Posts Tagged ‘Trading Lesson’

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Trading Lesson in Today’s Post

Sunday, May 13th, 2012

This post is for Thursday and Friday’s session May 10th and May 11th.

A small trading lesson in today’s post below, but I will give a small recap first.  I will put up Thursday’s session first and then Friday. Both days had gains, with Thursday being pretty healthy. Friday I had the makings of a good trade short and did get in on it, but had to expectantly take off and just settle for a couple of ticks. That was the high of the day and the market just went straight down from there the rest of the session.

Overall I had a good week and nothing to complain about. I will take it one day at a time this coming week and not be anxious. I suggest we all try and stay cool and let your trade setups come to you, what ever they are. It is best not to hunting for a trade. If you relax and let it come to you, with no worries of missing a trade or move, you will likely see what you were waiting for and have a good trade.When you hunt for trades, you often will see things that are not there or find something that you have conjured up in your mind that fits and then try and look for the setup that matches that. DON’T DO THAT. It does not matter what your trading style is, I believe this to be good advise.

When traders are more relaxed, you have a better chance to see and think objectively and that can make all the difference in the world. This is not a race. If you push it, you only feel then more compelled to make that up and thus, you will be hunting yet again. “Relax”,  take a deep breath and wait until it is right. If you wait until it comes to you, many times you won’t have to sweat it out as it finishes the work it needs to put in before it goes in your direction.Good Trading to all.

Thursdays session;

Friday’s Session;

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Trading Lesson: How to Handle Trading Losses

Saturday, February 18th, 2012

Thursday and Friday, February 16th and 17th I saw two day’s of small losses, -2 points and -1 point.  I was just not in sync and it shows. Two small losses are better than large stop out days, of which is 4 S&P points per session max. If I am making poor decisions it is best to let the day go and wait it out. That is what I did and for that I am content. I can make that up this coming week if the market gives me an opportunity. I should not hunt for trades but need to remember to let them come to me. That is good advise for everyone as well.

When the market is acting well, that is the time to either trade a little heaver and or trade for additional points. It is a lot easier to make up any daily goal shortfall on a session that you are seeing things as they are and not as you want them to be.

This is a good lesson for me and for those working through their own trading method. I am happy with the fact that I did not overly try and get even or go ahead when it was not the time to do it. On Thursdays session, I had my chance with the last trade entry as it was a very good runner for 5-6 points. I was it at the right timing but somehow I talked myself out of the trade and even then went short when the method said not to do either one.

That is a clear sign that “I am the problem” and trying to trade through that, can do more damage. The best thing a trader can do it let it go and close it up, which I did. That is a victory in itself and I see it as such. Being down only 2 small points and not doing any additional damage is a very good thing. Losses happen to everyone, but its what you do with those losses and how you handle it.

Some traders can not handle loosing trades and loosing days, but we better learn to accept it. If we put our self worth as a trader into every trade and or every trading session, you will create a barrier for yourself that is almost impossible to overcome. For many, this is all they might need to do in order to adjust themselves towards profitability.

So much of this is tied to the mental aspect of trading and often overlooked, which is the reason why I bring it up. Dealing with losses is a difficult matter, but it need not be. The blockage comes from your own expectations of what you feel you should have gotten but did not. Thus, a let down and negative self worth as a trader can easily creep in.

If you don’t allow yourself to tie your performance in any one session to the big picture performance, than it is just a small loss that can be make up in another session or just kick it out and keep moving forward. This is one of the hardest things for traders to do, because they will get all to consumed with the fact that they make to many mistakes and thus create more mistakes.

That which you hate the most is what you invariably and overwhelmingly drawn to. Think about that for a moment….

It can very easily become a self fulfilling prophesy, as traders make the same mistakes over and over again. Why is that so?  Another good question and worth a moment of pause to reflect within.

The decision is often up to you, believe it or not. If you know how to trade and have an OK method to follow, many times it is just the negative self image a trader hold deep down within himself that he is not even aware of, that subconsciously pushes himself towards a self sabotage mentality.

I know many know exactly what I am talking about because it has happened to most traders across the board sometime in there trading career.

These things can be overcome but a strong will and determination to first address it and then take action as described is a start to turn things around. I tell you this because its true, even though it may hurt. Often, the truth does hurt, but when you embrace it, rather than run from it, you are taking the steps towards recovery and establishing a solid foundation.

That is one of the best ways I can describe it. Building a trading foundation that looks within just as much as the outward expression that is tied to your actions of pulling the trigger. You need both to be successful. Having one without the other will eventually express itself towards the least common denominator and that is towards ones weaknesses. The market is always looking for personal cracks in your trading armor. Seeing and exploiting your weaknesses where ever they may be. A lack of patients is very common and one that gets many traders over and over again.

Premature entries draws on fear of lost opportunities and causes entry before its time and so on. I could talk for days on all of this, because I to have lived it. Its learning how to deal with it and stay in control at all times and again this is found within.

I write this for myself just as much as I write this for those who follow me. This is my way also to remind myself of the many truths I have learned and a nice way for me to express it and help a few others with similar issues along the way.

With that in mind, I hope it has helped. I will post my trades below for the last two sessions and look forward to a better week.  Trade well, trade committed!  Vince

Friday’s Trades:

Thursday’s Trades:

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Valuable Trading Lesson

Tuesday, November 15th, 2011

Today is November 15th, 2011 and was a good trading day, not because of points made, but was a nice regrouping from yesterdays loss. The method is there to follow, and when I don’t follow it, it becomes a gamble on it working or not.

You could see in yesterdays posting, that I took some non method trades. The indicators are only a reflection of the method, but a good way of seeing if one is following it or not. If you are going off the reservation, it will be clear to see and when you are on track, that is also clear to see.

Today, I got back on track as it has been weeks of modest daily gains before this. Losses happen, but they don’t have to induced by lack of patients, or lack of allowable trading time. If one does not have enough time to trade, it can be best to not trade. I need to remember that, as that was my downfall yesterday. I did not want to take the time to wait out the market to best get into position that would allow me to get the trading advantage on my side of the table and it cost me. It was just a few point loss on the day, but that is not the point. I could see I was off and for the fact of me stopping, I get an extra bonus for that and makes up for my mental short comings at least in my mind. Let me post today’s trades below before I get to far along.

Just three trades here, with the first one a 5 tick loss. That is really not a problem as it was an acceptable loss for the entry taken. You can see a reverse signal and that is my confirmation that a stop there was appropriate. The move was a last ditch effort by the market to take out the shorts before it actually does go down. My re-entry was spot on and I did not hesitate as the shorts were right in taking the market down.

It was all in the bigger picture to take the market down, so that it could then take it up higher in a big way as shown. I did miss that next wave up as I was doing a training video for my group as things were developing. I can honestly say, I missed the move as it just got past me. The secondary move higher, was caught as I could clearly see higher prices and did point that out in great detail in the training video I was just finishing up.

The market did move higher after my last exit and that is OK.  I don’t have to get it all and enjoy selling into strength a lot more than selling into weakness.

In a recap of the daily’s, we did get the second day of pull back early on as the market sold off in the night session and again just after the open, only to then recover and move higher on the session modestly.

The market is now in a position any time to make that next move. It could go either way and I won’t say it can not go down, but I do have a bullish bias and would not be surprised to see things resolved to the upside. We always have to remain open minded, which is what allowed me to see the huge reversal at the bottom of the market 6 weeks ago or so.

The same thinking will allow me to accept and see that the resolve could yet again be to the upside, to the complete and utter amazement of the masses and guru’s.  We need to learn to think for ourselves, to see for ourselves, and then trade for ourselves. If we become dependent on others to lend us insight and that means even me, we will not be helping ourselves long term. I think it is fine to get different opinions from others, but that should not be the only thing we do to see what we should be learning and calculating on our own.  If you just don’t know how to go about that, then that is a legitimate concern and there is no fault to bear.

To make trading progress, we need to learn and gather insight from the market as it relates to a proven methodology that will be consistent over time. Next is to not overlook what we are going to do to ensure that we have the ability to follow that trading method and execute it in a way that leaves us profitable.

To do that, we need to always work on ourselves and uncover any mental weakness and replace it with mental fortitude and determination. That can only come by facing the hard cold facts that traders don’t like to face the facts. Are you willing to see what your trading weaknesses are and do what ever you have to change that within you to get the desired goals you aspire to achieve?   Many would say, Yes; but the truth is they are not willing to face those issues and change. It is a lot easier to blame past trading troubles on the method, system, the market, or any other outside factor but ourselves.

In order to take your trading to a higher level, you need to look within. There you will most often find the answers that you seek. Yes, you need a solid trading method, and without it, you will be lost, but you also need everything I just mentioned above as well. I respect my readers enough to tell them the truth.

You may have a good enough trading method as you stand today and all that is needed is the inner strength to maintain control, to follow your personal trading plan as it relates to you.

I had a nice reminder from a member this evening of this simple fact and feel compelled to share that. We all need a personal trading plan within our trading method to succeed. Find yours and you could be on your way.

Trade well, trade committed, Vince

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Trading Lesson – What you Believe can make all the difference-

Sunday, December 19th, 2010

This post is for Friday’s sessions, December 17th, as we saw the market with no gain or loss in the major index’s.

Currently the Stock Market is flirting with new highs for the year as we saw a nice reversal off of Friday’s bottom. As mentioned a few days back, their is more room in this market if it wants to rally. The S&P has upward sloping resistance at around 1258 give or take. Currently we are at 1238.50 as of Fridays close. With that said, it looks like around 20 S&P points and or 200 Dow points to run into this overhead resistance.

Typically, the week before Christmas is a bullish time for stock overall, but the volume tends to dry up. Don’t look for high volume days this week, because a lot of traders will be taking this week off and I will likely be one of them. I will play it by ear as of Monday’s session. If I can get up early enough to put on a trade or two, I will if the market looks active. If I wait to long, the volume will dry up and that is no fun, waiting around for something to happen. Below is my one set of trades from Fridays session. Two entries, two exits, on one move, two points and done.

I will be traveling to the S.F. Bay Area this week, for a few days, so it is unlikely I will do much trading. Outside of that, this is a good time to do some evaluating of your goals and plans for the coming year. This is always a good time to start making plans for 2011. The volume will likely be back by then and starting the new year where we would like to see ourselves be is a good idea.

With that said, I was thinking of a few things the other day and shared them with my group. It started with a single word, “Believe”.  Let me share a small piece of what I sent out to my group the other day, as this is a pretty big issue in what ever method or trade style you hold to. You can apply this to how you trade or the way you see the market. If you have a good trading method, then this may be just one thing that is holding you up. If you need a good consistent trade method, then you could always contact me, but that is all besides the point. See if some of this can help you right now, where you are at. I hope it does.

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When trading, you need to quiet yourself down internally and just express onto the screen what you have learned. Sounds easy, but that can be harder than we to often make it. If their are doubts in your mind that you may not find your way to profitability, you need to get rid of that right now. Do not allow for doubts and negativity to creep into your thinking. You have come so far and need to finish the race. Confidence is important, but we are not even talking about that emotion right now. First, lets start with “believe”. You need to do that first and get that deep down inside of you. The more of that one thought the trader gets into his or her mind, the more power you possess to actually make this happen.

In the dictionary, the word “believe” shows some of these meanings. See how you can apply these attributes to your own trading.
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Believe:  be·lieve  (b-lv)

v. be·lieved, be·liev·ing, be·lieves
v.tr.

1. To accept as true or real: Do you believe the news stories?
2. To credit with veracity: I believe you.
3. To expect or suppose; think: I believe they will arrive shortly.
v.intr.

1. To have firm faith, especially religious faith.
2. To have faith, confidence, or trust: I believe in your ability to solve the problem.
3. To have confidence in the truth or value of something: We believe in free speech.
4. To have an opinion; think: They have already left, I believe.

Idioms:

believe (one’s) ears

To trust what one has heard.

believe (one’s) eyes To trust what one has seen
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Their are so many good points here. To accept as true or real.  Do you accept as true or real what you have learned with this method?  If their are any doubts, then you know what you must do, change that.

Next, to expect;  Do you expect to find what you need in the session to get your points for the day?  If you don’t you need to start thinking that way, not negatively or with doubts.

Next one; To have faith, confidence, or trust, I believe in my ability to solve the problem. Do you have faith in your ability to solve the problems that come up as the trading day is trying to derail you and your emotions?  If you don’t, you need to find some, because you need this, all of this in your trading.

Next on the list; To trust what one has heard. Do you trust that what you have seen and heard with this trading method?

Next;  Believe (one’s) eyes, to trust what one has seen. Do you believe with your eyes the things that you have seen and how it can be harnessed to give the ambitious trader a few points a day?  If you don’t you should, because this works.

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The word “believe” is a power word if it is harnessed properly. If you have doubts, you are going to have problems. You need to get to the place where you possess the real likelihood of overcoming anything that is holding you back. If it is a lack of knowledge, you need to do something about that. If it is your own emotions, running wild, you need to settle down and re-evaluate. With every problem, their is a solution, but it all comes down to us. Are we willing and able to meet the challenge. For some, the cost is too great and for others, they only need a little structure and guidance to help them stay straight. Either way, only you know you need. Take the time with coming weeks to evaluate where you are and where you want to go. Your strengths and your weaknesses. Taking action is always better then just sitting on our hands hoping for something to change. We must make it change.

I wish everyone a great Holiday Session coming up. Enjoy time with your family, and keep a healthy perceptive on everything.

Good Trading to all. Vince

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Trading Lesson Today ! “Thinking Your Way to Succuss”

Wednesday, December 9th, 2009

Today is Wednesday December 9th and the markets get back half of what they lost from yesterday.

It was a pretty interesting day in that the market showed weakness early on, followed by strength, followed by weakness and finally strength into the close. Do you know what pattern was formed in todays trading?  Take a look and think about it.

I call it a “W” pattern and if you look closely you will see it pretty clearly. The market is struggling to give up ground, trying to hold above 1085, past support. I can see the bounce I mentioned from yesterdays post coming in at this level instead of the 1080 level I previously mentioned (trend-line support), but we will still need to see if todays late rally has any follow through to it and by how much. There is room for a continued move up, if the short-term momentum stays intact with this bounce, but how the market reacts when its done is going to say a lot.

It has been three weeks of sideways action and long-term position players can get chopped up inside these big swings. You have to have deep pockets to remain inside this range. The pressure cooking continues to cook and the positions are built on both sides. Tomorrow I will post the sentiment numbers and we will see if there is any movement.

Today I will give you another thought-provoking day to help those traders identify any blockage they may be facing in their trading results. This is really important stuff and not something many traders think of, so that is why I am going to write about it here today.

Thinking your way to success, I imagine, is what you could call todays thoughts. Our mind is the organ of our thoughts. With it we think, know, remember, imagine and understand everything we see, it all begins with a thought.

Our thoughts determine whether we succeed or fail in life and in our trading. Put another way, the way we think determines the decisions we make. You could say that our mind is the steering wheel of our life and we are going to be governed by how we think. Our thought impulses are very powerful and are the sum total of how we are going to live and trade. The two go together, living and trading. You can try and separate them, but when it’s all said and done, you will see how you live and think about yourself will have a 100% reflection on your trading results. I know it is a little heavy, but do we want to be the best that we possibly can or are we looking for the easy way out. Unfortunately there is no easy way, trading successfully is not easy and is not natural for most people. You really need to work in all area’s to master it in as short of a period as possible, hopefully quick enough while your account is still alive.

Our decisions are a compilation of past experiences which come from thoughts. Who decides how you see or think about yourself ?  You do!   We are responsible for the way we think about ourselves, we have the choice, good or bad. We can think ourselves well or sick. I totally remember doing this when I was in grade school and wanting to stay home. I was fine, but acting, thinking, talking like a sick kid, to convince my mom so I could stay home from school, actually got me totally sick. I never forgot that and it was 40 years ago.

Don’t allow other people to think on your behalf, if you do, they will try and control you and often bring you down. All of this does get played out in our trading, I know, because I lived it and experienced it first hand. Often we allow other people’s negative thoughts and idea’s to decide for us subconsciously and it is possible for us to parrot there idea’s and adopt them as our own. Negative influences and idea’s are powerful and can bring us down, the end result is your trading will suffer.

If you see yourself a certain way you are going to act it out. Our attitudes and our actions are a product of our thoughts. If you see yourself as a struggling trader, who never seems to be able to get it right, that is exactly what you will see as your results. Self sabotage often come from this type of thinking.

The best news is we have the privilege of choosing how we see ourselves. When you have and think of a very definite goal, mixed with a burning desire to achieve that and you mix that with persistance and you are willing to work at it and (lastly for me and others who think like-minded) ask for God’s help, you will be able to accomplish your goal no doubt. This is not a formula, but it is what works. It is based on principles that have existed from the beginning of time.

This is not new age thinking or mind over matter, it is what it is. I did not come up with this myself and as I said, it has been around forever, literally.  The apostle Paul, was quoted as saying “as a man thinks in his heart, so is he”. How you see yourself is going to be reflected in everything you do and that means trading as well, especially trading. This business is very emotional and so many traders success or failure, can be determined by how we see ourselves.

Again, I can only really talk about this because I have lived it all, to the last detail and my results were and are a reflection of the way I saw and currently see things.

Once you have a solid approach to trading and you know how to do what needs to get done in order to capture your gains, every trader needs to work on these hidden things like I talk about in today’s post. It can make all the difference in the world. This is in my opinion one of the biggest reasons traders who know how to trade, just can not book there gains and hold on to it. It can be buried in a negative self-image and that will get transferred to the markets and the market has a way to purge all excess. Don’t let that be you. See yourself as a winner.

Tomorrow part two, one simple exercise you can do to improve in this area, so you can achieve all your long-term goals. I hope you all enjoyed it.

 http://www.screencast.com/t/MDM2MGZjZ

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Do you have a Daily Trading Loss Limit ?

Wednesday, December 2nd, 2009

Today is Tuesday December 1st, and the market is showing strength.

This is a good example of the lesson I talked about a couple of weeks ago. Stay open-minded and let the market work.

I have been saying for the past 3 sessions,  that the market needed to stay above the 1085 level on a closing basis to stay alive and so far, through all the news good and bad it has. I would rather see it that way, because it is a barometer of future growth in the economy and the job picture. The market does not listen to me, so it really does not matter what I or anyone else wants, but is a collection of mass emotions reflecting the economic standing of our country.

With the new month now here, the monthly chart as far as my work is concerned has just turned up finally, the weekly charts are up, the daily charts are up and the 120 minute chart just turned back up today. So the monthly, weekly, daily, and 2 hour bar chart are now all up. That being said, be careful, but it is looking like market wants to break out. We have been here about 5 times now and every time it fails. If it can’t go down, it may just be building for a break out up. I was looking for it about a week ago and it did not come and am not making any more calls on major direction because it is all to conditional right now. The only thing I know is that if the support at 1085 gets broken, that will spell trouble and we will have lost momentum and lower prices may be inevitable. That has not happened yet, so we are really still good to go as of now. As I have said, things change fast, so be on your toes if daily price moves are that important to you.

Yesterday, in the night trading we broke above the 1101 resistance pretty easily and continued higher today to close to the high of the day, a good sign at 11o9. It is going to be pretty significant if this market breaks out to the upside. We will just wait and see how it all shapes up, but stay open-minded and let’s have the market decide for us, it’s easier that way. If it does break derisively up, a short covering rally will add fuel to the fire, so the move can easily be explosive.

Today I took a few trades, the first was for -1 point, +3 ticks, +13 ticks & +8 ticks on a split trade, followed by +1 tick and -1 tick.  I picked up my daily goal in a little more than an hour, but I was not to happy with how it went down. I talk about it in the video below.

It does go to show you, that if you do the right thing, the right things will happen. To me, the most important thing is to trade correctly and not so much about the money. If you trade correctly and follow your trading model, over time, you will come out on top, if you have a good formula, method, system or what ever or how ever you trade. If you take “Non-Method” trades, that actually work out for you, it can be to your overall detriment.

Successful trading should really be pretty boring. You keep doing the same thing over and over again. You also keep getting the same boring results week after week, month after month. That is just what the “Doctor Ordered”. If you do the wrong thing and get the right results, it can build negative reinforcement and create bad habits that you will soon be forced to deal with and break.  So the moral of the story is, stay with your trading plan and only take trades that meet your criteria.

Yesterday I was talking about having a limit on your losses. Have you given that some thought as of yet. Every trader trades differently and rarely do you find traders that trade exactly the same. That being said, if you trade the S&P’s and carry a larger stop, say 2 or 3 points, you will need to have targets that are at least close to that if not much more. That is not me, but it could be you and you may be successful at it?  The other thing with that is you will have to be more selective in the process and you may only find 2 or 3 trades for the day that meets your criteria. So, you have to wait and sit for hours for your set up to develop. Question. Do you have the patience to do that? Do you have the time to do that? If you get antsy and take a less than desirable trade, you are now underwater by say 3 points and you only put on one trade. Can you see where this leads. A struggling trader who gets frustrated with his or her results.

These are the reason’s why I trade with small stops and work on precision entries. My target are often small as well, but I do have on average a minimum one to one Risk/Reward ratio on my smallest of trades and much higher on my larger ones. The other benefit is, you have so many more trades that can be taken, without waiting for hours at times for conditions to come together. Your wait is usually only minutes for the next potential method trade.

I will talk more about this tomorrow or very soon. Until then, see you next time.

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DAY TRADING LESSON TODAY, understanding time/tick charts!

Monday, November 23rd, 2009

Todays post is for Friday’s session, November 20th and the sell off slowed a bit, but still ended down slightly for the session. I did not trade today, traveling out-of-town and may wait until next week? We will see.

The momentum has swung to the downside, going into Thanksgiving week, where we typically see market strength. It will be interesting to see how the market handles this dichotomy. A word of caution, the volume is going to slow this week. It should be a little busy early on, say the first hour, but after that it will probably slow substantially. Each day will get slower until Wednesday’s close. Just from memory, the session during Thanksgiving week Wednesday, is usually a half day. Everyone should find out what the hours are for the week. Fridays session is usually normal hours, but you should look for yourself. If I have time tomorrow, I will look it up and post it for tomorrows session.

One more thing I will say, before I go to the next section is, the market sentiment did get more bullish by a few % and the bearishness dropped. Only 20% of professional stock market newsletter writers are bearish, that is not very many and does pose a problem for the bulls to continue higher. It had been at these lower levels but it dropped by over 5 % this week and is the lowest in recent memory. Only one in five believe the market is going to go down. Sounds like a minority position to me. All I advise is caution, be careful, keep stops on all of your long-term stock positions. You just never know what can happen with this market. Take is a day at a time. Currently the short-term momentum is down.

TRADING LESSON TODAY !

Today I will continue with a topic I touched on last week. Each day is usually different as far as price movements are concerned and the person who can feel the pulse of the market can get an edge on trading it.

Each day, the market expresses itself in different ways, those expressions come out exhibiting the struggles between both sides of the market, bullish or bearish. Usually one side will have the upper hand and prices will end the day in that direction. Along the way, the struggle will be shown when one looks into the micro moves of the market.

I feel, the best way to do this is by using tick data. Tick data is far different from using time data. With time data, the charts reveal the price movements, high, low and close for that specific amount of time. Many traders use 5 minute bar charts to trade the S&P. Far more traders use time charts over tick data. If I had to guess I would say at best it would be 80/20 but it may be more like 90/10. 

If you day trade the E-Mini markets, you may want to look into using this type of data. It is different and it may take some getting used to, but it offers much more advantages than disadvantages in my opinion. If you are looking to limit your exposure and risk, tick data, if used properly can do that for you.

You will get a much better look and feel for where you get in and out of the market. As volume increases, the bars will post more often and reflect the quicker pace of the market action. With more detail and information, you have the ability to make a more informed trading decision, thus putting the odds in effect, more in your favor.

As mentioned, you have the ability to limit your risk by identifying more defined pivot points, which in a way, could be classified as decision points. This does give you an advantage by identifying where the tipping points could come in at. Not every pivot point is a decision point and you have to understand a lot more than this, but it is a start.

If you go back over some of your previous trades and look to where you placed your stops for some of those entries, you will find that you are probably in good company. I would bet that most of those stops had a significant amount of movement in the direction of your stop. The reason for that is most people place there stops in the same places and they don’t even realize that they are doing it. In some way, they know the exact spot they will through in the towel to get out along with everyone else, which causes the price to move substantially in that direction.

What if you reverse the process and do not yet place an order and look, think and ask yourself, if I was in this trade, where would I place my stop to get out?  That is probably the place for you to establish an initial position and ride the wave of everyone elses stop orders going off. 

Again, this is one way to help understand how price action works and how you can take advantage of it. Don’t fight it, go with it and everyone else. There loss is your gain. That is why and how, I am able to risk only 3 or 4 ticks on a trade and still have the odds about 80% on my side that the trade will produce some profit for me.

That is why and how I came up with the term, “SNIPER-DAY-TRADING”. If I can limit my risk to a very small amount and get the momentum on my side, so that the current natural rhythm of the market is to go in my direction, by stop orders and current position orders going off in my favor, that is all I can ask for.

Keeping the struggle down to a bare minimum, is what I enjoy. I don’t like fighting the market and if I lose the edge, I get out, immediately until a new edge presents itself to me.

I feel, this is hard to accomplish if not impossible with minute charts. So that is why I have built my trading models around this type of analysis. You may want to explore it further on your own to see if you can find or get the edge.

Good Trading, Vince !

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Mental Trading Lesson Today!

Wednesday, October 14th, 2009

Today is Tuesday, October 13th and below are the turning points for today’s session.

Just a brief note, we could be making new highs in tomorrows session, but remember to always look both ways, you would not want to get hit. That is what my mom always told me growing up. Little did she know that can be applied to day trading. Be careful not to form to strong of a market opinion. That could really kill you one day, no kidding aside.

Tomorrow’s session may be going higher, but I need to leave my mind open for any directional change that may take place. If I get stuck on only thinking in one direction, BAM, your dead, or seriously injured. Be careful and look at both sides of the market. In the long run, you will never become surprised about a move that came out of nowhere. I have heard of traders say, that was one of the key turning points in their career as a trader. When they started to see both side of the market, looked  at price action objectively without bias and  had a plan for both, should a counter trend reversal takes place. That is the right attitude and approach. Anything less than that, you are only going to get hurt, don’t let that happen.

The reason’s for this is really amazing. You would be so surprised at how powerful the mind is. The power of suggestion has the ability to blind you from all reality and that is the truth, I have lived it first hand. You will not see the obvious trades right in front of you, if you have told yourself, “this market is going up, I know it”.  Well, you could know a lot of things, but you may be wrong about this one, then what. Do you have the mental capacity to be aware of what exactly you are doing and take the appropriate steps to STOP and readjust yourself to the pure price action at hand. Well, if you don’t, it is only going to be a matter of time before you hand your account over to other traders who do have the ability to do just that.

Your trading system or method may be very good, but if you do not train yourself to relax, calm down, realize what you are doing and look at price action objectively with an open mind, you will have the tendency to BECOME  BLINDED by what you think you see. If you are the type of person who hates to be wrong and has trouble admitting it, boy are you going to get hurt. The trading markets have no mercy for traders like that. Do some searching, inside yourself and see if you have tendencies like this. If you do, you would be well served to address this before you continue your trading adventures. Failure to do so, will not bring you the recognition as a successful day trader that you aspire to become, but part of a statistic that adds new members to it ranks every day, ACCOUNT CLOSED.

http://www.screencast.com/t/kgQTfXzT7dQ                 Todays Turning Points

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Trading Lesson: Part Four

Saturday, June 27th, 2009

Today is Saturday and as I promised, I have a little more meat for you to chew on over the week-end. Give this some serious thought for those who are motivated to excellence and victory. I am sure this stuff will help many.

I will do a recap of what I have been discussing over the last few days. These are some of the most common reasons why traders fail to take the trading efforts to the next level. It can mean the difference to actually being profitable at a minimum, weekly, if not daily basis. With modest targets a solid methodology and the self discipline to follow through with your plan, a trader with the vision and will can overcome and make it to the other side. Do you believe that you are one of those who can, or are you one that only hopes he can one day? That is the question, how bad do you want it and are you willing to make changes and sacrifices along the way to get there?

Many would be traders want the money and time freedom that trading can offer, but are unwilling to address personal blockages that hold them back. You may say you will go the extra mile, but in reality it often times is only words. All one has to do is check your actions and attitudes, if they seem to overall be the same, it may be good intentions but no real action behind it, which will result in the same outcome, struggles and frustration. It is during these times that you have an opportunity to get going with the things that will turn your struggle around. Don’t look at it as failure, but as opportunity to overcome.

If you set a daily loss limit, like you should do as previously discussed, you are immediately taking the pressure off of you. The very worst that can happen to me today is “X” amount of dollar or point loss. I use double my daily goal as my stopping point. You must resolve in your mind that you will stop for the day and come back tomorrow with a fresh start and chip away at your goal for the day. The market will give you opportunities to get more in any one day, say double, triple or better your daily goal, but you do not know which days those are, so you trade with your daily goal only in mind until it is clear that today may be a great opportunity to pick up more and you make up easily your previous losses in the week.

It is really an excellent approach to systematically handle your trading venture. Identify in yourself NOW, do you have the resolve to stop trading for the day if you have hit this point. The risk if you don’t is a massive blow to your trading account, that most up and coming traders can not afford to absorb. So, “JUST SAY NO”. You need to go over it again and again in your mind that you are going to be responsible and do just as you say. Come back tomorrow and you will be fresh with a new perspective and approach.

Trading is not a sprint, it is a marathon and you need to pace yourself or you will get burnt out and fade right out of the picture, only having memories of “should of – could of – would of “. The time is now to create what you do not have and file it away, bring it up on demand when necessary. Again, if you are able to stop trading for the day after you hit a modest daily loss limit, you will have scored a HUGE VICTORY in your trading ventures.

You may say, “What is so victorious about walking away with a loosing day”. All the reason’s I mentioned above is why. You will prove to yourself that you can do this one thing and in doing so, know that if you find yourself in that position again, you will be able to take the appropriate actions as your plan calls for yet once again. This is going to establish confidence in yourself that you are not going to blow your account up and will remain in control at all times.

Going through the process and having one day where you are able to stop at this predefined point is going to possibly be a turning point for many in and of it self. This will be a big victory for many traders who struggle to limit the real bad days that seem to come out of nowhere. The market has a way of purging the system of weak traders who struggle with this lack of control, even if you have a solid trading plan and know what it is that you are doing. If you don’t limit your losses on bad days, you will never make it. The market has a way of only letting the cream rise to the top, don’t be one of the ones that settles to the bottom.

I got off on a whole new tangent there, but all of these ideas just came to me and felt I needed to roll with the subject for  while, before I run out of room for this posting.

I see that I have so much more I can say and will just go back over Friday’s posting and touch on that one point again. Look at both sides of the market and keep your biases to a minimum as far as short term direction.

This is so important. Don’t find yourself taking stop after stop and wonder what the heck is going on. If you take two stops in any one directional move, you are out of sync. If the market is going to break and you enter, you may be off on your timing or the market may push you out by a tick or so, but the direction is still right and you believe the move is ready, so you re-enter again and take your position, only to find out that you were wrong again and the market is just toying with you and many others to create doubt and take your capital.

Don’t give a third opportunity to do it again. Wait it out and give it some time, get up and doing something to get the blood flowing and re-access the situation after you see what is really happening. Often times the market will just go into a chop zone and start swinging high to low knocking out stops in both directions, step back after your second stop and wait it out. Once the dust clears you will see the real trade develop and it may be a 4 or 5 point gainer, easily making up for your earlier mishap, but you won’t be in that position if you don’t stop and wait it out. SELF DISCIPLINE, find it with-in yourself before you continue to trade and you will be glad you did.

Lastly, just think about this. When you cross the street at a busy intersection, you may be waiting for the light to turn green, we all do that, but when the light changes do you just start walking without looking hoping that others will obey the rules or do you look both ways before crossing. I always do, and you should too, if you value your life. Looking both ways says you see the cars coming in both directions and you know the risks. The same is true with trading. Waiting for the light to turn green would equate with just following indicators and going when it says to go. If you fail to look both ways you are taking a chance with your life and assuming all is well. Don’t take that chance, “ALWAYS LOOK AT BOTH SIDES OF THE MARKET AND KEEP AN OPEN MIND”.

Trade on, fellow travelers.

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Trading Lesson: Part Three

Saturday, June 27th, 2009

Today is Friday June 27th and we got that day like I suspected we would, consolidation.

Yesterday’s blog pointed out the fact that after a day like we had the previously, we often get a consolidation day. The downtrend has been confined to a new parallel channel which broke out yesterday, now we have been making a move back up to the middle of the range. A late rally brought us very close to a 50% retracement, but no staying power and it fell back.

One very interesting observation I saw today was that the S&P was making one move ahead of the Dow. After the S&P made a move, the Dow would come up behind it and duplicate the move the S&P just put in. The market since yesterday midday has been just moving sideways consolidating the earlier gains. It has formed a new parallel channel of which the S&P broke out of first late in the session, while the Dow just moved up to the top of the channel, but no break out like the S&P. From there it was one move behind.

When you see things like that it can help you get a glimpse into what is coming next. Next week is going to tell us a lot as far as which way the continued trend is likely to go. The support came in exactly where I thought it would on a parallel channel support from the dailies and has moved up 32 S&P points since then during the last 4 days as I originally called.

What to look for this week. It would appear the the move back to the middle is not yet complete, so I would first look for some follow through to the upside of 5 to 10 S&P points on the cash market. Once that is completed, that is where you are going to have to keep your eyes open. If the market stalls, what we have in place is a real nice pivot point for a continued move down. If that pivot point gets broken to the downside, you are going to see a lot more selling come in and lower prices.

On the other hand, if the market acts strong and can move past its mid level retracement point and push up close to the old highs, it will start to challenge and possibly break out over it. That is what we don’t know. We still have what looks like a “Head & Shoulders” formation brewing, but that can all be washed away by renewed strength back to top of the range.

The market sentiment numbers are not giving any real clues as they are currently in the neutral range. We have to remain open minded as far as direction is concerned. So keep what I said fresh if you are trying to figure out short term direction on the daily charts.

I will pick up where I left off on the training. These were the three things I was talking about and discussed the first two already. These are some of the biggest reasons traders fail to become profitable.

1)  Place trades out of fear of missing a large move

2) Reaching for trades, trying to make up previous losses

3) Create a mental directional position that makes it impossible to trade against when the market turns against you.

If you tell yourself that the market is going to go up, based on whatever it is that helps you determine that and you are strongly convinced, you will blind yourself to any future price action that says differently. Not a good idea. You will repeatedly get stopped out of your positions, because you will not allow yourself to see both sides of the market.

This is a real big one and not to be taken lightly, as are the other two. Your subconscious mind will not allow you to take a trade in the opposite direction because it will go against everything that you hold to be true, so you become blind to the real price action before you and repeatedly get stopped out, wondering what just happened. Only after the markets have closed and you look back, will you see what was happening and tell yourself, “I can’t believe that I did not see that”. It happens to traders all over the globe every day.

How do you avoid such foolishness. Answer:  Keep an open mind to direction and always tell yourself to look at both sides of the market. If the move is up and you are in it, fine. Look at the next two higher time frames (separated by a multiple of 4 or 5 – I use 4) and identify the status of their trends. If it is unclear, you can always trade out of the middle time frame and let the other two stand idle for a while until it becomes more clear.

At this point you need to trade the price action alone, not what you think is going to happen or what should happen. Forget about it. Trade what you see and not what you think. What until you see a solid base trade setup and move on it.

The other point is, if it is not clear, again, forget about it. Leave it alone, take a break, walk away, give it some time. Don’t allow yourself to take more than two stop outs on any one move, it is just not worth it. Let the action finish up and then you will see where it wanted to go after all, but you can learn from the price action and be better prepared upon the next directional move.

Now doesn’t all of that make sense?  Sure it does. The next question is going to be, do you have the self discipline to do just exactly that? Only you can answer that, but if you are not sure, you need to get sure, FOR SURE. You need to know yourself pretty well to answer these questions. If you have doubts, you need to start going over it in your head ahead of time. What are you going to do if you find yourself in this situation? Force yourself to answer the question and don’t leave the table until you at least have the answers.

Next, you need to find the will to follow through with your conclusions. One way is to play out the script in your head over and over. Repetition has a way of cementing the ideas into you, so that when you need  ”memory recall”, you access  the hard drive of your mind and bring it up. If you write out the process even better. That is like adding 4 gigs of ram to your system.

So much more to say, again not enough room here. I will recap these 3 training points, maybe over the weekend if I can slip it in, ready for Monday trading.

Have a great weekend !

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