All Entries Tagged With: "Confidence"
Picking Up Points in Penney
September 7, 2012 at 9:15 am
Thursday allowed me to close out an excellent 11-day trade in JCP which paid 12.9%.
As simple as that sounds, there were several steps involved, including patience, so I wanted to walk you through the process of this trade from beginning to end in hopes of helping you with your next position.
Perking Up
With JCP having endured a significant downtrend from February to July, the stock sat more than 55% off its highs. That alone is never reason to enter a buy, but it can indicate the shorts are overconfident and the stock has become beaten-down enough to produce a bounce.
So, after seeing a short-term higher low established in early August, it was placed on my watch list. Not for a trade, but simply to monitor in case this developed into a change of character.
Here’s how JCP first looked when I noticed it and put it on watch:
Pressuring Resistance
Having then rallied past resistance, JCP then entered into a narrowing base just beneath a short-term level. Dips were getting bought a bit more aggressively, creating some higher lows over the previous few sessions.
I set up a buy for $24.80, which triggered on Aug. 23. Here’s a look at the chart I shared with subscribers when I listed the trade:
Producing Gains
The initial trigger wasn’t met with great enthusiasm, but neither did the stock fail its breakout attempt in grand fashion. It was quiet, so I stayed with it without panicking. Just a few sessions later, Target 1 had been reached for a pretty quick 8%.
The stock pushed just 8c past that level before seeing some mild profit-taking, which ultimately allowed me to tighten my stop for remaining shares. Here’s a closer look at the chart as of Target 1:
Pausing Before Payoff
The profit-taking was mild and took place on quiet volume, which meant virtually zero pain but also required a little patience. This stage of trades always brings on the questions… “is it done?”… “should I just book this and move on before it pulls back deeper?”.
But I stayed with my tightened stop and waited for the stock to either roll back over and stop me out or push higher and prove itself. That resulted in the final push, worth 12.9%.
Here’s a look at the rest phase before the pop to Target 2:
This was an excellent swing trade which paid off quite nicely. It took some good initial analysis to detect the play, it took proper management of the position once it was on, and it took a little patience to stick with it through the mid-trade lull before the final pay day.
These are the kinds of trades we make a big portion of our money on. Every one of them is shared with subscribers of our stock pick service, along with the entire trade plan from the outset and ongoing evaluation once the position has been put on.
Try us out for yourself and see if we don’t deliver the value I’m referring to. It’s no wonder so many of our members find the monthly price so easy to pay when plays like this are provided.
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
Shifting from Smart to Equipped
June 28, 2012 at 10:33 am
One of the things I love about TheStockBandit University is the opportunity to interact with the traders who enroll in the courses. As they’re learning and asking questions, I have the chance to see the light bulb go on when things begin to click for them. It’s very rewarding.
Recently a trader reached out to share his thoughts with me mid-way through the courses, and I just couldn’t help but share it with you here. This is what he wrote:
“I have just finished the “basic†course. I thought I would have a lot of questions, and I would be pestering you with emails along the way, but I have no questions. You answered them all and many besides. Perhaps, you gave me the skills and confidence to answer my own questions. Something happened anyway.
The “basic course†is very comprehensive. I’m excited now. I have gleaned lots of ideas from your presentation to improve my trading plan.
I’ve been to university, I have a degree in medicine. I can’t remember though, ever coming across such an excellent teacher. I suspect your teaching is spawning leaders in the field rather than followers.
On with the Advanced Course now. Can’t wait!
M.P.
That is so cool. This already smart trader is now equipped – and there’s a huge difference. That’s exciting to me, that the work I put into the courses is paying off for this trader. More importantly, his own efforts in the learning process are rewarding him with the ability to be self-directed in the markets. He’s no longer a slave to a single trading style. He no longer needs the market to do something specific in order to find success.
I rarely share testimonials here with you, but this was one I had to pass along for those of you who are on the fence when it comes to taking the next step toward becoming a self-directed, complete trader. Our stock trading courses are risk free – there is zero barrier to kicking the tires. Enroll today and find out for yourself what it’s like to be prepared for whatever the market throws at you.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Win More by Risking Less
April 5, 2012 at 8:10 am
Each of us understands that we have to take some risks to get paid, but for most traders, improvement lies in taking the right kinds of risks.
Recently I sat down with Tim Bourquin for a MoneyShow Interview, and we discussed this topic of how to Win More by Risking Less. The clip is 3 minutes and can be viewed here.
In the segment, we discuss the mentality traders should bring to trading, the importance of knowing your exit, risk/reward ratios, and position sizing. We also discuss the often misleading notion of accuracy in trading and what that should be replaced with.
(Another 3-minute video from this same interview discusses The Trade Plan that Works For Me, which you may also enjoy.)
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Think Like a Poker Pro
April 4, 2012 at 7:40 am
I love the movie Rounders, in which Matt Damon is a poker player looking for a big break (and then a way to get out of some serious trouble).
In the movie, his character Mike McDermott makes a comment early on that as a player, “your goal is to win one big bet an hour – that’s it.”
Notice he said “win one big bet” rather than “place one big bet.” There’s a key distinction here and it applies to trading.
Amateur Hour
Amateurs too often think they need to place some big bets in order to win big. They couldn’t be farther from the truth.
Amateurs are also generally too proud to fold. That’s admitting defeat, and rather than seeing the bigger picture of losing some battles in order to win the war, they take a stand when they shouldn’t – and they pay for it.
How the Pro’s Play
Professional traders, on the other hand, realize there’s plenty of quiet time to endure before those payout opportunities occur. They realize it’s a matter of hanging around, staying in the game, in order to be fit to capitalize on the best “hands” they are dealt.
Professionals understand that taking small hit after small hit is easily undone by just a win or two – so long as they’re losing smaller and winning bigger. Be willing to fold repeatedly if necessary – the goal is to be net profitable, but that won’t happen every single time you commit your capital.
Trading is a numbers game, and professionals only play (or play for meaningful stakes) when conditions are most favorable. Very simple, but very difficult for many amateurs to do.
So the question is… are you thinking (and acting) more like an amateur or a pro?
(Hint: your results are likely already reflecting it.)
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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5 Takeaways from the NYC Traders Expo
February 23, 2012 at 11:35 am
Last night I returned from my trip to the NYC Traders Expo. It was a great experience. Visiting the city itself with some great February weather and seeing all the famous landmarks was nice, but I really enjoyed spending time with some Bandit subscribers and some other trading friends I’ve made over the years from different parts of the country.
In addition, I was fortunate to speak to groups of traders twice while there, which was both challenging and insightful as I prepared ahead of time then fielded some well-thought-out questions from attendees. It was really fun!
There’s an energy when traders collect which is always motivating. From the trading floor I first participated on back in 2000, to times in Chicago seeing everyone file into the CME ahead of the day’s session, there’s just something that happens when traders gather to compete or exchange ideas – I love the atmosphere.
A few thoughts on what I witnessed, in no particular order…
Hunt for the magic bullet. There are a TON of traders who show up just wanting the latest lure to fish with. They aren’t willing to put in the work, to learn to think for themselves, or to understand what it takes to become successful as a trader. They want the overnight shortcut, and they exit the scene just as quickly as they arrive, disappointed and surprised that trading isn’t red and green infomercial-easy.
Trading is a process. I’ve known this, but was reminded of it through my preparations for speaking and in conversations with other traders. Trading requires adaptation, a willingness to lose regularly. Imperfection is to be expected, and so it all becomes about good management of trades rather than finding the can’t-miss sure thing. What works now may not work in a few weeks, so you have to be willing, able, and prepared to shift your approach. The market evolves, and so must you if you want to stay in the game and keep seeing opportunities.
Expectations. Expect some losing trades (and learn to manage them wisely). Expect periods of frustration and confusion, they’re going to happen. Expect the market to surprise you – it’s just that way, so you’ll have to be ready to respond accordingly. Times will come when you have no clue what’s next, but that’s OK. When they arrive, you can accept them and sideline yourself until clarity comes.
Hard work is rewarded. I saw Expo attendees show up early and stay late, attending multiple sessions, taking notes on the good things they heard, and leave tired but hopeful that some fresh perspectives will influence them to improvement in the days ahead. I saw prop traders from SMB who started their day extremely early, made the commute to lower Manhattan, gave it their best all day (though some admitted it was a tough day), then stuck around after the close to listen to my thoughts. Even after I was done presenting, they showed the discipline and desire to improve by asking questions, just absorbing knowledge even though they were tired and hungry and eager to call it a day. Those who work hard – even when it isn’t comfortable – are the ones who will make it, keep improving, and eventually see the fruits of their labor.
Trading is a battle. What’s interesting – and which few stop to recognize – is that only part of the battle is in the market. The rest usually happens internally. So be ready, you’ll need to bring your best if you want to compete in this game. You need to prepare a plan, and think through the emotions you might face while implementing it. Regardless of style, strategy, market, or timeframe, every great trader has his head on straight. Those who don’t will have it beaten to a pulp by a ruthless market.
If you were there, or if these have resonated with you, feel free to share some thoughts of your own.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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The Zurich Axioms
January 25, 2012 at 12:08 pm
I first learned about The Zurich Axioms by Max Gunther in the daily Worden Report when Don mentioned it among his favorite trading books a few years ago. Soon after, I picked up a copy and found it was indeed packed with some great insights – enough to be a must-have trading book.
There are 12 major axioms highlighted in the book, with a chapter devoted to each, as well as 16 minor axioms. It’s a relatively short book at only about 123 pages, but the “Rules of Risk and Reward Used by Generations of Swiss Bankers” offers no shortage of wisdom and insights for any trader or speculator.
Without disclosing all of the Axioms, I’ll summarize two of my favorites.
Always Play for Meaningful Stakes.
This minor axiom highlights the importance of trading with enough size for it to matter. This goes beyond the learning stages in which a developing trader needs to hone his skills and not fixate on the money. Rather, playing for meaningful stakes is about getting over the fear of getting hurt in such a way that when a play works, it’s well worth the risk taken.
A story is told in the book about the oil tycoon J. Paul Getty, who grew up rich, but once he became an adult he was sent out on his own. Wanting to enter the oil business, he shunned various opportunities to invest $50 in the early 1900’s in favor of betting nearly his entire savings of $500 on an oil lease he felt was more promising. After paydirt was hit, he sold his holdings for $12,000 just a short time later.
Getty mentioned that if he had not struck oil, the $500 would have hurt, but that he could have found a way to save that amount back up again. He was quoted as saying “it seemed to me I had a lot more to win than to lose.” That’s playing for meaningful stakes.
As a trader, it’s not about walking a tightrope where bankruptcy is the result if you slip. It means you don’t nickel-and-dime your way throughout the entire year if you want to get somewhere interesting.
Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
What an excellent reminder for traders! Gunther makes the point that without some level of optimism, one cannot trade to begin with. However, there is general optimism and there is specific optimism. According to Gunther, it’s the venture-specific optimism which can become dangerous if you allow it.
The latter mention of what true confidence is just cannot be ignored here. Do you know how you will handle the worst? If you do, then you’ve got arguably the most difficult element of a trading plan already in place – the adverse exit. The ability to fail gracefully in trading – over and over – is what will ultimately define how long you can stay in the game. Your success may eventually be tremendous, but if you’re unable to handle losing the right way, you’ll be taken out long before the big wins can ever come along.
My advice? Pick up a copy of The Zurich Axioms and get a pen ready to mark up the margins and underline key points. It’s a quick read and one you’ll return to often.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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What it Means to ‘Trade Like A Bandit’
January 11, 2012 at 11:02 am
I cap off every post and free video with the phrase ‘Trade Like A Bandit!‘ Some get that, others don’t. This post is for the latter group!
While teaching in Dallas recently, an attendee casually said to me prior to my presentation, “TheStockBandit…huh…just like Wall Street?“ No. I explained that he couldn’t be more wrong to compare my style or what our trader education business is about to the crooked suits who aim to dupe investors Madoff-style into handing over their money.
The guy had no clue what’s in the name TheStockBandit, so I explained to him that day what it meant. In case some of you don’t get it either, I felt it was appropriate to clarify here as well so that there are no misconceptions of what the name is all about.
Here goes…
Think of the great heist movies…Ocean’s 11, The Italian Job, etc. In them, we see that the best bandits plan the hit extensively. They mock up the situation, review scenarios which may unfold, and determine how they’ll handle them.
Then they execute that plan with total precision, even if it means making some adjustments along the way.
In turn, they get away safely and move on to the next job.
That’s exactly how I like to trade.
I want to plan for what might happen in the trade, and do my homework to locate the best setups (targets) in which to allocate capital. Then I need to have the discipline to execute that plan, stay objective throughout, and make any logical adjustments along the way in order to protect myself and my profits as the trade progresses. That allows me to get away (exit the trade) and then shift my attention to the next opportunity.
It’s a blend of survival and protection. I’m ensuring that when a trade goes wrong, I don’t have to surrender any more than is absolutely necessary…I simply abort (stop out). It allows me to survive, to stay flexible, and to maneuver again when an opportunity arises. And when I’m right, I’m capturing those gains and then shifting to the next play.
The word ‘Bandit’ has a negative connotation to some, but that isn’t the case here. I’m not ‘the stock magician’ fooling people with smoke and mirrors, or ‘the stock thief’ pulling the wool over people’s eyes in order to take advantage of anyone. I’m not out to con anyone – I just want to make great trades. Like a Bandit – because it works. Come trade with us and see what I mean.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
