Posts Tagged ‘choppy market’

Scalp Trading a Slow Market – the way to go

Tuesday, March 22nd, 2011

Today’s Trades;

Monday’s Trades;

Today is Tuesday March 22nd and we saw two days back to back that were the slowest days together that I can remember in a long, long time. There was just no movement and what there was didn’t go very far. This is when scalp trading can really come in handy. A person who does not know how or is not willing to take small gains in both directions will get eaten up alive. I can only imagine, that traders across the globe just got killed in this type of market.

This is only one of the benefits of being able and willing to take what the market gives. That is the key. You can not take blood from a turnip. I think we have all heard that before. You also cannot take a trade expecting a trending move when one does not exist.

Being able to read the market and scalp trade your way through it, when the conditions say too, is the way to have a profitable day. When the market is trending, great, we can do that. When the market is choppy and trend-less, that is OK too.  I will admit, I did not like Monday’s or Tuesday’s session at all. It was difficult to sit through the session and wait it out, but I knew that is what had to be done or else, just don’t trade today. Well, I elected to exercise some extra discipline here and there to pick up back to back daily goals to start the week off. I have quiet a long streak going and will try and add to it going forward.

Today, I was a little concerned, with the first two losses in a row.  They were not the worst entries, but they were not the best. I could have taken a little more time to get up to speed with what was going on. I rushed it today, for sure especially on my first trade. Well, I can go back over a bunch of what I did not like, but I can also say what I did like and there was plenty to be grateful for.

Last Friday’s post, I did say that we had a least 15 S&P points left in this move up, and we got about 20 and now two days of pause. For the market to move back and fill the large gap opening would be normal and somewhat expected, but you have to leave the door open for a continuation move up again to another level, it is possible and I will call out the upside numbers.

If we break S&P 1193 on the upside, we could quickly see 1307 or slightly more. (That is just my opinion and not investment advise). In the night trading we are off several points to the downside, but by tomorrow’s opening that could change. If the market has a chance to break out we should recover any night trading sell off by the open tomorrow and quickly be challenging the low 1190″s area to have a shot at the upside breakout.

Be ready for anything. With two days of very quiet trading, the market is just digesting its gains and will have mustered up another big appetite for more or will feel tired because he overate. Be ready for both, because we should see good moves coming out of these doldrums.  Good trading to all.

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Market Ready for Continued Advance

Sunday, October 17th, 2010

This post is for Friday’s session as the market is still showing strength in the midst of bad news.

On Friday, the market bounced off of some very strong support, in the Dow and S&P 500. Once that support was touched, it reversed back up off that figure showing a sign of strength. The S&P futures closed strong into the close showing gains for the day. Currently the S&P futures are off in the night trading as of 8:40 pm Sunday evening West Coast.

Often, you will see prices off in the early session only to close the gap and move higher. I think that is exactly what will happen in Monday’s session. If Friday’s low gets taken out, scratch that, as we will need to hold Friday’s established support and I think we will.

The market is in a good position to continue its advance. We have had three days of sideways movement giving the market a chance to catch up with itself. I have talked many times about “Time and Price”, as they go hand in hand. After a very large run up or run down, you will see a choppy market as the time factor gets kicked into gear. Time to digest its gains or losses and re-establish value as the market participants see it. We don’t need to question its moves, but only to interpret them and trade accordingly.

So, back to the daily charts as I was saying, we have seen three days of sideways action and the market seems a bit determined to move higher. I see a big day coming early on in the week, Monday and Tuesday are likely days.

The market sentiment moved up again last week by a 2% putting it at 47.2%.  It has been moving slowly right with this advance a little at a time and we are now past the mid-way point looking at the other end of the extreme. We are not their yet and will need to see 55%+ Bullishness to be on guard for a market drop of significance. By the pattern covering the last 7 weeks or so, this number has been slowing creeping up with the advance and is acting very typical as far as I see. I have set a target weeks ago of around 1220 + on the S&P futures and we are not that far away from it. We could see 1200 in the early part of this week very quickly.

The only way to get the bulls to continue to shift their opinion to get bullish the stock market, is for the market to continue to advance. I can see the resistance ahead as clear as day. I saw it many weeks ago, even before the market moved out of its base at the end of August in the 1040 area. I can’t say for certain as in this game, nothing is certain, but the odds favor a continued advance to the numbers stated, which is just my opinion.

We are coming up to the mid term elections which are only weeks away. This would tie in with my target area getting hit and the gas coming out of the market at that time. Their will be a good excuse, I am sure. It could even be the looming  “Foreclosure Banking crisis” that is just ticking like, well, you know what.

This rally is a big draw to get the public and anyone else who thinks that they missed it again, to jump on board. Time will tell as I am sure a lot of people are confused that the market did not go down in September and October, typically the worst two months out of the year. Once the public catches on, the market will throw you a curve ball and take you out. That is what is happening the last two months. Once everyone gets cleared out of the shorts and the public gets long,  only then will the market drop, my opinion, for what ever its worth.

No trading for me on Friday, but hope to get back into things this week. Its been a light trading schedule for me the last week and did OK considering my limited trading time.

I will post on Monday after the markets are closed for sure, so come on back and see what I have to say, until then, Good Trading to all.

Vince

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Big Stock Market Move Coming !

Sunday, February 28th, 2010

Today is Sunday, February 28th and this post is for Fridays market.

The market on Friday, I believe is marking a little time. There is a good chance that we will see the rally that I had talked about last week. We saw an inside day, from Wednesdays market, followed by the sell off I was looking for, but came up about 6 points short of reaching the target. The next part of that was the reversal I called for, and it did come, closing at the highs of the day, I am sure a complete surprise for many. That happened on Thursday and Friday we just saw some base building and ended the session up slightly near the highs of the day. Monday will have to be the day to rally if in fact it does. To me that is the on time day.

The market sentiment numbers came this week with some changes. On Tuesday, the new numbers came out after a large market drop and thought it might have an influence. It didn’t, in-fact, it went the other way with bullishness increasing by over 6 to around 42% and change.

I believe there is still room for a rally here, but it will probably be contained. The market is in a key spot right here. The volume and volatility is going to pick up for sure. I can see it in the daily charts. Be on the look out, I think we will see a trending day up, but anything can happen. The market is in tipping point position, a move big one way or another, which ever way it breaks, you will see high volume and a little conviction behind it. Well, that is what I see. Always keep an open mind and don’t hold onto any market direction opinion so strongly that it blinds your decision making ability to read the price action. I mention it, because it happens all the time to traders.

Trade what you see, not what you think. That will keep you out of trouble to some extent. One more thing, if we get a trending day, try and trade in the direction of the trend as best you can. Trying to go against a strong trending day, can wreck havoc with your account equity.

Find what you feel are safe entry area’s and enter as the trend continues. Playing a choppy market or trending market is different and you need to ready for both.

Fridays trades below, daily goal met. It is not perfect, but trading is not about being perfect, but doing enough right things to get your points for the day.

Good Trading to all.

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A Good Lesson for Day Traders Today

Monday, September 28th, 2009

Today is Monday, September 28th and the Index’s had a nice day back up. This is the price action reversal that I was talking about last week. We needed to see a day like this after the most recent sell off and it came right on time. The Dow bounced  right off support from Friday’s session and set the stage for today’s rally, very nice.

This last pivot low is going to be very critical, in my opinion. We will need to stay above this point to keep the trend intact. If it is broken, I will have to believe that others will see it as a sign of weakness and take profit off the table. That could cause a rush for the exits and we could get a much bigger pull back. Right now, no one knows which way it is going to turn, but you can have a conditional set-up. If this, then that. If pivot low is broken, look for a meaningful pull back. More work needs to be done to establish a continuation of the current up move before a long position can be taken, so we wait and see. This is all for the daily market, which I really don’t trade off of, but follow, because everyone else does.

I trade out of some very small time frame charts that aim to capture just a small piece of the days movements. Today was a very slow day. A lot of the price action came in the pre-market, but there was some nice trades to the upside, just after the open. A little later during the New York lunch time, 12: 00 pm to 2:00 pm, things slowed considerably. This happened to be right at the high of day at that time and the market virtually stopped. A little move up, a little move down, and so on. It can be hard to try and trade during this slow period, because it will many times not produce the gains that you are looking for and frustration will set in. When that happens, it never usually turns out well. You start forcing trades and not waiting for conditions to present themselves to you.

One rule or thing traders can remember that will be of great value when you find yourself struggling. “Trade by Exception”. What do you mean, someone may say? Well, by taking this advise, you will wait until your most favorable conditions are before you, but when they are, that is when you will not hesitate, but take action immediately. If you tell yourself that, you do not have to take a trade, if my conditions are not met. I will not trade, plain and simple.

This will take the pressure off of you to perform. Relax, and know that you are in control. Wall Street is banking on you loosing control as most traders do. If you are trying to trade out of the slow time of day, you had better know what you are doing and have great timing. If you don’t you will get spanked and sent to your room, without dinner,  (lol).  You will need to learn from those mistakes or you will do it again.

Trade with purpose and definition, know what you are doing and why it is that you are doing it. After it’s all said and done, you will have the ability to go back over your trades and see which one’s were done right and which one were a mis-trade. A loss is not considered a mis-trade to me. A loss is the cost of doing business, if you are trading with focus and purpose. A mis-trade is when you force the trade, trying to make something happen. I still do this on occasion myself, but I know what I did wrong and why. I go back over the trade and see that I did not wait for the trade to shift overwhelmingly in my favor. Even if the trade is for a small target, you still need to wait. Your percentage win/loss ratio needs to be high when trading for small targets only. In a choppy market, this may be all you have available and need to adjust your thinking for very modest returns.

Today, I choose to trade at a slow direction-less time and area. It would have been better to trade the open or wait until after the lunch period, but I adjusted my expectations on direction and took what the market gave me. I was not imposing my will on the market, but taking what the market could safely give me at that time. If I was not willing to accept these conditions, my only option would be to wait the period out for more favorable conditions or not trade at all, both of which is quite alright. Remember, you live to trade another day when conditions are favorable.

Maintaining control and knowing your limitations are very important. Every trader should not think more of themselves than they ought to. Having a humble attitude towards trading is essential to a winning mindset. That does not mean you should not feel confident, you should, but your confidence should be in following your method and not solely in yourself. You will let yourself down, when you think you know better than your method. If you take a non method trade, the best thing that can happen is for you to get stopped out. This way it will force you to trade correctly and stay with what you know. Going outside, can often produce bad habits that are hard to break, only instilling a more difficult journey for you overall.

The moral of the story, know what your abilities are and try and stay with what you know. No sence in pushing yourself to become the trader that you are not. This process take a long time. It may be that you need to focus only one setup and condition and trade that. The rest will come over time. A modest daily goal of two points per day is a great place to start and finish, I might add.

http://www.screencast.com/t/IZjv1ndi                Today’s turning points and few small trades

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Today’s Profits: Finished in 7 Minutes !

Thursday, March 26th, 2009

Today is Thursday March 26, and it was a quick day of trading.

Yesterday I had posted that I wanted to increase contract size and trade less. Well, I got my wish.

I was able to shift my thinking to attain my stated goal and it was nice. I had two trades, the first one for 1 point on 10 contracts, all in – all out. The second one was for 1 point on 5 contracts and 2 points on the other 5, and I was done.

This what I wanted to do as I wrote yesterday. $1,2oo profit after commission on two trades. Now I have the rest of the day to accomplish other things of interest. I would take every day in the same fashion, and will be working towards that end.

This was my original plan from the beginning and I will continue to work at it. Consistent daily profit is the objective, combined with the least amount of struggle to get there. Once you reach your daily goal, I will admit, it is and will be hard to stop trading. That is where you will also need a mentor, someone who is on the same desired path and can give you the support and discipline to stick to the plan.

Anyone who partners with me will have my full attention and support to help them see what I see and do what I do. It is hard to go it alone and you will most certainly pay your dues one way or another, but it would be my job to help make those dues as small as possible. There is usually no easy way around the fact that you will need help in trading consistently for daily profit. You will pay someone for the experience. Everyone does. You will pay the markets because of your losses and you may still not have learned how to trade consistently. Or you can pay someone who knows how to help you get there.

There are very few trading programs that are of any value and a lot of them are a waste of money. Many of them are focused only on indicators, or some other idea that puts you and your account at great risk before you are able to capture your occasional gain.

There are many ways to trade the markets and I believe that the way I approach day trading is one of the best available. When it comes to a choppy market, I love it. While others are just wishing for the day to be over. If we are seeing large swings up and down by several points, I love it. Because I can easily capture additional profits on extended moves. When the markets are showing long extended trending markets, no problem. We just look for low risk entry points along the way and pop in and out before anyone even spots us.

When you are able to trade the very small stuff, 3 or 4 ticks, you are able to take advantage of any kind of market, because you use the method to get you into a HIGH PERCENTAGE trade that gives you a pre-determined amount of profit. If you only need a couple of those trades for the day, it does not matter what kind of action the market is displaying.

In any of the three types of markets that I described above, you come out on top. There are many people out there that say scalping is the most difficult type of trading there is. In part, because they are not able to do it successfully, so they talk it down and people believe them. Then you look at the alternatives – trading a higher time frame chart, waiting hours for the right set up, risking 4 or 5 points on the trade, and then have it go against you for a loss. Now what do you do? You are running out of time before the day comes to a close and you want to be profitable for the day, so you take a less than desirable trade now for another loss and you are totally frustrated. Not a good day.

With my method, you will see plenty of trade possibilities in whatever type of action the market is displaying and have the ability to capture a nice trading profit each and every day the markets are open. That is the goal. Is it attainable? Yes.

If you have any questions, please email me and I will be glad to answer them for you. Have a great day.

 

http://www.screencast.com/t/gYuBtR2l              Today’s trades

http://www.screencast.com/t/GP2oGYTi            Today’s equity chart

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Controlling Fear and Emotions while day trading !

Thursday, March 19th, 2009

Today is Thursday, March 19th and the markets back off on light volume.

The Market, in general, slowly backed off its highs from yesterday. The night trading saw a move back up to yesterday’s high and when the general market opened at 6:30, the Dow shot up 50 points and the S&P about 7 points. There was a gap in the S&P and when you get an extended move, like what we have had the last couple of weeks, with the market trading near its high at 800, it was likely the gap would be filled rather quickly.

I missed the initial move down by a second and found myself a little frustrated, not a good emotion when trading. I was looking for a low risk short entry and took a trade a little early and got high tick stopped. I was in a little heavy, I think 7 contracts. I was sure we were going down but was just a little too anxious. So I started to back off on size a little. I had to wait the market out, but I was still a little anxious. I prefer to see a choppy market early on, because there are usually a lot of small trade set ups, but when it is trending right off the bat, it can be hard to find a low risk place to get in.

All in all, I did OK, making 15 trades with 9 gains and 6 losses. I scaled out of all the trades with 2 targets. Posted about $800 dollars in profit. I made a few mistakes today, but it happens. The market did just what it always does, so I definitely can say that I was to blame on a few of the losses that I could have avoided. The other losses were no one’s fault – just probabilities that show up.

After yesterday’s big gains, I decided to back off a bit. I am trading a lot more than I usually do and I can’t complain. I have been posting very solid profit every day for about 7 weeks of trading. I need to do some assessments and go over my trading plan. I do not want to lose sight of my goals. I had wanted to increase my contract size and make less trades, but I have been making more trades with small contract size. Again, I can’t complain. I have been getting the increased gains that I had planned on, but I have been having to work a lot harder to get it.

One interesting thing I recently saw, there is a TV show in England that took 100 people and interviewed them for a trading career. Out of the 100, only 8 were chosen, with a mixed level of education. To make a long story short, within 2-3 weeks of being properly trained, 4 were making money and 4 were losing money.

The person who did the best was a mother of two children who had an entrepreneurial background. The person who did the worst was a I.T. engineer. The I.T. guy said this was the hardest thing he has had to do in his life. When a program is not working right, he just reprograms it with the right settings and the problem is solved. He tried to apply the same principles to trading and could not do it. The next best trader was an ex-soldier. He said he was used to making quick decisions and was flexible to the current task at hand. He was not boxed in, with seemingly an absolute frame of mind.

The moral of the story is, that being successful at trading has more to do with your personality than intelligence or I.Q.  We follow principals and not so much rules. There are definitely guidelines to follow and you have to know what you are looking for, but having the right personality for the job is essential. The Mother of two was cool under pressure and applied what she learned. She was not overly scared, but placed the trades as they came up and she got the expected results.

We all can learn from this story, including myself. There is no place for FEAR when trading. If you are afraid, then you are not ready. You may be trading with too small of an account or you may not really be able to take on the risk. The best way to approach this is to allocate an amount in your account that you can comfortably risk. If you draw down to that amount you will stop trading and give yourself a month off to assess the whole situation.

So if you are OK with risking, say $500, that would be 10 S&P points with only one contract. You could give yourself a daily loss limit of say just 2 trades or 2 points. If you are not on it, with gains out of the gate, then you wait until tomorrow and try again.

But do not trade with fear at your side. The worst thing that can happen is already predefined, so accept that fact and go forward. You have 5 days of losses, assuming you lose every day, before you get to your total limit for the month. That is really not too much damage to take on, when you look at the big picture of hitting your daily goal of 2-3 points per day.

http://www.screencast.com/t/RVRfEqSe19Y             Some of today’s trades - Still shot

 http://www.screencast.com/t/vGOqsxDEII               Today’s equity chart

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Called Live, Short Term Top In Today’s market.

Tuesday, March 17th, 2009

Today is Monday March 16th and I posted another good day on the e-minis.

While Trading the S&P e-minis today, I called out the short term top in the market before it happened. You can hear me make the call before it happens exactly at the the high of the day. Then you can hear me make the call, on how we will be pulling back from that high point down to lower levels. At the close of the day, the S&P pulled back off of my short term target, by 20 points. That is a lot in two hours, with the Dow off 190 points.

This is going to lay the ground work for a continued pull back. I suspect that, at the open, we will get a small reactionary rally, but I would definitely be watching for short trades. We have had some technical damage and the path of least resistance should be to the downside.

With this being said, the market can do anything it wants at any time, there is no guarantees. All I can tell you is that when I see a pattern like the one I am looking at right now, a pull back is what usually follows. I will be watching for short trade setups and will stagger some of my exits. That does not mean all of them. I always watch price action to tell me what to do and that is what I will be doing.

I try to not have a strong bias for direction too far in advance, but it is something I will be looking at. It may be that the big sell off does not come until the afternoon session, or it could come early on. Price action is what will influence my decisions at that time. I only lay this out for you because I am looking at the daily chart, just like I am looking at a 5 minute chart or tick chart for that matter. The price action is the same and currently looks bearish.

The day was really pretty smooth. I had the time to trade, so I just kept at it. I started out with some nice gains and within a few minutes I had my daily goal. I cut my size back but kept on trading and added to earlier gains. I mostly traded small all day, 2’s and 3’s were the most common contract size. If I had some draw downs it was not going to eat into earlier gains with the small size. I did have some good runners today and captured some of them on video below, so be sure to take a look.

There are different ways to approach the trading market based on price action. If we are in a choppy market and you are trying to go for bigger moves, you are going to struggle. One way that I overcome some of that is to first identify what kind of market we are in. If its choppy, don’t even think about going for more than 4-6 ticks. You will have another trade in just a couple of minutes to capture additional profit. If in a trending market, you can set yourself up for a few more ticks, but you have to know how to play it and not get greedy.

Again, in today’s market, I had quit a few of these. If you have the time, take a look. If short on time, you can always come back later. The bottom line is that I try to get myself in a break even situation first, then a small gain, locked in. After that, if the market runs, it’s all gravy.  By only trading small, I was still able to post some nice gains because of the runners.

I closed out a long position that I got stuck with over the week end for a profit of several points. That gain did not count towards today’s numbers below. Today, I took 32 trades, 25 gainers and 7 losers and my total scaled out percentage was 77%. The total equity gain for the day was just a little under $2,500 dollars on mostly small size.

During a couple of the videos I am calling the intermediate term direction and as the next video progresses you can see it come to pass. We hit the short term top in the market today and pulled back 20 points, take a look.

http://www.screencast.com/t/oPiqTiFG6              Today’s equity chart

http://www.screencast.com/t/P9iiuTUPd              Some of  Today’s Live Trades

http://www.screencast.com/t/Bna8H6Oe              Some of  Today’s Live Trades

http://www.screencast.com/t/NAik15UUR           Some of  Today’s Live Trades

http://www.screencast.com/t/y7YeoTIZC            Some of  Today’s Live Trades

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