Posts Tagged ‘patterns’

Beginner’s Info

Thursday, February 25th, 2010

Before you start trading, it is very important that you know what it is that you are doing and what you are trading. It is similar to trading stocks but at the same time, very different. There is a definition of terms for those who need to know the basic language in the glossary.

We are trading the S&P 500 E-Mini Futures contract. This represents a shadow or a mirror of movement in the S&P 500 cash index. Traders and institutions across the globe buy and sell contracts with each other. For many, it is a hedge against a portfolio they own and sell contracts equal to the value of their portfolio as a form of insurance. Pension funds and large institutions do the same as well as mutual fund managers.

They are buying and selling protection in the form of contracts against the Index. To do this they need a very liquid pool of futures contracts to draw from and that is where the trader comes into the picture. He or she may not want to hedge their portfolio, but may want to speculate on the future direction of the market. Traders are an essential ingredient to offer the liquidity that the institutions need to quickly move into and out of the market.

I once heard a man ask a trader what he does for a living and his answer was, “I am an asset liquidity provider, how about you”. That statement is true. That is what we do.

Each contract traded represents 50 times the current value of the index. Lets say that the Index is 1000, a nice round number. Multiply 1000 x 50 = $ 50,000 and that is the value of one contract. If the index was trading at 1100 the value of the contract would be $ 55,000. You need to put up a deposit for the right to buy and hold a contract. If you hold the position over night, you will need about $ 5,000 deposit. If you close the position at the end of the trading session the margin will go down to about $ 1,250 for one contract.(day trade margin)

At Sniper Day Trading, we trade for a modest daily goal most days, between 2-4 points. The S&P 500 emini futures trades in ticks. There are 4 ticks that make up one point. Each tick is $12.50 and since there is 4 ticks to a point, one point is $50, 4 x $12.50= $50. If our daily goal is capture 2-4 points we are trading for $100-$200 dollars per contract traded. With an opening balance of $5,000 you could conceivably buy or sell 4 contract. So to use the example above, 4 contracts traded x 100 to 200 each contract, you would be making $400-800 per day.

We don’t recommend that traders start trading the maximum, but start at the smallest and work your way up. It is possible, averaging 2 points per day that in 4 weeks you could be trading at 4 contracts and bringing in the kind of money above. You can stay at that level or increase it over time. What ever you feel comfortable with. You may decide to go slower and reach that level in 2 or 3 months and that is OK. The main thing is averaging that 2 points per day over an extended period. It is very possible, people are doing that and more all over the country and you could to.

On the main page we talk a lot about discipline, patients, and focus, all essential things for reaching your goals. But first you need to know how to trade. I offer that in my course and if you decide to become part of the family, I will see to it that you understand my trading method and how to apply it.

When we put on a trade, we teach how to enter at just the right moment as the momentum will carry you higher or lower which ever way to you are trading.

Make Money as prices go up or down

Which brings me to my next point. You can make money in either direction, up or down. Often, prices go down a lot faster that they do going up. The principal works the same. When you put on a trade that is going up, we would call that a LONG TRADE and when you put on a trade that is going down, we call that a SHORT TRADE. We teach how to take these trades in a clear concise way. No gray area.

When we take a Long Trade, we Buy to Open / Sell to Close

When we take a Short Trade, we Sell to Open / Buy to Close

There is always someone on the other side of the trade to take the position, the price is the only thing that changes. If you sold the futures or “Shorted” the market at the S&P price of 1091 and you covered the trade by buying it back at a lower price at 1088, you just made a 3 point profit of $50 X 3 points = $ 150 dollars per contract traded.

Remember that each tick is broken up in quarters and 4 quarters make up 1 point. You can think of it like 4 quarters make a dollar, but in this case, it makes $50, because each tick is worth $12.50.

Commission cost for the transaction varies on the broker but the typical costs is about $2.00 to buy one contract and $2 to sell one contract. The complete transaction is called “round-turn”, buying, then selling.

TIME CHARTS

When building our charts on the screen, we use tick data. Tick data is different than time data. Trading in a one minute bar chart is the smallest increment of time that you can use. When using TICK CHARTS, you can create a much more detailed view of the trading history. It is through this trading history that we are able to draw up our entries in this much more detailed view. It allows us to enter at the exact point, Sniper Style, to hit our mark. Get in, Get out, Get done.

We teach precise entry and exit points using these tick charts and with the ongoing training you will always see the method applied to current data.

Above, is an example of a Candle Stick Chart. These are typical setups for us, as you can see the entries short and then long. The first trade was good for 1 to 2 points and the second good for the same or higher.

I usually follow bar charts that have an open, high, low and close to them, as shown above. Some people like using candle stick charts and that is a matter of preference. Candle charts have a wider body and make it a little easier to see the open, high, low and close, but using tick charts, often we need the screen room to see the complete patterns developing as well as one feature that I use to help visually see the change in direction. Often, this change in direction matches the other components of the method which helps to confirm our entry, LONG or SHORT.

Different Types of Orders

There are three main types of orders used in our style of trading. There are “Market Orders”, “Limit Orders” and “Stop Orders”. I use all three of them at different times for different reasons and explain it all in my course and mentoring program.

A market order, in our style of trading is typically used to close positions that are still open. Others may use them to start a position but we don’t often do that. It better serves us to use this order when we have an open position close to our stop loss and decide it is better to close the position and the protective stop at once. Both done with one click of the mouse at the same time.

A “Limit Order”, is an order to buy or sell at the specific price that we specify. See the example below. There is a blue column, the “Bid Size” and red column, the “Ask Size” This is where I place my orders. By clicking inside the blue column, price 1091.50, I am willing to buy at that price only. When contracts become available from the other side, the red column, my order is filled and I will have gone “Long the S&P emini futures market”. The opposite is true for “Selling Short”. This is an example of buying or selling with a “Limit Order”.

The last order type, “Stop Orders”, are usually used to protect a trader from incurring a greater loss than what he has predetermined ahead of time. For me, it is 1 point or less on all trades I put on. ($50 dollars per contract traded or less). That is the maximum loss and is set automatically at the time I click the order to buy. No need to do anything else. You can set predefined limit order targets and they can go up at the same time as your order entry as well. One click of the mouse and the rest of the entire process is complete. You can even stagger your “Limit Order Targets” if you trade more than one contract, say 1 point and 2 points. If the first one gets hit and filled, your stop loss will automatically adjust itself to only protect now the remaining half of your open position. Nothing else needs to be done, but just the one click order entry, period.

This is a very nice feature for those who may lack discipline in placing their stops and targets when and where they should after they enter the market. You can even use the one click feature just explained and use a “Trailing Stop Loss”. This will automatically move your protective Stop Loss up with say a rising market. You can set a trigger point, say its one point. When you reach that one point level you sell half your first position, every tick the market rises from there, your stop will rise by that much, keeping a 4 tick stop position. If the market had moved up 3 points quickly and came back 1 point, you would automatically sell your remaining position at 2 points, locking in your profit. This is because you preprogrammed it to do just that. This again is a great way to capture more profit in a fast moving market all automatically. The only thing that starts the process is just the one click of the mouse. Done. Very Cool. I, most often do it manually, but that is me. I can show you how to set this upin a blink of an eye and teach you to effectively use this feature.

Different Types Of Trading

There are different types of trading. The three most common, “Day Trading”, “Swing Trading” and “Position Trading”. Day Trading is what we do, because we never hold any position over night and make a few trades inside the daily session. Swing Trading, will carry positions over-night and hold those positions for several days. Position Trading, will hold similar trades but for several weeks or months.

Inside of Day Trading, there are several approaches as well. We look at three main tick charts, separated by small, medium and large time frames. Depending on the traders preference, if he or she has one, we can tailor our program to match your current trading style, or mirror what I am using for my trading. In our first meeting together, I will be able to help you discover what is the best time frame for you to start with. Naturally, I will show you how I set up my charts and fully explain the way that I trade. After that, we can go from there.

Scalp Trading

Scalp Trading, is often misunderstood. There is really no set definition that will clearly define it. It may mean one thing to someone and something else to another. That said, what I most often do is Scalp Trade the S&P 500 futures emini market. You can trade other markets like the Russell, the NASDAQ, or the Dow Jones. Each has an emini futures market that is liquid and very trade-able.

When the trading range is very narrow, scalping 2, 3 or 4 ticks, may be all the market safely gives you, without waiting around hours for a good trade setup. This is how I would define Scalp Trading.

With our base daily goal of 2 points or 8 ticks, you only really need say, 1 trade for 1 point and two trades for 3 ticks and that would also cover commissions and you are done for the day.

The setups are the same in the smallest time frame, as compared to the highest time frame, because the market is “Fractal” in nature. That means the same patterns and setups occur in all time frames across the board, showing a trading symmetry that is often seen in nature, below is an example of that.

With my trading approach, we are able to capture what the market is giving us. If the trading range is expanding and large swings are showing up, we can capture those moves for multiple point returns.

Scalp Trading, gives you the ability to save time in your trading, by getting in getting out and getting done with it and on to other things. I don’t trade all day, like many do. This style of trading offers the “Time Freedom” that many covet. Having the Trading Discipline to walk away after hitting our Day Trading Goal is key in keeping the struggle to a minimum.

Getting what you need from the market, is like shopping for fresh meat and produce at your local supermarket. If you try to stock up on too much, it will go bad and you will lose it all. I find the same true in trading, getting what you need for today is a better approach and produces trading discipline, controls greed and keeps the traders struggle manageable. It is a lot easier to get 2-4 point in a day verses 8-10 points in a day. When you are not able to reach this high trading goal, it will produce frustration and feelings of failure can creep in, derailing all of your efforts.

Controlling Fear and Greed

Many traders just starting out, soon discover that they have almost what seems like uncontrollable trading emotions. They find it difficult to stay focused and maintain control. Often, traders find themselves trading with their minds to focused on the money. That is a sure-fire way to slow your progress and often ruin it entirely.

Most traders have gone through this, but most don’t know how to break the bonds of these powerful emotions, Fear and Greed while Day Trading. The good news is, I do know and is very much apart of the Sniper Trading approach. These are things that I uncover and address to my students and take this part very seriously. Starting out, many are not even aware of these dangers, but that is my job to prepare you for any unforeseen problems that can come between you and your modest daily trading goal each day.

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Called the Stock Market Bottom!

Friday, March 13th, 2009

Today is Friday, March 13th and the major indexes are closing at their highs again.

On Monday of this week, I posted a bold prediction that the market was going to rally big the next day and that we were going to close at the high of the day as opposed to what we have been doing, selling off at the end of the day. In fact my head line post was, “That’s it, tomorrow we Rally”. Yesterday I made a short 5 minute video showing exactly how I came up with that market call and what it was that I was looking at – days before that market bottom. If you go to yesterday’s post and look at the bottom, you will see the link. It may be helpful for some to see how the market seems to have a predictable pattern, in the midst of all the ups and downs.

Technical Analysis is the study of price movements and their patterns. You can take data from the past and come up with probabilities for the future. By studying these moves of the past, you can take a reasonable amount of risk, for an acceptable reward. That is what I try to do when I trade. You cannot expect to get them all right – losses are a part of it, but you will expect to get your fair share which should put you into the green.

This week, the futures contract month of June for symbolESM09 has started trading. I switched over to it today. The volume has been split in the old contract and the new contract and by next week it should all be rolled over to the new month. These contracts are set for 3 months and then a new contract will come out called the “FRONT MONTH”.

I had a little trouble with the low volume today, because I started trading during the slowest time of the day, in addition to split contract volume. It did throw me off a little, since I trade on tick charts, which are all tied to volume. As the time started to get closer to 11:00 am, though, I got my footing. That is when traders come back from their long lunches on the east coast and get back to business. It is hard to trade on light volume, but if that is all I had, I feel I could easily adjust my style, which really would not be much of an adjustment, to capture my few points per day. Short targets with short stops, would do the trick nicely.

I know a lot of traders always look for the home run. It’s nice when you get one, but during their quest for it, they strike out repeatedly, hurting their batting average.  They only have one game, “Home Run”. I feel you have to be diversified in your approach, but if I had to pick only one, I would choose the very short stuff, singles and an occasional double. Your batting average would increase, but you may not get the notoriety of a Barry Bonds. Ask yourself what it is that you want – to be famous, or consistently hit singles and doubles? 

The comparison is related to pulling out a few points per day and depending on how many contracts you trade, that can easily mean $500 to $1,000 dollars per day. Most people could comfortably live on that, but the key is “per day”.   With the occasional daily loss as an aberration, daily profits are the norm. That is what I strive for each day. I expect to come out posting solid gains each day and have been doing it now for going on 7 weeks straight without a losing day.

If my daily goal is $1,000, then my daily loss limit is $2,000.  It all depends on how many contracts you’re trading. When I am trading up to 5 contracts, my daily loss limit should not go over $1,000 dollars because my minimum daily goal is $ 500 dollars. Two points per day x $250 dollars per point when trading 5 contracts, (each point for a single contract is $50 dollars, so 5 contracts is $250 per point) which is $500. That is before commission so I always have in my mind to hit a little over the two point mark. During the past 7 weeks, I have averaged about 3 times daily goal (that is a rough estimate), so $1,500 per day. I may go back and add them up and divide by the number of trading days to see the actual numbers, but I think it’s close. 

In today’s trading, I hit 75% profitable trades for about $ 1,500 dollars profit and in fact have 3 contracts still working with 4 1/2 points of unrealized gains in that trade. I rarely hold a position over night, much less over the weekend, but I had a small glitch in my Internet connection. I had planned to get out just before the close, but now have to wait until Sunday afternoon to place my stop.

Since I am in it, I will place a stop and give it a little room to see if we get follow through on Monday. Since we closed near the high again today, there is a real good chance the market is going to run come the start of the week. I did say in yesterday’s video recap of the Dow and S&P that we were going to get to the outside trend line that I drew on the chart video, which is about another 20 points on the S&P.  That still holds and now it is more likely we will pull up to it, with today’s market action leaning bullish for Monday’s open, we shall see.

That all for today, I hope everyone has a great week end.  If anyone has questions, please feel free to email me at vinnie@sniperdaytrading.com

 

http://www.screencast.com/t/P3kAllia             Some of today’s trades 5 minute video

http://www.screencast.com/t/tTFIJnlTsGc     Today’s Equity Chart

http://www.screencast.com/t/j9ftesjC               Screen Shot of last trade

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Wall Street Rally – Mission accomplished

Tuesday, March 10th, 2009

It is Tuesday March 10th and boy did we get a rally.

It was nice to see the market rally today, because yesterday I stuck my neck out with a bold market call. I stated that the market should move up nicely off the low end support and rally up at least +185 points plus. When you see patterns and formations thousands of times, you can come to expect repeatable patterns when the conditions are right. That is what I saw in yesterday’ s close, a market that was ripe for a move up.

Technical Analysis is the study of price action patterns combined with support and resistance. It takes a lot of screen time to be able to spot those patterns so that they are second nature to your eyes. Meaning it does not take long to be able to identify whether a pattern is bullish or bearish and have the confidence to be able to place a trade in that direction.

I feel blessed to have the amount of screen time that I do, because it has made me a better trader overall. There are so few people who can process the amount of information you need quick enough to trade the short term swings and, as I said, I feel fortunate to be able to do so. As time goes on, I would expect that anyone who comes into my trading group would have the benefit of years of market knowledge available to them. It is not easy to be consistent, it takes work, and I feel, if you are going to cut down the time it takes to learn how to trade, you will definitely need a mentor. It does not have to be me, but it can be if you choose.

I did not have a mentor and learned how to trade by myself over many years. If I had the benefit of a mentor years ago, I could have learned a lot faster. One of the reasons I didn’t was I could not find anyone I could trust and who I thought really understood how the market flows. So, I worked through it all by myself.

You can see through my videos and postings and consistent trading that I do know how the market works and how to capture daily profit from it. I will soon be gathering up a group of traders who want to learn my method of trading and be able to pull good money out of the market each day. If you are one of them, send me an email message and I will get back to you with more details. I will write about this again in the coming days.

Today’ s trading went very well. I had 10 trades with 8 gains and 2 losses. I split some of the exits up for some increased profits again today and was still trading small, but had very good profit of around $ 1,200 plus for the session.

Again some of my trades below.

http://www.screencast.com/t/LnlvBx6z             Today’s equity chart

http://www.screencast.com/t/ZckxwreoV        Screen shot early trades

http://www.screencast.com/t/9kx1aNNQxfu    Live -some of todays trades

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S&P 500 bounces off double bottom & Trading Lesson

Monday, February 23rd, 2009

It is Sunday February 22nd with a weekend report and review.

The S&P 500 bounced off the previous low set on November 20th last year. It did close up off of that low which is good. I have been hoping the overall market can hold on for a while before it continues down, but what I want does not matter to the markets. It would be wise, to learn from that point of view. When you trade, don’t try and impose your will on the markets, by your strong directional bias. The market does not care about what we think, it is going to do everything it can to fake you out and get you to establish a position in the wrong direction.

The S&P 500 is currently at the bottom end of it’s range. Usually, when that happens you will get a bounce off that bottom. At this point there is really no way of knowing how big a bounce it will be. I suspect that it would be enough to make up a bit of the drop that we have recently experienced the last week. This rally, if we get one,  is what I would call a retail rally. What I mean by retail, is this is usually not the smart experienced money. A double bottom is a very basic chart formation and it looks to me like this may hold over the next couple of days.  It could turn into something more significant, I hope, for the country’s sake.  The Dow actually broke down over 100 points below it’s November low. Sometimes that can be a sign that a short term rally will come. It broke just enough for investors and traders to bit. Now we shall see, if the market turns.

One interesting thing that many people do not know is that the Dow has recently had some changes in the stocks that make up the 30 companies in the index. It seems that any stock under 10 dollars per share has been taken out and replaced by other companies that have higher share prices. This will change the index values and not really give us a true representation of the market. Its like playing cards and you know you are going to loose with the hand that you have and so you just get a new set of cards and see if those work better for you. Seems a little shady and misleading to me. There has been a lot of that going on these days. On another day, I will have more to say about what is really going on in the markets and economy. Believe me, there is a lot more than meets the eye on this one. I have been following the stock market, politics and world events for over 25 years and there is a story here, but for another day.

                                                               TRADING LESSON: Trading Without Bias

When you establish a position in your mind, that the market should do this or that and when price action is saying something different, you are about to get burned. Fortunately my stops are small and my losses are thus small as well. When you have 2 or 3 stops in a row, you just need to stop. It does not matter what is going on, you are out of rhythm with the markets. Until you let a little time go by and focus on what is actually happening, only then will you begin to see the light. A little time is the best medicine for this scenario. If you still do not get it right, you need to stop for the day.

I have a rule, that if I am down more than my daily goal, I need to take a break, no matter what. After that break, when I come back if I go down in equity by double daily goal, that day’s trading is over, period. I came up to this point once this week and my next trade had to be right or I was going to have my first losing day in months. Fortunately, I waited until I found a high percentage trade and built my equity back up from there, one trade after another.  That bears repeating, one trade at a time.

Many people will try and make up negative equity by getting it back all at once. I do not advise this. If the patterns present themselves, then take the trade, but you may even want to decrease your size for a short time until you know you are back on track. Once you have yourself in tune with the markets again, you can then resume your normal trade size. I would throw in taking small breaks during your come back, to insure you are not getting overloaded or burnt out. A fresh mind can do wonders for your P&L.

This one rule can save many traders from blowing their account out in such a short amount of time. If you don’t stop, it then becomes compulsive negative behavior and that will ingrain in you very bad habits, which you may never break until the market has broken you.

If traders followed this one idea and have the trading discipline to adhere to it, the percentage of successful traders would go up by a wide margin. But human nature as it is, we know through studies of trader psychology that most people will not change. They will insist that they know how to trade these markets and they had just gotten a bad break here or there. Well, if it was not this day’s bad breaks or next week’s mishap, it will be something else. The market has a way of cleaning out all of the weak hands. Whatever their problems are, it will find them and exploit them, until it breaks you. That is the hard cold facts.

Now on the other hand, when you are aware of this force and plan and train for the days that the market is trying to take you down, you need to fight back. How do you do that, you may ask? Well, it first starts out by having a trading plan. You would be surprised how many people do not have one. Second, you will need a trading journal. This helps you record for yourself, if you are following your trading plan with what you are doing right and what you are doing wrong. If you can identify what you are doing wrong, then you can take steps to change and/or improve. When you are doing things right, that also is very important, because it is establishing in you consistent trading behavior that you will need to fall back on when things become difficult. You need to have a plum line, something that is constant, your trading plane.  Everyone’s trading style is different, because we are all different in our personalities.

Trading involves emotions, that is what brings most people to make a buying decision or not. The struggle of bulls and bears during the trading day is all about personal convictions for most people. We need not get caught up in the struggle, but knowing that it is going on is vital in positioning ourselves in front of that emotion. When we do that, we will be able to ride small waves of movement or (emotion) and capture profit from that. The markets have proven themselves to be consistent because people are creatures of habit. They seem to do the same things over and over again. We just put ourselves in the position to capitalize on that predictability.

More coming tomorrow

Vince

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Training series / First in a nine part series

Monday, February 9th, 2009

Hello, this post is for Monday, February 9 th, 2009 and today I will begin a 9 part sample training series on how to trade the S&P 500 E-Mini Futures for daily profit.

I know some of you missed Saturday’s training with conflicting schedules, but I have decided to give out some of my material to the readers of this blog. The information is, I feel, very valuable to the person who is trying to find a method that has the ability to take money out of the market every day.

All traders are different, in that you may find a group of traders who all use the same method, but they all use different entries and get different results. That being said, you can train yourself to react in a consistent fashion when you have repeatable patterns presented to you. The main idea is to walk away with a modest profit and do it again the next day and so on. It is a very attainable goal if you know what to do.

The first thing anyone who aspires to become a successful day trader is you need to know how to trade. That may sound a little simplistic, but you would be surprised at how many people do not trade with a plan but by the seat of their pants. I don’t mean to offend anyone out there who is able to trade this way, but whatever feels good or looks good usually does not produce consistent results.

There are so few people who are able to be successful at this. In a way, I guess that’s good because the returns would not be as large as they can be for some. For the person who makes a million dollars a year, the odds drop way down. One of the reasons for that is most people are not able to 1) trade profitably and consistently;  2) they cannot overcome the mental aspect of trading . You first need to know how, then you need to work on yourself in ways you may have never thought about before. Sounds like a lot of work and it is. Nothing worth while is ever easy, cheap and without cost.

Have you ever thought of the main reason for your trading pursuits?  One of the many benefits I find rewarding about living a trader’s lifestyle is you have the ability to make your own hours. For me, that is a high on my priority list. Not having to work for someone else is without a doubt high in the ranking. You know, the money is not as important for me as it may be for others, because I don’t need so much to meet my daily needs. The time freedom is probably the most valuable to me. The money just affords the opportunity to take advantage of that benefit. The answer to the question above is going to be different for everyone, but it is a good question, so maybe give it some thought.

This business is not for everyone and I will be the first one to tell you that. You need to have a desire and/or a passion to pursue this seriously because you will be going up against professional traders worldwide. You cannot take a casual approach and expect to consistently come out on top.  

Back to the training series. I have part one of a nine part series posted below. These are only 5 minute clips and they will continue the next day where I left off. The nine parts will last a total of 45 minutes and this represents just one complete trading day. I have moved up my chart to a 233 tick chart from what I usually trade, 100 tick.  I look at 3 different time frames during the day and make my final trading decision in the 100 tick. When you trade a higher time frame chart, two things happen. You usually need to account for a bigger stop, so your target needs to be higher as well to account for that, and the second thing is you have fewer trade setups.

The smallest time frame for me is the 100 tick as I have said and this is basically a scalping method by definition (taking small profits of a few ticks to a few points). I find that, it would be advantageous for someone to trade a separate account for a different style. Like trading for larger point runs based on the appropriate trade setup. With this style, I do like to gradually scale out of trades when I see nice chart patterns present themselves. Maybe taking off the first part at 1 to 2 points, then the second at 2 to 3 points and the rest, let it go to where ever the market says get out, that is easy to identify with my method.

I might add, there is another way I have handled nice trade setups and that is, I would identify the next biggest time frame up from the 100 (I usually go up in incriments of 4, for me that would be the 400 tick chart). When I see a nice pattern in the 400, that I know in the past has produced nice movement, I look to the 100 tick and go long with a standard order, lets just say 3 contracts. I will add another 3 at a new break out with my new stop in place and move up my old stop to the second add on spot. I will add again at a new break out treating it as a separate order with its own separate stop.  In a 10 point run you may be able to add 4 or 5 times safely without any additional risk other than your first order. Basically, I am pyramiding my position for maximum return without the risk. You stay within the larger trend which is pushing you higher and add in the smaller time frame for maximum return. You can do that if you are able to recognize patterns and be ready with your plan in place. Keep that in mind when you view the short video’s.

You can see the patterns more easily in a larger time frame. That is why I have gone up to the 233 tick chart. It does not matter the time frame, everything is always the same. There are a lot of ways to trade and no one can say that my way is the best way, because it may be the best way for you but different for others. I would say, I do like the 233 tick chart and I have traded it before. It is the maximum time frame I can go and still keep a small 5 tick stop, so it is a very good alternative to the 100 tick, which may be a little too fast for someone who is just starting out. This is still plenty fast and the trade setups are still fairly frequent. When I counted the trade triggers generated in the one day, there were 50 possible trades for this time frame (233 tick)

Again, the training is broken down into 9 segments of 5 minutes each, given to you one each day and represents the full trading day of  Thursday, February 5th, 2009.  By the way, Friday’s market action looks the same as Thursday’s and Wednesday’s looks the same as Friday’s, they all  more or less look the same, repeatable trading patterns that happen over and over again.

This is just a sample of what you can learn with me. If you decide to partner with me, you will be able to follow me in the morning for 30 to 60 minutes, capturing your daily goal. I think you will be nicely rewarded with new knowledge, experience and hopefully some extra cash to go along with it. 

Ask about my “Mentoring Special”, Learn While You Earn.

Have a great day!

Vince

http://www.screencast.com/t/WhGbWgD8Y                     Sample Training part  #1

http://www.screencast.com/t/44E4Uu492Qt                   Today’s equity chart

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

http://www.screencast.com/t/kGkg0mjTPe                     Add on trade/1 entry 3 exits

http://www.screencast.com/t/ut61mZJgZn                      Updated equity chart

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Good to get it right

Saturday, February 7th, 2009

It is Friday afternoon, February 6th and I am just thinking that it is nice to get it right.

The markets were up almost 3 % today across the board with an overwhelmingly large amount of the market participating. The depth of today’s move was impressive with 6 stocks going up for every one that went down.

Just after the open today, the market had a real nice trend line break, 4 points across the bottom, forming a declining wedge in short term downtrend, then, BOOM – IT HAPPENED! The market went up so fast like I had said it would, catching so many at their pain thresholds, having to cover in a hurry.

The Dow went up 170 points in less than 30 minutes, as well as all the other major indexes. It kept going up and closed near the high of the day, a positive for a follow through in tomorrow’s session. The daily chart is now positive, with the weekly trying to turn into positive territory, maybe next week. I have a chart of the two below. The weekly chart may turn positive, but I do not think the monthly is going to go positive for a long time yet.

As I was discussing yesterday’s daily price action, I could see that the pattern was a bullish one that I have literally seen thousands of times before. You can see the same patterns in small time frames giving you the same results, time and time again. Reading the markets is not a science, it is more of an art. You do use probabilities and pattern recognition to help you identify areas that have low risk and yield you positive returns, but you have to know what you are doing. The only way that happens, well you guessed it, practice. 

Make no mistake about it, trading is not that easy overall. If it were, there would be a lot more people making money at it and you don’t hear that very much these days.  Having said that, I would beg to differ with those people who say that the average guy out there cannot compete with the professional traders all over the world. I say you can, if you have what it takes. 

You may be asking yourself, what does it take then? And if I don’t have it, how can get it or find it?  That is a question every one needs to take seriously if you plan on being successful. You need to find out what it takes and are you willing to pay the price.  I had to ask myself that question a long time ago and my answer was, what ever it takes and how ever long it takes.

Let me say, I would not do anything unethical to advance myself for the sake of advancement of my goals, but barring that, you have to work hard. If you have a mentor or someone who can show you how to cut down the learning curve, I am all for that.  Without learning from someone who has already done it, you will add many years to becoming successful, something I never had.

First, there are the three things you need to find within yourself to be successful and they are, “Discipline , Focus and Patience”.  Those are the first things you must have. I will go into more depth with these at another time, but these are essential. These qualities are from within you and you may have to dig inside yourself to find out where you stand. There are mental exercises you can do to bring the best of those qualities out.

I say all of this because trading is not only about putting on a buy or sell order. It goes way beyond just trying  to make money. If you are not prepared for the mental side of trading, you will end up doing everything wrong and you won’t know why that is, even when you know better at times. You need a solid trading method and solid mental skills and be willing to be honest with yourself and not think more highly of your skills than you should.  The markets have a way of dealing with people like that and I would call it an old fashioned humbling.

We need to stay thankful for what we can take out of the market each day and resist the temptation of GREED. That word I just mentioned has killed a lot of good traders. The other word that goes with the last one is FEAR. Those two go hand in hand with each other. Again, these are emotions and they need to be controlled or they will control you. You first need to be aware of them to try and control them and that is why I am bringing it up. It takes a lot to become a consistent trader who can take money out of the markets on a regular basis and you just need to ask yourself, do you want to become one of those people.

You can make a lot of money when you can come to terms with the points mentioned above. To control greed, you can come up with a modest profit target that you would like to make each day. That right there, in its basic form, can do wonders for you. An example from today would be taking a small profit of 1 point on the S&P when I could have had 3 or 4 easily. If I let my emotions take over, I will be kicking myself saying why did I take my profits so quickly while I could have had a lot more. Next time I see that, I will go for it. When you talk like that to yourself, you are setting yourself up for something that may not be there and you may be wishing for it. You place the trade it moves up over 1 point and then backs off quickly stopping you out. Then you say, “why didn’t I take my 1 point target.”

It never ends with the mental battles you face unless you come to grips with sticking to your plan and taking what you need for the day, 2 or 3 points.  I guess this story fits well for me today, because I knew I was not going to trade a lot today. I just needed to get my daily goal and be done with it.

I had 4 trades today, +3 ticks, -2 ticks, +3 ticks and the last was split into two sells for +7 ticks and +4 ticks. This got me my minimum daily goal for the day of 2 points after commission in just a few minutes. If you follow my trading plan of gradually increasing your contract size as your profit increases, you don’t have to trade all day to make more money, just increase your size gradually.

I will be increasing my size next week to account for this myself. Also if you learn to pay yourself a little each week, you will come to see that you will be rewarded for your discipline, focus and patience. Starting with only 1 contract and following my plan as outlined, trading for only 2 points on S&P per day can make you all the money you could need to live a very comfortable life. For someone to make that kind of money, you would have to be a top executive, doctor, or other highly educated profession. The one thing that they don’t have is the time and freedom to enjoy what trading can give. In 30 to 60 minutes per day, it is possible to get a modest goal of 2 points and keep doing it.

That is one more reason why I like the way I trade. There are so many opportunities to pick that up in just a short time. If you didn’t get it, you stay with it until you do. The trades are posted below. I’m still doing an introduction to my method tomorrow for those interested. There is no charge. I will be starting at 8 am West Coast time and going to about 9:30.  Email me at vinnie@sniperdaytrading.com . Read my post from yesterday if you missed it and it will explain what to do.

Bye for now. 

Vince

http://www.screencast.com/t/LMfgyPXvu              Some of  today’s Live trades

http://www.screencast.com/t/gv4Xif7zBo              Today’s equity curve

http://www.screencast.com/t/AZAJpcM1              S&P daily chart update

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Keeping it simple, in a difficult environment

Monday, November 3rd, 2008

As I stated in my last post, you will see the same patterns every day, up and down. I am capturing small winning trades every day with positive results. You need to be able to open your mind up to the possibilities of taking trades in the down direction as well as the upside. We do not care in what direction the market moves, but only that is does.

It sure is doing that these days with some very large moves. Sometimes I catch these and other times its just a smaller move. The best part about my method is that there are many places and times to be able to get in. There are a lot of great signals in the early morning open. The first 30 minutes of the day is some of the best trading although it’s really good for most of the day, but it can be a little slow during the New York lunch time, 11 am to 1 pm eastern standard time (9 am to 11 am west coast time).

Look again at a few early morning trades I have posted under this article. Also, I have some nice screen shots of a classic trading chart pattern setup that I look for. There are many great trading chart patterns to look for and some of these will include “Flags, Pennants, Wedges, Triangles, Channels, Head & Shoulders” and more. You can learn to trade all of these with no indicators, but with just trendlines, as in the examples I have below. Learning to trade without indicators is really a great skill and I highly recomend people interested in trading take the time to explore it. I have all of this broken down in the training section of my website. For the time being, I will be posting some of this training on my blog. This is not meant to be a complete explanation, but just a small sample to give you an idea of what you can learn.

When trading futures as I do, you don’t have to trade all day because of the leverage involved. The idea is finding patterns that happen over and over and being able to capture a small piece of that move. The key is finding patterns that consistently repeat themselves so you can take advantage of them by positioning yourself in the right spot where small mini panics take place. I have said that before but it is key in understanding how the market works.

A basic way to think of this is, “Support & Resistance”.  Resistance is where there is a barrier where prices seem not able to advance. This is because there are no more buyers at that price and selling pressure ensues to take prices down brought on by profit taking. My method is such that we can easily spot where those turning points are. One of my custom indicators is set up so that a simple change in color more easily shows you that a shift in momentum is taking place. This is just a tool to help you see what is already present in price action. Just remember that “Price always rules”.

Tommorrow I will discuss Support and take it from there.

Vince

http://www.screencast.com/t/F3AdFKR1sE

http://www.screencast.com/t/HjUf8PKeEdI

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Just Look at the Patterns, the Same Every Single Day

Friday, October 31st, 2008

Take a look at the patterns below. Its the same every day, week, month and so on. Using my method and road map to financial freedom is possible.  The deciding factor is going to be you.  There is a famous line from a movie, and maybe some one knows which one it is, but the line goes like this, ” You are the problem.”

Sorry I don’t remember, but the idea is there, in that we are at times the problem.  As I have written in previous posts here and on my website, we are the ones that hold ourselves back. And that is reality. If you have “Focus, Patience and Discipline,” you can get your minimum goal of 2 points per day. If you do that, you will be set.

The next thing after that is “Time.” Time to let the compounding affect of your consistent goal of 2 points per day take its full effect. The trades are there, now it will be up to you to learn how the market works. So many people think they know and are rudely awakened by the fact that they are under water and start to panic. Its during this time that restraint is in order to refocus yourself and just chip away at the signals and you will be back.

Don’t ever think of how much money you leave on the board. That would be a form of greed and that is not a good thing. That thinking will sink you faster than a box of rocks thrown over the pier. Do you know what happens at that point? “Straight Dow baby. DON’T DO THAT”. This game is won in your mind only once you know how to trade. I can teach you how to trade and it will be up you to stay consistent with the method. People who follow my lead in my trading room will have the opportunity to hear and see my screen live. You will learn a lot this way as well as the online videos of live market action and all the other training that I give.

Have a good day.

Vince

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