Archive for February, 2012
How Long are Levels Valid?
February 29, 2012 at 9:55 am
A Bandit subscriber recently asked me about levels and how long they should be watched. This was a great question, so I wanted to be sure to share this exchange with you.
Question:
Jeff, I’m new to trading (since Christmas). I’m wondering how important long term resistance levels are. I suppose it depends really on the market conditions. A skittish market probably respects them more. This market seems to be plowing on through them regardless. The NASDAQ now, is free and clear of them with its breaking through the eleven year high, unless it goes down again.
The reason I am asking is that I’m sticking to a 4 1/2 month chart and ignoring any information older than that. It simplifies things and I wonder how far back people really remember. I also am thinking the older the resistance/support level, the less significant it is. Do you think I will be ignoring less recent history at my peril? I also find that the more information I bombard myself with the less clarity I have.
Thanks
Answer:
Great question and this really deserves its own blog post so I’m glad you asked. To answer you though, here’s my take on it.
I’ll begin by saying as long as a level is being respected, it’s worth taking note of. That pertains to an individual stock which keeps knocking on the door over the past few weeks, or to an index chart like the NAZ which has just recently pushed through multi-year resistance.
So, they’re worth taking note of. As far as how important they are, let’s consider the psychology at work here, which is what it really comes down to.
Technical levels are representations of buyers and sellers, which often times base their decisions on emotions. The older the level, the less emotional significance I’d attach to it. More recent levels are fresher in terms of emotion, and therefore tend to get respected to a greater degree.
I’d say anything inside 18 months or so is game, whereas I place lower significance on multi-year levels. They may be noticed by technicians, but anyone who has held for 11yrs in the case of the NAZ isn’t likely to bail out now that they’ve finally gotten their money back – I think they’re the “invested” crowd who never truly intends to sell.
What do you guys think? What would you tell this new trader?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Video Review of the Indexes 2-26-2012
February 25, 2012 at 11:31 am
The major averages moved mostly sideways last week with the big 3 posting only small gains as stocks rested near key levels. Each of them were able to mark new intraday recovery highs, but the strength didn’t inspire more buying and instead the market simply based overall.
Selectivity remains the key for new plays, which I’ve been noting within the member area. A number of stocks remain within uptrends, but it’s the kind of market which is rewarding some finesse with entries more often than chasing strength.
In preparation for the trading week ahead, let’s examine some important levels to keep an eye on for the indexes. That will have the greatest influence on how individual stocks are going to move, so it’s part of our weekend process.
(Direct video link is here for those interested in embedding it elsewhere to share).
Be sure to view in HD (720P) and full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Follow @TheStockBandit
Week 8 Trades Review (Video)
February 25, 2012 at 11:26 am
Last week saw the market edge higher overall, but momentum was distinctly absent.
Inside the Bandit Hideout, we took only a few trades. It wasn’t a great week by any measure, as it was holiday-shortened and I only traded Thursday and Friday after being in NYC for the early part of the week. Generally, the weeks which offer more plays tend to be more profitable, as our technical edge is able to play out, so anytime only a handful of trades are taken, it places a higher premium on accuracy.
I wanted to give you a video recap of the trades I took this week. It should give you a feel for the kinds of setups I’ve focused on of late. And for those curious about our trading style in the member area, this should give you a good indication of the kinds of plays you’ll see highlighted for subscribers each night. Check out the trial if you’re interested in adding our ideas to your own.
(Direct video link is here for those interested in embedding it elsewhere to share).
Be sure to view in HD (720P) and full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Follow @TheStockBandit
5 Takeaways from the NYC Traders Expo
February 23, 2012 at 11:35 am
Last night I returned from my trip to the NYC Traders Expo. It was a great experience. Visiting the city itself with some great February weather and seeing all the famous landmarks was nice, but I really enjoyed spending time with some Bandit subscribers and some other trading friends I’ve made over the years from different parts of the country.
In addition, I was fortunate to speak to groups of traders twice while there, which was both challenging and insightful as I prepared ahead of time then fielded some well-thought-out questions from attendees. It was really fun!
There’s an energy when traders collect which is always motivating. From the trading floor I first participated on back in 2000, to times in Chicago seeing everyone file into the CME ahead of the day’s session, there’s just something that happens when traders gather to compete or exchange ideas – I love the atmosphere.
A few thoughts on what I witnessed, in no particular order…
Hunt for the magic bullet. There are a TON of traders who show up just wanting the latest lure to fish with. They aren’t willing to put in the work, to learn to think for themselves, or to understand what it takes to become successful as a trader. They want the overnight shortcut, and they exit the scene just as quickly as they arrive, disappointed and surprised that trading isn’t red and green infomercial-easy.
Trading is a process. I’ve known this, but was reminded of it through my preparations for speaking and in conversations with other traders. Trading requires adaptation, a willingness to lose regularly. Imperfection is to be expected, and so it all becomes about good management of trades rather than finding the can’t-miss sure thing. What works now may not work in a few weeks, so you have to be willing, able, and prepared to shift your approach. The market evolves, and so must you if you want to stay in the game and keep seeing opportunities.
Expectations. Expect some losing trades (and learn to manage them wisely). Expect periods of frustration and confusion, they’re going to happen. Expect the market to surprise you – it’s just that way, so you’ll have to be ready to respond accordingly. Times will come when you have no clue what’s next, but that’s OK. When they arrive, you can accept them and sideline yourself until clarity comes.
Hard work is rewarded. I saw Expo attendees show up early and stay late, attending multiple sessions, taking notes on the good things they heard, and leave tired but hopeful that some fresh perspectives will influence them to improvement in the days ahead. I saw prop traders from SMB who started their day extremely early, made the commute to lower Manhattan, gave it their best all day (though some admitted it was a tough day), then stuck around after the close to listen to my thoughts. Even after I was done presenting, they showed the discipline and desire to improve by asking questions, just absorbing knowledge even though they were tired and hungry and eager to call it a day. Those who work hard – even when it isn’t comfortable – are the ones who will make it, keep improving, and eventually see the fruits of their labor.
Trading is a battle. What’s interesting – and which few stop to recognize – is that only part of the battle is in the market. The rest usually happens internally. So be ready, you’ll need to bring your best if you want to compete in this game. You need to prepare a plan, and think through the emotions you might face while implementing it. Regardless of style, strategy, market, or timeframe, every great trader has his head on straight. Those who don’t will have it beaten to a pulp by a ruthless market.
If you were there, or if these have resonated with you, feel free to share some thoughts of your own.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Follow @TheStockBandit
LIVE from the NY Traders Expo
February 19, 2012 at 10:25 am
On Tuesday morning at the NY Traders Expo, I’ll be teaching live at 8am ET. I hope you can make it to my session if you’re anywhere around NYC. If not, be sure to register for the Webcast so you can attend virtually!
Specifically, I’ll be discussing Unique Traits of High-Performance Traders. I have a lot of good stuff planned, plus I’ll share the setups which have been working well for me recently as well as the best setups I see in the market right now. I’m excited about being there and giving you some insights for better trading.
Make plans to be there by pre-registering or just show up (it’s free)!
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Follow @TheStockBandit
Video Review of the Indexes 2-20-2012
February 18, 2012 at 10:00 am
The market eased higher last week, shunning a Wednesday reversal which had potential to shift the landscape. However, a Thursday lift made the mid-week pullback ancient history, reminding us once again that the dip-buyers are operating in a highly aggressive fashion.
The market remains stretched here, no doubt about it, but the long side is still the side which is offering the opportunity. Until a character change comes along, you’re either long or you’re wrong. Selectivity is the key for new plays, which I’ve been noting within the member area.
In preparation for the trading week ahead, let’s examine some important levels to keep an eye on for the indexes. That will have the greatest influence on how individual stocks are going to move, so it’s part of our weekend process.
(Direct video link is here for those interested in embedding it elsewhere to share).
Be sure to view in HD (720P) and full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Get our free newsletter to keep up!
Follow @TheStockBandit
Week 7 Trades Review (Video)
February 18, 2012 at 9:30 am
Stocks headed higher again last week in a lackluster fashion, as a Monday gap was followed by some mid-week hesitation, and ultimately a move to new recovery highs for the NAZ, S&P 500, and DJIA.
Inside the Bandit Hideout, we took a number of trades on day & swing trading timeframes, as well as in both directions, so I wanted to offer a video recap of each of them. It wasn’t a great week by any measure, but once again the numbers game of trading proved essential as several stopped trades were offset by some winners. Diversifying trading directions, timeframes and strategies has some big advantages.
I wanted to give you a show-and-tell look at the trades I took this week. It should give you a feel for not only how I managed my trades, but also the kinds of setups which have been working well of late. And for those curious about our trading style in the member area, this should give you a good indication of what a typical week looks like. Check out the trial if you’re interested in adding our ideas to your own.
(Direct video link is here for those interested in embedding it elsewhere to share).
Be sure to view in HD (720P) and full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Get our free newsletter to keep up!
Follow @TheStockBandit
