Want to become a successful trader? Then it’s important to understand how your mind works. In trading, when something goes wrong and you lose money, nine times out of 10 it’s nobody’s fault but your own. Most of the time the breakdown occurs in how the trade is managed, since many trades do go into and out of the money during the course of their respective durations. Unless you just hit a bad trade that drops like a rock, there is at least (typically) some opportunity to take a profit along the way. In these cases, trade management is one of the most important factors in realizing a gain. Moreover, how you manage your emotions while managing any specific trade often plays a key role in determining the final outcome of a trade as well.
Many traders, especially those new to Wall Street, focus heavily on learning the market. In my view, however, becoming a successful daytrader has more to do with learning about yourself and less to do with learning about the market. Over the years I have been trading, I have seen many individuals try their hand at becoming traders. Some have been successful, while others have not. Some have given up and decided that they are simply not cut out to be traders, while others blow out, taking on too much risk, unable (or unwilling) to correct problems that keep them from becoming profitable over the long term. As most seasoned daytraders will tell you, learning to become a consistent, profitable trader is generally a long, expensive, and difficult road.
Continue reading Trader, Know Thyself By Ray Johns
This basic system can be traded profitably on a short-term basis. Some of the most basic systems can be the most effective means of making money in the futures markets. In this article I will demonstrate one of the simple systems that can be traded successfully on a daily basis. There are no complex calculations to determine entry and exit points nor indicator cross-overs to determine entry and exit points. If you can add two numbers and then divide them by 2, you can do the most difficult calculation involved in this system. All this system does is some near-term price comparison, placing a stop order to keep losses in control and determining the time to exit the trade with your (hopefully) profit or loss.
MY TRADING DAY
The basic philosophy behind this system is to latch onto a trend that is in place based on the first half or so of a trading day. As many markets have gone to 24 hours a day, it’s difficult to determine exactly what entails a day of trading. I like to divide things by who is awake and trading at any given time, at least those of us who live normal lives and don’t live in Chicago and trade Tokyo hours. And because I live in Chicago, I usually designate 6:00 am Central Time (CT) to 3:00 pm CT as my trading day.
Continue reading Short-Term Trend Trading By Russell Rhoads
Here’s how a popular pattern can present trading opportunities in a bear market. The year 2008 marked the beginning of one of the worst economic crises of our country’s history. But just like all other economic crises, it too will come to an end, and when it does, those who have prepared will profit in a big way. How? Most stock traders have either traded or at least heard of the cup-with-handle formation. It has long been recognized as one of the most useful technical patterns, and I have been fascinated by the versatility it possesses from the time I started using it.
Like other bullish patterns, however, it fails sharply when the markets turn bearish. Thus, I began my quest for an indicator that would perform in a bear market the same way that the cup-with-handle performs in a bull market. As a result, I developed the inverted cup-with-handle and was pleased at how these two indicators worked to offer some of the best trades available. The problem is trying to find these little nuggets in a timely manner.
Continue reading Low-Risk Trades Using Cup-With-Handle By Dale Glaspie
PATIENCE: Patience is a virtue, especially in the stock market. Acquire it if you can. You must have patience to wait for the right opportunity to come, and not be overanxious and get in too soon. Once you buy or sell a stock and it starts moving in your favor, you must have patience to hold it until there is a good reason or sufficient cause for closing the trade. Never close a trade just because you have a profit; do not become impatient and get out for no real reason. Every act, either in opening or closing a trade, must have a sound basic cause behind it. Hopes and fears must be eliminated. There is no use selling a stock because you fear it is going down, nor buying it because you hope it is going up. Look at your charts and see which way the trend points and follow it. If no definite trend is shown, use patience and wait.
Continue reading Essential Qualifications For Trading By W. D. Gann
This candlestick pattern projects the selloff. Candlestick signals are considered highly accurate because their graphic formations are produced by changes in investor sentiment. The information built into each indi-vidual signal becomes an even more powerful analytical tool when they are utilized for identifying candlestick patterns. The signals and patterns work just as effectively for identifying bullish price moves as well as bearish ones.
Candlestick signals also interpret what is occurring in investor sentiment. This combined information creates extensive insights into price movements. Not only that, these signals produce highly accurate trend reversal identifications. Each signal incorporates an immense amount of information.
Continue reading The Dumpling Top By Stephen W. Bigalow
This strategy has potential for double-digit returns with a large built-in hedge. Current market conditions have set up a unique opportunity to build a conservative portfolio that will profit even if the market falls by a certain percent, stays flat, or eventually rises over the remainder of the year. It goes without saying we have witnessed the most violent and dramatic market moves of the last 75 years of late. After falling a whopping 38.5% in 2008, the Standard & Poor’s 500 is already down another 21% in the first eight weeks of 2009. How does a traditional investor defend himself against this kind of market volatility and still have a chance of making money?
Continue reading Downside Protection With Double-Digit Returns By John Manley
For investors or traders to make important money-risking decisions, they must possess the ability to focus on the important tasks at hand. To focus, you must have a quiet place where only you, your rules, and the execution of an opportunity exist. This formula sounds simple. But, in the Twenty-First Century, we live with myriad distractions that enter our lives on a second-by-second basis. Distractions arrive through our mailboxes, over our televisions, by way of our cellular telephones and, of course, “You’ve got mail.” With this chaos surrounding us, it can feel miraculous when we do make intelligent, profitable decisions. For most investor/traders, the problem of distractions is even worse when you are working from home than if you are investing and trading from an out-of-the-home office. That is the reason I have listed the five most common distractions and strategies for handling them.
Continue reading Dealing With Distractions By Adrienne Laris Toghraie
After the huge losses in the recent past, many investors are asking themselves whether there are possibilities of participating on the stock and futures exchanges with reduced risk. In the following method, I will show a trading strategy which will work for everyone who is willing to invest the time and has the skill and patience to execute the trading strategy described here. In the following method, I will show a trading strategy which will work for everyone who is willing to invest the time and has the skill and patience to execute the trading strategy described here.
Continue reading An Investment Strategy For Everyone By Robert Fischer
For those who are unfamiliar with the expression, a Key Level is merely a profound level of resistance or support. They are the points at which the very best trading opportunities are to be found. Specifically, they are the levels at which reversal and continuation scenarios unfold. For successful traders the world over, Key Levels are the holy grail. The vast majority of successful traders have techniques and approaches that revolve around Key Levels. The reason is simple. Key Levels enable the implementation of a sound risk management strategy.
Failing to control risk is the greatest hazard known to a trader. Those who fail in this endeavour do crash and burn eventually. There are many risk management techniques held out as credible, but the only one that I have found to be effective, is the one that utilises Key Levels.
Continue reading Key Levels By Paul Nojin
MoonTides are electrical waves set up in the earth’s electric field by the Moon, and to a lesser extent, the other planets. These waves are felt by traders as electrical currents, and trigger emotional buying and selling. Thus they are very useful for timing day trades. They apply to all markets, but are extremely useful in the S&P 500. This chart shows 2 days of the S&P, with MoonTides. The first thing to notice is that there are 2 MoonTides, a positive one shown in green (+Tide), and a negative one, shown in red (-Tide). When the energy from a Moon/planetary event hits the earth’s ionosphere, it sends two waves around the earth, one in each direction. As these waves meet at any point, they are of opposite polarity, hence the two waves.
These waves create electrical currents that are unconciously felt by traders as emotional swings. Markets are provably about 60 per cent fundamental, and 40 percent emotional. The emotional component is very clear in daytrading. So knowing when the emotional swings are likely to change gives you a trading edge.
Continue reading MoonTide Overview By Hans Hannula (Al Larsen)