Search Results for 'traders'
Video Review of the Indexes 12-13-2009
This market is at home on the range, and just one glance of the daily charts over the past several weeks makes it clear that the standoff between buyers and sellers is still in effect. The bulls have maintained control for 9 months and counting, yet with a wonderful opportunity to produce a breakout and stretch their legs a bit, they’re hesitating. Why?
Who knows. The fact of the matter is that as traders, you and I must recognize such things as a trading range, and adjust as needed in order to survive. For me, that has meant keeping tighter stops and staying selective until better momentum surfaces. Eventually, this too shall pass, so hang in there!
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?
Always Something to Worry About
Ever get spooked out of good trades? It’s one of the worst feelings in trading, knowing you were right and just couldn’t stick with the play long enough to get paid a fair amount.
The back-and-forth nature of the market makes it easy to jump to conclusions that a turn may be right around the corner, perhaps even a painful one. As a result, it can be really difficult to stay in good trades, or to continue riding a trend which has gotten a little bit long in the tooth. The flight to safety plagues us all from time to time – often prematurely.
An example is the current environment. The indexes have made a tremendous move up from the March lows, making it hard for those with inventory to stay long or for those with cash on hand to put it to work after such a surge. What if the trend changes?
Or take that trade you were in last week. You nailed it – well, the entry at least. Sure would be nice if you were still in there, huh?
Well, I’ve been there. I’m familiar with that frustrating feeling. And you know what I’ve come to realize?
There’s always something to worry about in the stock market.
Earnings, upgrades/downgrades, the Fed, interest rates and inflation, terrorism, nukes, the economy, elections, geopolitical events, strained relations with other countries, etc. It’s virtually an endless list. Looking back over my past 11 years in the market, I can recall “major” concerns for every calendar year. And yet for every single year, there were some phenomenal stretches of trading.
There’s literally always something going on. That something may be a driver of prices, or it may simply be a sideshow – a distraction, if you will.
But here’s the thing… for traders like you and me, what matters is how we respond to the conditions – not what the actual conditions are or our ability to determine what’s going to happen next. We have to walk that fine line between making wise decisions to protect our capital and allowing some fluctuations to occur so we remain on the right side of the tape and fatten our accounts.
Profits come from putting money at risk when there’s some potential payoff. For individual traders like you & me, it means we need to be agile enough to hop on board with whatever it is the big money is doing. Doesn’t matter why they’re doing it. It only matters that we pay close enough attention to determine the trend and find appropriate spots to take action. We get paid for taking risks – especially the right kind.
Silence is Golden
Don’t be surprised if you can at any point in time find arguments for why the next bear market is about to begin, or why prices will never decline again. Not only is there a constant difference of opinion, but there often is some decent logic behind those arguments, whether bullish or bearish. That’s what makes a market – thank goodness!
But those opinions will be shrugged off many times, so our flexibility is critical.
Bears and bulls alike will constantly beat their drums as to why they’re positioned the way they are. Don’t let that be the reason you put cash to work or pull cash out of good trades. Get long during uptrends, and get short during downtrends and you’ll come out just fine. It isn’t necessarily ‘easy’ but it is simple.
Stick to the charts and keep ‘reasoning’ in check, because the market can defy logic for extended periods of time. Is it doing that right now? Who cares! Prices will do what they do, and it’s our job as traders not to predict anything – but to react accordingly. Trade what you see – not what you think – and you’ll usually be far better off.
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?
Managing Day Trades Effectively
Would you rather make money by the minute, or by the day?
I’m open to either, so why not both! I like swing trading for the set-it-and-forget-it benefits it offers, as I can structure my trade and manage it with little effort on a multi-day timeframe. The time requirements are minimal, and the payoffs can be great. But I also like day trading and the flexibility it offers. I can enter the day with zero directional bias, and still find some opportunities to capitalize on from the intraday chart patterns.
Trading multiple timeframes is one of the best ways to diversify as a trader, there’s no getting around it. But let’s explore this idea a little further of managing day trades, because that’s one subject so many seem to struggle with.
R & R
It’s no secret that the key to good trading – for most of us anyway – isn’t how frequently we’re correct, but rather how big we’re correct. After all, we’re going to be right sometimes and wrong sometimes, so the net difference is where the rubber meets the road. For me, that comes directly from the size of my winners as compared to the size of my losing trades, or my risk-reward ratios. Let me repeat: it’s not really the frequency of wins that matters… it’s the size of them.
So if that holds true, then it’s true across all timeframes. From the position trades you might hold for a few months, to the swing trades of a couple weeks, to the day trades which might last a couple of hours, the key is risk vs. reward.
Deciding on Day Trades
In the Bandit Hideout, there’s a nightly video newsletter called the Bandit Broadcast. It contains setups for plays across multiple timeframes, from the swing trades I’m considering over the coming days, to the day trades I’ll be making tomorrow. The day trades are for brief, short-term moves of up to a few hours. They look like on the daily charts that they could make a quick move but not necessarily a lasting one, so instead of holding them overnight I simply look to grab them for the initial move and then ring the register and set them free.
For these plays, I’m not trying to endure pullbacks or wait around to see if it’ll keep running for several days. So once I’ve determined if a stock is trade-worthy, I tend to watch 3-minute bars and simply look for the same kinds of chart patterns I seek on the daily charts….channels, flags, wedges, triangles, etc. The same patterns will still play out across timeframes, which I’ve long said is the beauty of chart patterns and technical trading.
The Other ‘E’
When I find a setup that looks suitable for a quick play, my attention isn’t solely based on where my entry will be. Too many traders focus on that alone, and in return, fail to recognize the other half of the equation – the exit.
For stops, I usually set about 1% from entry as a stop (as outlined in the day trading strategy). The previous day’s low is often much farther from there, so I really just focus on today’s chart and try to first and foremost limit risk.
After that, it is a matter of gauging momentum by monitoring the volume, strength, and pace of the advance so that I don’t overstay my welcome. I’ll gladly offer out shares in chunks on the way up, scaling out and using the strength to my advantage. Once the momentum fades, I’m outta there.
I really like the advantages that swing trading offers me when it comes to setting up plays and letting them work, but I simply can’t deny some of the aspects of day trading which offer flexibility and potential for grabbing short-term moves.
So as you construct your day trading strategy, be sure that it’s suitable to your unique needs as a trader. You might be willing to withstand more risk than the next trader – or less. You might prefer to exit in pieces, or you might like jumping out all at once when your stop or target levels are hit. Whatever your style may be, just be sure to stick to it for maximum consistency. It’s how you’ll manage your day trades most effectively.
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 11-1-2009
The major averages sold off hard last week as profit-taking dominated the action. The lone advance happened on Thursday, but Friday’s selling pressure alone had no trouble erasing it.
The NAZ is now facing a very critical level, and the overall character of this market is quickly changing. Volatility is expanding, and suddenly traders are remembering that the market can indeed move both directions.
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?
Oversold Bounce or Higher Low?
Following an impressive surge higher from early October, the market has finally taken a breather. The pullback of the past week has offered at least a short-term change of character that has my attention – and yours as well, I’m sure.
Downside follow through has been notably absent for some time now…until this week. Four consecutive declines began with last Friday’s reversal from the highs in the NAZ (2190), and ended with Wednesday’s punishing selloff. Thursday’s bounce was headlined by a near-200-point jump on the DJIA, but under the surface we saw the NAZ post an inside day. The S&P 500 erased Wednesday’s losses, but on declining volume. Mixed signals, to say the least.
Looking at the daily charts of the indexes, a case can be made for more than one scenario here. We are in well-defined uptrends, and the dip of the past week could again get bought and prove to be yet another higher relative low within the trend. But by the same token, the bounce we saw on Thursday could merely prove to be a relief rally after the harsh selling which put the market short-term oversold. It’s hard to place my entire weight on either scenario just yet, as more technical evidence needs to be seen to support one or the other.
So at this point, I’m making zero predictions. This isn’t a spot to buy blindly and bank on another rally straight back up to new highs. The selling intensity we just saw wasn’t like the modest pullbacks which preceded it. It was a little more vicious and a little more ominous. It could be the start of a change of character. And this isn’t a time to call for a market top and start shorting the daylights out of every name out there. The intermediate trend is still up, and that should be respected.
I’m expecting the next few days to carry some significance. Either the bulls prove themselves yet again, or the bears build on their newfound confidence and we see another leg down begin to develop. Personally, I don’t care which side wins out – I have no bias.
My approach is to stay very short-term for the next couple of sessions, day trading for quick moves in this increased volatility, and see what happens. Many stocks broke down hard and have the potential to construct bear flags and rising wedges if the rebound loses momentum and volume continues to sag. I’ll be watching those bounces intently. Other stocks still aren’t far from their highs, so I’ll observe them closely for signs of real strength returning – not simply a relief bounce of one day.
Both the bulls and bears have something to prove these next few sessions, so it could wind up being a pretty good battle. No matter what, volatility is picking up, and that’s a great thing for us as traders.
So stay objective out there, anything is possible. Expect surprises in both directions. We’re getting into the best season for trading in the next several months, and I’m excited about it!
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Huge News at TheStockBandit.com
Occasionally, it’s my pleasure to get to deliver some great news here on the blog.
At the beginning of this year, I introduced you to the Trading Videos site over at TheStockBandit.TV. Then in the spring, I got to show you the stock trading course at TheStockBanditUniversity.com, a video-on-demand training course for beginning traders.
Well, today I get to do it again with the announcement of a brand new website at the heart of our network, TheStockBandit.com. The new look is indeed cosmetically striking. It’s cleaner, more streamlined, and straightforward. A huge improvement, and I want you to see it.
Along with the new look comes the best part – new functionality.
It used to be on the old site that members logged into a Member Area which was sequestered from the rest of the site. Every feature was found in a different location, which meant it was hard to navigate and easy to get confused!
The new site works more like a blog, with anything new hitting the top of the members-only area – that way, our subscribers are continually seeing what’s new. It’s fantastic. There’s even the ability to interact and comment right there inside The Bandit Hideout. (Catchy name, yes, but appropriate!)
So head on over and check it out – we are excited to show it off! And by the way, all the usual free resources and trading education info made the transition too, so those pages of chart patterns and trading strategy outlines are still there.
One last thing… we dumped our database of former members.
That sounds bad, but it’s actually VERY good because you can start another free trial – even if you already received one on the old site. It’s only logical that with a new site, everyone gets a freebie.
So, I’ll see you in The Bandit Hideout!
Jeff White
Are you following me on Twitter yet?
The Power of Focus
Just last weekend, Tiger Woods collected another trophy. It was an impressive win by a wide margin, his 10th career win by 8 shots or more. And while he’s posted 6 wins this year alone, there’s one in particular I’d like to discuss today. Surprisingly, examining it offers some real value for us as traders.
On July 5th, Tiger held a 1 stroke lead heading into the 72nd hole of the tournament he hosts, the AT&T National. Needing only a par to win, he rifled a 3-wood down the fairway. Holding a 9 iron as he stepped to hit his approach shot, his focus was as intense as it had been all day. He chose a specific target, mentally rehearsed the shot, and executed it perfectly with a shot to about 12 feet. Enough for an easy 2-putt for the win.
The highlight reels didn’t mention how he played the 18th, and some would say it was downright boring and uneventful compared to other shots he hit that day. However, his focus did not waver with that all-important par at the last. He was ready for it, and he added yet another victory to his resume because of it.
So how does all this relate to trading?
Well, for each of us who have ever faced our screens with fear or trepidation, the study of a great performance by a top athlete will always offer applicable lessons. Observing someone else who’s producing great results under pressure gives us an opportunity to grow and improve, so it’s always an exercise worth doing.
Let’s learn a few things from Tiger…
Preparation = Confidence
When it’s time to get ready to play, nobody outworks Tiger. He’s willing to put in the necessary time to get the results he wants. Are you? When it comes to your trading, if you were to rate your level of effort with regards to preparation, how would you fare? The very best traders aren’t lazy. They thoroughly prepare for a variety of scenarios, and it enables them to respond in the heat of the moment with confidence. If you’re not confident, you’re probably not preparing adequately.
Confidence = Chances to Win
We’ve all heard the phrase ‘confidence breeds confidence.’ It’s true. Showing up with a winning mindset is at least half the battle, whether it’s sports or trading. It’s a positive outlook rooted in the fact that you’re ready for whatever comes your way. You’re patient yet aggressive, and you know that you won’t fall prey to hesitation or indecision. That mental sharpness elevates your performance, and it increases the chances that you’ll be at your best. As a result, winning becomes more likely.
Frequent Chances to Win = Success
Giving yourself the best chance to perform well day in and day out will repeatedly open the door for success to happen. It’s aided by good preparation and a thorough routine, and it results in better focus and even a more relaxed state when it’s all on the line. What each of us want is to have opportunities to create big performance breakthroughs regularly, because we know we’ll capitalize on some of those. Tiger wants to have a chance to win going into the back 9 on Sunday, to him that’s what it’s all about. Prepare in such a way that your odds for success naturally increase. Anticipate multiple scenarios, visualize how you’ll respond, and set fear aside as opportunities come your way. The confidence you’ll derive from that will go a very long way toward helping you convert a decent day or month into one you’re really proud of.
Whenever you have the opportunity to observe the best when they’re at work, do it. Regardless of the endeavor, you’ll see the power of focus at work and pull some qualities from that experience to apply to your trading.
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?
