Today is Monday May 10th and the market took investors for a ride back up.
That’s right, in a blog that I wrote but never got uploaded, (glitch), I said in that post that we had a very good chance to go yet higher as the retracement back up closed near the high of the day. That is always a good little clue as to the next move. Fridays market action settled us back into the range where today we took off. The actual number I saw us getting to initially was 1145.
Today we saw the market trade past my number by a little, which was good. As things have settled from today’s session with the S&P up close to 50 points and the Dow up over 400 points, where do we go from here?
This is only an observation as the market has with today’s run settled into a 62% retracement from top, bottom and now back to the middle at 62%. High 1217 low of this move 1056, 62% at current price) At 50 -62 %, a common retracement point for all trading instruments in all fractal time frames, but in the daily chart the S&P is now again looking at 62% retracement from the top.
It seems the market got excited about the prospects for a European bail out of 1 Trillion dollars. That is a lot of money. It may help in the short run, but I can’t see exactly how this is going to make all the problems in Europe go away. Many countries are in bad shape and this may just push off the “Day of Reckoning”. I do think that day is coming when the market won’t come back but just keep going in the direction of last Thursdays market. That day may be pushed off in the future for now.
It is a good thing that as a day trader, you start each day new, with no concerns or worry’s of previous positions. I could see the market pull back off of its run up initially in tomorrows session, but we will have to see how things turn out. I would not rule out a move all the way back up to the previous high, it is possible. At that point, I think you would have to be open minded about the possibility of a new downturn? I think the market sentiment will give us a very good clue as to what is the next move. I will be looking at the new numbers coming out this week to see how much market euphoria we were able to release. It is really hard to tell right now. One thing is for sure, if you know how to day trade, you can do very well. The opposite is true just the same. Here are some things to remember.
Don’t get greedy, and don’t be controlled by fear. Both of those emotions will cause you to place trades that you wish you could take back. Place trades only if they meet your criteria. You will stand to loose a lot more than trading capital if you allow yourself to be gripped by these two emotions. Be sure to never pull your stops, ever, for any reason. If you did not enter right, don’t try and compensate your position for a wider stop. you will often times only be making a bad thing worst. If you do this and it works out, it will only cause you to do it again thinking too that this time it will work out and you will loose more than than you bargained for. Your first loss is your best. If the markets are showing a much wider trading range, you may have to move your stop to a larger position, but this will all be done ahead of time, not as the trade is getting under way. I did this last week. I usually have only a 4 tick stop while trading the S&P and with the increased volatility I moved it up to 6 ticks. That was a preset position that gets entered every time I put on a position. I feel all traders should have the same. Don’t put on a position and then go and place your stop after that. Things move to fast at times and it only takes one time for a position to move against you by several points in a blink of eye, at which time you may be shocked. That shock can cause you to freeze and before you know it, you are reeling with a huge loss.
Lastly don’t trade in fear. Fear of lose and fear of missing a big move. Both can cause you to enter the market at times that do not reflect your trading plan. It is not worth it, you need to tell yourself that now. Be disciplined. If I can’t get filled in the area that my method or plan tells me to, then I need to let it go. Don’t look at all the money you could have had. That will only cause you to enter at the top or bottom only to be stopped out. You need the trading edge, if you don’t have it over other traders, they will have it over you. Which do you want to be? If you don’t have the edge or advantage, don’t put on the position. Much of this has to do with seeing the trade ahead of time. Do not get confused with seeing what you want to see. That will hurt you as well. Being and staying objective is the name of the game. Don’t make up your mind and say that you are sure this or that is going to happen. If conditions change and you do not stay open minded, you will become blind and start forcing trades where you have no business to do so.
Be humble and trade with confidence and exercise trading discipline. If you don’t have confidence, build on it, then it will come.
Below is a video of some of today’s trades, I called the last trade pretty nicely but I did not trade it. Overall a rough start with three small losses then some nice trades to end the day in the green.
Today is Tuesday April 20th and the market continued in its reaction rally up from Fridays sell-off.
I did not look at any news that may have drove the market today, but there seemed to be some good reason for the market to drive higher. The pure technical picture said to play the momentum as the market turned higher at 7:40 am West Coast. Just before that it had come under a little pressure as the night trading had follow through from yesterdays close. The move at 7:40 was a clear take off point. I was not trading at that time, but wish I was because the price action was dismal after 9 am (12 noon New York time). A slow grind for the next two hours as volume dried up and traders patience was tested. Unfortunately I was one of them. I did OK but it took forever. Why I say to myself do I even trade that stuff. I guess it is because I did not get prepared for the early open.
I came up a little short of my daily goal. I did basically have it, but gave it one last trade and that put me under. Only trading small but I have time and room to give myself a break after last weeks monster gains from Thursdays session.
To be successful, we most often have to be our own coaches and talk ourselves through difficult situations. All traders should analyze there “Self Talk” to see if it lines up with there trading plan and objectives. If you find yourself not sure what you are looking for, that is a sign that you need to practice more and become familiar with what is going to take you to your goals and objectives. You do not have the luxury to get it wrong. On the job training is very expensive. If you pay for a course or become self taught, it is still going to cost you. If you go the self taught way, it is going to take you a lot longer to learn what you will need to bring it all together. It is possible and it is a option. I am a product of being self taught. I never bought a program, course or any other trading vehicle to get me where I am today. I may have been able to speed that up if I had, but maybe not. All trading courses are not the same, and the ones that don’t teach you how to actually read price action, but be dependent on indicators or any other thing, is going to slow you down.
All traders need to learn how to read supply and demand just by looking at a chart and be crystal clear on what it is saying without any doubt. A trading course that falls short of accomplishing that is not the best route. There are times the market is right in between making up its mind on which direction it wants to go and that is when you need to pay special attention and listen to it.
Being a good trader, is knowing in advance what makes up good price structure and what does not. The stuff that looks like market noise, is what you leave alone. You don’t have to trade every twist and turn. Let the market set itself up to give you the trading edge . If you don’t have it, don’t try and trade it. You need to be at least 80% sure that if you put a trade on, that it is likely to go your way. If you don’t feel that you have that kind of a trading edge, leave it alone until you do. It is not worth it, for those who are trying to figure all of this out.
Often, the market is going to suck you in long, just when you think you got it, only to take you down. At those times, you can not afford or allow yourself to give up a lot of room. You will need to learn where the market is breaking away from you so that you can cut your loses short. If you don’t, you will be looking at 2-3 point loses in moments, which will be the next guys gains. Don’t do that.
Look at a chart and if you are a day trader, I would say a tick chart or volume chart. You will have the benefit of hindsight here, but this is good exercise for those who want to get better at timing. Forget about indicators and just look at the price bars. Since you have the benefit of looking at the chart after the fact, where do you think would be a reasonable spot to go long and short based on what you see. You probably will not want to place your marks at the very highs for short or the very lows for long, but within a reasonable margin, where would you like to have placed your order to capture a piece of the move. Don’t be greedy with the exercise, but be reasonable. Tomorrow I will give you an example of what I mean on the charts.
Ask yourself, how can I know the next time I see this set of price conditions that the movement will be similar? There is a way to do that. It can be done with stocks, for daily price bars, futures emini contract or any trading instrument in any time frame. This is one way of teaching yourself. It will take a lot of practice and you will have to invest a great deal of yourself to find the patterns that will bring it in.
If you can afford it and want to jump start your training, I have just the tools, framework and structure to point you in the right direction to speed up the process. If you want to continue to go it alone, I offer small tips and hint of what you can do here in my blog, but never really get into the technical nuts and bolt of my trading method. You will hear me talk a lot about market psychology and how to overcome one of our biggest obstacles, us. So stay tuned or drop me a line, I am hear to help for those who want it.
Today is Wednesday March 31st and the market bounced off some key support today, 1162, two times.
The S&P market is holding in there. It does not want to go down and not able to move up, for some time now. A big report is coming out on Friday, the unemployment numbers. The last report was the first decrease in unemployment since the recession started and a back to back positive reading is going to send a strong message to Wall Street. There are many traders and investors thinking only one way. That this market was going to go down. That is having tunnel vision and not usually a good idea. You need to stay open to direction and then interpret the price action to properly trade this market.
I know there are traders who are adamant about this market falling and they may be right, but it has made virtually a complete come back from the drop earlier in the year. If the unemployment numbers are good, it may spark a big rally just be ready either way.
The trend is up and holding, but five trading days ago, we traded at 1177 to the next days low of 1157 and we are currently at 1167, right in the middle. We have bounced up and down inside this range for the last 5 days. That is why yesterday I said that we will probably see inside action over the next day or two, “Containment”. This containment is only adding to the fuel that will be expelled once the market gives way outside of this consolidating range. I will show a chart of it tomorrow and explain a thing or two about it, so be sure to come back and get some insight as to the next big move.
In today’s trading I took 8 or 9 trades and did pretty well. I only had two small losses for a few ticks, the rest gains. I scaled out of the early trades and took an all in, all out approach for the last bunch. equity chart below.
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I have been talking in between various topic’s, like trading within your dominant trading personality. If you trade stocks and look at 15 bar charts, your pool or available trades are going to be limited, but your rewards are going to be much bigger than someone trading 5 or 1 minute bars. Your stops are going to automatically be larger based on your time frame, but everything about trading is still the same and is relative to the time frame you are trading.
That is because the stock market is fractal in nature. Some may not know what that means so I will explain. If you trade daily charts and follow a set trading method, you will have to wait for days as the bars line up to a desired formation or condition as per your method or system. Again, your rewards will be much greater than someone trading hourly bars, but your risk will be greater as well. The stock market shows consistent patterns inside of every time frame and can virtually be traded exactly the same in any time frame producing the same type of results, but with relative returns. I have an example of this fractal nature found in nature itself below.
This is the reason why it is important to trade within the time frame that best serves you and your personality and situation. With the leverage available through trading futures contracts, a trader does not have to trade for very large moves to make a good daily return, but he needs to be able to keep risks small and exploit market moves as they are given to him. Just as the price moves are relative to the time frame you trade, the returns are as well relative. By using leverage in the market you magnify your moves, positively and negatively or you could say, for you or against you.
It has been said, that the smaller the time frame you trade the harder it is. Now, why do you think that is? I think the reason is, traders are not conditioned enough to react as new patterns are presented to them. They are pron to make more mistakes and to over-trade. What can be done to change this. Practice and get the conditioning you need by knowing what to do and when to do it. Get the knowledge you need to exploit these price imbalances and live your dreams of trading for a living. There is rarely any way around paying your dues if you are going to attain this goal. Many forgo training and leave there results to a combination of idea’s, but never having a complete trading method, and road map to follow. If you are going to trade, you need knowledge and support.
If you become proactive in learning how to trade, you can trade stocks, commodities, forex or any trade-able investment instrument and speed up your learning by trading the smaller time frames. You will be forces to interpret the price action and follow what ever indicators you have if any, to gain the trading edge. After doing this, you will see that when you go back to higher time frame instruments, you will see, feel and know so much more than when you traded daily, hourly or 15 minute bar charts. In addition, you may find that this smaller time frame type trading is what you are best suited for all along. That is how it was for me, but it took years to figure it out on my own. I am just presenting the idea’s to those who have not thought about it.
Consider it a training boot camp as you get dozens of market conditions reads per session, capturing the trading edge.
Give it some thought, trade on and trade safe. Video of today’s turning points using tick charts, take a look.
http://www.screencast.com/t/NGJlNTJi Equity chart of today’s trades
Today is Wednesday March 24th and we had a little pull back in the major index’s, -5 points on the S&P, -52 on the Dow and -16 on the NASDAQ.
Today’s action was quite normal given the large run up over the past weeks. The market still has plenty of room to move sideways and rest. We saw an inside day for the S&P futures from yesterdays range. This will build a bit of pressure for Thursdays session. A break out above 1166 should bring us higher prices and a break below 1161 should produce lower prices. Those are pretty key area’s as of now going into tomorrows session. Currently we are right in the middle at 1164.50.
Today I am going to talk about managing risk. This is a question that comes up all the time and I will go over a few points here on the subject.
Risk management is essential to surviving the trading game. I have mentioned recently in my previous posts this last week that a 1 to 1 risk ratio is alright as long as you are right more than you are wrong, sounds pretty simple and it is. I know many traders trade only the same amount on every trade and if that works for them, I guess that is fine. But let me give you an alternative idea. If you are trading poorly and have gone back and forth with no progress, I would suggest to decrease your size if possible, until the best opportunities come along. Waiting the market out, for favorable price pattern opportunities is the best, but if you continue, it is better to decrease your size until you start to see the best opportunities come to you.
There are definitely better trade conditions on some days over others. On the days things do not seem clear, you are better off to trade very small and or wait. I recommend waiting until you are sure you have the edge. If you jump into the market and expect things to fall your way, when you have not done the work necessary to give yourself the trading edge, in this case, “Waiting”, which is a trade position, you can not expect to come out on top.
Waiting the market out, for the trading edge, is as I mentioned “a trade position”. It is a “no position” and that is just as important as putting on a position. Try and let that sink in just a bit. Often, traders will expect, hope, wish and want the conditions that they seek to make there trading goal for the day.
I have to watch this myself and I do, if it does not posses the qualities that gives me the edge, you have to wait. Most of the time if you are a scalper, looking to take a point or more from the S&P futures, you wont have to wait long. By waiting 10-20 minutes, especially in the morning open, you will get a whole new set of reads and new opportunities that will jump out at you or it should. If it doesn’t, I will use an over used term, but it applies, “Just say No”. You are not under any obligation to take a trade, after all, we are traders and we trade market not the other way around. The market does not make us trade, we trade against the market and other professionals.
If we are going to have money on the line, we need to be sure that we have the trading edge. Some traders may be saying, what is that and how do I get it? You need to have a model, method or approach that is consistent. Many struggle trying to find this and there are no easy answers. It needs to something that will always work and I would say based on price and its predictable movements. This is the best in my estimation. In addition, once you have that, you will need to get familiar with it and practice. The practice is going to bring the confidence you need to give you the results you are looking for.
If you are going to control your risk, you will have to look to exit the trade if you start to loose the advantage. That is what I do, if I don’t get the results I am looking for after entering a new position. Order placement is going to be the key. If you place your order to buy or sell and you overpay for that position, you run the risk of getting taken out, if you run a small stop. There is a way to do this and keep your risk down. Most traders are not able to find the “Sweet Spot”, in there order placement, but that is what is needed to make this work.
Trade selection and order placement are key components to risk management. Don’t look to trade every twist and turn. If you have a modest trading goal for the day and I think traders should, you only need to break this down into a few trades. If they are the right trades using method trade selection and you trade multiple contracts, you always have the option to scale out. I know for a fact that lots of traders do not like doing this. The reasoning, if I can get two points on 4 contracts, why not take it all instead of half. The point is, you don’t always know if you are going to see the 2 points in the first place. What started out as a nice gain turns into a loss and creates frustration. “Trade by exception, you will be glad you did”
No trading for me today, I was traveling to the S.F. bay area. I may continue with this line of reasoning in tomorrows post, so until then. Good Trading and be Safe ! GMR62JYPQ7EG
If you have 60 to 90 minutes a day, a computer, risk capital, the Internet, mental discipline and “Sniper Day Trading”, I believe you may have what it takes to attain financial and time freedom by Day Trading the E-Mini Futures.
Emini Course and Mentoring Program
In my Emini Trading Course, I show you how to utilize a “Sniper Trading” type approach using my tested method to earn at least 2 points per day from the markets. You could learn how to make consistent profits in good or bad markets. Our method focuses on high probability trading, delivering you your points for the day. Day trading for a living does not have to be hard, if you have the right method, plan, course of action and someone to explain it to you in a live market trading environment.
Price action, is driven by emotional buying and selling decisions for a variety of reasons, all of which are present in the current price at any given moment. Our job, is to find the turning points that exist in each session through precision market timing. These turning points are present every day the markets are open. Sniper Day trading will teach you to clearly spot where these turning points are, using a trading mastery type approach. These points show up like consistent “Sniper” shots on your trading screen and are clearly defined by using the custom tools I have created.
We strive to teach our students to learn price action apart from indicators or tools, but they are helpful to point out what may not be seen in the beginning. I am sure what I have in full is not being taught by anyone and is unique to me and the many years I have spent developing and now clearly defining the “Sniper Day Trading Method”. The signals generated by my method will produce the same signals to anyone who is following it, there is really no gray area, only which trades you decide to take and which you let go by.
Sniper Day Trading Method
We trade with tick data and use multiple time frames in timing our trade entries. I have three different styles I trade and bring them up as the price action dictates. One is a “Scalp Trading Method”, (T-1 Trade) that is very accurate in picking up 2,3 or 4 ticks on the S&P. My stops are such, that this approach averages a one to one risk/reward ratio, but enjoys a very high percentage “Win/Loss” ratio. This is bread and butter for me.
The second style enjoys the benefit of my “Precision Turning Points” model, (T-2 Trade) and is usually traded with multiple contracts. The first part is scaled out around 1 point, which quickly brings me to a no loose position and the second half is usually allowed to run. I have four incredible ways to get out, all of which act independently of each other, but are uncannily similar in their results.
The last, is a “Pyramid Trading Method”, that when conditions are right, you are able to keep your first risk small but scale into the trade, adding positions in the direction of the trend, but only at very low risk entry points, keeping your stops down to 1 S&P point. Each one of these methods are very clearly explained in my 80 page trading manual and followed up in the DVD training part of my course. They will also be gone over in our live trading sessions.
While only needing to pull 2 points after commission per day out of the market, (8 ticks) catching a few scalp trades or a T-2 trade, is really all you need to hit your daily goal. I believe in setting realistic goals, which increase your chances to meet them. By having a clear mind, a solid trading plan, with position sizing risk limits and rock solid money management, you come that much closer to trade your way to financial and time freedom.
Examples of two typical trading days back to back, applying the Sniper Day Trading Method. It only took about 20 minutes to get my daily goal plus on both of these days.
Mental Discipline and Trading Psychology. I have told you what I can offer to you, but this is not all you will need for success. I am convinced that my method, custom indicators and complete approach could make the aspiring trader profitable on a regular basis, but do you have what it takes? Trading psychology plays a huge roll in all traders, whether they know it or not. You have forces constantly working against you. Success is only going to become a reality to you, if you have the qualities needed to pull this off. What you are going to need is * Discipline * Patience * Ability to follow rules * Control your fears * Get a grip on personal greed. Frequently, I talk about this in my daily blog, because they are too often why traders fail to reach their goals.
I offer a lot of support in this area as well, if you are a struggling trader and want to change, I have the tools, method and know how to likely turn you around, so that you can create the consistent income, free up your time and fulfill your dreams in becoming a successful day trader.
Mental Exercises
In my program I address some of these issues in a series of “Mental Training Exercises” that I have put together. They are designed to get your mind thinking and believing that trading for a living and meeting your daily trading goal is normal, natural and the only outcome you will accept. The titles in the first series are; * Financial Freedom * Positive Risk Taking * Holding your concentration while trading * Achieving your Trading Goals. The titles in the second series are; * Overcoming Trading Obstacles * Controlling Emotions while Trading * Overcoming the Fear of Failure * Creating Hope & Success.
These I believe are very powerful and are in, “the first person” and will become personal to you. They are a form of Neuro-Linguistic programming that can take you farther and bring you closer to meeting your trading goals. They are, in written form and in audio CD and created by me. My plans are to continue to expand these in the future and make any new additions available to students who come on board, all at no extra charge. These training series are specific to traders and cover issues they face.
Solutions for traders, Sniper Day Trading
I realize that not everyone is born with all the qualities a successful trader will need, but I feel it can be learned if you want it bad enough. Ask yourself, how much do you want to become a consistent successful trader ? The answer to that is going to make all the difference in the world.
I know personally the things that hold traders back from bringing it all together and I know exactly what to do to help them change. I believe I can help the struggling trader as well as the trader who has never done this before.
I can set you on a course that is tailored to your experience level and walk you through everything needed and expected. The good part is, you won’t have to go it along. If you have any question, I can not only answer it, but help you apply it, to get the results you will need. Our daily goal is not to hard to hit, 2 points + per day. We can take a conservative approach to help you get that goal regularly.
If you are honest and know you need help and are willing to work hard and change what ever you have to, then I am sure I can help. Trading for a living is possible, but you need to do different, be different and think different from the majority of other traders. If you first commit to yourself these things, then I will commit to you, which will bring you one step closer to the success that we all strive for. Lastly, I want to assure anyone with doubts, my method, straight up works. The only question that remains is, will you move forward and decide to make it work for “YOU”.
Price Action Day Trading
“Price Action Day Trading”, is the key to your long term success. The markets do something everyday that is consistent since they began trading, over one hundred years ago. It exists in all time frames and gets played out on trading screens across the globe each day. It is important to understand and learn, “good price structure” and how it is built. That is what I teach and that is what students get when they partner with me at Sniper Day Trading. The key is learning what to do and when to do it and why. If you don’t know the answers to those questions you will eventually fall short. Many traders use indicators to help them and that is OK. I have them and use them also, but I do not base my trading decisions on the indicators. I base it on good price structure and trade setups that happen over and over, day after day. Traders and investors are very predictable, they base many of there trading decisions on emotion. Knowing slightly ahead, how they will react when certain prices are reached and breached, give us the trading edge we look for. With that said, the indicators magically line up with our trading decisions which can give us the added confidence to put our money on the line.
Below is a typical trading day where you will see the trading, “Turning Point”. I have stripped away everything from the screen except two things. There is much more, but I just want to show you that the indicators line up with our turning points. Which came first the chicken or the egg. The chicken and that is price. Price is always first and the indicators are second. That being said, the indicators can help traders see what is already on the trading screen. I hope this explanation helps clarify in the minds of seeking traders that what we have and do is real and works.
What You Get With Sniper Day Trading
My E-Mini Trading Manual (hard copy 80 full pages) with future updates. (very nicely done)
Complete DVD video training package in very nice hard cover locking case / extra: will include method applied to stock trading.
Method explained throughout the week, with full screen video and audio illustration in both the T-1 and T-2 screens, “Turning Points”. Very powerful part of ongoing training. (This service will be included ongoing all at no extra charge)
All custom chart settings to build your trading platform and help by me if needed to set it up.
All of my custom and modified indicators I created, that will unmistakably identify my “TURNING POINTS” for the T-1 and T-2 trades, when applied to the method.
Method checklist work-sheet ( for examining trades against method).
Laminated 8×11 “Method Overview”, to pin up over trading screen. Laminated 8×11 “Mental Exercise Overview” pin up over screen.
Mental Training Exercises: eight titles – audio CD and in written form. On-going future title releases no extra charge.
Leather bound “Trading Journal”, to help you keep your thoughts, progress, questions and answers.
I will personally work with each trader by screen sharing technology and voice of I.P. through SKYPE, in a live trading environment. After you go through the material, we will set appointments for our personal sessions together. We will apply live market data to the method and I will show you exactly what to do and how to do it. The manual and video’s will give you a head start, but working with me personally will undoubtedly bring it all together. I will spend as much time as needed with each trader who comes on board until he or she understands the complete trading method.
If in the future if you have questions, I will always be here to discuss them and go over your charts to help point you in the right direction. I am not just selling my trading method, but offering much more, mentoring and getting you profitable. Traders often face mental barriers that hold them back, but they do not know exactly what it is or why they consistently make the same mistakes over and over again. I can uncover the problems here, find the solutions and set you on your new course.
My goal is to get each trader that joins with Sniper Day Trading to book at least 2 points per day and gradually increasing contract size to a desired income goal. I will do my part as stated above, will you do yours?
Futures Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any e mini trading system or methodology is not necessarily indicative of future results.
Daytrading Involves High Risks and You Can Lose A Lot of Money.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under or over-compensated for the impact, if any, certain market factors, such as lack of liquidity. Simulated e mini trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Additional Cautions
There are no guarantees or certainties in trading. Reliability of trading signals for mechanical systems are in probabilities only. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during the methods off times (and all methods or systems have off times) – If you are looking for guarantees, trading is not for you. Most people lose trading. One of the reasons is that they are not consistent and lack discipline. A method of system can help you become consistent, BUT you have to stick to the method like a formula. The ability to be disciplined and control your emotions is even more important than any technical indicators a trader may use. Worrying about the money aspect of trades (which is an emotion) can contribute to and cause a trader to make errors. It is important to trade only with true risk capital. You can find further information at: www.sec.gov
Today is Tuesday, January 12th and the momentum has slowed the last two days.
Todays Index’s were down across the board, with the NASDAQ getting the worst, followed by the S&P -10 points and the Dow, -30 points. We are very close to the extended March 6th trend line support on these index’s. If that support breaks, it will be the first clue that we may have turned the corner on the rally. But still it remains intact and all is well.
As I had thought, today we saw the first signs of life in the futures market, with volume coming in at over 2 million contracts. Just what I was saying yesterday, that 2 million contracts traded in the emini futures market is considered good volume and we hit it today. It has been a long time, probably longer than a month with this kind of volume.
As day traders, we need volume to push the market around, otherwise it becomes more difficult for traders to make money. It is always easy for them lose money and with low volume, bingo, you are there.
Most traders do not know how to trade in shallow trading ranges and end up getting beat up pretty bad. But if you know how to Scalp Trade this market, taking a little out of the middle, you can survive in any kind of trading environment. That is not easy to do for most people and there will be those that say it is foolish to try. Probably because they were not able to make it work for them. Traders are doing this all across the globe and they are taking it from those who think they can.
Some people only scalp trade and that term can mean different things for different people. To me, taking 2,3 or 4 ticks, will qualify as a scalp. Others will call taking a 2-4 point profit on the S&P emini’s, a scalp. So, the term is used widely. If I can make a profit on these small trades while keeping my losses to an equal amount 1 to 1, I am doing OK, because my percentage is pretty high. You need to have 60% or better with the better being more like 75 and up.
When I trade, I look for both kinds of trades. If the market will give me an extended move, often I position myself to capture it. At times I take half off early which gives me the extra ability to ride the move out. It’s a good way to trade.
In my trading today, I did not do as well as I had wanted, but I had a few bigger trades to cover myself. I came in late in the day and missed some big moves short. Overall I think a came a little short of my daily goal because of commission, but close. I had 10 trades 5 gains 5 losses, but had a few trades for higher point returns. As I said I was off. Lack of concentration and I did not take a break from a training session I had with a student.
My timing and concentration was off, with the first two trades as loses. They were not good entries and it cost me. I could have avoided some of the lose by closing the trade out early as I normally would do once I start to lose the edge. To me and my method, the Trading Edge, is clearly defined and when I lose it, I need to get out, often avoiding my full stop out of 1 S&P point. I start out with a 1 point stop on all trades, but it almost instantly goes to three ticks when I get one tick of movement in my favor usually when I am in scalp mode.
Often times I am able to catch trades for several points as I did last Friday with a 4 and 5 point gain. It does depend on the price action and what the market gives you. If the markets clamed up and its daily trading range shrunk, many traders would suffer, because they only know how to trend trade. When its choppy, they often stay out, but only after they got burned by non directional non moving market. Being able to Snipe or pick off a few trades makes life a lot easier, providing that you can do it. You end up having the ability to pull a few points a day out of the market, no matter what kind of market you have.
I will make a few comments from where I left off yesterday, about needing all three components to become successful as a trader. It does not matter what you trade, these are things everyone in this business needs.
We all need to know how to trade, by following a methodology or system of some kind. Next you need trading discipline, as it is often talked about. The last thing is, you need to be aware of the forces that are naturally working against you. What forces are you talking about? Well, for starters, yourself. When trading, there is something called our human nature. That nature says many things about us and our ability to become profitable. It is to often, the unseen things that holds us back from realizing our dreams. ————————————————————————————————————————————————-Let me focus on one point and see how far we go. GREED. That is a human emotion that all of us are faced with. We did not learn it, it comes very natural for most of us. I believe, we need to unlearn it or decide ahead of time, by an active decision to not allow this emotion to take root in us. If we can, it will make so many things better not only for our trading endeavors, but in every other area of our lives, good stuff.
The only way we can ever address it, is if we are first aware of it. After that, what are we going to do, to get a handle on it? This emotion has been one of the leading causes for traders to blow up there accounts.
We need to be content with modest gains when we have them. The opposite of content is discontent and the twin brother of discontent is greed.
Unless you are content with your piece of the market, you will continue to strive for more. In trying to get more, you will lose what you have. Take control of your trading and your emotions. Trade with a purpose and a goal.
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