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.
Dealing with the Pop and Drop Trade
May 17, 2011 at 1:43 pm
This question came in from a fellow Bandit recently, and I wanted to share it (and my response back to him) with you here…
Question:
Jeff, what’s the lesson to be learned from this today. One trade I was watching (***) moved past 13.45 in a hurry this morning. By the time a trade could be executed it was already up in the 13.60s, got up as high as 13.74 and then dropped like a rock back down to where it started the day. All of it happened in about an hour. I’m thinking it would have been better to leave this one alone today. Thoughts? B
Answer:
That one did shoot quickly past the trend line, and anytime that’s the case I try to lighten up into the move. The sharper the moves tend to be, the more prone to reversal they are. So while it’s nice to see a big fast favorable move, at the same time it’s imperative to recognize that it may not last long and to use that strength to book some profits.
Another thing I’d add is that anytime you happen to get a bad fill on your order (in this case 13.60 as you mentioned when you wanted 13.45, it’s important to recognize that the risk/reward profile of the trade has just changed. You might have intended to exit around 13.30, or just about 1% from your entry, but a higher-than-intended entry necessitates raising your stop aggressively in order to offset the late buy. Otherwise, your stop is simply too far down and the risk/reward is no longer as favorable as your original plan for the trade.
The idea is to keep managing risk, keep managing risk, keep managing risk when day trading. Sometimes you get ‘slipped’ on an order like that and end up with a later-than-intended entry, so when you do, either keep a tight stop beneath it or trail it behind the trade aggressively so as to either exit with a minimal loss or book a little gain. If the trade doesn’t unfold as planned, look for the next-best alternative, which is getting out about flat or slightly better if possible.
Sometimes as you said, hindsight will show stocks which may have been better left alone, but on the fly we can still manage the situation well with some good habits.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Archived Webinar
April 20, 2011 at 12:47 pm
Good news! Last night’s webinar in conjunction with Worden was recorded and is now available. If you missed out in real-time, there are still a TON of ideas worth taking note of.
The run time is under 1 hour, and I promise you’ll learn something on top of all the trade ideas presented. Here’s the link to the archived webinar.
Enjoy!
Trade Like A Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Reminder: Webinar Tonight 8ET!
April 19, 2011 at 10:39 am
Here’s a quick reminder about tonight’s free trading webinar, as I would love to see you there if possible.
Locating Trade Candidates 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 a setup that’s been trapping traders lately, which means opportunity for you if approached properly.
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:
Locating Trade Candidates with TheStockBandit
See you tonight!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Webinar: Tuesday, April 19
April 15, 2011 at 2:49 pm
I wanted to be sure to invite you to the webinar I’ll be presenting on Tuesday (April 19th) with the folks from Worden – there’s no charge and I hope you can join us!
Locating Trade Candidates 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.
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.
I’ll also be covering some of the latest developments in how stocks are moving, helping you avoid some of the “obvious” setups which are trapping traders frequently in today’s environment.
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):
Locating Trade Candidates with TheStockBandit
Remember: 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?
What Are the Leaders Doing?
April 13, 2011 at 11:15 am
The market has been resting for a couple of weeks now – and who could blame it? After a run of more than 7% off the March low, some kind of digestion was in order.
Initially, we just saw indecision as the indexes flip-flopped around key levels (NAZ 2802, S&P 500 1332, DJIA 12400, etc.). Since then, however, they have weakened a bit. That isn’t bad, and the pullback could quite easily result in a higher low on the daily charts (vs. the March lows which are well beneath current levels).
While the broad market grapples with where to go next, perhaps a more pressing issue is what are the leading stocks doing? Let’s take a closer look and see how they’ve fared of late, as well as some key levels to keep an eye on in the days ahead.
The best thing to do right now is allow the market digestion to continue and allow the chart patterns you’re watching to fully mature. Forcing entries out of boredom isn’t the secret, so maintain your discipline and let the market generate signals before you take action. If you choose to play at the wrong times, it’ll cost you. Once somebody else starts the move, then you can hop on board for a ride.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Trend Line Entries: Tilted or Flat?
April 5, 2011 at 2:00 pm
I take a lot of trend line trades, as they give me a clear indication that price is either clearing an important level, or that it’s making a meaningful turn.
Recently I was asked why some of those trend lines are flat (lateral), and others are tilted. Additionally, I was asked how I determine my entries on each. Here’s what I said:
Whenever a trend line is slanted, I go with a break of the trend line itself. In the case of a bullish trend line break (a move above a descending trend line), I’ll place a buy stop just above the line itself, perhaps only a couple of pennies above it. These tilted trend lines are themselves the resistance for a stock, so once they’re broken, the stock tends to be free to move higher.
Whenever there’s a flat trend line of support or resistance, it’s evident that price is bumping up against a key zone which remains constant. Sometimes this is at a round number, like $100, but it doesn’t have to be. The way I trade these flat trend lines is to set a buy stop 10-15 cents past the resistance zone, as that will help to confirm I’m entering upon a true breakout that’s taking place rather than a brief penetration of only 1-5 cents which could prove to be a head fake.
When you’re drawing your trend lines, consider the overall situation. Is price struggling to clear a constant level? Use a flat trend line if so. If price is simply seeing a counter-trend pullback, then the pace of the pullback is better seen with a tilted trend line .
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Consistency Over Time
March 30, 2011 at 1:19 pm
It’s been said that good trading is a marathon – not a sprint. I’ve said it too, because I agree. Overnight riches come to very few, but the truly successful usually earn it over time.
Think about it…it takes some time to learn this game, to get comfortable, to evolve to where you’re agile enough and have the discernment to switch styles or approaches when the situation calls for it. A newbie only does that out of desperation. In this game, experience pays.
Truth be told, March has been a tough month for me. I’ve been whipped out of some trades, bought some highs and sold some lows. Naturally, it has elevated my frustration level. The good news is that I’ve been here before. I’ve had those months where I have struggled, and every time I’ve been able to battle back – thankfully. This time should be no different.
I’ve looked over some trading results today, and it was a good exercise. I was reminded that there are occasional stretches where I give some back to the market. But they’re just little phases, and they’re inevitably followed by good runs – so long as I keep after it. I don’t have to make huge bets and get it all back in one trade, and I also don’t have to force trades in order to see my account back at highs. I simply need to keep a level head and persist.
Ask any distance runner, and they’ll tell you it’s all about maintaining a steady pace. The hills hurt, like losing trades, but you maintain your tempo and push through it. Cadence is important to cyclists, so they shift gears along the way in order to maintain that rhythm.
Similarly, you and I size up when we’re in the groove, just a runner takes longer strides going downhill or a cyclist shifts to high gear. When the road gets rougher or tougher on us, we scale back our size but we keep taking One Good Trade – that’s our job.
Trading at times feels like a fun run…achievement comes easy and you get the t-shirt as a bonus! At other times, it feels like an ultramarathon for which you aren’t prepared. Fortunately, we have the chance to rest along the way, and improve as we go. Attitude is key, as is taking a long-haul approach with our career as traders – even if we love short-term charts!
How are you running your race?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
