Author Archive for Jeff White
Jeff White is the founder of www.TheStockBandit.com, a nightly newsletter for active traders. He has been trading his own account for over a decade and currently trades full time in Texas.
Video Review of the Indexes 11-13-2011
November 13, 2011 at 3:55 pm
Last week we saw the major averages test important short-term areas to further validate the recent trading ranges, and the tests were passed. Now it’s up to the bulls to produce a breakout, but from a technical standpoint they’ve got some real positives going for them.
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.
(Direct video link is here for those interested in sharing).
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
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Video Review of the Indexes 11-6-2011
November 6, 2011 at 1:48 pm
A sharp pullback to start last week left the indexes testing some important levels and filling some gaps, both of which proved to be technically beneficial for the market. Dip-buyers emerged to stem the losses though, erasing a fair chunk of the deficit from last Monday and Tuesday.
More progress will need to be made for the bulls to regain their October momentum, but overall the price action is constructive and this pullback – if kept shallow – could still result in a higher low on the daily charts of the indexes.
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.
Update: direct video link is here as the YouTube embed code is hit/miss.
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
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
4 Traits of the Perfect Trader
November 3, 2011 at 9:48 am
Maybe ‘perfect’ isn’t the right word. We can strive for it, but we’ll all fall short of it given enough time. Greatness, though…that’s attainable. But what does it take to become a great trader?
Well, I’m still working toward it myself, and maybe you are too, but we can agree it’s a combination of things. It’s having the ability to walk the line between two sometimes contradicting attitudes or beliefs. Here are a few of those, and I’d love to hear your thoughts on it if you have others to add to the list.
Great traders blend:
A ‘Just Go With It’ Attitude with a ‘Question Everything’ Mindset. What do I mean by that? Well, traders can be a skeptical bunch, but the best traders still act on what they see. A market move might be difficult to trust, but it’s underway and it’s happening with or without you. Traders know they can exit right away if it doesn’t work out, because after all, isn’t that why we trade rather than invest? I recently saw a comment regarding a “real bull market” by a self-proclaimed trader. I find it silly that a trader actually cares. Real traders don’t mind if the moves last or not, they just go with it and adapt along the way.
Flexibility with Structure. Great traders have a game plan in place, which gives them structure or a framework of rules to guide them in the right direction and help them avoid trouble. But they’re also very flexible in how they implement their game plan. They may not deviate from their discipline, but they can shift gears quickly when conditions call for a momentum-based tape or some fade trades when prices are range-bound.
Confidence with Respect for the Market. This is a tough one and in my experience, never completely mastered. Great traders understand risk, and they know the market can take their hard-won capital quickly if they don’t defer to the price action when their timing is off. However, they aren’t afraid to participate, so when they see what they like, they execute with confidence. This might be among the hardest things to get a grip on for a developing trader.
Science with Art. Trading is definitely a science to some (quants, that’s you!), and it’s an art form to others (tape readers, holla!). Some traders develop their own discretionary system whereby they know exactly what they’re looking for but weigh a number of factors before executing. That might mean taking into consideration if the market’s fast or slow, or if there’s a trend or indecision, or how a run ahead of scheduled news might prompt a reversal. Great traders develop a feel (art) through their experience, helping them identify better when to implement the proper strategy (science).
Where do you fit into the mix? Are you out of balance in one or more of these areas? What can you start improving on today?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Chasing Trades Isn’t Paying
November 1, 2011 at 7:27 pm
Current conditions and the overall complexion of the market is always subject to change, but it’s still always worth taking note of. The market seems to be continually morphing into another phase, whether it’s range-bound, trending, highly volatile, or really tame.
Right now, we’re in short-term pullback mode after seeing some upside continuation. The past couple of sessions have been characterized by hefty downside gaps accompanied by limited intraday follow-through. So with that in mind, I wanted to discuss the idea of chasing trades in an environment like this.
In this video, I’ll show you what I mean based on the last couple of sessions.
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
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Video Review of the Indexes 10-30-2011
October 30, 2011 at 1:07 pm
The indexes ran higher last week, bolstered by a European debt deal which had been anticipated for quite a while now. With stocks rallying ahead of the news in recent weeks, the actual event actually prompted additional buying rather than a sell-the-news response. As a result, new recovery highs were established across the board.
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 HD (720P) and full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Market Makers, Specialists, and Stops
October 28, 2011 at 9:40 am
A subscriber recently asked me:
“Do you believe market makers and specialists really gun for the orders that are on the books that are only a few hundred shares, or do they only search out bigger size?”
Here’s my response:
My take on market makers and specialists is that they just want volume, all day, as they’re selling on the offer and buying on the bid. A few hundred shares here throughout the day add up to a lot. Stocks will naturally gravitate toward key areas of support and resistance, so if they just get close then it’s not that difficult for market makers to ‘spook’ prices a little further and run some stops.
Suppose there’s resistance just a few cents away, they know buy stops reside beyond that level. Flashing a big bid will have shorts quickly covering based upon the quote (which is real by the way), and buyers step in front of it in hopes of catching a run. They can then flip that large order to the ask and it spooks everyone to sell, taking the stock right back down to where it was.
You can see how doing that throughout the day adds to the back-and-forth range-bound type of price action which churns the accounts of retail traders and leaves the stock not necessarily making any big headway.
Also, do not discount the presence of programs doing this exact same thing. If supercomputers can automate the process via algo’s, all the better for the smart money to spook the retail traders out of positions on a regular basis. Head-fake moves which last only long enough to inflict enough pain to prompt an exit is all it takes, so it need not be a lasting move to catch the small trader off guard and separate him from a dime here or a quarter there.
One last thing…
On a trend day when market makers are shorting into strength (selling on the offer during an uptrend ), if they didn’t have a lot of inventory to dump, then they’re getting shorter the higher we go. They will hedge via futures (ES or NQ) or through options. Those derivatives have a huge impact on how the market moves, yet few traders really recognize that.
So when people watch call buying activity or put buying activity in the options, they think they know that someone big is betting on a rise or fall in the shares, but the fact is nobody knows if it’s that simple or if it’s part of a more complicated hedge for a market-neutral position.
It gets cloudy, but there’s my take on market makers and specialists. What’s your opinion?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
How to Think About a Loss
October 26, 2011 at 12:58 pm
We all lose here and there, it’s just part of trading. You can’t avoid it, but that isn’t the issue. Where many traders struggle is how to handle a loss gracefully.
Instead if equating a trading loss with personal failure, shift your mentality for what a loss means.
Does it mean you’re stupid? Not necessarily.
Does it mean you were wrong? Yes, in at least one way.
Does that mean you will never get it back? Absolutely not.
Losses are an event, yes, but it’s also a distribution from your account. Consider them a cost of doing business as a trader. Brick-and-mortar stores have overhead, but as a trader, the biggest portion of your overhead is the losses you take.
When businesses cut costs, they’re reducing their overhead as much as possible to fatten their profit margins. Do the same with your trading. Reduce your ‘loss overhead’ by accepting a loss quickly and moving on to the next trade.
It’s much more fun to always be adding to your account rather than seeing funds flow out, but as soon as you start viewing trading losses as something impersonal, it’s going to change your perspective in a very helpful way. Rather than fret over them and allow losses to cloud your thinking or alter your mood, viewing them through the proper lens will help you more quickly get them back and then some.
Like it or not, trading is a business…how are you managing yours?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
