Archive for December, 2010
When Goals Impede Progress
December 30, 2010 at 11:10 am
Like it or not, it’s that time of year where goals enter the picture again. This is of course a time for family, gifts and bowl games, but it’s also a time when each of us are compelled to take a look back and a look forward.
Reaching the finish line at the end of the year leads us to consider how things went, and most all of us know whether we exceeded or fell short of the goals we set a year ago. In turn, we evaluate where we are and take a good hard look at where we want to be a year from now.
Goals have some excellent qualities and they serve a real purpose when used correctly. They can make us think bigger and cause us to grow. They can drive us to consistently work toward an objective, helping to bring purpose to our daily activities. And goals can boost our confidence when we achieve them, helping us to realize that we’re capable of striving for higher levels. Goals are great, and I’m a goal-setter. I’ve discussed goals here numerous times over the years, but there’s one take on goals I’ve never before mentioned…
Goals aren’t always good, and they can actually hold us back when they’re set in the wrong manner or approached in the wrong way.
What Bad ‘Goals’ Look Like
As an example, years ago I would periodically update the wallpaper on my PC’s desktop with a new dream car that I’d want to go after with my trading profits. Inevitably, my trading would go almost instantly in the toilet! The new ‘goal’ was a distraction to me from what I should have had my focus on, which was the market action…not something I wanted to buy with my trading profits. (Realizing this, I’ve since kept pictures of my family as my desktop wallpaper!) My goals now involve processes I need to go through for good trading, rather than cars or destinations (duh). First things first!
3 Ways Goals Can Stunt Growth:
1. If goals are too high, we sometimes force trades in an effort to reach them. Lofty goals are good, but they can’t lead you to take on outsized risks or overstep your bounds in terms of risk. Set goals that will require growth on your part and get you outside your comfort zone, but which are still attainable for your style of trading, account size, and risk tolerance.
2. If goals aren’t practical, we may prematurely dismiss hope for achieving them. I’m not referring to quitting, I’m talking about not pushing oneself the right way. Suppose you have a profit goal for the month and you’re down to the final week and miles away from your goal. It’s easy to dismiss that goal and wait for the next month to come around, yet there’s opportunity you’d be missing out on now if you did that. Grow your account every chance possible, even if you’re lagging on a goal.
3. If goals are distracting, they don’t help us. Like the car example above, my ‘goal’ was merely an aspiration and therefore not something that directed the focus of my trading. Instead, it detracted from it, and took me farther from where I’d have been without it. Make your goals process-oriented, and the results will take care of themselves.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Video Review of the Indexes 12-19-2010
December 19, 2010 at 3:04 pm
It’s still a bull market, and last week we saw continued price action which was constructive to the current trend as the indexes tagged new highs and consolidated.
The buyers continue to provide support on even the smallest of dips, although we haven’t ramped higher since earlier this month. There’s still time for an end of the year rally, so with an underlying bid beneath this market, be careful not to rule that out.
As we head into a brand new week of trading, let’s examine some important levels to keep an eye on in the days ahead. That will have the greatest influence on how individual stocks are going to move, so it’s where the trading week begins.
Be sure to view in full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Video Review of the Indexes 12-12-2010
December 12, 2010 at 3:06 pm
The bulls reminded all last week of the fact they have the upper hand (hoof?) in this market by producing new multi-year highs and finishing off the week in a strong fashion.
At some point, we’ll see this market correct, but right now that’s apparently far from the minds of traders as they see the push into the end of the year. What’s perhaps aiding the cause of the bulls is simply the fact that we’ve seen some nice rotation between large-caps and small-caps as turns are taken for the leadership role from week to week.
As we head into a brand new week of trading, let’s examine some important levels to keep an eye on in the days ahead. That will have the greatest influence on how individual stocks are going to move, so it’s where the trading week begins.
Be sure to view in full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Trading Scene Still Great
December 8, 2010 at 12:30 pm
On Nov 1, I mentioned the scene was set to improve, and since then we’ve seen exactly that. I didn’t base that post on the notion of higher prices necessarily, because UP does not equal GOOD – just as DOWN does not equal BAD.
I’m a trader, so for me it’s all about the movement. It’s volatility that makes for a great trading environment, especially when the technicals are playing such a prominent role. We’ve seen a pick up in volatility of late, which simply delivers faster moves for us as traders.
Lately, we’ve seen exactly that. Individual stocks and the indexes alike have respected trend lines and important resistance and support levels, allowing for some excellent trading opportunities for the astute trader to capitalize on.
Taking it to the Charts
For example, the indexes have been textbook in their respect of key levels. The S&P 500 has been range-bound between 1173 support (with numerous tests of that level in recent weeks) and 1227 resistance (tagged a few times but no close above it yet). That’s perpetuating the short-term trading range, which could easily serve as a stepping stone for another advance if it’s resolved to the upside.
The DJIA also has been highly respectful of key levels. The mid-May post-flash-crash bounce carried the senior index up to the 10920 area, and since then that level has been revisited. Currently it’s serving as support over the past few weeks, while the early-November high at 11451 was tested and held on Tuesday.
Individual stocks have also made exceptional moves through important trend lines as well as out of well-defined patterns. Here’s a look at a few examples:
So the general trading scene continues to improve, which means there’ll likely be ample opportunity in the weeks ahead to capitalize on. But the market won’t give you money – you’ve got to know where to find it and how to extract it. If you’re preparing daily with several if/then scenarios, and you’re managing your risk appropriately, you’re positioning yourself for continued success.
Trade Like A Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Reminder: Webinar Tonight!
December 7, 2010 at 2:07 pm
Here’s a quick reminder about tonight’s free trading webinar, as I would love to see you there if possible.
Update: here’s a link to the webinar recording – enjoy!
Weighing Risk & Reward with TheStockBandit
I’m excited to run through a number of interesting chart setups, from both the bullish and bearish sides, in order to teach you some concepts and of course put some quality plays on your radar.
I also plan to share with you the most powerful pattern I’ve been trading in recent weeks.
The webinar is scheduled to run 45 minutes, with 15 of those minutes set aside at the end for Q&A and a look at your favorite charts.
Visit this link for registration to the 8pm ET webinar:
Weighing Risk & Reward with TheStockBandit
See you tonight!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Webinar Tuesday December 7
December 6, 2010 at 10:38 pm
I wanted to be sure to post a quick announcement here that I’ll be presenting a Free Webinar on Tuesday (December 7th) with the folks from Worden, and I hope you can join us!
Update: here’s a link to the webinar recording – enjoy!
Weighing Risk and Reward with TheStockBandit
It’s scheduled to be a 45 minute webinar, the first 30 minutes of which I’ll be going through my watch lists, pointing out to you what I’m seeing in the charts for both the overall market and individual stocks.
There will be 15 minutes of Q&A time at the end where you might want to bring forth your favorite stock and we can take a look at those too.
I certainly do not have all the answers, but it’s going to be a chance for me to convey what I’m seeing out there and hopefully not only teach you a few things, but also put many stocks on your radar which you may find of interest.
Oh, and the best part about it is that this event will be FREE, so be sure to register at this link for details (and access to the recorded version if you can’t attend live):
Chart Reading with TheStockBandit
Remember, free webinar this Tuesday night, 45 minutes of charting reading with you and me – I can’t wait!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Trade Like You Don’t Need the Money
December 3, 2010 at 8:07 am
The post title says a lot, and we could probably all tape the phrase to our monitors and come away better traders.
But let’s spend a few minutes digging a little deeper to find what it would mean to “trade like you don’t need the money.” What does that look like? What are the advantages and disadvantages of approaching your trading with this mentality?
Let’s start off by looking at some examples of people who have experienced massive success in their respective fields. That isn’t by accident, and they sure didn’t quit once they got “rich.”
Professional athletes in general make a lot of money. Many of them spend more than they make, so we’ll discard those for the sake of this discussion. There are a few superstars in every sport though, and with the global coverage most sports tend to get, they’re household names. Kobe Bryant, Derek Jeter, Peyton Manning, Tiger Woods, Roger Federer, and the list goes on. Having an 8- or 9-figure net worth is not what drives them…it’s greatness. They find fulfillment in preparing and performing in such a way that they’re the best.
There are musicians who have had the same kind of success. One of the most popular bands in the world is U2, and they had “arrived” many years ago in terms of popularity and revenue from album sales and concerts. But they kept going, kept evolving, and kept on succeeding. It’s not the money that pushes them, or else they’d have walked away long ago.
Think Record Books, Not Scoreboard
As traders, it’s so easy to become motivated by the money. Our P&L is the scoreboard that’s always right in front of us…during the day, and once the closing bell rings. We know where we stand at any moment, and that’s actually more of a hindrance to many than it is a help.
Some platforms allow you to hide profit & loss numbers, and that’s a band-aid solution which some choose to do in order to focus better on the price action and less on profits. But rather than try to treat the symptoms, why not go right to the source of the problem – your mindset.
To trade like you don’t need the money, your goals and passion have to be centered on something much bigger than money…and bigger than what that money can buy you. Your satisfaction from trading needs to be rooted in the process of attaining success.
That means you care about digging for great ideas more than booking a $1500 winner. You know if you do the former well, the latter will take care of itself.
It means you love turning off your screens at the end of the day knowing you followed your rules with discipline.
It means your undivided attention is on the market when it’s time to trade, and distractions aren’t allowed to interfere.
It means you’ll spend time doing things others won’t, like watching trading film (hat tip to @smbcapital) in order to recognize your mistakes as well as reinforce and mentally rehearse your strengths.
It means you follow other traders’ blogs and StockTwits streams only when their ideas are suited to your trading style, and you avoid all else because it becomes noise.
And it means you fuel your competitive drive day in and day out to focus on winning and nothing else. That brings with it a host of other issues, like staying out late or treating your body well, because you care about peak performance.
Trading like you don’t need the money requires passion for what you’re doing that exceeds all hopes for monetary gain. It’s a mentality of maturity whereby you realize that truly great trading will provide you with all you need and then some, and once you’ve fully accepted that, you’re able to let go of the monetary concerns and completely center your efforts on improving your process.
Put your strengths to work today with total focus, and just see what happens. If you’ll do it for a week, then a month, and build on it each day, you’ll be implementing habits which deliver all kinds of ongoing success – including money.
** If you’ve got something else to add, please share it in the comments.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
