you will wish you had not.

I do not get any compensation for recommending him or his site, but I want the readers of my blog to have all the advantages they need to succeed at day trading for a living.

Ralph has a free audio on his site called “The Best Year Ever” it is in the top left hand corner. It is a twenty-minute audio that I feel every aspiring day trader should listen too.

He puts out a daily motivational quote and it is always different, some are longer than others, but they are all great. He has done this for over 10 years. The daily motivational writings are free but he offers an audio message each week that runs 20-30 minutes long and can be downloaded to an MP3 player so you can listen a few times throughout the week. He only charges $10 dollars a month and is totally worth it, in my opinion. That is .33 cents per day and the best money I ever spent. 

As I said, I want the readers of my blog to get relevent information that can really help them achieve their goals. So here is the link for his site.  http://greatday.com/motivate/100202.html  His site is called “The Daily Motivator”.

I hope my readers see the importance of going the extra mile and building a great foundation. This is the kind of thing that can increase the odds of bringing it all together and living your dream.

 

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Do You Have What It Takes To Be a “Day Trader” !

Sunday, December 6th, 2009

This post is for Friday, December 4th and what a reaction from the unemployment numbers.

Friday’s session started out strong, reacting off of the strong unemployment numbers, only loosing 11,000 jobs for the month. This was a lot better than the street expected, bringing in the buyers. The thing about it is, that it did not last. It sure did make for some nice trades to the upside, but the market stalled and the smart money used the rally to get out with the gains in hand. We did get within a point or two of that 1120 number that I have been eyeing for a long time now. I would call it a HIT, seeing that it has come so close.

This market has been trading very light volume as per the NYSE. The last few month, the volume has been slowing. September was lower than August, October was slower than September and November was slower than October. A growing trend or the calm before the storm?  With the kind of top we are putting in, broadening, with very little price movement, it could be considered worrisome for the bulls.

What has been forming for some time, is called a rising wedge, which is in a up-trend. That traditionally is considered a bearish chart pattern with the resolve being, a break to the downside. The characteristic’s of the formation is a broadening top, one that has slowed and has clear overhead resistance established, yet still making new highs. On the other side of the chart, the bottom side, you will see rising bottoms that seem to accelerate at a much faster pace, forming what appears to be a “Rising Wedge”. The movement is getting squeezed off.

The interesting thing about this formation is, that it is running out of room and something is going to give. As I mentioned, the give, is usually to the downside and often it breaks hard and fast. The reason is, all of the built up sell stop positions under each critical low. Traders and investors have been riding this market move up steady now for 8 months and they have consistently moved their stops up under each one of these critical lows to protect their profits.

We got a taste of how fast and quick the market can move with this type of setup building. Last week, after Thanksgiving as I may have mentioned in an earlier post, the futures market sold off around 45 S&P points in the night trading alone before recovering. That is equivalent to about 450 Dow points. What I believe was also happening, was a  shake out of the shorts. Those traders that tried to position themselves for this expected big selloff, were pulled in and thrown out, with a big fat loss.

The market never likes to make it easy for those traders who are trying to capitalize on any expected move. It will do what it has to in order to incur losses and build frustration before a big move. The next time the trader tries to enter on the real move down, he will hesitate and thinks that the market is just tricking  him again, but this time the move is real and he is “Left Behind”.  As he realizes that the move is real, he jumps in, just as the market is now ready for a reaction rally back up and he looses again.

This is typical market behavior and it happens in every time frame a would be trader engages with the markets. Successful traders have come to understand the natural rhythm and flow of the market. They use the above scenario to their advantage and are able to take money out of the market, where the struggling trader is just trying to make sence of it all.

There are many reasons why the markets tend to flow the way that they do. There is always a great deal of emotion behind buy and sell decisions, which then get released into a sort of herd mentality. As traders, what ever time frame you trade, your job is to minimize your risk first by pre-defining it and exploit the opportunities that favor a move in your direction. You always look to get the edge before you put on the position. No edge, no trade. If you do place a trade and you don’t see your advantage, then you are gambling, straight up.

As professional traders, there is no room for that sort of behavior. A gambler will never have the advantage, but hangs his future on hope and that is never where you want to find yourself. The market will do its job in purging the undisciplined trader from the ranks by leaving him with nothing but losses to show for his action. With this, even stronger emotions set in and self sabotage is too often the end result. It is very sad, that this happens day in and day out, but everyone on Wall Street who trades can not come out on top, even though they all think they will.

What are you going to do to make sure that you are not one of the undisciplined. How are you going to be sure that you have the edge and what will you do if you start to lose that edge? These are all questions that need to be addressed before you start trading.

One thing I caution any trader just getting started and that is, be humble. Don’t be overconfident and think that you are going to make a killing. Usually, it only works against you and makes your goal toward profitability that much harder and or impossible. The second thing is, be conservative and realistic with your performance. Having a goal of 8-10 points for each session is not realistic, especially for a new trader. A goal of 2 to 4 points is more practical.

All that being said, you must have a solid approach to trading or you will never see the light of day. I will try and pick up where I left off in my next posting.

Fridays trading, I did something a little different. I started a little earlier and finally saw some volume and movement, hurrah. Secondly, I played the move for a bigger point return. The first trade was stopped out for -1 point, the next was staggered for several points and I was done. See the video below.

Have a great weekend

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