All Entries in the "Trading Tips" Category
Free Webinar This Tuesday June 9th
June 7, 2009 at 4:05 pm
I wanted to be sure to post a quick announcement here that I’ll be presenting a Free Webinar this Tuesday (June 9th) with the folks from StockFinder, and it’s gonna be fun so I hope you can join us!
Chart Reading with TheStockBandit
It’s scheduled to be a 45 minute webinar and for the first 30 minutes I’m going to be working through quite a few stocks of interest, pointing out to you what I’m seeing in the charts for both bullish and bearish candidates.
The final 15 minutes is going to be Q&A time where you might want to bring forth your favorite stock and we can take a look at those too.
I certainly do not have all the answers, but 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 might find interesting.
Oh, and the best part about it is that this event will be FREE, so be sure to register at this link for details:
Chart Reading with TheStockBandit
Remember, free webinar this Tuesday night, 45 minutes of charting reading with you and me – I can’t wait!
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]
Trading Education
June 2, 2009 at 11:30 am
The timeline for success for almost anything looks something like this:
It’s a pretty simple process, although certainly not always an easy one.
Steps 2 & 3 are pretty self-explanatory, so let’s explore the first step in the process a little further. Hopefully you’ll gain some insights or gather some resources for ways to increase your learning and progress as a trader.
A Common Question
Rather frequently, I’m asked by traders how to build their trading knowledge. Many are familiar on some level with various aspects of trading, but feel there are still some missing links before they get to Step 2 (practicing).
Here’s an example of one trader’s inquiry:
I have read several books that you have recommended, have gone to several seminars ( some good, some a way to spend 10k) have gone to local investor group meetings etc…..I guess my question is, when did you feel as a trader that you were getting some quality trading education?
My response is usually along these lines:
Every one of us should be in continual-learning mode. I have been at it for a decade now and still am learning lessons…some are new, others are “refresher courses.” All kidding aside though, I truly think the market evolves over time and it naturally requires that we adapt to it – hence the continual learning.
Looking Outward
Quality trading education comes in many forms. It can come from interacting with other traders (in places like Twitter). Reading good books and visualizing ways to implement the lessons into your own trading is an excellent way to grow.
Taking a stock trading course for some training, or watching trading videos or even attending a seminar here or there definitely will speed up the process. And of course there is no substitute for experience, so our daily trading activities certainly contribute a lot to our learning as traders.
Those are the external ways to learn, all of which are valid and I highly recommend them. But don’t neglect the internal ways to learn.
Looking Inward
I’ve always felt that if I’m objective about my own trading strengths and weaknesses, then I know exactly which parts of my trading need improvement. If you are able to determine that, congratulations and you are on your way to finding what you’re missing.
Many traders won’t be honest enough with themselves to see what they need to “fix” or adjust, so they keep on searching for something. Some of us need discipline on cutting losses, some need help holding onto good trades longer (ME!), some need to find a method for locating trade ideas, etc. The list of potential missing links is long, but you only need find 1 or 2 to see a huge difference in your results.
Evaluating it All
Once you are aware of what you need to work on, you can evaluate every piece of info (other traders, seminars, books, etc.) and know quickly if it addresses your specific need.
So if you get some piece of info which helps you to accomplish your goal of improvement in that key area, then you’re getting quality trading education.
Maybe it’s expensive, maybe it’s free, but the deciding factor is whether it’s useful.
I do my best to offer quality free education here on the blog and the trading videos site, but the spectrum of traders here is wide when it comes to experience level. Some have been at it for a long time, while others are seeking more basic information as they build their trading plans from the ground up.
In the premium nightly newsletter over at TheStockBandit.com, the education provided there fits a narrower audience of traders who want a few trade setups to evaluate and some understanding behind those plays. They’re still learning, but on a more experienced level.
Whatever route you choose to build your trading knowledge, be certain that you’re comparing the info to your own situation and constantly figuring out how it applies to you. That will bring more value whether you’re getting free or premium info.
And of course, let me encourage you to keep learning regardless of your experience level. There’s always room to improve.
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]
Testing 1-2-3
May 12, 2009 at 7:17 am
I’ve written before about my opinion of backtesting, but let’s go a different direction here and talk about just plain-Jane testing.
If you were told that a diet pill would have you in that beach body by June, you’d probably be skeptical. But given enough evidence, you just might try it. Tentatively.
We’re no different in our trading. Those of us who trade daily, who observe the price action and who are truly students of the market will on a regular basis run across something of interest. Maybe it’s a routine in the overall market (such as early strength or late-day weakness) that seems to provide an opportunity. Or perhaps it’s a setup that’s been producing some phenomenal moves.
Whatever ‘it’ happens to be, the odds are that you’re initially intrigued by it but yet reluctant to really go for it and trust it.
Why that is, I don’t know. Human nature I suppose. But regardless, when we do identify that anomoly which could quickly prove profitable for us as traders, we have to find out if it’s legit.
Enter: the test.
Let’s suppose your standard trade size is, oh, 1000 shares. Or maybe it’s $20,000 per position. However you define your standard position size, throw that out the window when it comes to testing a brand new trade idea.
Because the first time you do it, even the 5th time you do it, it’s not about making money. It’s all about gaining some insights into how that idea plays out. It’s about getting a feel for how it acts. It’s about building a little confidence in that setup before you go for it for realz.
So cut that size down by, oh…90%. I’m saying take 10% of your standard size and give that trade a shot.
Trade it so small that you won’t feel it – win or lose. Because remember, the point is to start getting a feel for how it might go. Removing the risk we all feel which is tied to performance is crucial in the testing phase, so that’s a necessity. Trade tiny and see what happens.
As you start to gather a little data and see some ways you might improve on entry, exit, or timing, then you’re getting closer. And again, you most likely haven’t made or lost much at all during this test process – because that isn’t the point. Just feel it out, evaluate the info which comes back to you, and adjust.
Then, once you’ve got it down and have developed a more sound methodology for putting on and taking off that trade, only then is it time to step up the size. And then have at it, because that’s the point at which it’s about making money.
Anything prior to that is merely a test.
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]
Trader Interview With Jeff White
April 26, 2009 at 10:25 am
First of all, welcome to those of you who have arrived from TraderInterviews.com! There are literally hundreds of trading articles here published over the years to sort through, so spend as much time here as you’d like and come back often.
To those of you who are regulars here, I am honored to have been asked for another interview from Tim Bourquin from Trader Interviews. That’s a site I’ve frequently visited over the years to tune in for excellent podcast-style audio interviews with top traders. I’ve learned quite a bit there, and it’s one very useful place to study not only the methods but also the mindsets of traders who are finding success in today’s markets.
They do an excellent job of locating traders across various markets with a wide range of styles, which provides a great resource for any trader who wants to stay sharp & continue learning.
Here’s the direct link to my interview, which runs 40 minutes. You can listen on the site or download the MP3 and put it on your iPod if you want it on the go.
Enjoy the interview & I hope your trading week is a great one!
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]
7 Trading Lessons from the Masters
April 13, 2009 at 1:58 pm
As a trader who loves my job, I find it difficult to witness any big event without looking for some parallels to trading. The sports arena is one of those places, and it doesn’t take much of a stretch of the imagination to recognize frequent lessons that are applicable to trading.
Just about anytime someone’s talent or emotions are being tested, you’re likely to also gain some insights which can help your trading.
This past weekend in watching the Masters tournament, I couldn’t help but notice a few things about some of the players. Here are some of the things which caught my attention and the corresponding lessons…
1. Some days you don’t have your best game, but grind it out anyway. Tiger was a little off all week. He verbally discussed it, but it was also easy to see if you’ve watched him at all when he’s at his best. But in spite of not having his “A” game, he chose to grind on every shot and concentrate as much as possible. He came up a little short, but he had a chance on the back 9 on Sunday – which he admits is all he ever wants. What if you’ve done the same all week with your trading by the time Friday afternoon rolls around – do you think you’d be satisfied?
2. Stick with your style and be confident in your approach. Jim Furyk isn’t a long hitter compared to the guys he’s competing against, so he of all people is not going to overpower Augusta National. He had to lay up on some of the par 5’s, but he kept to his strategy and it put him into the mix with a chance to win come Sunday. Waiting for your setups to come along as a trader means not attempting unfamiliar approaches or those which don’t work for you. Trust your method!
3. When you’re hot, ride it – and enjoy the moment. Anthony Kim at age 23 is just one year older than Nick Adenhart, the Angels pitcher who died tragically last week. Recognizing the similarities of not only their ages but careers as professional athletes, Kim was touched by Adenhart’s death. Thinking of how brief life can be, Kim decided to enjoy himself and put life into perspective. After reading about Adenhart on Friday, Kim went out to set a Masters record by making 11 birdies in a round. He got out of his own way and allowed his talent to take over. When you’re reading the market well and your trading is on track, trade a little bigger and see what happens. It’s only trading.
4. Take your lumps with maturity. During the second round on the 15th green, Padraig Harrington addressed a short birdie putt when a gust of wind moved the ball. In accordance with the rules, he replaced the ball to its original position with a 1-stroke penalty, and made his par putt. Having won the previous 2 major championships and having been in good shape on the leaderboard Friday, Harrington would have had plenty of reason to be upset or shaken. But he went on about his business, not allowing a bad break to rattle him. When a good trade suddenly reverses on you or unexpected news costs you money, accept it like a mature trader. Keep plugging away with unflappable confidence.
5. Embrace opportunities with confidence. Kenny Perry has been close before in a major, having been beaten in ’96 in a playoff during the PGA at Valhalla in his home state. He’s won a number of times on the PGA Tour, and worked himself into the lead during the Masters. Success would have meant he’d become the oldest winner of a major championship, as well as his first major win. Facing the opportunity which Sunday brought along, Perry knew he’d either succeed or fail. And he relished the chance to walk that fine line. Trading afraid or scared won’t bring the success you crave. View every chance as an opportunity to build greatness, and face it head-on.
6. A little bit of nerves are good. Chad Campbell found himself right in the mix all week as he searched for his first major victory. When asked by the press about his nerves being on such a big stage and facing such a huge opportunity, he openly admitted that he had been and would be nervous. He also noted that having some nerves are a good thing, that they show you’re intense enough to care. When you find yourself nervous over trades, is it because it matters to you or is it because you’re afraid?
7. Don’t let a poor start steer your day. Angel Cabrera struggled early on Sunday as he found himself playing in the final group. At 1-over par through 5 holes, he was playing worse than everyone else on the leaderboard, losing ground and clearly uncomfortable. But he settled himself down and played solid for the remainder of the day, finishing with 3 birdies in his last 6 holes to get into a playoff – which he eventually won. Allowing your first few trades of the day or the week to define you isn’t the best course of action. Even if your year is off to a poor start, you can still salvage success. Stick with your game plan and trust that your experience and effort will pay off. Your attitude is a weapon – either you hurt yourself with it or you use it to your advantage.
I hope your trading week is a great one!
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]
The Importance of Losing Small
April 7, 2009 at 2:05 pm
Losses are inevitable, but small losses are easily overcome.
I put that first because if you don’t read anything else here, I want you to be sure and see that.
In fact, that one statement could be considered the key to my trading. I remind myself of it often, and when I’m staying disciplined, I am able to see it in action.
Take Monday for example. I took several trades…7 to be exact. I made money on only 2 of them (no, it wasn’t a great day), and yet my net P&L was only slightly red. Just a little bit negative – that’s all. It was a down day for me, and yet it was about as painless as they come. A minor loss. All because I was able to recognize quickly when I was wrong, and immediately focus on damage control.
The trading landscape has changed dramatically just in the past year. The market is moving differently, the stocks which are in focus are a different group, and there are even some new fees and rules making their way into the fray. Nonetheless, there is still one constant: the trader who is able to lose small is able to stay in the game. He’s able to survive, which means he’s able to profit. And that of course means he’s able to thrive.
Two Big Benefits
Keeping those inevitable losses at a minimum carries with it a pair of huge benefits…
First, when you’re wrong, the damage is far from devastating. Falling off a pony compared to falling off a Clydesdale sure makes it easier to get up and get back on that horse. And trading is all about getting back up. It’s an attitude thing. It’s important to stay in the game, and that means an occasional bump or bruise is far easier to overcome than the occasional amputation. The point is this – protecting the downside offers you a safety net to fall into. Why not use it?
Second, confidence stays high, and that’s a major factor for a successful trader. Confidence should be protected just as vigilantly as one’s capital, for it can be considered your psychological capital. Just as money isn’t easily replaced, confidence isn’t quickly replenished once it’s wrecked. Looking out for yourself by way of small and limited losses means you’re taking no big hits to your trading account or your psyche.
So on those days when you’re just not feeling it and you feel a step or two behind, be quick to recognize it and live to fight another day. Keep the damage minimized, and you’ll be able to return tomorrow fully prepared to erase that small deficit quickly.
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]
Know Your Method
January 20, 2009 at 11:29 am
For nearly a year and a half, I’ve been blessed to be a dad. It’s been an awesome experience, and I have really learned a lot (though I still have a long way to go).
During the same time, I’ve been able to observe my wife in her role as a mother, and it’s really amazing how quickly a mother knows what their child needs! I had heard of a mother’s intuition, but witnessing it first hand really puts it into perspective.
I think mothers start out with an innate ability, a talent, to determine their child’s needs. And yet there are still the elements of practice and experience which enhance the natural talent that was there to begin with. It takes work, but the combination of talent and effort produces quite a skill.
Similarities Abound
Trading isn’t any different in that regard.
As traders, each of us start out with some kind of talent. It may be that we take quickly to reading the tape and gauging momentum, or it might be that we realize very quickly just where the boundaries of our comfort zones are when it comes to risk tolerance. Whatever it happens to be, generally it isn’t long before we start to build a method around our needs.
And what’s so nice about trading is that’s entirely possible in the market – since there are so many ways to seek out profits. We truly can custom-build a method which is fully-suited to us.
Once we get to that point, and if we want to trade responsibly, then one of our biggest obligations is to understand our method backwards and forwards. We don’t have to know everything about the market or be able to predict what’s going to happen next. Anyone who tells you otherwise just hasn’t traded much. All we need to do is keep our eye on the ball and continue to monitor and adjust the way we’re trading in order to achieve better results.
Worthwhile Effort
Just like a mother’s watchful eye on her child, our ongoing effort to remain aware of everything that’s taking place can lead to a great understanding of our method. As a result, we quickly learn when to adjust and how to go about modifying our approach whenever necessary.
What would it mean to you if you understood your method well enough that you could make small adjustments on the fly and right away improve your results? It would be huge, wouldn’t it?
As the newness of the year begins to fade and early resolutions fall by the wayside, take a stand for your trading. Make a commitment – a goal – right now to become sharp enough that you pick up on subtle changes in the trading landscape which warrant your attention.
Learn to detect when the environment is not ideal for your trading, so that you will know when to adapt or back down. And then when you see opportunities to do so, make those small adjustments so that you can stay on top rather than falling behind.
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]
