Archive for July, 2009

Video Review of the Indexes 7-19-2009

July 19, 2009 at 4:19 pm

What a move last week, huh?  A 7% spike across the board in the indexes is certainly one way to get the attention of traders.

Especially those caught short after the creation of lower highs and lower lows in recent weeks.

We’ve got a new week fast approaching, and anything goes.  That means it could be a dull, quiet week with no momentum.  Or it could be another rip-roaring surge to new multi-month highs.  Or something else.

That’s a big part of why I’m a trader – there’ll be opportunity to profit no matter what happens.  As long as you show up!

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more. Until then…

Trade Like a Bandit!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Managing Gap Risk

July 15, 2009 at 8:25 am

It’s a simple fact that stocks gap.  The indexes gap.  The news flow causes it, upgrades and downgrades cause it, and even just excitement or fear at times will cause stock gaps.

There are common gaps, which tend to be small, and then there are of course bigger, harsher gaps like breakaway gaps or runaway gaps.

Alot of these actually do end up getting filled, whether quickly or eventually, but let’s talk about one major cause of sizeable gaps:  earnings season.

Right now we’re getting into the thick of earnings season, which is a few weeks long after the end of the quarter.  Companies need to report their results for Q2 and let shareholders know how business is going.

Business, schmizness…I’m a trader.

The Importance of the Clock

So while I don’t really care much about the business environment for XYZ Corp., I have to recognize that holding a position into that earnings report means one thing – the inability to manage my risk.

With company-specific news set to be released imminently, I know that the stock is likely to bolt one direction or the other.  That’s not such a big deal in itself, but the problem is that earnings reports primarily occur outside of market hours.

That means by holding a stock overnight when they’re set to report earnings (whether after the closing bell or before the next day’s opening bell), I’m inviting a big gap to come along.  Even worse, I can’t do anything about it.

Maybe it results in “free” money for me if the stock goes my way, but it could just as easily result in a black eye – or the loss of a limb!  Have you seen some of these earnings gaps?

So what I do to manage the gap risk associated with earnings is simple:  I do not hold a stock going into earnings.

Not a dramatic enough answer for you?  Well, what are you in the market for…money or excitement?

Why Do You Trade?

If it’s profits you want, then you care about preserving capital and managing your risk whenever that capital of yours is on the line.

But of course if it’s excitement you’re after, then you just want a story to tell – and you’ll get it when you hold positions into earnings reports.  Only problem is, nobody really wants to hear about it.

The Visual Version

Last night over on the trading videos site, I posted the following video.  In it, I discuss this topic and offer a practical way to manage gap risk during earnings season.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

And here are 3 earnings calendars I reference in the video, they’re certainly worth bookmarking:

EarningsWhispers.com
Yahoo Finance
Earnings.com

Thanks for stopping by and I’ll see you here soon with more. Until then…

Trade Like a Bandit!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Are You Developing Your Trading Strategy?

July 13, 2009 at 9:51 am

One huge benefit I have of running the premium site over at TheStockBandit.com is the opportunity to interact with many traders on an ongoing basis.

As a trader, I’m thankful for the chance to keep the dialogue going with others, discussing trading strategies and current conditions with traders all over the world. No two of us are exactly alike, but we have plenty of common ground to stand on as traders.

I usually have quite a few email conversations going with members of the site, and one from this week was worth revisiting.

There are a few elements from it that I’d like to share, so I’ll break it down into a couple of pieces.

This particular trader (named Lisa) described herself this way:

“I am still in my development phase of trying to find my niche, as to where I fit in this big world of trading.”

She’s right – there are many ways to skin the market cat, and many developing traders never quite are able to determine which one is right for them.

I think a big key here is to be decisive.  Rather than staying on the fence between numerous styles of trading, it can be very rewarding to select one which is appropriate for your situation starting out.  Seek out some possibilities, pick one, and start to develop it.

After describing a couple of specific strategies she’s trading right now, she went on to make the following comments:

I am becoming a much more diciplined trader. I think I am coming along with my own style and my own thinking, and it is truly a process. I know enough to keep myself above water, but I am fine tuning my technique.

Awesome!  Discipline is always a good thing, and learning to think for yourself is an absolute must.  I have no problem assisting traders however possible, but the aim is to get them to the point to where they do not need to rely on me.

It’s very satisfying to become self-sufficient as a trader.  If you aren’t aiming for that, what’s holding you back?

Also, it’s important to remember that our development as traders is indeed a process.  That means some patience will be required, and we’ll need to make some adjustments along the way as we move down the road to success.

Lisa’s doing a great job of developing her trading strategy.  She’s identifying her ideal opportunities, and staying away from those which have not proven fruitful for her.  Are you doing the same?

Thanks for stopping by and I’ll see you here soon with more. Until then…

Trade Like a Bandit!

Jeff White

President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Video Review of the Indexes 7-12-2009

July 12, 2009 at 8:57 pm

With a brand new week of trading here, it’s time to examine the major market averages and check out some key levels to watch for the coming days.

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more. Until then…

Trade Like a Bandit!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

One Way to Review Your Trades

July 9, 2009 at 4:47 pm

If you’re at all like me, every now and then certain aspects of your trading will stand out as having changed.  Sometimes that’s for the better, other times for the worse.

While it’s fun to see improvement over time, one key to trading success is the ability to modify one’s approach periodically in order to stay on track.

I think of it like that statistic you’ve heard about how much of the time an airplane is just a little off course when in flight, with the pilot constantly putting it back on line toward its destination.

As traders, we have the same responsibility.  We maintain our direction by reviewing (mentally or physically) how we’re doing, and then by making the necessary adjustments.

Well, last night I recognized that one particular strategy which I happen to trade has been off a little lately.

So what did I do?

I got up early this morning (that’s part of preparation) and spent some time going over some of my historical trades when this strategy was really on, and I compared what I found there to how I’ve been trading this strategy lately.  It was an eye-opening exercise, and so far, a profitable one.

This same clip is posted over on the Trading Videos site and perhaps you’ve seen it there, but in case you didn’t, I wanted to put it here on the blog.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more. Until then…

Trade Like a Bandit!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Halftime Honesty

July 1, 2009 at 8:23 am

The year is halfway over, and I hope you’re exceeding your expectations for 2009 thus far.

With an extended holiday weekend approaching, it’s the perfect time to pause and reflect on not only your performance, but also your process.

So let’s head to the proverbial locker room and examine how the first half has played out.  Doing so will enable us to properly prepare for the 2nd half and finish strong the way every winner should.

First 6: Something for Everyone

2009 has been an interesting year already.  January began with some real promise as the market sprinted higher for a whopping 3 days before turning south and stomping on the gas.  We headed lower into mid-March, when a meaningful upside reversal brought about significant gains – and virtually in a straight line for some 9 weeks before pausing.  Since then, we’ve climbed incrementally higher, and currently stand somewhat range-bound with traders waiting for momentum to return.

That means that to date, we’ve had several kinds of price action with the market throwing the kitchen sink at traders.  Downtrends, reversals, rip-roaring rallies, and even a few trading ranges have been seen.

The way I see it, that’s a little something for everyone.  Including you.  So if I were to ask you how you’d grade your performance during your favorite stretch, what would you say?

And more importantly, where do you see room for improvement?

Right now’s the time when brutal honesty can bring big benefits – if you’re brave enough to bear it.  Sure it’s more fun to reminisce about the best trades we’ve made, but the failed trades and the missed opportunities hold within them perhaps the greatest promise – the chance to learn and apply, and with it, the chance to rise above our previous best.

I don’t know about you, but that fires me up.

I’m always looking to gain an edge, and I love working toward continual improvement.  Growth and sharpened skills do much more than pay the bills – they motivate and reward me.  The thought of getting better gives me some momentum, particularly in my mindset.  Trading is such a mind game that having an edge there means more to the bottom line – which is nice, because I do not like to lose.

New Year’s is Coming

Here in Texas right now, we’re seeing triple digit temps daily and it’s quickly becoming the Great Yard Bake of 2009 with the heat wave we’re in.  Summer is in full swing, but you know what?  Winter will come.

When you stop to think about December 31st, it probably seems forever away.  But put yourself there mentally for a moment, and think about how you want your 2009 to finish.

Will the halftime checkup prove to be a turning point for you, or will you have squandered an opportunity to grow in the 2nd half?

My hope is that the former will be true for you.  Right now, you might be fed up with the current trading ranges and lack of momentum.  You might hate the summer doldrums and just want a break from it all.  And truthfully, now’s not a bad time for that if so (I just spent 10 days in the Caribbean).

But if you’re driven to grow and improve and make this the year you actually make some real strides – both in your account and in your mindset, then right now is the perfect opportunity to pause and pay attention to your process.

Spend some time crunching the numbers.  Put in a few hours to review – truly review – your trades from the first half, and be honest and see what you learn.  Some of them you nailed…congrats!  But others you knew you should have taken and didn’t.  Find out why.  Some of them you bailed out of too quickly, micromanaging them by undermining your original plan.  Figure out what happened.  And yes, a few of them you got blindsided by.  It happens, but really do your best to determine whether the fault was your own and something you can avoid in the future.

The Moment of Truth

Here’s the thing… the future arrives daily, and either you’re prepared for it or you aren’t.  Either you want success bad enough to find it, or you’re satisfied enough with mediocrity to keep enduring it.

Get honest with yourself, and before you head out for the 2nd half, decide how you want to feel the next time you walk off the field.  The first half is over, and only you can determine what happens in the 2nd half.  Get clear on what you want.

I want to win.

Trade Like a Bandit!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]