Author Archive for Jeff White

Welcome to The Kirk Report Readers!

September 18, 2008 at 2:10 pm

I just want to welcome those of you who arrived here on the blog today as a result of the Q&A post on The Kirk Report. I’m glad you stopped by and hope you’ll return often!

Charles is a great friend, a class act, successful trader, and of course top-shelf blogger who works hard day after day to churn out only the highest-quality content for his readers. Needless to say, I’m honored to have been invited for a “Q&A” on his site! It was without a doubt the most in-depth, challenging interview I’ve ever done, and I really enjoyed the thought-provoking questions Charles asked. Hopefully you find it beneficial to read!

While you’re here, let me point you to a few posts which will help you get a bit more familiar with my style of trading and writing…

You can read the about page for more info on my background and this blog. I’m a technical trader, a family man, and I wear t-shirts to work!

I write a nightly stock newsletter over at TheStockBandit.com for traders wanting daily ideas, but I put out regular content here on the blog which I hope you find useful whether or not you subscribe to the paid service. There is also a Free Video Newsletter which I publish nightly that you can sign up to receive. Just see the top-right corner of the blog sidebar and add your email address there to get it (you can opt out anytime).

As for the tour of this blog, you will find over 300 posts here from the past couple of years along a variety of trading subjects. I’ll run through a few highlights from the archives which you might want to check out.

Here are a few articles about my trading style…
*Deciding if a Stock is Trade-Worthy
*Small Mistakes = Small Consequences
*Goal Number 1
*The Day After
*Check Your Rolex
*Another Definition of Trading
*TASC Magazine Interview

A few articles on trading psychology…
*Slay Your Trading Giants
*Trading Discipline
*How Gaps Change Motivations in the Market
*When Bulls Become Sellers
*The 2nd Worst Feeling in Trading
*My Biggest Trading Fear
*3 Signs You Have a Pet Stock
*Gap Lessons: When Trades Get Lucky

Here are a few how-to articles I’ve written…
*How to Grow Your Trading Account (Part 1)
*How to Grow Your Trading Account (Part 2)
*Gauging Urgency in Chart Patterns
*3 Keys to Buying Dips
*Finding Short Sale Candidates
*Stop It!
*How I Use Worden’s TeleChart 2007
*Watch List Management
*Blending Your Style With the Current Environment

Regardless of what you choose to read about while you’re here, I hope you find it useful to your trading approach. This blog exists for that very purpose, so make yourself at home and come back often!

If you’d like to subscribe to this blog, here’s the RSS feed. There’s also a feed reader icon in the righthand sidebar which will do the trick, or just beneath it you can subscribe by email so that you won’t ever miss a post!

Thanks again for stopping by to visit, enjoy your weekend, and I hope to see you back here soon!

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

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading, Charles Kirk[/tags]

Blending Trading Plans & Flexibility

August 6, 2008 at 11:49 am

In my previous post, I discussed the biggest enemy of traders. Among other things, I mentioned “formulating a flexible but well-defined trading plan.” Let’s unpack the ‘flexible’ portion of that comment today.

Sidestep Risk & Stupidity

If I plan to stop out of a long position in XYZ below $25, and the stock falls through that level and I hang on in hopes of a recovery, I’m not being flexible – I’m being stupid.

However, let’s say news surfaces from XYZ that they’ve modified their earnings announcement date to tomorrow afternoon as opposed to a week from now as had been planned. For me to be flexible means I roll with the punches and modify an exit strategy accordingly so that I’m not holding the stock when that major news is announced (as per my Trading Rules).

See the difference? Flexibility is crucial in today’s environment, but it must be implemented with some discretion.

‘Outline’ Your Plan

How about another comparison? What if we thought of a trading plan in the way a public speaker uses an outline. The speaker knows what he needs to say and when to say it, but just in case he gets distracted he’s got an outline right in front of him to bring him back on course at a glance without missing a beat.

Similarly, a good trading plan lets us know at any point in time what move we need to be making – whether entering a position, standing pat on an existing trade, or closing out a position at an appropriate level. At times we’ll be distracted by the price action, so the trading plan prevents us from becoming panic-prone.

The ability to pair flexibility with that trading plan comes with experience, but it does come. Just as a polished speaker can read his audience and recognize when certain topics may need additional time and attention based on the response (or lack of) of his listeners, an experienced trader can read his position and gather some feedback from it in order to determine when stop or target levels may need to be modified. But just as a first-time public speaker should stick with his outline, new traders should stick with their game plan.

Cater to Your Account, Not Your Feelings

Many traders think of a trading plan as something which is too rigid to allow for modifications which might be warranted, but that simply isn’t the case. A trading plan should be implemented to benefit you. Only allow it to hinder your poor habits. If you find yourself in a situation where it isn’t accomplishing that, or if the landscape has changed in a way that your original plan did not account for, then don’t think twice about making an adjustment.

The key is that you don’t want to go about making changes in order to accommodate your feelings. Because remember, great traders control emotion by trading without it. So get a grip and utilize your trading plan purely for functional reasons.

As you begin to gather the experience which builds ‘gut feel,’ you’ll come to recognize situations which warrant a modification to your trading plan. But until that comes along, don’t rush it! Stick with your plan like a speaker watching his outline, knowing that it will keep you focused and on the right track.

Trade well out there!

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

P.S. Have you signed up for the Free Video Newsletter yet? It’s a new feature with regularly-updated video posts which are brief but beneficial. Check it out!

What It Means To Wait On The Market

November 21, 2007 at 10:54 am

One comment I make frequently over on the main site is to “wait for the market” to produce good trading setups. Those of you who read me over there understand what I mean, but the rest of you have no doubt heard the phrase. I thought it might be helpful to explain just what it means and give some examples of how it’s done, particularly because it is so important in this wild market environment.

A good trade is usually a planned trade. For me, that means scouring the charts in search of patterns which I’ve found to be repeated over time. They also give me a black & white entry and exit as they confirm or fail their patterns. My style is such that I won’t trade unless and until I see these patterns emerge. Oh sure, I’ve forced plenty of trades from the usual boredom trade to the revenge trade, but those kind rarely pay me. The ones which pay the bills are the ones which come along and really stand out from the charts, the ones which I can’t pass up.

Waiting on the market means that you don’t go hunting excessively to find a good trade. It means you do your homework and take what the market gives. I’ve found that when I have to dig and dig to find a trade that it’s usually not worth taking. The best trading periods offer up plenty of opportunities for entries and new trading ideas, so when you’re not seeing what you like don’t force it.

The current trading environment is a sloppy one, so I’m having to put this theory into practice daily right now. After a prolonged uptrend, the market entered a corrective phase a few weeks ago and volatility is running extremely high all of a sudden. Emotions are swinging back and forth as traders take profits and fund managers worry about getting left behind every time a bounce begins. This means that the daily charts which typically offer a steady flow of multi-day trade candidates are now just not offering much without drastically increased risk.

As a result, I’ve been doing more day trading than swing trading, reducing my trading timeframe so that I can keep my risk in check. Even planned trades which have abbreviated timeframes (like day trades) are requiring extra patience right now, because the frequent reversals and morning price gaps which have been so common in recent weeks are preventing many of them from triggering entries. So rather than lower my standards purely for the sake of activity and put on lower-quality trades, I wait!

If you’re new to the game, be aware that trading shouldn’t be full of excitement and thrills every moment of the day. It’s easy to want to be actively trading at all times, but sacrificing your objectivity for the sake of entertainment will mean a quick exit from the game. There are times which will be downright boring as you wait for your pitch to come along before you swing the bat. Your ability to accept this fact will put you miles ahead on the learning curve, and you’ll pay far less tuition while learning the ropes.

Patience is probably the most underrated attribute of the successful trader, but it’s the one most-often exercised by those of us who make our living in the market. So whether you’re letting a good trade develop or simply looking for your next play, wait on the market to provide the conditions you’re seeking and you’ll eventually be glad you did.

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

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

Parabolic Blowoff Top

May 15, 2007 at 7:20 am

It’s been 7 years since we saw a lot of these chart patterns emerge, but even today there are stocks which get in uptrends at steeper and steeper angles until, POP, the party ends. These moves don’t happen frequently, but when they do there are some big opportunities for pain and gain in both directions.

TNH has been trending higher for many months now, and recently this one went parabolic. As the stock continued to advance, bases were built and breakouts were produced time and time again. Without a sufficient resting phase for the stock, the pace of the climb continued to accelerate until the stock was moving up at a near-vertical rate. Once the ascent reached a climax, the path of least resistance became down.

There is a great deal of psychology at work in a move like this, and it impacts those on both sides of the trade. Buyers see gains stack up at a dizzying pace, and more momentum players quickly join the chase. This produces some stellar gains in a very brief amount of time, which feeds the rush. Those who want to fade the move and short sell into the strength quickly get squeezed, watching their losses mount rapidly as panic sets in. The shorts begin to cover, adding fuel to the fire as the stock reaches stratospheric levels. And once everyone has finally made their buys, the music stops and there’s not enough chairs. There’s nobody left to provide demand for the stock, so everyone rushes for the exits at once, producing a spectacular reversal with record volume.

TNH is a perfect example of what a blowoff top looks like after a parabolic run. This one image shows both fear and greed, and it says “stay away” for the next little while as this stock tries to get its bearings.

(Click on chart for full-size image)

Staying greedy in a big trade or trying to fade a powerful move too early can be costly, so keep your wits about you when you see explosive moves like this. If you don’t, you’ll be padding someone else’s trading account!

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

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

The Numbers Game of Trading

May 14, 2007 at 4:12 pm

This week’s Free Newsletter over at TheStockBandit.com discusses the topic of The Numbers Game of Trading.

Those of us who aren’t in the buy-and-hope crowd are traders, and it really is a numbers game. Learning to approach your trading with this mentality can have a very positive impact on not only your profitability but also your attitude as well. So be sure to stop by and read this week’s free newsletter for more thoughts on the topic.

By the way, you can sign up for the free newsletter on the Free Newsletter page at TheStockBandit.com and we’ll notify you every time one is published. An opt-in form is provided at the top of the page which puts you in full control of your email subscription at all times.

Trade well this week!

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

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

Market Indexes Trying to Base

May 13, 2007 at 6:46 pm

The market indexes gave us a little of everything last week, with some rest, a selloff, and a rebound. Overall some needed rest was put in, but more of the same would sure be healthy. But with a solid uptrend still in place, there’s no telling if the bulls will allow it or not.

We may get some added rest from this point, but even if we don’t last week’s dip helped to shake up many charts of individual stocks, and that’s a good thing. No matter what you’re trading this week, be sure to check out this week’s Market View page over at TheStockBandit.com for a closer look at the indexes as they stand tonight.

Trade well this week!

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

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

One Year Ago This Week – May 12-18, 2006

May 12, 2007 at 7:03 am

Here are a few of posts in case you missed them from one year ago this week:

We all know we need discipline to succeed as traders, but most talk of it is in relation to losses. Don’t neglect The Other Side of Discipline.

The Great Expectations Series looks at the importance of trading goals in the post Eyes on the Prize.

Adaptation is the key to survival in the wild and in the market. Another post from the Great Expectations Series discusses the Chameleon Trader.

The Great Expectations Series wrapped up with the conclusion and a review of some key points.

Enjoy your weekend and do something fun!

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

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