Posts Tagged ‘Day Trading’

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Day Trading for Income

Thursday, February 25th, 2010

Today is Wednesday February 24th and the market is holding up.

I will show a chart of what is going below, this may help create a better picture of where we go next. But first, the daily momentum is up, the hourly, is up with the weekly down and monthly up. There seems to be more momentum on the upside right now and we did today put in an inside day. This creates pressure in the middle. We now have a pivot point established above us with yesterdays high and we did bounce off of some very strong support late yesterday and early today that I missed in my market assessment. The chart to the right will help explain.

In todays S&P E-Mini  trading, I took two trades and scaled out of it as follows; + 1 point +1.75 points + 2.50 points and flat for the second. I come up a little shy of 2 net points but that is all I felt like trading today. Still very good, because it was painless. Scaling out of the first part of the trade on strength, actually weakness because I was short, takes a bit of the pressure off. I often do that, even if I think it is going lower. A lot of it has to do with how I am feeling. By taking part of the trade-off, it releases a certain amount of anxiety over the trade. Everyone has some anxiety when they trade, admitting it or not, it is still there to some degree. Getting control of it and not letting it control you is key. Managing the trade in a low risk manner, helps to release some of the unknown, because now you have an element of certainty to the trade, you have taken a profit on a portion of it and you have reduced your exposure on the remaining contracts.

There are times when I feel very strongly about a move and have my position open with no targets. In fact that is now how I usually trade, a stop always in place with the exits open. Many times the market will burst up or down and I will be able to take advantage of that move and start scaling out at 2-3 points first and up for the remaining.

This may not be the best way for everyone. If you are not quick with your decisions the market can move up 1.50 points and back down just as fast and you have nothing. Catching a quick 1 point trade with 3 contracts is a fast $150. Do it again and you have just made more money than most people make in a day, in fact more than some people make in a week, all inside of 20 minutes or so.

That was the kind of price action that was present in the first couple of hours. There were tons of trades available. Many for good runners and some for quick 1 point trades. How much is enough? To often, traders never seem to think that what they have bagged is enough.

Trading for 2-4 points a day is really plenty. By averaging 2 points a day, some days more some a little less because of a occassional stop out day, (-4 points for me), you will bag 40 points in a months time. If you are just trading 3 small contracts that is $ 150 x 40= $ 6,000 for the month or $72,000 for the year. OK, that is not really a lot of money these days, but it is something to build on. Being consistent is the first thing to best establish. If you can bring in that amount of points on a regular basis overall, trading up to 5 contracts is not much different. That puts you at 120k a year. That is a little better. Do that for a year and keep your head screwed on straight, not getting greedy and wanting and wishing for more. More will come, in its due time. When you have been faithful with what you have been given, more will be given to you. First be a good stewart of what you are able to do and make, then when the time is right, you can increase your size and watch your account grow, but again, don’t be in to much of a hurry.

In this business longevity is the name of the game. You want to “Last – Learn – & Earn”. Then, you can see yourself a bit more stable as a day trader. That is not what most do and it is unfortunate. Getting steady sound trading input is key to your survival. I try to do what I can for the readers of my blog. I don’t often talk about my exact method for trading, but I talk about everything else. If someone wants or needs training I offer that through my course and mentoring program. All of the other things are really just as important. You need both. Being mentally prepared and of sound mind with good judgement, able to exercise  ”strength of Mind”, Concentration, is vital to coming out on top.

I know for a fact that more people put a emphasis on the trade execution of trading than they put on the mental side of trading. The truth is, you really need both. One without the other, will do you no good. That is for sure. You can have the best trading method or system or what ever, but if you don’t or can not trade it, you will not profit, plain and simple. So many traders fall into that category, because they fail to realize that the difference is in the other part of trading that they have failed to pay attention to. They often times have a fairly good idea of how to make the trading game work for them, but just don’t seem to get it done.

I have been recommending as of late my free book on concentration. It has so much on the mental side of trading to help those who are seeking answers to problems they just can not exactly put their finger on. This could be the missing link. I am so sure it will help in some degree your trading efforts.

I sent the book out to some a few days ago and got back my first response. I was encouraged because he applied a few things that he read in the book and it helped him to string up several winning trades in a row. He was jacked, and told me that this stuff works.

That is what I really like to hear. It gives me encouragement to know I am helping people achieve their goals even if they are not a student of mine. The feedback eventually benefits me in some unseen ways and makes what I am doing much more rewarding.

So, I welcome your requests, and look for your feedback. Email your requests for the free book at vinnie@sniperdaytrading.com

Good trading to all !

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Building Solid Mental Foundation for Day Trading

Thursday, February 4th, 2010

Today is Wednesday February 3rd and I picked up my goal today with a few small trades and wrapped it up. I did see a lot of potential trades I could have taken today, but I was satisfied to stop with 2 points. Below is a follow up from yesterday post.

I find it very interesting two days ago as I first made mention of a post “Face your Day-Trading Weaknesses with change”. In that post I talked about how important mental fitness is in the life of a day trader. If we ignore the things that are holding us back and refuse to face and deal with it, we will not be moving forward but backwards, staying true to form with the majority of other traders.

We need to do different things than the majority and be strong enough to face our fears and challenge ourselves in the area’s that hurt. That is where change is going to come from, identifying our weaknesses and building on our strengths. As I mentioned already, failing to do so, we will only find ourselves repeating the same day trading error again and again, to our destructive amazement. That is no way to make it to the top.

In keeping with the theme, yesterday I made mention of a man who puts out really good material to help all people, but it is so applicable to “Day Trading and Trading for a Living”  

 It is very similar to what I have talked about and although it is not earth shattering, it is simple, practical and what we all need to be doing. You would think that something as elementary as this would not be that hard to do, but it can be some of the hardest things to face and overcome.

His post is from February 3rd, and the title is called “Examine your weaknesses”. The February 4 th post is all so true. The site is called “The Daily Motivator”.

Some may find it strange that I am promoting another guys blog or website without personal gain to me, but this site is more than about me. It is a way of helping traders see what it is that they need to do, in order to find success. I feel my trading program will help many as well, because I do offer a road map and some personal mentoring to help those who choose, find their way. If you already have a trading method or plan that you are following, that is fine, but for those that need one, it is always available.

 
That is a lot to swallow in one sitting, but you can take it slow. Make a list of your trading problems. Start with the biggest to the smallest. Clearly identify what it is you are consistently doing wrong and go to the next one and write it all out. This should be in your trading journal as all of us should have one. As you go down the list, try to be as honest as you can. No one will see this, just you, so expose your weaknesses.
 
Now, think of what it is going to take to start changing what you are doing. If you are trading live and your trading equity is slowing going down, that is the first thing you need to do. STOP TRADING. See, that may not be what you want to here, but it is tough medicine. It is only until you get yourself situated. To stop trading is hard, especially if your trading account is funded and ready to go, but unless you stop momentarily, you will end up blowing your account out. Treat your trading funds as though it was the blood in your veins. You need that blood to stay alive, lose it and you die.
 
If you have no plan or trading method that is clearly written out with rules and objectives, that could be your first order of business. Trading without this, is like setting sail for England without a map, compass and other navigational tools, hoping that you will find it if you just go east.  The odds are probably about the same, not good.
 
If you have that already, you need to be sure that what you are following is sound and will be applicable to a variety of market conditions. We rarely see the same market on a regular basis, that is why system trading does not live up to its claims. If your plan or method is rock solid, then you need to follow it. There may be reasons why you struggle to follow it and that may be a lack of confidence in your ability to perform when conditions are right. You may need more time to practice your method and build your confidence, so take the extra time you need before you jump back in and build the mental side of your trading so the two can become one, success will follow.
 
If anyone is in need of a “Trading Method” that works and some “Mentoring” to go along with it, I offer both. Visit, www.sniperdaytrading.com and see the possibilities.

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Two Live Trading Video’s in Todays Post !

Tuesday, January 12th, 2010

Today is Monday January 11th and is a typical day for many traders to return to the market after having taken time off.

The price action seemed a little better than it has been lately, but the volume was really about the same. A busy day in EMINI S&P Futures is between 1.5-2 million contract, with the lower figure being border line active in my opinion.

On Friday I posted my blog a bit early, I had a few things to do and wanted to get it out before the weekend, but I did come back at 11:30 am West Coast time to pick up a nice move. I had a couple of small loses of only 1 S&P point combined, trying to figure out which way the market was going to move. I initially was leaning long and was just a little early. Had I waited, I would have had the real market read that I was looking for. The market did give me a head fake and I bit to the short side. With no follow through and a loss of the momentum, I did not wait to take a full stop. My first thought of a long break out was right and I jumped on it quickly without hesitation. I was down 1 point so far, but did not let that persuade me into taking the position. It was on the high tick, I did not want to miss it because I could see that the move was for real. I left the position open and road it to the top. I exited the first half of the trade at I think +4 1/2 points and second half at +5 points as I can remember. I posted it on U-Tube Friday and will paste it in here today.

That was nice to go into the weekend with a nice gain, but I like the fact that I did not get flustered by the first misdirection. Friday was a brutal day for anyone who traded the middle part of the day, just brutal. That is when you need to wait and back off. No follow through to any trades and no price range movement.

I happened to stop right after I got my first trading goal for the morning on Friday. Had I been trading, I am sure I would have been trying to scalp only those small swing trades for a few ticks, 2,3 or 4. If you tried to get any more that, you would have been stopped out, several times over the course of hours. The market stopped moving Friday, so to speak at about 7:30 and it started up again at 11:30. Those are the times I had said last week or so, were the best times to trade. The first 60 to 90 minutes and 11:30 to 12:45, West Coast time. We will see the volume and the trade range come back pretty soon, but until then, be modest with your trading goals.

There is nothing wrong with- get in, get out, get done. It works for me. It could work for you too, if you know how to operate it. Just like a piece of heavy machinery, you could not expect to get up on one of those Cat Tractors and start pulling and pushing levers. It takes time for someone to show you how to do it. It comes with instruction and you need to practice. In time, you know how it operates and you can maneuver it around.

The same is true for trading the S&P emini futures market. You most likely will need someone who does it, to show you how it is done and explain what you need to look for. We are not born knowing how to trade and it is not natural for someone to pick it up like riding a bike. It is more like driving a tractor, not everyone is able to do it, but for the traders who are determined to succeed and have the patience and trading discipline to go by the manual, and occasionally use a little insight, it can be mastered. This what I teach in my Emini Day Trading Course at Sniper Day Trading.

I mentioned in Fridays post that you need three things for success. Trading Discipline, to not over trade and wait for High Probability Trade Setups, you need to know how to trade, (Sniper Trading method or your own method or system) and you need to be mentally strong to overcome and recognize the mind games that come with Day Trading, especially if you decided to Day Trade for a Living. All three of those are no easy task and is attainable, if you break it down in small bit size pieces. Like any large project or undertaking, you always break the project down to small tasks. When those tasks are addressed and a certain level of success has been had, you can move on to the next. You may work on all three area’s at the same time, but in small attainable goals that will be achieved simultaneously.

Many people just want to get up on that thing and ride it. Side step the needed training, not think about developing personal disciplines to help you not react impulsively and not even be aware of the last  part, influences of negative trading psychology. We often end up being our own worst enemy and I know I said that before once or twice.

Start doing things in your life that you can exercise trading discipline and self-control. If you wait until you are in front of your trading screen, you could be giving good money away, don’t do that. Much more to say and no more room or time. Continued in tomorrows post.

Today, I took four trades, last video,  -1 tick /+4 ticks, +4 ticks / + 2 ticks / +4 ticks , +4 ticks.  I split up a couple of the trades, thinking there was going to be more, but I could see that there wasn’t and rather than give it back on the second half, I elected to take it. To me, 1 S&P point or 4 ticks is fine. Others would say, why bother. To each his own, I guess. I have been only trading very small, there will come a time that I will get back up to a larger contract size, but I am in no hurry right now. I am enjoying building my website and teaching traders to see what I see.

   

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Scalp Trading

Saturday, January 2nd, 2010

Here are a few idea’s to help you see some of the benefits of Scalp Trading.

There are many forms of trading with different objectives. One form, is often called “Scalp Trading“, with the objective to take a small portion of a move out of the middle. Depending on the time frame that you trade will largely determine your risk. “Scalp Trading” a 5 minute bar charts, you will be risking more than trading 1 minute bars, but your returns will be larger. The opposite is true as well, while risking much less on the trade, your reward will be smaller.

Given the fact that trading the S&P 500 emini futures carries a potential 50 to 100 times leverage, you don’t need to make very large point returns to day trade for a living, if in fact you can be consistent and that is the key. Will you be able to make 2 to 3 points per day and call it quits?  Many traders can not and do not, which is a big reason why they struggle. If you are not skilled and trade during the slow period of the day, it can ruin you and your account.

The best times to trade, I believe, is the first 90 minutes and 11:30 to 12:45 West Coast time. Starting this New Year, I will be trading during those times mainly. I spent too much time last year trading during the more difficult times of the day. I still made my daily goals but I could have accomplished the same thing with a lot less time trading the open.

Some of the benefits in learning to “Scalp Trade the S&P emini’s” is that you usually have multiple opportunities to find winning trades. When you trade “Tick Charts” as opposed to minute charts, you have the ability to cut your risk down much smaller than minute charts. Reducing your risk per trade is key. But finding the trades that will produce income is also important. The two go hand in hand. I usually risk one point or less when trading in this screen and my return is equal to my risk. The difference here is a high winning percentage. I have an additional screen set up for trending markets and am able to trade those setups for several points, but still only risking 1 point or less as well.

“Scalp Trading” gives you the ability to get in, get out and get done. You need to know where to get in and where to get out and when should you finish for the day. Those are all things I discuss in my “Emini Trading Course” at www.sniperdaytrading.com

If you know where to get in with a high degree of accuracy, and get out with a reasonable amount of return compared to risk and when you should stop for the day, you could be well on your way.

When in “Scalp Mode”, I teach and trade with the momentum. If I start to lose that trading edge, I will look to exit the trade. The signals I use are clear. A trader needs to know if he is trading with the trend or trading counter trend, relative to the time frame he is trading. That is very important to determine targets and manage risk.

I have all of this layed out in my emini trading course and make it pretty clear. It does take some time to grasp, but it is really not hard to learn and straight forward. Some of the custom indicators I use can make it easier, but all of the trades are derived from “Price Action” in combination with “Support and Resistance“. I mentioned this in an earlier post, but it bears repeating.

Another benefit in learning to “Scalp Trade”, is the ability to adjust yourself to changing markets. Everyday is different and you never really know what kind of market you are going to get until the price action starts to reveal it to you. Only then will you know what screen to trade out of. Each is set up differently for the conditions. You have options, is the bottom line. If all you know is how to trend trade, then you are at a disadvantage. Looking for trend trades that are not trending means, stop outs and losses. The market trades in a confined “Chop Zone” much more than it does trend.

Limiting yourself with only one set of conditions does put you at a disadvantage in my estimation, not to mention the time you may have to sit out, waiting for conditions to become favorable again for you.

While a trader is in this scalp mode screen, he needs to be very conscious of his entry. The entry will determine how much heat he takes after the trade is put on, which is why you need to be like a Sniper, Trading for his daily income.  

I personally feel this is like having a double-sided nickle in my pocket, no matter what side you flip it, it always comes up heads. Well, that is how I see it. Anyone who pursues a trading career or try’s to supplement income, needs to always have “Trading Discipline”, that is a must. Without it you will struggle. I cover many of those issues in a training series of “Mental Exercises” for day traders I put together.

Trading is a skill of the mind, money and method. You will need all three to be successful. If you are lacking in the mind or method, give my “Emini Trading Course” a try, I believe you will glad you did.

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A Sniper Who Day Trades

Monday, December 28th, 2009

Today is Monday December 28th a.m. and the market is in slow motion.

Have you ever thought of what a Sniper does. He waits patiently for the right moment to hit his mark. In the battle field of war, it is never an easy thing to do. You have so many distractions, but your training has called for you to mentally train your mind to block everything out that is not relevent to your task, hitting your mark, what ever that may be.

Just like a Sniper, the window is very small, with little room for error. The same is true when day trading the emini futures market. You should strive for precision entries, exhibiting the least amount of drawdown against your position.

Lowering and controlling risk is the key, but how do you do that. I believe, all traders need to be able to identify if they are in an up-trending market, down-trending market or choppy sideways market. Approaching the current price action in this fashion will give you an advantage by maximizing your potential returns.

Many traders do not like to trade counter trend and that is understandable. There is going to be larger moves in the direction of the predominant trend by definition. The problem is, that the market does not wave a flag announcing its intentions.

Another issue with that, is you need to have patients to sit through the pull back and it could be a long time. As frustration can often become your enemy, you can be tempted to take non-method trades and suffer a loss.

I feel it is better to be skilled in having the ability and training of a ”Sniper”.  If he is called on, he can exercise his skills in a moments notice and engage.   

If you have the time to trade all day, have the discipline and patients that will constantly be tested, then yes, you could have a better risk reward ratio when you pull the trigger. When you go to the bank, you don’t deposit ratio’s, you deposit currency.

Currently it is not my plan, intention or method to trade all day. I could and have the time, but I enjoy keeping the battle down to small skirmishes, instead of a ragging war.

These are all questions that traders across the globe need to ask themselves. It is fine, if someone wants to trade all day, but that is not for me. In a later post, I will go over the different stages and times it is best to trade. The benefits and advantages to trade during certain times. This has proven to be very consistent market behavior and will point it out for all to see in a future post.

The market is in post holiday trading mode and will take this slow time to post some thought-provoking questions in preparation for the new trading year.

Enjoy!

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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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Day Trading Turning Points for Monday

Tuesday, September 22nd, 2009

Today is Monday September 22nd and the markets still a little quite out there

We had a pull back below the pivot low that I had mentioned on the 60 minute chart from the other day and we did break it, but the buyers quickly came in to support the drop. That is a good sign, although still to early to tell. The drop was mostly done in the weekend night trading and the cash market just dropped to catch up with futures. Often the market likes to fill the gap, as it is called and trade back up to the upper range in a strong market and that is pretty much what happened today.  We need about 6 more S&P points back up to turn the momentum back to the upside. Tomorrow should tell us a few things. If we do, it is likely the move will continue up with 1100 + on the S&P as a target. The Index’s are so close to the round numbers of 10,000 on the Dow and 1100 on the S&P that I am leaning to the side that it will get hit, before any meaningful pull back starts. It seems like a date with destiny for both of those numbers to get hit, we shall see.

Below are the turning points for today in the 400 tick chart. These are the turns my method gave me and said to buy or sell at these levels. It is all backed up with a solid reason,  (not shown or explained) you just need to pull the trigger. We  aspire to hit just a couple of these trades and only really need to book 2 points per day, but every day with a high degree of success. That will, over time and a gradual contract increase, will take care of the need to swing for fences, usually not a good idea.

We use only a 4 tick stop and have a 4 point stop out point for the day. Go minus 4 points and you are done for the day. That would be about 4 losing trades and we stop. We can make it up on another day, but we live to trade again, is the point. Everyone has a bad day and sometimes the market is not very forgiving, but with my approach, it is very conservative and attainable. The turning points below.

http://www.screencast.com/t/Ov2BC7KJK                      turning points video for S&P 9-21-09  400 tick chart

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Successful Day Trading Continues

Tuesday, April 14th, 2009

Today is Monday April 13th and I had a nice smooth day trading, although not feeling very well.

I took Thursday and Friday off last week and meant to post a note letting everyone know, but I forgot. Friday the markets were closed so not much happened anyway. I had a great Easter weekend with family and friends.

As the morning started, I was not feeling like myself today and considered not trading at all, but I gave myself a little extra time to see if I could handle putting on a few trades. I guess it turned out pretty good.

I was only going to make a few trades, get to one thousand dollars and stop. That would have been plenty good enough, but since I had not had a loss and it was coming to me pretty easily, I decided to stay with it for a while.

I really had patience to wait for the trade. I let a few go by but I took many trades for small profits, some for only 1/2 point. That was all the market was giving me, because the range was so small. I started in the slow time of day and had to wait out the trades, but there just was very little movement and it took a long time to develop, so I picked up whatever I could get safely on each turn. It added up just the same, like I have said before.

A little later, I had a nice 3 point + trade to tack on to what I had put together. All in all, I took 27 trades and they were all gains, with one trade at break even, for a $3,500 dollar day and I was not feeling well.  I should get sick more often -  just kidding.

It sure is nice to hit the trades for gains over and over again. It adds nicely to your confidence and will set you up for the rest of the week. You can be sure, I will not let my guard down.

We always need to respect the markets, like I have talked about so many times. Many traders will have their biggest losses right after they had their biggest gains. It’s all in the mind and how it processes the emotions of a big day. Settle down and take tomorrow just like you had no gains at all today. Each day needs to really stand on its own. It would be best for me to put this day out of my mind and prepare for a smooth day of profits tomorrow, with as little draw down as possible.

I am going to wrap it up a little early today and will have some kind of trading lesson for tomorrow’s blog.

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

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Mental Discipline / Key to Success

Thursday, April 9th, 2009

Today is Wednesday, April 8th and things keep moving right along.

Today was an interesting day. Well, they are all interesting if you think about. It’s kind of like that box of chocolates I keep hearing about – you never know what you are going to get. What I am referring to is price action. We never really know ahead of time what kind of price action we will get, other than the pre-market trading that takes place before the open. That can give you your best indication, but it’s after the open that really counts.

I started the the day trading in a cluster of consolidation, but my timing was really good and I picked up 5 trades in a row. I had about 3 & 1/2 points and was going to call it a day, but since I was only trading small, I did not get the desired $ amount I was looking for and kept trading.

I did something today that I don’t usually do. What’s that you ask? I put a string of 4 losses together in a row, taking my equity from around +750 to -600. Very unusual for me to do that, but it goes to show you, if you let your guard down, you can get clocked.

Going over the trades afterwards, I saw that the market flow was really just fine and if I had just stuck to my tight style and kept an open mind, those trades would all have been gains. I got it in my mind that the market was going to start moving bigger and I was sticking around for those larger moves, and they did not come. I did not scale out on those trades, which would have at least got me to break even.

It was not the end of the world, I took a break, made a few phone calls, got something to eat and came back later to literally pick it apart wih a long string of winning trades. I made myself one of those deals again. I would stop trading for the day after I had my first loss and I did, but not after I had 10 positive trades in a row, with 14 pieces of profit – some I doubled up on the position. I ended the day around +$2,500 with 72% profitable trades.

I will be trading the open starting on Monday this coming week and the reason is low volume. The start of the day has high volume and movement to go with it, and that is what I need. As I said earlier, I started trading in a low volume cluster/consolidation and still did good, 5 for 5, but those were for on average of only 3 ticks, because the price action was not giving me more. All of those trades over shot my target by a couple of ticks and that’s good, but I need more volume. The last two hours has volume, but I don’t plan on sticking around that long usually. The upcoming Holiday has something to do with the low volume I am sure. A lot of people take this week off and it shows.

Mental Discipline is one of the key ingredients to your trading success. If you have it, you will have one important part of the equation. If you don’t, you will see the difference. You need to know what to do, and what to look for, in waiting for high percentage trades.

The other part is knowing how to handle yourself when you hit a tough patch. Are you going to step aside and take a break, assess the situation, wait for a change up in direction, so you have new reads and opportunities? Or are you going to force the situation because you cannot handle the fact of being wrong. Well, if you have a big ego, and a lot of us do, you will have to check it in at the door, before you enter the trading world, or else you will not do very well.

Humility is a very important virtue as a day trader. If you never thought about that before, you would be well served to cut yourself a slice and eat it slowly so you can digest it well. If you choose to pass that one by, get ready to be “served”. You cannot afford to think you have this thing licked. You need the discipline to hold yourself back when conditions are not right. “Just say no”. Go back to the basics and don’t trade it unless you see it – STRONGLY.

If you have no conviction before placing the trade, just let it go. If you miss the bus, another one is going to come in just a few minutes. Remember, we are trading for a daily goal, something in you that says, “it’s enough for today”. Once you reach that point, have the discipline to stop trading and wait for tomorrow. If you trade past your daily goal, make a deal with yourself, that you will not let your equity go any lower than x, after you reached your spot.  If you find that you break your promise to yourself, then you have work to do in the discipline area.

Who is in control?   Ask yourself that question.  

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

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Best day trading I ever had

Monday, March 30th, 2009

Today is Monday March 30 and today was the best day of trading I ever had.

I had no idea that today was going to turn out the way it did. What a day. I was going to stop much earlier in the trading session, but I kept putting trades together and they kept hitting my targets. I said that I was going to stop when I had my next loss, but it never came, so I kept trading. This is one of those days that you get rewarded for doing the right things. I stayed out of trades until the trend had a high degree of follow through.

The thing about today, is that we had a very big gap day down and most of the drop occured in the night trading and premarket. I know better than to try and trade for long swings on days like this, especially in the morning. This is a day that you want to trade for short targets and be done with it.

And that is what I did on most trades early on. There were a few that I took for more, but they all added up to make for my best day trading. I was trading with bigger size after the profits started to pile up, putting on 10 and a few times 15 contracts. I had the room in my equity, so I went for it, all the while being patient, hitting the short term trends up and down, but mostly down.

Below is my equity chart and a little closer break down under that. If you are right with the direction of your trades, a 1 to 1 ratio (profit to loss) can add up very nicely. Timing is the key. Can it be learned? YES.

http://www.screencast.com/t/SpwL097Sh                  Today’s equity chart

http://www.screencast.com/t/52z5jIOWP                    Closer break down of stats

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