Search Results for 'traders'
Be Patient Buying Dips
Novice traders are equipped with very little useful information, as even your grandmother knows to “buy low and sell high.”
With the recent correction, many stocks now are starting to appear ‘low’ on the scale, and that’s enticing – but dangerous – to those who have been waiting for a shot at getting in. The trouble is, that age-old “wisdom” doesn’t tell the whole story.
Cause for Caution
Merely buying a stock on the basis that it’s cheaper now than it used to be is no formula for success. The goal is to be buying when there’s an expectation of higher prices. When prices are declining, the trend is of course down, which means it’s best to wait for some technical proof that the correction has ended before aggressively buying.
Think of it this way. At the department store, escalators come in pairs. There’s an up escalator, and a down escalator. Buying stocks on the slide in expectation that they’re going to go right back up is like getting on the down escalator in hopes of it rising. It makes no sense. Eventually, the down escalator will end at a level floor, which in the world of technical analysis will be support. Only once that’s found can you step onto the up escalator with a realistic expectation of a ride back up. Wait for stocks to do the same thing.
Proof of Change is Needed
After a long-lasting bull market like we saw from March 2009 to April 2010, there’s going to be new money attracted to the game. So we know right now there are some new traders in the mix who are aiming to buy low, and it’s no surprise many are getting hurt with the recent ‘discounts’ we’ve seen in prices. The market has been in a correction phase for several weeks now, and it hasn’t been pretty. More importantly, it might not be done yet.
The real key here is to wait for the technicals to shift, and that will come in the form of a higher low on the daily chart. We’ve already seen higher highs get established in the NAZ, S&P 500, and DJIA, but they have yet to create higher lows. That may happen soon, or it might be a while, but that’s the next element to watch for before committing to the long side for anything but quick trades. On the premium site, that’s the stance I’m taking for now, and June’s been good so far because of it.
Trade Like a Bandit!
Jeff White
Swing Trading & Day Trading Service
www.TheStockBandit.com
Are you following me on Twitter yet?
Disgusted
Disgusted…
It’s a word you probably learned in junior high when someone paid that kid $5 to eat frito pie from the cafeteria trash can.
But it’s a word you still experience.
You hate the way you feel, so you start eating better. You hate how your yard looks, so you get more diligent at mowing, fertilizing, and watering it. You’re sick of that relationship being on bad terms, so you make amends and try harder going forward.
Trading can be the same way. It can leave you wondering what you’re missing. The market acts or moves a certain way for so long, then shifts on a dime. You’re left feeling clueless and out of sync. You’re hemorrhaging capital, and you have no idea how to stop it. You’re completely disgusted with it.
Disgust isn’t necessarily a bad thing though. Mind you, it sure isn’t a good way to feel, but it can produce some incredible results – if you know how to use it.
Channeling Disgust into Diversity
What you’re about to read may disturb you, but here goes…
Embrace it.
Disgust is usually the rock-bottom spot where you’re finally ready to do some changing…of your attitude, of your expectations, of your approach. Most of us have to get to that place before we’re willing to make a change.
Until we’re there, it’s just too easy to tell ourselves “I’m just out of rhythm” or “this market is just acting strange” or “things will get back on track any day now.” Uh huh. What if the market stays strange for a while, or what if you don’t find your ‘rhythm’ quickly? You’re in big trouble, right?
Perhaps the greatest opportunity born out of disgust is that of diversity. When we hate the results we’re getting, we either continue to get them (by not changing), or we expand our horizons and learn some new approaches. Those are the 2 choices we have.
When it comes to trading, those new approaches might include different trading methods we’ve heard about or considered, but have not yet committed to. Or it might involve different timeframes for trades. When day trading isn’t offering much, shifting out to a swing trading timeframe can often make all the difference in the world. That’s why it’s so important for us to diversify as traders.
Dual Benefits
When you shift your approach from one which isn’t working to another method, you’re going to see some short-term changes in your results. Often times that’s going to mean instant improvement, which is quite refreshing. It brings you out of your funk almost immediately, so your attitude is also likely to be better.
But what’s even better is that as you learn another method, you’re that much more equipped down the road to make a shift when conditions call for it. Because you’ve now recognized what isn’t working, and which conditions prompted a change, you’ll be able to identify similar shifts the next time around, and you’ll now know better how to adapt. Win/win.
So if you’re currently feeling rather disgusted with your trading, I’m aware that it’s no fun – I’ve been there too. But if you want out of that mode, then don’t wallow in your sorrows any longer. Get on the move and start finding and employing some new styles and strategies – the ones you’re using are costing you too much in capital and confidence to continue using them right now. Keep them in the bag for later, but channel your disgust into a desire to develop new approaches, and you’ll be glad you did.
Trade Like a Bandit!
Jeff White
Swing Trading & Day Trading Service
www.TheStockBandit.com
Are you following me on Twitter yet?
Selective Memory
Trading is one of those things that really requires a selective memory.
The same kind of selective memory that I needed when I was on the dating scene. I chose to ignore the bad experiences I’d had with certain girls, and I stayed in the game long enough to find the wife of my dreams.
It’s the same kind of selective memory needed on the golf course. That bad shot from a few holes ago needs to be suppressed for this next one across the water hazard. Otherwise, you’re toast.
Some traders never develop this skill, unfortunately. They cling to the past, unwilling and unable to let it go for the sake of making that next trade. Getting faked out of a good trade last week prevents them from taking a similar setup this week, afraid it will hurt their account once again, or worse, their ego.
They have a good memory, yes, but they’re not using it in a good way.
That’s no way to trade. Clinging to memories which don’t empower you is a form of recency bias, and it can really prove costly in this game.
The Petrified Don’t Profit
Take last week, for example. The downdraft in the market left many trying to step in and get long near what they thought was the low of the dip. They were early on Wednesday and Thursday. Those who threw in the towel never took a swing at it on Friday, which provided the best rally of the week with the morning gap fill and continued climb into positive territory.
Sound familiar to you? Is this starting to ring a bell?
In a recent conversation with my friend Charles Kirk, he was telling me about some newer traders he had been working with. His delight came not only from helping them discover more about trading, but also from their attitudes in taking trades during difficult market conditions. He mentioned how the newer traders see a setup and just go for it, rather than hesitate the way some experienced traders do who are dealing with recency bias.
Love is a Choice
Love is commonly described as a feeling, but true love is really a choice. It’s a commitment to look beyond one’s faults and accept the entire person. It’s a decision. Marriages which last 40, 50, or even 60 years are based on that decision, long after superficial beauty has faded.
Having a selective memory in your trading is also a decision. It takes commitment and practice to make it a routine, but it’s worth it. Expect the best from yourself, but along the way, know that you’re going to make some mistakes. There will be headfake moves which shake you out. They aren’t fun, but they don’t have to sideline you and damage your confidence forever.
Mistakes cost money, so they’re worth learning from. However, they can also cost us opportunity if we allow the memory of them to stand in the way of taking new trades which suit our plan and which offer great potential rewards.
Look for some mistakes you made this week, learn from them, and then choose to look beyond them so they don’t cost you any opportunity.
Trade Like a Bandit!
Jeff White
Swing Trading & Day Trading Service
www.TheStockBandit.com
Are you following me on Twitter yet?
An Open Apology
I just crawled out of my cave. At least it feels that way. And it probably seems that way from your perspective, so I owe you an apology.
The regular articles and free videos just haven’t made it into the rotation for the past couple of months. Truth is…the free stuff goes first when there’s a time shortage.
For the past couple of months, I’ve been working my tail off on a brand new resource that has just required a lot of, well, all of my extra time. Hence the reason I haven’t been putting out very much of the great content you’ve grown accustomed to seeing here for the past 5+ years.
But there’s good news – on a couple of fronts.
Good News #1
First, that resource I’ve been working on…it’s DONE. That’s not only a relief to me to have such a huge project behind me, but it also means you’ll be able to access it this week.
To give you a little background on it, TheStockBandit University was initially just a Basic course on trading, which is ideal for beginner traders. Those who are wanting to make the transition from ‘long-term investor’ to ‘trader’ can shorten their learning curve BIG TIME through the Basic course. I’m really proud of the Basic course, and it continues to deliver for those who enroll in it.
But…that doesn’t really help many of you who have been trading for a while. The Basic course really is below the level of experience which most of you have already reached.
Well, the feedback and the response was so great from the Basic course, that it was only logical to build on it – not only to take the beginners to the next level, but to aid current traders in the areas which they struggle so much with.
Students of the Basic course now have a grasp of the fundamentals of trading, but they need more. And subscribers of my stock newsletter, readers right here on the blog, and regular viewers of the Trading Videos also have been wanting some upper-level education to get their trading to the next level.
Some higher learning.
So, a few months ago, I set out to create an Advanced Trading Course for those who are already traders, but who still aren’t getting the results they desire. Like the Basic course, the Advanced course is a video-on-demand training course which can be utilized as an ongoing resource. The difference is the content of the course, as it’s not for the beginner.
I wrote out the course plans, the lessons (merely 150 pages of single-spaced typing), hit the studio and recorded them, and the course is now ready to go live this week.
Which brings me to the second bit of good news…
Good News #2
I now have a LOT more free time to tend to the things I used to spend time on. I will again be putting out more free videos, writing more articles here on the blog, and of course providing more features to the membership at TheStockBandit.com.
For the past few months, I devoted my days to my trading and to my family. Extra time (early mornings, late nights, and weekends) I had went straight to developing curriculum for the Advanced course. But now that it’s completed, that extra time will once again be utilized for the things you came to know me for…
Quality posts.
Trade ideas.
Lessons.
Video reviews.
All the good stuff.
So, I hope you’ll accept my apology for largely being absent these past couple of months on the blog, and I hope you’ll return often and give me a chance to continue helping you.
I’ll have another post here when the Advanced Trading Course is made available to the public, so don’t disappear!
Whether you decide to register for the course (it does come with a guarantee), or you simply stick around here in hopes of finding more good stuff from me, you won’t be disappointed. Win/win!
Trade Like A Bandit!
Jeff
Video Review of the Indexes 4-25-2010
A week ago, traders were mulling over the option expiration Friday selloff which brought the most red the indexes had seen in a couple of months. The S&P 500 broke its uptrend line, and many wondered if that might be the end of the rally.
And then last week arrived. The buyers stepped in once again, keeping the uptrend intact. And perhaps just to prove their point, more new 52-week highs were made on Friday. That’s an important reminder that the uptrends still deserve respect, and that the top-calling game might hold appeal for some, but it isn’t paying very well at this point.
As we head into a brand new week of trading, let’s examine some important levels in the indexes 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.
This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.
Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.
Thanks for stopping by and I’ll see you here soon with more.
Until then… Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Video Review of the Indexes 4-18-2010
More new highs were reached yet again last week, although the week ended with some abrupt selling. What was shaping up to be a quiet down day turned into the biggest drop we’ve seen in a couple of months, thanks in large part to news out of GS.
Regardless, the turn lower is good in the short-term for a couple of main reasons. First, it reminds traders that the market CAN go down! Many have forgotten that in recent months. Second, it should help some new bases to form in the charts of individual stocks, and even lasting reversals in some cases. The shake-up will be nice, so if the selling caught you off guard, don’t worry.
As we head into a brand new week of trading, let’s examine some important levels in the indexes 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.
This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.
Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.
Thanks for stopping by and I’ll see you here soon with more.
Until then… Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Video Review of the Indexes 3-14-2010
Lately, it’s been shocking to see a down day. The indexes seem to go up daily – even if not by large amounts, they’re green. It’s as if they’re green enough to remind everyone that the bulls are getting their way.
Not only are the buyers propelling stocks higher, but so are the bears who keep needing to cover their shorts – both on strength (to avoid pain) and on any weakness (in order to book quick profits and get back out while they can). Clearly, it’s been one impressive run.
At this point, the biggest question is when will we see a dip or a rest? After all, either one will be a welcomed sight for traders, simply because chasing extended moves is among the toughest things to do for those of us with shortened timeframes. Well, it will happen, so patience is the key right now while we wait for one to arrive.
As we head into a brand new week of trading, let’s examine some important levels in the indexes 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.
This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.
Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.
Thanks for stopping by and I’ll see you here soon with more.
Until then… Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
