Posts Tagged ‘over trading’

Big Day Trading the S&P Emini’s

Tuesday, September 13th, 2011

I had a good day in the markets as I was looking at the long side of the market today as I mentioned yesterday. We were likely to have some follow through and was looking to 1176 as a possible high today, but it may still come in tomorrow session. The days highs came in at 1070.50 a little shy.

The night session is off right now, but that can all change by morning. Either way, it does not really matter which way the market goes. I do like to see and spot the bigger trending moves in the daily market as many follow that in stead of the micro moves of each day.

As day traders, we open and close all positions within the day and look to be profitable at the end of each day. We don’t need to take a ton of trades, but just a few will usually do the job just fine to pick up a modest daily goal. There are days that trading more is OK and today for me was just one of them. There were better price action days to trade, days and weeks past, but I was on vacation then and just getting back in the groove. Having a better than expected day now and then is good as it helps to round things out for any loosing sessions and keeps pace with overall expectations. The day ended up better than 3x my average daily goal of 2-4 point

Since I traded most of the session today, I can not fit in all the action so I have a larger sized chart but it does not match the entry signals that I usually show, so as not to confuse anyone, I just elected to take it off and show the basic bars with the trades taken.

Tomorrow morning the sentiment number I watch are coming out and that may give some insight into market direction and overall expectations in the daily market. Trading in the opposite of the dominent market wisdom has been a long established way to bet against the crowd.

Again, as day traders, it does not really matter what direction the market moves, but I do like to comment on it when it seems obvious. Currently it can go either way and will have to look both ways. I still think that 1176 number is possible in the short term but we will see tomorrow. I won’t be stuck on that number and lock myself in a narrow mindset so as not to see the price action in front of me, which is good advise to all who trade.

Think about it, read the current price and stay open minded and let the market tell you which way it is going to go. Try to predict it all in advance is not to wise, as you will not see the trades that are in front of you.  I know this is a big problem for many traders, don’t let that be you. Remain in control and trade your plan, what ever that is. Control your emotions and don’t over trade. What ever is your method, discipline yourself to stay on script.

Success, will come when you are able to control your urges to trade for the sake of trading or being in a move. Waiting is a trade, and many have forgotten that and or never thought about that. I will say that again. Waiting is a trade, and not trading is a position you need to get comfortable with. Those that can, will wait for the what is the easy and obvious entries and just pick up cash with little struggle.

Trading should not be a struggle. You don’t want to use your mind and emotions in a Beta State, but using the Alpha Brain State while trading, will get you much better trading results as you are exercising your ability to stay calm and rational. You will not overtrade in this state, as you are better likely to wait for the next signal that has the odds on side. If you take low percentage trades, you will not likely be mentally ready for the better high percentage trades that will show up. When they do, you will be either getting stopped out of the weaker position and miss the better opportunity and or just miss it all together with your preoccupation of the weaker trade position.

So much more to say here, I will try and continue it tomorrow. Until then, good trading.

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Over Trading, an overlooked issue

Friday, July 15th, 2011

7-15-11; The last few sessions the market has been marking time, as it tries to decide what its next move will be. It has pulled back from recent market highs into the middle of its trading range as recent events unfold. The debt ceiling is a big one and it is not going away as well as so many other issues. Gold is coming back as all the uncertainty is making the metal shine as it moves to all-time highs.

There is a lot one could take in, but one thing remains as day traders, the markets will continue to move and with that movement are opportunities.  Below I will post my trades for the last two sessions as I did not post yesterday. The posting will continued below.

Friday’s Trades / Just one!

 Thursday’s Trades

As you can see from these and the hundreds of other daily trade postings that there is something to this. The trade indicators are only a reflection of the trading method and not the other way around. You don’t have to get them all right to come out on top for the day. You only need a few trades and often only one to pick up good daily gains for the session. Two times this week I picked up much more than the minimum daily goal I set for myself, which is between 2-4 S&P points. Those days can make up for previous losses and or days where one did not trade. This week, I did not trade on Monday and Tuesday’s session make up nicely for that. Wednesday’s session I did a little better on my timing and also picked up much more than the minimum, so Thursday and Friday I just coasted. I would rather take the easy road than to slug it out trading the whole session. If you can get ahold of your emotions and “at times” be satisfied with a modest gain, you will give yourself a greater sense of self control and that can help your confidence a lot.

Day Trading is about picking up consistent gains. You don’t have to hit home runs to make this work for you. Being patient, using a few of the tools for confirmation to pick up a few points each session is the way to go. There will be days you have losses, but they should be small, no more than 4 S&P points for any one session. If you don’t have a point that you stop, you can find yourself down 10 points and that will hurt your confidence and make matters only worst.

Being able to put the brakes on during a bad trading session is another sign of good trading discipline and though a losing session, you can make that work for you in the fact that you stopped trading when you should have.

Overtrading can be a big problem for many traders. You have to be able to follow through on making the tough decisions and saying “no”, “stop” or “wait”,can make a world of difference on how things turn out.  Overtrading can be a reflection of what is going on inside, but all without your knowledge. Examine yourself and see if you are overtrading. You can be better served by waiting for the better trades most of the time.

Many traders beat themselves at this, knowing and feeling that they can overcome, only to fall victim to the lack of will power to maintain control. You have to exercise your mind just like you do your body for other tasks. The battle is in the mind, so why not exercise the mind as we should?  There are lots of reasons, none that we often like to consider. Let’s try laziness for starters. O’ we will work hard on other areas, but when it comes to facing the difficult part which might be more mentally challenging than we are willing to commit to, be bail and find many reasons why we don’t.

These are just some of the deciding moments that will make a great trader or not. I know, it is hard to change parts of ourselves that get comfortable in bad habits. It is those bad habits in various areas’ that lend to a weak mind and thus a lack of will power to follow through with what we know we should while trading.

Are you starting to see how things can be different if you really want them to be? Those who need or want a fresh start and get some renewed insight into finding the mental strength to follow through may want to download the free E-Book on my website. Don’t worry, I won’t be trying to sell you anything after that point and up till now have not contacted anyone who has signed up for the book in any way.

I always meant to write a newsletter but never have as so many of my posting are of newsletter quality, at least I think so?  There have been a few hundred downloads for the book and that is great. I am sure it has helped many. My intentions were not to use it to contact traders to sign up for Sniper Day Trading, but to be a help in their mental trading challenges. For those that it may have helped, I am always open to hear what you think.

For those who have questions about your own trading and want some objective advice, you can contact me for that too. Again, I keep it to what you are asking about and don’t use those times for any other reason. I love to get positive reports back and have been getting a lot of them from members, but occasionally I do get some good feedback from a few who I have helped who are not members.

If my blog postings have been a help, don’t hesitate to let me know. That is what drives me to keep them interesting. I admit, occasionally I don’t put in as much as I could, but a fresh batch of encouragement will always help. OK, that’s it for today. I wish all my readers the very best.  Vince

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Scalp Trading as a Form of Income

Saturday, January 22nd, 2011

1-22-11;   Scalp trading, can be defined as picking off small price moves in any trading instrument for profit. It can be in day trading stocks, futures, or in my case the S&P emini futures market.

It is not difficult to participate in this venture, but doing it profitably is another thing. Most traders and or investors have a difficult time pulling money out of the markets on a regular basis. It is not that they don’t have desire, but being profitable on a regular basis has a few key components to those who can.

One of those being, trading discipline. One can only have this kind of discipline if he is informed on what to be disciplined towards. If a trader has no written plan, then he is just flying by the seat of his pants and could never expect to get consistent results based on how he or she feels. You can not trade by feelings. This is different from trader insight as I call it. That would be when after long hours of price analysis, you become tuned in to the markets behavior and get a feel for the rhythm of the market.

This is being in tune with what is, not trying to guess on the next market move. Most often, the market will tell you what it is going to do next. If you are in tune with the unspoken language that it throws off each day, you will be able to time these trading entries with precision.

So, you need a written trading plan first. I have written about this before and it is essential. Then and only then, you would be able to exercise discipline to follow that trading plan. So often, we are anxious about getting what the market has to offer, but that impatience is what clouds our judgment, which creates anxiety and we begin to make rash decisions that we can hardly understand. When we look back, we are in dismay, on how did we ever put that trade on there.

It happens to ever trader, whether they admit it or not. For some it happens all to often. Our job is to keep those times to a bare minimum if we want to become the consistent traders that we aspire.

Scalp trading is an awesome opportunity to profit from the stock market participation, only if we have the discipline to follow a plan, make a reasonable amount of profit and get out for the day. As you get more experience, trading for more or take all the markets gives, can be achieved, but that does take time.

Traders are all to willing to take everything they can right out of the gate, and end up getting nothing. It would be better to tell yourself that you are only going to make two trades today, if the market presents the opportunity. That way, you know you will not be over trading.

If the first one works out, you put yourself in a no loose situation for the session. If you exercise good discipline and wait for the best confirmed entry, you will only add to the days gains and end your session.

Over trading is a big problem for many traders especially the ones who are drawn to scalp trading, like I am. We often times are drawn to the action as day traders place trades, right, so, get in their and trade. That line of thinking will hurt the up and coming  trader and steal any confidence that he had, sending him back to the drawing board. Don’t let that be you. Take steps to prepare yourself and your mind for your challenges.

This part is not easy and is so overlooked it is not funny. Traders fail to plan for the mind challenges that are certain to face them. They only end up reacting to them after it is well under way, as they struggle to try and get even. This mindset ends up working against you. You are focused on the money and it now has a hold of you, to the degree that you often don’t know what to do.

If you plan on taking two trades, you limit all of those possibilities for yourself to blow up, get frustrated, get even, rack up huge commissions against your account and do a number of other destructive things. You could call it, “The One Two”.

If you have a losing trade, you may still be able to have a wining day with your next trade. If you exercise trading discipline and only take a good method trade setup, that has a 2:1 trade ratio or higher, you will still come out slightly ahead for the day.

Tomorrow becomes a new day and you get go again. This type of approach will take longer to achieve the returns of your dreams, but at least you have a chance to attain it. Most traders are going to blow up their account in 30 days or less. Don’t let that happen to you. Scalp trading as a form of income can become a reality, if you have support.

If you don’t know what makes for a great trade and have it crystal clear in your mind, you then are only guessing. I don’t need to tell you what you can expect with that approach. It then boarders on gambling and no one likes to have that label attached to them.

If you trade high percentage trades, you are not gambling. The odds are in your favor for profitable results, only if you stay in control of your trading emotions. Lose it, and you become a statistic. Maintain it, and you can make a living from the markets, which would you rather see.

Let the rush of trading go by you. Fulfill that part of your life some other way that will not affect your finances. Let Scalp trading be what you first thought it could be for you. A profitable way to bring in extra income.

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My trading results for Friday, Thursday, and Wednesday in that order. Wednesday I was sick and traded anyway, you can see I lost my concentration and took many non method trades. The indicators are not my method, by any means, but they are consistent with it. I get all my entries by price action rules of the Sniper Day Trading Method. I did recover that day nicely, but I put myself at great risk by increasing size on my last trade. All three days were profitable with Friday being my best day as far as timing and following method rules.

Enjoy the rest of the weekend to all and see you on Monday’s Post.

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Trading Psychology, should not be overlooked

Thursday, December 30th, 2010

Today is Thursday, December 30th and we saw the market back off early and close down slightly for the day.

The market is still in the doldrums with low volume and movement in the major index’s. Look for things to get back to normal after the second week of January. No trading for me until after the New Year, but am posting the low risk market turns as shown in the chart below.

As we approach a new year, traders will be looking for answers to there personal trading performance. Many times, they will be looking for new trading methods and or trading systems to solve their problems and that could be the answer for many, but their could be other solutions to look at first. Trading psychology is best not overlooked.

One of the first things we need to look at when assessing our trading performance is “ourselves”.  I will agree first of all, if you don’t have a solid trading method that you follow, with rules for entry and exit, that is clearly defined and in writing, you are going to have a hard time. Having it in writing, is important, as it defines exactly why, where and when you are to enter a trade. Then can define, when you should exit a trade. All of that said, to say this;  If you have that and things are not working out, many times, it is the unseen things withing ourselves that we are overlooking that is holding you back.

I know for sure that their are traders who have a good trading method that they themselves have come up with and or, purchased from the outside but have failed to make it work. The first order of business is to examine ourselves and see if something has been overlooked within ourselves that is holding us back from hitting our trading goals.

Many times it is these hidden things that if uncovered, will set us straight and put us on the road towards our long term trading goals. Let me expose just a few of them which may help jar some memories.

Do you move your stop after entry?     Do you second guess yourself after pulling the trade trigger?       Do you find yourself over-trading?       Do you find yourself always cutting your gains off early?     Are you taking bigger stops than you should be?      Do you have blow out days?

All of the above are things related to “US” as traders and many times not the trading method. We need to be able to follow the method and not our emotions while trading. That can be easier said than done, but if you identify the possible problems, then you are better able to do something about it. Ignoring these issues will not make you a better trader and looking for the Holy Grail of trading systems or methods will not do it either.

This may sound a little harsh, but it is intended to help only. We need to be totally honest with ourselves if we are going to see the lasting change we desire.

Go back over the list of questions above and ask yourself to answer those question to see if you are doing any of them. No one will see your answers but you.  You need to come clean with yourself and if you find that you are doing some of those things above, ask yourself why? Then ask, what can I do to stop?  Often the answers are found much deeper within you and can be difficult to extract, but is possible.

Fear, is all to often a reason for some of the above. Fear of loss can get you out of a good trade and force you into a bad trade. Both are motivated by a very strong emotion. Eliminating or getting control of that emotion is essential and must start with asking what am I afraid of. Is it fear of being wrong? If so, then it could be your ego is getting in the way. To often we don’t like to be wrong and will force trades and or re-enter a trade to quickly because we so want to be right.

Their is no room for large Ego’s in being successful in this business. The market will humble any trader who sports this attitude before to long. Humility is the opposite of this and is what is needed. If its not within your character to be this way, then you know the first thing you have to change.

Greed is another strong emotion that often goes together with trading fear, kind of like, peanut butter and jelly (lol). Trading greed can make you do things that you will question long after the trade has been made. You will say, “why did I do that, I knew better”. Well, these are only some of the obvious factors that can hold us back at traders. I am not immune to all of this myself. Writing about it, helps me maintain the right attitude and hopefully helps a few along the way.

Not trading with true risk capital can bring in additional pressures that not need be present, which can be traced back to a lack of patients, to wait until your financial situation is best suited to take on this risk. So here risk capital is traced back to lack of patients to wait. What do you think will get transferred to your trading screen and account if you lacked patients before in pushing to trade sooner than your situation properly allowed? That is right, a lack of patients to wait for the right setups and a lack of patients to wait for the trade to develop once in. Both are going to give you less than optimal results.

I can continue, and may pick this up from here tomorrow, but you can see, the traders who engage in some of these things may have perfectly good trading methods, but the problem is within themselves. It is not always the case, but it can be.  Every trader needs a written plan for their trading and it needs to cover everything, whether it is self done or purchased from the outside.

Examine your self and trading behavior to best see the results you desire this coming year, 2011.

Good Trading to all, Vince.            P.S.    Please feel free to comment on the above !

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Exercising Self Control while Trading

Friday, July 16th, 2010

Today is Friday, July 16th and we saw the first signs of that expected temporary pullback.

I mentioned on Tuesday that we could very well pull back for a few days before we see the expected bull surprise move to the upside. As we move down, I see us getting to 1050 minimum and possibly 1040 on the S&P. I can see possible weakness on Monday as a follow through maybe after an initial bounce up, but we came this far, so getting to 1050 minimum and maybe 1040 is very likely. As the market comes down, it is only going to add to the bearish stand that the market has set in motion. This looks like the perfect storm brewing. The extra time the market is taking, is a gift for those who want to prepare for something bigger. Well, that is how I see it all happening. If you disagree, that is OK with me.

I will point out the numbers I will be watching to confirm the move is underway. When I see a break of 1090 S&P futures, that should do it. The next important number to take out is just above that at 1096. When we see those two numbers broken to the upside, you are going to see the mother of short squeezes and general buying. I don’t know what the trigger will be but, I really believe it is going to take out that last high like no body’s business. Again, this is my own opinion on the matter and is not investment advise. I am just one guy with an opinion of where the market is going to go over the next several weeks. This is a very unpopular belief right now and I know that.

Last year I could see the market making this advance to where we are today and thought then, that this would be where the next big drop would come in at. That was then, March and April of 2009. Now that we have pushed the upper limits of this rally retracement, 1550 to 666 and back to upper middle range 1060 currently, but things have changed. If to many people take a one sided position, the market never likes to accommodate them so easily.

So, lets just let this market settle into this pullback, gain its footing, and see what it can do. The prove is always in the pudding and I like pudding.

Took today off, since yesterday was such a good day and have relatives visiting from out of town. We live in the a small mountain community in Northern California. The Marble Mountain Wilderness is basically in my back yard. Lots to do for the adventurous. Summer is going by so fast, hardly keep up with it.

We all need to rest and take breaks from trading, to help gain and keep perspective on everything. It is easy to get out of balance, especially when we are on a quest for greatness. The thing is, you can at times achieve more by stepping away from the ring, to get and keep a healthy perspective on your short term and long term goals.

I think it is healthy to be able to not trade at times and be OK with that. This business does have the ability to burn traders out, by over-trading and reaching for the upper limits of each possible day.

Self control is more than some nice word that sounds good when spoken here or there. Self control will make all the difference in the world to how long you stay alive to meet and reach your goals.

Most traders have desire and that is a good quality which can drive us to take action for the “pursuit of happiness”. Desire is good, but you will need more. For traders, self control while trading, will hold you back from jumping in to soon, before things come together. Self control while trading, will also help you from getting out to soon, when you have the perfect trending trade setup and move under way. Self control, is so important, it can not be overstated, or understated for that matter.

Over trading is another problem traders face when they loose control. Trading is something that we do and no one else can take the credit or blame for our success or defeat. The word “Self” says that this is in-fact true and the word control, would imply that you can handle it.

Is this the case for most day traders entering the market place each day?  I don’t think so.  For those who want to be apart of the very small percentage of profitable traders, you will need to have and find this control over your trading or you will just not last long in this venture.

We can exercise and find this control, by starting with our lives first. Some may not understand this, but every weakness we have as human beings will be exploited by the markets. The markets will ferrite out your personal weaknesses and try and bring you down. I am not making that up, its just the way it is. I have been at this a long time and know that to be true for me. I know I am not the only one, for sure. Human nature is such that this applies to everyone who enters the trading game.

This is where taking time off occasionally, especially in summer, to do those things that can help bring balance and perspective to the whole operation.

Being able to not trade, when you want too, is a way for me to exercise self control over my trading, especially when you did well for the week already. There are a lot of ways for me to do this as well and I am going to explore one more of them. Trading the early morning market open. That is a hard one for me. I usually stay up late and the open here come at 6:30 am. We will see how I do this coming week ?

Below, are a few stock charts showing there respective turning points in different time frames.  Anyone with question or inquiries, don’t hesitate to email me, I am here for those who need it.

Have a good weekend. Vince.

P.S. Click on the chart to open, click again to enlarge. If you click one more time, you will  get clearer view of the chart.

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