Author Archive for Jeff White

Worden Blocks Raising Eyebrows

June 5, 2008 at 7:30 am

In case you haven’t heard, the charting program that two years ago I referred to as “the future of charting” is now… (wait for it)… FREE!

In a similar spirit to that of the ever-evolving trader, the fine folks over at Worden and The Blocks Company have shifted their approach and are now offering their revolutionary charting program free of charge for end-of-day data.

That means that those of you who have considered checking out this amazing trading tool can now get your hands on it free and right now. This does not appear to be a limited-time promo, which is really incredible when you consider what this thing can do.

I have a feeling that everyone who is currently using free charting packages such as QuoteTracker or web-based StockCharts are about to step out of an old pick-up and into a Ferrari and find out that it’s completely in another league from what you’ve been using. Build watch lists, annotate your charts, add indicators from a plethora of choices, scan and sort without any limitation on what’s possible…it’s all in Blocks and it’s fully customizable.

To those of you who want integrated news, BackScanner, or of course real-time intraday data, each are available (along with several other services) with separate pricing. But to those who have been needing a charting program and didn’t want to pay for it, you’ve now got the very best at a price that you literally cannot beat!

To download and install the program:
– Visit Worden.com
– Click the Blocks icon at the top of the page
– Click the Download Now button.

Trade well today!

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

Skipping Trades Can Be as Bad as Overtrading

June 3, 2008 at 6:30 am

This guest post comes from a friend of mine, Dave Mabe of StockTickr, an automated trading and performance analysis tool designed to help traders improve their results. Dave’s post outlines the benefits of adhering to a trading plan, as well as the pitfalls of deviating from it.

Most traders are aware of the dangers of overtrading, that is, taking too many trades or trading with size that’s too large. Overtrading can quickly turn a reasonably bad day into a disaster. However, the less obvious problem of undertrading or skipping valid trades can be almost as bad.

If you’ve been trading for any length of time you’ve no doubt experienced it. A setup comes along that fits your trading rules just fine – but you find a reason NOT to take the trade. No harm, right? We all know what happens next – it runs and runs and had you taken that trade it would have been a nicely profitable trade. But you’re still sitting on the sidelines.

There’s More Lost Than Just an Opportunity

In the scenario described above, there is the obvious opportunity loss of a perfectly good trade. You could have made money on that trade, but you spent time warming the bench instead. But there’s a more important loss that is often overlooked. By skipping trades that meet your trading rules, you’re going to have an incomplete picture of your trading system’s performance. Think about it – when you go back and review your journal to gauge the performance of your trading system, you’re looking at the trades you took. If you’ve skipped trades that met your trading system’s criteria then those performance results are skewed and less meaningful than they could be.

It’s easier to imagine how a losing trade that you skipped can skew your results – when you review your trading metrics your system looks like it performed better than it actually did – it’s a little like looking through rose-colored glasses.

What Those Skipped Trades Might Actually Mean

If those skipped trades are starting to mount up, it might mean that your system needs a little more clarity. There are probably some additional trading rules that need to be more clearly thought through and applied to your trading plan. A well defined trading plan will allow you to be decisive and give you confidence to take trades that meet your critieria without hesitation. I’m not one of those guys that preaches that you need a fifty page thesis for a trading plan before you start making trades, but you do need a clear definition of the setups you’ll trade. You also need to be flexible enough (and humble enough!) to be able to look at your results objectively and make adjustments to your plan over time based on what the market and your journal are telling you.

“Small” Mistakes Can Often Lead to Bigger Ones

The seemingly benign mistake of skipping a trade can lead to more painful ones. Think about your worst trading days – many times they start with a small mistake that leads you into making larger trading mistakes that do put a dent in your trading account. It’s easy to slip into revenge trading after missing a good trading opportunity. Sometimes these skipped trades can snowball into a disaster.

Your Trading Plan is There For A Reason

Having a game plan is critically important. Without a well defined plan you’ll be subject to our human emotions which often encourage us to do the opposite of what is required for profitable trading. Take the trades that meet your criteria – no more AND no less.

Dave Mabe
www.StockTickr.com

Patient Progress

May 22, 2008 at 10:09 am

Developing an effective trading methodology takes time and patience. It doesn’t happen overnight, even if you hit a home-run in your first at-bat. It’s been said there is no substitute for experience, and that is as true in trading as it is anywhere else.

There will always be stories of new traders who had no idea what they were doing who happened to get lucky with a big score early. They are the exception, not the rule, so pay them no mind. The truth is that becoming a great trader and gaining the experience you’ll need is likely to take some time, so pull up a chair!

I’ve always found it interesting how in the trading realm, speed does not necessarily trump wisdom and discernment when it comes to capturing big profitable moves. Oh sure, the gunslinger-type might be able to impress with some rapid-fire executions, but they’re often outgunned by guys who have been around the block a time or two. The point of trading is to make money, so even if your trading style involves the need for speed, remember that it’s going to take some time to formulate your opinion. You might be eager to learn, but be careful not to rush the process.

Truth be told, you’ll be far better off pulling up a seat beside an experienced trader any day of the week than to hear a story from an overleveraged and overconfident new trader who just made a heroic trade. The experienced trader has been around and seen it all, and often times can spot a move coming from a mile away. Plus they have an uncanny ability to sift through all the noise and get to what really matters – gauging the forces of supply and demand. Stated otherwise, they know how to wait on the market.

So as you proceed down the path in search of profits, remember to be patient with yourself. Take it slow if you’re just starting out, and don’t force trades, especially if you don’t have a defined trading plan or method. Preserving your trading capital so that you can stay in the game is your number 1 priority if you’re going to find success in this game.

Observe the market, observe other traders, and always observe yourself. Don’t let your emotions get the best of you – and you will find yourself fighting them plenty! Giving yourself the best odds for success in every individual trade, every week, and every month will leave you knowing that over time you have an edge.

And finally, keep tabs on your progress – not just monetarily, but psychologically as well. If you’ll be honest with yourself along the way about what you’re learning and how well you’re applying it, you’ll shorten the learning curve significantly. The idea is to always be gaining momentum as you progress, just like a good trade!

Trade well out there!

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

Blocks Webinar

May 17, 2008 at 11:16 pm

Just wanted to post a quick heads-up here regarding a webinar I’ll be attending on Monday evening for Blocks.

What’s New in Blocks Trader – Monday, May 19th 8-9pm ET

The webinar will be put on by a friend of mine, Worden’s Training Director, Craig Shipman. Craig has educated many thousands of traders on TeleChart (which I’ve used for almost a decade) and now Blocks (which I’m integrating more and more into my research). Needless to say, I have no doubt at all it will be worth attending for some tips & tricks on using this amazing charting software.

I wrote long ago how Blocks would “revolutionize the way stock chartists and researchers tinker with data, because it allows the user to combine data sources all in one place – on the code level.” I continue to be impressed with the way Worden is improving and updating the program, which is no surprise given the tremendous success they’ve had with TeleChart for so long.

To register and attend the Webinar:
Visit Worden.com
Click the Blocks icon at the top of the page
The center of the next page will have the Webinar info.

Have a great weekend!

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

Trading Video – The Influence of the Market Indexes

May 16, 2008 at 10:33 pm

Here’s another video of a trading lesson I learned in the market today.

I do my best to stay aware of what the overall market is doing, and particularly the major indexes, because they so frequently have an impact on how individual stocks move. Today’s video discuses exactly that.

Feel free to share it if you’re a fellow blogger, the embed code is on the YouTube page.

Without further delay, here’s today’s video. Enjoy the show!

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

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

Trading Video – Looking for Explosive Breakouts

May 12, 2008 at 9:04 pm

Here’s another video of a trading lesson I learned in the market today.

Because I trade a lot of breakout patterns, the more characteristics I can find which point to an explosive move, the better! Today’s video discuses exactly that.

Feel free to share it if you’re a fellow blogger, the embed code is on the YouTube page.

Without further delay, here’s today’s video. Enjoy the show!

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

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

The Complete Turtle Trader

April 24, 2008 at 7:35 am

As much as I love trading, it’s no coincidence that I frequently have my nose in a trading-related book. I stay away from the how-to books these days, sticking primarily to interview-style books, conceptual trading books, or just ones which tend to tell a good story.

One benefit of writing a blog is the occasional opportunity to check out a book straight from the author, so when Michael Covel offered to send me a copy of The Complete Turtle Trader, it was an easy decision to respond with a resounding “yes.” Now, I’m ashamed to say that it has taken me some time to get to this book (my apologies, Michael!), but once I was able to start reading it, it didn’t take me long at all to finish it.

I quickly realized that The Complete Turtle Trader contained a little bit of everything I like in a trading book. There are numerous quotes from turtle traders and others surrounding the famed experiment which give portions of it an interview feel, there’s plenty of discussion on the concept of the turtle trading method and objectives, and to see the puzzle pieces get put together the way Michael did it certainly tells a good trading story!

About The Turtle Traders

The great turtle trading experiment began in 1983 when Richard Dennis and William Eckhardt decided to take a friendly wager to the next level: they recruited and trained non-traders to see if they could become successful traders using their system. People from many walks of life ultimately joined the team, and the legend began. Dennis and Eckhardt combined for quite a team, with Dennis being described as a pure trader with an incredible feel for market psychology, while Eckhardt was a mathematician who calculated the formulas behind the turtle method. Their decision to hire trainees proved to be extremely successful, and the tale has been told in various ways since then.

Reader Benefits & Impressions

As a full-time trader, I’d certainly heard of the experiment, so I was eager to see what The Complete Turtle Trader had to say. As I progressed through the book, I learned a great deal more about the entire process than I had ever realized before. Amounts made and lost, drop-outs and primadonnas, just what the turtles were doing and trading, and oddly, how much time they spent just letting their positions run.

Here are a few parts of the book which stood out to me:

* Richard Dennis, who funded the experiment, felt that money was purely a way to keep score in the game, which is likely a big part of why he was so successful – his emotions didn’t interfere with his trading process. Interestingly, Dennis was able to successfully blend his bold approach with a healthy dose of respect for the market – two traits which nearly oppose each other but offer the trader two invaluable tools for success.

* The initial training actually began with managing risk. That’s not what one might expect from this famous bet/experiment known for making huge amounts of money, and yet it supports the notion that great traders know how to lose properly.

* Aggressive trading can pay off big, but knowing when to stomp on the gas is the part that many traders miss. Covel mentions that Dennis would go big when he sensed he had an edge, implying that he not only varied his position sizing depending on conditions but also that perhaps he traded much smaller when he lacked conviction. How much difference would it make to your trading results if you hit your favorite setups hard?

* Staying in the present tense and making the best decision “now” will lead to long-term success. Eckhardt knew that how you arrived at your current situation and what you choose to do going forward were separate variables, and he wanted every trader to make the proper decision at all times based on what their rules specified. Covel mentions that Eckhardt “wanted the turtles to literally trade as though they didn’t know what their entry price was.” That speaks volumes to trading your plan and having the discipline to stick with it while ignoring your recent results.

* No guts, no glory. Those who succeeded in the program had undeniable confidence and conviction in their trades, yet balanced that perfectly with a respect for risk. At the end of the day though, the best traders were those who took every opportunity which came along to turn a profit, setting aside any concerns for failure. Courage and determination were far bigger than the rules when it came down to being successful. I’m left with the distinct impression that those who were right frequently with their trades did not make as much as those who nailed the occasional trade with size and held onto it until the trend ended. Much has been made of the Turtle Trading Rules, and yet following them was only a part of how the turtles stayed in the program. Covel states that “if they did not exhibit…a ‘walk-off home run’ mentality every day, they would fail.” Each of them had to have a huge amount of confidence and a major drive to succeed in order to prevail, yet possess the ability to keep their ego in check.

Bottom line: The Complete Turtle Trader is an excellent book which offers loads of wisdom while keeping your interest. The market requires that we’re constantly learning, and this book provided me with a few new lessons while serving to remind me of numerous other valuable trading insights.

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

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