Posts Tagged ‘trading career’

The Key To Living Your Day Trading Dreams !

Wednesday, February 3rd, 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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Trading Discipline, Part 2

Tuesday, April 14th, 2009

Today is Tuesday April 14th and another large gain for the day.

I had a nice return on my time invested today for solid gains. I will get right to it with the stats. I had 20 gains, 3 break even trades and 3 loses. One of the losses was rather large, with a double position and a little larger stop than I usually take. That was early on, but came right back to forge forward into new equity highs. I ended the day at + $3,000 with very little draw down except that early trade.

Very happy with the results overall. I missed the large swings in the early trading. That makes it a lot easier to get the hit and run trades that I like to put on. It is harder to trade a slow moving market because it keeps you in the trade longer. Any time you are in the actual trade, there are forces working against you, straight up. You cannot get away from adversity, but it is how you handle it. A very large part of success is between your ears and we all need to remember that. Every other trader across the globe is having to deal with the same issues on a daily basis. The difference is going to be, who is going to handle the pressure and come out on top?

Having targets and stops built in, is a way to cut down the adversity that takes place. Many people argue that if you have small targets, it is not enough to make up for your inevitable losses. That can be true, if you have more losses than you have gains. In addition, if you stay too long, you may lose your concentration and give back your hard earned equity. All things to remember, especially if you are fairly new to the game.

I have heard it said that when you start and open a trading account, don’t deposit too much into it, because you are going to lose it ALL. This is actually not too far off and it’s really true if you try and go it alone. The world is full of S&P day traders who think it won’t happen to them. That’s the kind of thing that happens to the other guys, but not me. Well, I hate to break the bad news to would be traders who think they have a handle on this, work on your discipline after you know how to trade and what your looking for.

If you have one without the other, you are doomed. You will need to exercise discipline, just like a group of muscles at the gym. If you zero in on that quality, you can improve it and get stronger. This may be a foreign idea to you, but it is totally necessary to your success.

Here are a couple of ideas. I stated before that your environment has an effect on your trading results and that is true. A clean, neat work space, that is organized and in place, makes and has an effect on you mentally. It can have a reflection to your inner world, which translates into clear thinking, patience, focus, etc, resulting in better trading performance.

Now just think about other elements in your life that can have a similar effect. I don’t mean to get personal, and maybe I can just talk about myself to make my point. My goal is to create a home life that is balanced and also in order. By tending to the things in my life that have real true meaning, it helps establish a foundation of stability which gives me a sense of well being. This may not be for everyone, although I feel what everyone needs to know is “Why are we here on this earth?”

I ask myself this question often and it reminds me of what is really important. It is a way of centering myself with the busy lifestyles we all tend to live. The answer to that question is going to be different for everyone and I cannot answer that but for myself only. I get a great deal of peace when I reflect on this question, which then helps me to become a better husband and father to my grown children. It also provides the balance I need in my life to help me compartmentalize my trading goals and pursuits. If I do not exercise balance in that area, I may devote too much time into trading and letting other responsibilities get away from me – the ones that really mean the most. So it all boils down to discipline and remaining in control of your emotions and leaving your trading EGO at the door.

As a trader we will have those trades that bring us nice returns, but always need to remember that this is not easy to master and you need to remain Humble. That too is a form of discipline, to hold yourself back from becoming emotional after a nice gain. It is normal to be excited, but you need to see it as just one trade in the path of many that will eventually take you where you really want to go. That may be spending more time with your family, vacations, helping your neighbor with a project. These are all the things that a successful trading career can give you.

Just remember it’s not all about “us”.  What can we do for others?  You may be surprised, but that attitude will have an effect on your trading results and all for the better. It may say, “I have enough in me to give some away, whatever it is.” With that approach, you open the door for additional resources to find their way into your life, i.e., a growing trading account that seems to always expand.

This is what I find to be true in my life, anyway. I hope it helps someone out there to better handle and exercise discipline in their trading ventures. More to come on this subject. It’s a big one.

http://www.screencast.com/t/72VlG1w2 Today’s equity chart

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Controlling Fear and Emotions while day trading !

Thursday, March 19th, 2009

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

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

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

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

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

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

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

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

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

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

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

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

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

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