Posts Tagged ‘trading method’

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Looking for Market Reversal

Wednesday, December 14th, 2011

Today is December 14th, 2011 as the short term selling continued today, but am looking for a market reversal in tomorrows session.

I could see the S&P futures moving on down to 1197 early on and think that we could see a significant bounce and eventual turn around into next week. This is just my opinion and I will be willing to trade long and or short depending on the days action. This call is mostly for the daily market as I think the selling will start to dry up at the above levels.

In today’s trading I took 3 trades and invested about 30 minutes into my trading before coming up with enough for a modest daily goal. I came into the first trade a touch late but the second attempt was right on.

I put back up the same screen shots as I normally do but did add one other thing into the picture. There are yet more things I build onto the screen and other time frames that are tied directly into each other to make a complete picture, which is not shown. Let me post the days trades and I will continue below.

I recently in a few previous posts, blanked all the indicators off the screen for a reason and that is to make the point that traders really need to trade the price as it moves on there screens. If you only rely on trade indicators you are not really making progress. We need to know why the market moves, not just that is does. Knowing the “why”, is the empowering part that is missing from many traders. If we only react to what we see as trade indicators signal long and short, we can to easily get whipped around the screen and feel out of touch and ultimately out of control. So, the key is learn and understand price. How it moves, how it reverses, when is the likely times for turning points and continuation points and do all of that while risking very little.

Being able to zero in on the low risk spots is so very important. Trading with a 3-5 point stop to make 2 points on a trade is totally out of the question. If you are doing that, you will have problems sooner or later. The key again is risking little for a high probability of making the same at a minimum or preferably 2 to  3 times your risk.

Question; Do you catch yourself saying, “I think the market is going up” but don’t really know why?  If you had to explain your reasons for the market move to go up to someone and or had to write it down, could you. If you can not do that, then you need work. You can not just say, “I think”, you have to know “why” it will and or should go up and have clear compelling reasons.

This kind of thinking takes place all the time and traders are pushed into trades that are far less than desirable. They then have to struggle to justify the position and then do worst damage by blinding themselves to everything that says it is going the other way.

All of this can be eliminated and or reduced a great deal if traders would not take trades solely based on trade indicators. Seeing how and why markets move and positioning themselves in those low risk area’s for gain with limited risk is where you want to be.

Don’t trade just to trade, trade with purpose and a clear understand of price action, the trade indicators could then confirm your decisions and may be a comfort, but don’t let it be a crutch from you learning what you need to know.

Do you want to have fun or make money? Many would say make money, but there action say a very different thing. Think about it. You can do both as long as you strive to make money first in a responsible manner, then that could be fun.

So, the moral of the story is, learn what you need to learn to trade safe and responsibly. What support and resistance is and how you can harness it to your advantage. Easier said than done for many, but having a complete trading method that is spelled out with rules and objectives will take a lot of the pressure off as you will be creating some structure to your approach. It takes time, for some a long time, and for others not as long and still others never get there. Do the hard thing, not the easy thing, that could be your first clue and assignment.

Good trading to all ! Vince

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What is Sniper Day Trading ?

Wednesday, December 14th, 2011

12-13-11; What is Sniper Day Trading?  Day Trading is when you initiate a trade during a single session and you exit all positions before the end of the day. Some of those trades can last last minutes to hours depending on your method or style of trading.

The Sniper part comes in when you are able to zero in on your entries to such a degree that your risk is very limited and reward well worth the risk taken. I minimum risk reward ration is 1:1 and often much better at 2 or 3:1 and higher.

Every trader comes into this with different objectives and it is rarely the same for any two traders. Some try to trade all day and take several trades throughout. Others are more selective and only trade a limited number of times. I have done both over time and find that I enjoy coming to the market when I am ready and look for opportunities that will take me to 2-4 points for the session. I call that “my daily goal”.  There are times that I will trade more and hit 3 or 4 times my daily goal and or higher. I don’t look for those days they just happen, usually about 2-3 times per month. That can make up for days I have a daily stop out, out which is right around 4 S&P points.

My choice for when I start to trade and for how long I trade and for how many points I will trade for, are all personal to me. It is different for everyone and there trading style should be apart of there personal trading plan. This is in addition to there trading method. That covers all the aspects of what a trade setup is and how it can be read. Where the trade is likely to go and how you plan on managing the trade once you get in it. That is all about the trading method.

The trading method is price action driven and that means, we always look to the price first as that is what always leads any trading indicator. The price is first so it only makes sense to learn how to read the price and that is all very possible.

We use more than one time frame and they fit inside each other actually acting as one chart. The first is a zoomed in view of the second which is larger as that brings the view to light in a way that can be exploited when you again know how to read the price.

I do have some charts that I trade with that have no indicators on them at all to keep a clean pure view what I need to see with my eyes apart from indicators. I do also have other screens that do have them up as it should only be a confirmation of what you are doing, but all for its own method reasons apart from any indicators and the influence it might bring. That is a very important point.

There is no substitute for learn how to trade this way. Doing so will empower and enable you to trade any Stock, Commodity, Forex or Index future you choose to.

It is a good practice to wait for the best entries, but I often as mentioned trade when I am ready and take what is available. That may not really be the best for the best results, but I figure I gain my freedom in its exchange. If I were to stalk a big trade move for hours before coming into it, I could make more, but I have to give up my time and have to commit more of my day to the screen. This is just a personal choice and I usually choose not to. I like the fact that I can come into the market for an hour or two, get what I am looking for and leave. That is not always that easy to do for many others as the market does tend to have an addictive element to it and that has to be acknowledged. Failing to accept that fact can lead to over-trading and trading fatigue which will weight down on your overall performance.

Getting impatient can lead you to make mistakes and I make my share of them. I made a bad trade today on entry and exit. Its not the norm but it happens. Fortunately I had three other nice trades, especially my last with increased size.

Every trader needs to have a solid trading method to follow and adhere to. You then need your own personal trading plan to complement your trading method which will encompass many things as mentioned above like trading style including time frames, when you plan to trade, how long you plan to trade and for how much etc.  Not yet mentioned, you need to know how and what you are going to do to feed your mind with the right stuff to keep you balanced, committed, disciplined and patient. This is what Sniper Day Trading focuses on in full and what has helped me in my trading. Again this method is price action driven with clearly defined rules for entry, exit, stop placement, etc. It has a very simple element to it and a much more advanced element to it as well which comes over time.

That’s all for now as I will post my days trades under this. I have taken all indicators off my screen shots as I want to drive this point home to those who may be following. I wish you all the best.

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Trade in the Now, Leave the Past Behind

Monday, December 12th, 2011

Today is Monday December 12th and I think when looking at the big picture, the market is marking time.

What I mean by that is time needs to pass for the ability to make higher prices. That is an unpopular position as the world looks like it turning upside down, but it is still the likely path for price at this time. At this time is the key phrase as the market refuses to crack. Many are expecting a crash and they have valid reasons, but I still think we have time. We could see prices in the daily market to make slightly lower prices, but think there is another rally behind this last one, we shall see.

In the smaller times frames of which I trade, that is where the rubber meets the road. We started off in the early session, leveled out mid day and put in a rally late in the session. I started the day late and was in the slow chop section. The move I had been showing to members in a training video is the move that did show up. In today’s case, the market had to mark a bit of time before it was ready for the advance.

Today’s trades below and some additional comments;

I took everything off the screen today as I want to make the point that we do not trade off of trade indicators. Those are only a reflection of the price which always comes first. Indicators can be misleading at times for those who don’t know how to read the price first.

What came first, the chicken or the egg. OK, maybe that may not be the best example, but the price always comes first, then the indicators reflect what the price is saying. If you know and learn how to read the price and that means entries and exit, and managing the stops, you will be able to really trade. You can trade anything in any time frame.

Using more than one time frame is something we do. There is a complete reason for doing so, as there are trends and moves inside of others. Every chart in its own time frame is saying something about where it is and where it is likely to be going. If you learn the launguage you will do well as long as you have the  trade discipline to follow it. Many traders have a great method, but lack the patients and trade discipline to act only when called on.

This is something every trader always has room to improve on. If traders would work on themselves in this area just as much as they do in learning an actual trading method, they would see the results they strive for. Success lies within each one of us and it is just waiting to be released. You need to direct your energy in every area of your life to a balanced approach so that when you arrive to the trading part, it is synergistic to every other area and in harmony.

There is a lot to what I just said, but this is some of the most difficult stuff for traders to first see, then accept and finally act upon. If you are looking to find your spot in the markets, first look within and be honest with where you are and your abilities. Then take the steps to move forward. If you keep making some kind of progress, you will always be moving towards your dreams. Just be sure that it does not get stuck in the dreaming phase, because that happens to everyone. The sooner you move past that, the sooner you will get where you want to go.   Trade in the now, leave the past behind.

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Market showing signs of Strength

Tuesday, December 6th, 2011

Today is Tuesday December 6th, 2011 and the market is showing signs of strength with three days of not wanting to give up any ground. That could still work for the bulls benefit as market rotation could be taking place. The weak hands have traded there positions to stronger hands and in that way, the market does not want to give up any ground, thus market rotation.

There sure is a lot of news out these days and why I don’t like following it to help me make market decisions. All the news is constantly being inserted into the market on a moment by moment basis, so it pays to follow the market as that is more of a pure play. There can be to many games played as institutional traders try and work the news to draw in participants only baiting them so they can sell it off.

The price action within the day is in my opinion the best way to not get duped. Let me state, that if you don’t know how to read the price, you will still get hung out to dry. It does take time to learn, but it can be learned if you know or have the blue prints. A builder trying to build a structure with no blueprints would be foolish. In the same way attempting to trade with no blueprints, plan, method is also foolish, but traders try it all the time.

You have to admire the initial burst of self confidence, but it is soon most often met with trading  reality that it is not easy. Trading can be simple, but it is rarely easy. That is often a lure for many. It does not look that hard, until you try it for real and see that it is not that easy. I say that to those who don’t have a trading method that works. This is not just a few idea’s of how or what you will do when or as it relates to your favorite indicators, but an actual written plan on how to view, interpret and then trade the market.  If you have a few years, you might be able to come up with one yourself, but otherwise, you will may need to look around.

Not all trading method are created equal, that is for sure. With that said, it should include things that are visual to help you see what is present already on the screen and it should be backed up with a solid consistent trading methodology. The second part is the one most have a problem with as it often does not exist. I feel, a trader needs to know why a trade is going to go up or down, not just that it is. If he knows why, then he can understand the process and know what to do about taking advantage of it the next time he see’s it coming. Without that knowledge, you are left powerless to forces you do not understand and that is not going to help you long term. You will be left twisting in the wind.

So, to recap, having a solid trading methodology to go along with all the tools is imperative. The tools alone will not make a good trader. There is just to many things going on within the market on a daily basis that you will not be able to keep up with it.

Knowledge is Power and those that have the knowledge have the power. I know we have all heard that before and it is in large part, very true. Get the knowledge and see the power.

In today’s trading, I was only able to catch the last few minutes only of today’s market for a few points. I came in late and missed the opportune entry, but it still had a few low risk points left in the move. A screen shot below with an accompanying sister chart.  Good trading to all.

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Market Rally +400 on Dow Jones

Wednesday, November 30th, 2011

Today is Wednesday November 30th, 2011 and we saw the market rally +400 on Dow Jones, with the bulk of it coming in the night session.

That kind of a move is very nice to see, but it did leave most traders with little left to trade as the range began to narrow. Currently the market is still open with about 2 hours to go so there could be better action for those afternoon traders.

I did restart my trading today, with just very modest gains. I took 4 trades with three of them profitable. The second trade took care of the first trade with a little extra as I did add on and the next two added to that for as mentioned a modest gain for the day. Just a little over an hour on trading which is OK.  I really don’t like trading for multiple hours at a time. I am sure I could make more points if I hang in there, but I could make mistakes and have to struggle to come back and so on. I am sure many know what I am talking about.

When market conditions are favorable, that is when it could be OK to stretch it out a little. When the range is narrow and movement shallow, there is no need to push it. Early on after the open, things were much better, but after the first 90 minutes many are just finishing there day. That happened to be the top in the market and just when I started, a little more tricky. My trades and the first hours of the market action below.

Trading in the S&P emini’s can be simple, but it is rarely easy. Above are just a few small scalp trades that netted me a little better than 2 points. I look for 2-4 points per session and can go weeks at a time hitting that. Every trader needs a plan and a solid method to follow. I show a limited version of my screen as the indicators are just a reflection of price and my trading method. The price is always first and a traders ability to read it is key. These custom trading indicators are a nice way to tell you if you are early, late or should not even consider taking a trade. The color change is often a possible get ready indication that a turning point may be coming. Conditions need to be met for a strong buy at those area’s as some trades are better than others.

Yesterday, I mentioned I would go over the daily market and what we could expect in the weeks to come. I know Europe is on a tipping point and the market has corrected from its initial blast off from the market lows of early October, which leaves us coming back up towards overhead resistance. There is a little upside before that resistance firms up, which will be the ultimate test. Yesterday I wanted to write about this upside resistance being tested as we are doing today, but chose to skip it.

The market sentiment has pulled into a neutral area which does leave room for more upside in the weeks ahead. With last weeks large pull back, the sentiment continued to climb. With the market advancing the last couple of days, that lead me to think the bullish bias would continue, but it back off a bit instead. That leads me to believe that some skepticism did come back and will be what is needed for the market to overtake the overhead resistance we are approaching. Currently the market sentiment for the bulls is in a neutral area.  All very interesting stuff.

That’s it for now. Good trading to all.

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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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Each Trading Day is New Beginning

Tuesday, November 8th, 2011

See bottom of the article for last weeks trades: I have been having computer virus issues on my desktop and lap tops and had to resort to a third computer. Hope to get back on track with daily postings very soon. Thanks for your patients.  Below is an article I did last week and could not get it posted until today. Hope you enjoy it. Vince

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As a trader, each day is a new beginning. If we have the ability to separate the past from the present and then remain neutral on into the future, than that is a great statement. That is usually not that easy for most people, no matter the profession, but is it possible?

The answer to that is a big “Yes”.  It may not be that way for most people and thus traders, but it still remains a very strong possibility for those who can find within them the ability they need in order to do just that.

This is internal strength of mind to follow through with what YOU KNOW to be true. We may think many things but when we know something is true, that is were conviction comes from and when it is found.

The reason that is so, you act without hesitation and act knowing that the likely future outcome will take place as foresaw. That is a gift for those who get that far, but its not going to automatically take you where you want to end up.

Getting to where you want to go as a trader takes a little more. You need to act on only that which you KNOW TO BE TRUE and just leave the rest for the speculators. That is then what they do, but not us. The stock market is not random as some would suggest. It is a living and breathing entity and is made up of the collective minds of millions of people across the entire globe.

If you were to catch a closer look inside and see what they were thinking and planing well in advance, would that not be worth the price of admission. Traders leave a trail behind them as they make there way through the arena. Those worthy of interest, will rise to the top of the list. Where some gather, more are drawn and then you have a fully invested market filled with a multitude of idea’s.  Those idea’s that rise to the top are the ones that control the field.

Trading is a very interesting world. It has a strong allure, but its rewards are reserved for those that can go beyond the masses. What does it take to arrive at a place that sets you apart from the rest of the world?  It takes the ability to see things not as they are, but as they will be. You need to be a bit of a visionary in that, seeing where the price is likely to go, based on very similar conditions from the past. The past will always lend insight into the future. Those who fail to learn from the past are doomed to repeat it. Where have we heard that line before?

This can all be summed up with what is called a trading method. If you don’t have one, you need one. You can not leave your action up to random events, as they will only influence you to and fro, leaving you lost and confused. If you are new to trading and have not found that place yet, it may be coming soon. No one gets untouched from the sting of the markets as you learn.

Maintaining mental control as it relates to ones trading plan is the key for continual trading profits. If you are not sure, and have doubts, don’t trade. You should practice longer and apply the continual trading lessons that are sure to come your way. In time, your exposure can give insight, but not having the mental fortitude to follow through will just as well leave you as helpless as the one who does not know.

Get with the mental side of the game and gird up yourself to be worthy of the challenge, as not doing so will only leave you morally defeated. It all starts with a thought. You have the power to control your mind and make it follow your lead. If you leave yourself open to every inviting suggestion, then you will be sunk.

We as humans are predictable just the same as successful traders who are collectively able to move the markets, we have the ability to think as the masses think and look to do the opposite. Those results are often very duplicatable and what successful traders look for, thus giving them the undeniable trading edge.

Look for the trading edge as a large part of it is within you.  Trade well, trade committed !

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Below is last weeks trades missed and today’s late trades, no trading yesterday.

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As a Trader, Thought and Performance are Equal

Wednesday, October 12th, 2011

Today is Wednesday October 12th, 2011 and we saw another continuation of the powerful rally taking Wall Street by storm.

We added another 10 points on the S&P and another 100 points plus on the Dow. We did end off the highs by about 19 S&P points as the high of the day was 1216, a long way off the low of seven sessions ago.

I can say, that I really don’t think that we will be seeing the recent lows any time soon as the bears in this market are getting killed and expect more of the same over the weeks to come.  Again, a very unpopular opinion right now as many overnight traders have been praying for a pull back so they can get out, but as mentioned yesterday, this is not one of those markets that you could expect normal, as we are currently far from that.

We may see some pull back any time here, but expect it to be short lived, as the power is to the upside. In the face of all that terrible news two weeks ago, many bought into it. Doing so, only sets traders up for big losses. You can not look at the obvious as the money is made in the unconventional thinking and wisdom.

In today’s trading I only took one trade for solid gains of plus +1.50 points/ 2.75 points/ and 6 points on the high of the last trade in the S&P emini’s. The trade below with other signals before and after.

Today, timing was perfect with only two ticks of heat after the trade. That is one way I measure myself, in seeing how much heat I take on after the trade. It is a balancing act, as being early has its benefits, but waiting and coming in after or with solid confirmation also has its own set of benefits.

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Let me pick up where I left off in giving some commentary from the last post and training. If you want to get the background of what I was saying, go the post before this and scroll down the page to the last half and I will pick it up from there.

To find and make a living from day trading or position trading, it is not easy. Common people with a desire of having gold and diamonds, will not easily find it in the earth if they go on a search for them. If it was easily found, it would not be that special, but it is because of its rarity that increases its value.

The same here is true as traders, with few finding there way to profitability on a regular basis. The thing that gets in the way are two things. The trading method one uses, and the traders ability to get it done, no more, no less.

The next portion of that quote, states that if a person or trader for this illustration, will alter his thoughts, then he can change his destiny by the law of cause and effect. It is a powerful paragraph and says so much, one could write several pages just on that point.

James Allen, then quotes a law, “the law of absolute”, which states, that the one who knocks and seeks will find what he is looking for, as he persists in doing do so. That is my paraphrase and all very true.

If you seek, not just looking on the outside, which is necessary as you do need a solid trading method to build upon, but the seeing really needs to go within a trader, to examine why he does what he does and when. The discovery is there, as to the difficulties that face traders across the globe.

The power of the mind is not to be overlooked, but to the contrary, it needs to be harnessed. If you leave it up to chance, you will become a victim and part of some statistic.

You need to go beyond your natural reaction and instinct and look to the unconventional and less popular. It is hard to do the right thing when trading, but it is very easy to pull the trigger all at the wrong time. Again, this is a point to be sure you have. Doing the right thing, is hard to do and most will not or do not do it.

So, why is so hard to do the right thing?  Why is it that most struggle? This is the big question and the solution is in the answer. Everyone has thoughts roaming around in there mind, some are good and some not so. One trader may be faced with financial pressures and trading is his answer to those problems, but what he forgot to factor in is his foundation of thought, as the more you push for it, the less likely you will obtain it.

Trading for riches, with money in mind can cloud your judgment. Striving for the silver bullet that will make all your other issues go away, often times will only add to the problem. The reason, you are focusing on the problem and not relaxed to the point of making sound judgments. You may not really be in a position of taking on the risk, so that causes you to hold back when you should take a solid trade and then later take the less desirable trades that end up in losses as frustration sets in.

It is in our thinking and mental foundation that the changes need to be made. It is hard to give a one size fits all answer as everyone is different and comes to the trading arena with different baggage. Take out the trash and keep it simple. Relax your mind from outside pressures and just do what you know to be right.

The last part of that paragraph it states, that one needs to not give up and keep going as “he that seekith findith and to the one that knockith, the door will be open”.

A trader needs to seek in only two area’s. One to find something that works and that he can build upon. That can teach him how to read price action apart from indicators but those indicators will confirm what he already knows to be true. The next is to look within for the COURAGE to follow that method and the ability to block out all distractions and change his or her daily routine to the point that supports mental strength and concentration to get the end results.

More in my next posting.

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As a Trader Thinks So Is He #3

Thursday, October 6th, 2011

Today is October 6th, 2011 as the expected rally on Wall Street continued, taking traders by surprise.

We did hit exactly the high of the outside resistance I mentioned in yesterdays post of S&P 1160 and stopped. I mentioned this number also early on today in a training session for members and showed them why.

Currently we are at the top outside resistance as I describe it and two things are next going to happen. The first one will exhibit a greater degree of bullishness but both are good. If we break over this current level with conviction the next level up is around another 30 S&P points at 1190. At that time a pull back to the current 1160 area will be in order on our confirmed way to higher prices. The next scenario is a pause likely tomorrow, with a range bound day and a pull back Monday and Tuesday to around the 1113 / 1120 area. Followed up by a move back up and over the the current 1160 area to again much higher prices.

Both of those moves are not what traders would have thought three trading days ago, but it exactly what I had in mind. I did say back then in part that the S&P should stay above the 1120 area and it got flushed out during the next trading day, only to zoom past all of those levels to the amazement of many.

Currently, for a confirmed move, it would be to soon to enter, but a move up off the current level would be the early entry move. A second chance on a back fill from the would be break will likely be offered so there is still time either way to get in on the coming move.

I know this may be a shock for many, but what I see currently is the same thing I see in a tick chart of very small size, no different. Again, it is to soon from that stand point to enter, so hold still and wait.

I don’t want to sound like I am giving investment advise, so all of this is just my opinion and everyone should make there own mind up as to future direction. This is my thoughts talking out loud, though very unpopular I feel in good company.

Above is the one trade I took from today for roughly 2 & 3 points. A very easy trade with virtually no draw down and no waiting for things to happen, just the way I like it. As I mentioned yesterday, we need three things to make this work for us, Time, Place, Energy.   Those are the things present in this trade and that is why it worked when it did. It was the right time, it was in the right place or (space) and it had the right amount of stored energy.

There is a reason and it is duplicatable for anyone who can follow, but that is not always that easy. You have to have the right mindset to follow through with what you know to be true and that will take me into where I left off yesterday.

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Two days ago, I started a series of trainings that will be continuous for the near future. The first one was laying the ground work stating that our souls, not spirit is made up of three things. (Mind, Will, Emotions) Those are the things that define us as who we are. We need to get into all of those areas to find out who we are as it relates to our trading and much of that leads us to the second post yesterday which was tied to our thinking.

“As a trader thinks, so is he” is the title of today’s message. This is a term taken from the Bible, Proverbs 23: 7 , which states, “as a man thinkith in his heart, so it he”.  A famous writer, James Allen, picked up on this and wrote a book nearly 100 years ago about the truths of that statement. It is not really a spiritual writing even though spiritual principals are highlighted, but filled with immeasurable truths based on just that one line.

As a man thinks, so is he; is the basic idea, which is all based on the fact that our thoughts determine the outcome of most everything we do. If you feel you are a failure, you will only see defeat. If you see yourself as always making the wrong the trading decisions, then your next trade will be a loss. It is just that simple. The way you see yourself is what you are going to get. Look past what was and look to what will be. There is the answer and the ideal you are seeking.

Let me quote a section from James Allen, “As A Man Thinkith”;

“Only by much search and mining are gold and diamonds obtained, and man can find every truth connected to his being, if he will dig deep into the mind of his soul. That he is the maker of his character, the molder of his life, and the builder of his destiny, he may unerringly prove, if he will watch, control and alter his thoughts, tracing their effect upon himself, upon others and upon his life and circumstances, linking cause and effect by patient practice and investigation. And utilizing his every experience, even the most trivial, everyday occurrence, as a means of obtaining that knowledge of himself, which is understanding, wisdom, power. In this direction, as in no other, is the law absolute that, “He that seeketh, findeth; and to him that knocketh it shall be opened.” For only by patients, practice, and ceaseless importunity can a man enter the door of knowledge”

This says a lot and can write a pages just on what was said above, but let me start and just continue tomorrow where I leave off.

Gold and diamonds are not easily found it take work to uncover those treasurers. It will take work to search within our souls how best to control our minds, our will and our emotions. Anything of value rarely comes easy but this is the necessary search that  James Allen is talking about.

You can find what it will take to follow your trading method, what ever that is for you, if you make a decision to do so. It all starts with a thought and followed up with a decision to follow that thought, and then the will to see it through. Your answers are within you, search for the truth even if it hurts, that is the beginning.

More to come in tomorrows post.

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Day Traders, It all Starts with a Thought

Wednesday, October 5th, 2011

Today is October 5th, 2011 as we continued to see follow through in the reversal from yesterdays big move.

In two days, we have retraced back up almost 2/3rds of the declines within the last 6 trading sessions. Current price on the Emini S&P 1135 as more work will need to be done to get things turned around.  For the short term, 1160, is the outside resistance number that will need to be challenged, which is 25 S&P points away. We will likely see some resistance between here and the high mentioned, but if and when we break over the 1160 number will can expect more behind this rally.

In today’s trading, I just took one trade and it is shown below with other potential turns as marked. It was quick, fast and with little struggle with only a tick or two of draw down after entry. That is just the way I like to see it go down and only happens when three things are present. You need to enter at the right time, the right place and with the right amount of energy behind you to move your position. When you have those three in place, you get the prefect trade.

There were plenty of other good trades before this and plenty of good ones after this, but I took the one when I started following the markets that lined up with those three elements mentioned. Only invested about 20 minutes total in following and trading this session.

Day Traders can trade all day long and some of them do, but if you want to come out on top and not have to put yourself through undue amounts of pressure, then taking a few trades and being done is fine. Not all days are this quick and not all days are the points on the light side, but some of them are and by choice most often.

Trading all day is a personal choice, it is just not mine. I want to enjoy the freedom that trading offers and get to do that often. Living in the mountains, I have plenty of recreation and things to do, but its not all about me. Having time to invest in other things and people is a gift I want to continue to expand on.

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Let me shift gears into what I was talking about yesterday and just try and pick it up from where I think I left off.

The thoughts of a day trader is one of the most important things that surround him as he builds up to the point of entering a position. If those thoughts are in line, then many times they will lend itself to much better results, but if those thoughts are off in any way, a different force will tend to take over.

That force will often go unnoticed until it is often to late. Being aware of these facts will better equip you to tackle the challenges of profitability.

So let me go back to my statement, our thoughts will determine our actions and results. That is a very true and real statement. Let me quote a famous author who wrote over 100 years ago in a book called, “As a Man Thinkith”.  This is the basis for much of what I want to talk about in the coming weeks. The full quote is, “As a Man Thinkith in his heart, so is he”.

The author is James Allen and he was and still is very popular. He wrote 20 different works and died at an early age of 48.

This quote is taken from the Bible, Proverbs 23:7 and is the basis for his work. The practical principals transcends religion as that is not anything of which this is about, but getting in harmony with you and your world.

The way you think about yourself has so much to do with the results that play out, it is somewhat self fulfilling. If you see yourself as a struggling trader who just can not seem to get anything right, then you will get exactly that in the end results. To expect something different would almost be odd. You can only rise to the level that which you see yourself becoming and if it is that of a struggling trader who can not get anything right and always seems to get stopped out on your trades, then you will find a way to only enter your trades to line up with getting stopped out.

At that point, many will blame the trading method, or system they are following and look for something else, when the thing they need to do is look within themselves and examine the deep seeded views they hold for themselves and how they see the challenges they currently face.

If you make a choice to change your thinking and do the things that will produce the results that line up with where you are going, then you will find it within yourself to wait and only enter the trade when you know you have the greatest chance to profit.

These statements are in its simplest form and it will take a lot more to uncover where I really want to take you, but this is the basis for what we want to accomplish in the next few weeks.

I will stop here, but pick up exactly where I left off tomorrow. This way, you will have time to first think of what was just said and how it applies to you, the trader that is trying to find his way through all of this.

Let me leave you with this, as a trader,  if you know what to do, when to do it and why you are doing it, then you have that part covered and need to focus on doing just that. Many know the things mentioned above very well, and can not for some reason still bring it together. There are forces that are working against you that you are not aware of and it is not your fault. That is just the way it is for most, so don’t feel like you are alone. There is help and over the next few weeks we will uncover many of those issues to help you recover to top trader status. It all starts with a thought.

Trade well, trade committed, Vince

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