Search Results for 'traders'
Day Traders Return
Yes it’s true, Day Traders are Making a Comeback on Wall Street! For years there have been quite a few of us, but I suppose the steady uptrend which started last summer and ran for nearly 8 months is part of the reason. Dirt-cheap commissions at direct-access brokerages also contributes to the rise of day trading, along with just greater education and awareness of active trading.
I used to purely be a day trader, but I’ve been swing trading more in the past few years. I still make a fair amount of day trades when I see inefficiencies that I feel I can capitalize on, and I’ll continue to do so for as long as there are opportunities to pull some profits out of the market, in spite of the ongoing debate about day trading.
If you’re considering doing some day trading, you’ll no doubt find it easy to get spooked away. With countless stories of traders who got their head handed to them (via TraderMike‘s QuickLinks), you might change your mind before you ever even get started! However, there are a few things to keep in mind that are positive aspects of day trading:
Day Trading Helps You Manage Risk
It’s true! By looking “under the microscope” and shortening trading timeframes, the risk is inherently lower on a per-trade basis. Overnight gap risk is not a factor. Event risk is limited. Stated more plainly, closing out trades by the end of the day would have saved countless “investors” a lot of money by not holding onto losers!
Day Trading Offers Higher Leverage
Leverage can be a double-edged sword, and should be used only by those who understand & respect it. If you meet both of those requirements, you can get up to 4:1 leverage for day trades that will enable to you profit by a greater percentage than would be possible without margin. That’s a big benefit that offsets the shorter holding times of day traders, but I cannot stress the importance of understanding leverage and respecting it.
Day Trading Allows Money to Compound Faster
This is probably the biggest advantage of day trading, as the more rapid turnover of funds and adding up more small gains will lead to the faster compounding of money. Einstein called compound interest “the greatest mathematical discovery of all time.” That certainly supports the concept of frequent incremental gains adding up very rapidly for day traders, and it’s hard to ignore. Gary B. Smith made a great point a few years ago that a trader starting out with $5,000 who increases it only 0.5% each trading day will end up with quite an impressive sum after 5 years: $3,000,000!
So of course, do your homework, determine what trading timeframe is right for you and your needs, and investigate some day trading strategies. If you’re slow to act or if you’re a compulsive gambler, then day trading is absolutely not for you. However, it just might suit you and provide you with another trading method to build up your account.
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Proper Positioning for Traders
Toddo wrote a great article over at MarketWatch that I highly recommend reading. His 5 points of proactive thoughts on how to position yourself properly in today’s market is a quick read that we all stand to benefit from. Check it out, even if you only skim!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Attention Topless Traders!
That tan of yours isn’t cutting it yet, so please clothe yourself! And why not do it with a t-shirt from TheStockBandit.com?!
Tomorrow you’ll have another chance at the T-Shirt Trivia with another random question that could win you some new casual threads. Don’t miss Tuesday T-Shirt Trivia here tomorrow at 11am ET!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
Diversification for Traders
They send me junk all the time, as if I really care.
Those long-term accounts of mine are magnets for the endless supply of “investment” idea brochures and write-ups.
It’s all about diversification, they say.
But I’m a trader! Can I still diversify? YES, and I should. But it isn’t the same. It’s not about finding some international exposure to offset the large cap growth in my portfolio (did I just say “portfolio?”). No, diversification in my world as a trader is entirely different.
I can diversify my timeframes. I may choose to day trade some of my funds, looking for quick intraday moves while I let a swing trading position play out over the course of a few days. I can diversify my timeframes by checking not just the 3-minute chart but also noticing what the 15 or 60-minute charts show. That’s something that can help me as a trader when I am trying to determine my next course of action (or inaction).
I can diversify the sectors I trade. Maybe I trade semiconductors on a day like today when they’re the talk of the NAZ, and other days I turn to the homebuilders or the energy stocks for movement. The bird flu plays have been active in recent weeks, and they move to the beat of their own drummer. Diversifying sectors allows me to find exposure in places that will move with the market or not at all, which it helps to stay aware of on trend days as well as range bound days.
I can diversify my trading by going long or short. It cracks me up when people I know see the DJIA down 80 points and think I must have lost money. They forget I’m a trader. It’s about movement, not always price appreciation. I can go long or I can short sell and still make money as long as I’m paying attention to the market.
Diversify your timeframes, the sectors you trade, and be willing to go short. And when you get a chance, trash that value fund prospectus!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
New Location for the Trading Blog
Some of you have already noticed this, but just in case there are still some traders looking for fresh content here I wanted to be sure to point you in the right direction.
I’m moving future posts of the Trading Blog over to TheStockBandit.com, as I’ve been posting there for a few months and that’s where all the new posts and articles will be published going forward. Please be sure to update to the new RSS Feed to receive all the new posts as they’re published, and get on the email list to ensure you’re notified of any pertinent updates.
The reason for doing this is simply to consolidate content, as we already have a ton of information at the main site to teach and educate traders. Shifting the blog over there just makes sense so you can get it all in one place. I’ll continue to share trading insights, discuss the market, review charts, and do whatever I can to keep you on track with your trading.
Please note that the archives here will remain in place, so TheStockBandit.net isn’t going anywhere – it’s just not going to be updated with new posts going forward. There are 745 posts here which hopefully will continue to be read, because there’s gold in the archives that should not be ignored!
For ease of reference, we’ve also created a new Trading Blog archives page at the main site with the posts there separated by topic, so when you have some free time there will always be something to click on that’s worth a read.
As always, thank you for your continued readership and I look forward to helping you achieve your trading goals!
Trade Like a Bandit!
Jeff White
Producer of The Bandit Blueprint
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DVD Promo
Christmas is coming, so here’s a gift any trader will like: half price seminar DVD’s.
If you didn’t catch me live this year in TX, NY, GA, CO, PA, NV or you won’t be in NC in two weeks (details will be coming on that shortly), you can learn what I taught for less than the price of a Texas SUV tank of gas!
These are the video recordings from a Denver seminar with about two hundred traders in the room, so there were some excellent questions asked as well.
Details and links for each are below. Shipping is free, so how can you beat it?
Formulating Your Trading Plan DVD
– How to adapt to changing markets
– Integrate your personality in your trading approach
– The numbers game of success in trading
+ Watch me read charts on the fly and sharpen your technical skills
Locating Trades & Evaluating Risk DVD
– Narrow down a watchlist into actionable ideas
– Decide if a move is imminent
– Become more decisive and limit losses
+ Watch me read charts on the fly and sharpen your technical skills
2-DVD Bundle
– Both of the dvd’s listed above for a combined discounted price
Before the bowl games begin and as your preparations for 2013 get underway, these will help you.
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
Let the Market Dictate Which Plays You’re Learning
Newer traders quickly learn that there are a multitude of strategies to employ and a variety of timeframes in which to apply them. And then they make a huge mistake: they try to learn them all simultaneously.
Picking up new plays and honing skills takes time. You start out with one strategy and get better at it until you have an understanding of how and when it works best. And then you add another and keep repeating the process.
But few understand where to begin, so let me simplify it for you. Let market conditions dictate which plays you focus on.
Whatever is working in the here and now is the play you need to be working on. In a momentum tape, naturally it’s going to be breakout plays. In a trading range, you work on trading more reversals from key levels of support and resistance. When a steady trend comes along, it’s going to mean the best way to get involved is on pullback plays. And when corrections kick in like the one we’re currently caught in, you learn to trade the short side after failed bounces back to broken (former) support zones.
Don’t try to perfect a dozen plays simultaneously. You’ll feel overwhelmed and get nowhere.
You don’t acquire an entire wardrobe in a day. You build it over time as weather conditions change. With your trading, it’s the same way. Take it one play at a time based on current conditions, and you’ll grow your skill set with greater consistency over time.
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
