All Entries Tagged With: "Swing Trading"
3 Signs You Have a Home Run Trade
September 7, 2011 at 10:21 am
Here’s 3 signs you have a home-run trade on your hands:
* Your initial target gets reached faster than expected. Ideally, this is also accompanied by heavy volume to confirm the move. Either way, this is a stock that’s getting quickly on the move, and you’re participating – congrats.
* You get runaway gaps in your favor. A runaway gap is an indication that emotions are heating up and traders are becoming impatient. With prices moving in your favor, you’re in good shape to capture additional momentum and be able to offer out stock at higher levels.
* Your stock has a historical propensity to make big moves. This factor alone isn’t enough to produce a home-run, but with either (or both) of the previous two at work, it only adds to the likelihood that the move getting underway is going to pay you well.
Momentum trading requires a different mindset, and momentum arrives when there’s more emotion present than logic. Keep this in mind the next time you have a trade performing better than expected, and see how much you can get out of it.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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The Key to Trade Selection
September 1, 2011 at 9:45 am
There’s always a move you’re missing. It might be in the overall market (ETF’s), or it might be a sector or individual stock that’s making the move of the day.
As traders, we all dream of being involved in those names on a regular basis. And while you can focus your entire day on monitoring the news and the stocks which are jumping on headlines (some do and are highly successful), the fact of the matter is that those plays might not be best-suited for you. And that’s perfectly fine.
You’re unique, and your approach should be as well. Some traders are tuned-in enough to dedicate their attention to the headline stocks, but many are not. It’s important to accept that and go the best way for you.
Choose Wisely
In my experience, the important aspect of trade selection is founded in the ability to narrow a list of trading prospects to just a few actual candidates. The aim is to get your watchlist down to a select few which really “fit” you best.
Here are a few things to consider when doing this…
* Are there specific setups or chart patterns which have performed best for you in the past?
* What’s your preferred price range or volume minimum?
* Do you have a directional bias?
* Which type of play do you prefer… breakouts, reversals, pullbacks?
Hopefully you’re seeing some ways to start reducing that list of the cleanest 20 patterns and derive from it an actual trading list. This way, you can ignore what’s left and stick with only the ones which are most suitable for your style of trading.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Sitting Still
August 10, 2011 at 8:34 am
July 2, 1982 was a special day for Larry Walters. That’s the day the truck driver strapped 45 helium-filled weather balloons to a patio chair armed with a six pack, sandwiches, a camera, and a pellet gun to pop the balloons.
His intention was to go up and look around, but he quickly found himself terrified, having dropped his pellet gun, and over 15,000 feet in the sky in the primary approach path for Long Beach Airport.
When asked why he did it, he simply replied “A man can’t just sit around.”
Lawnchair Larry Wasn’t a Trader
There are multiple occasions when sitting still is the right thing to do in trading.
Sitting still with regard to open positions that are working is definitely a time to be less active. For instance, most of us are familiar with the quote attributed to legendary trader Jesse Livermore:
“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!”
Right now, we’re seeing yet another example of a time when sitting still is a worthwhile approach for traders having a timeframe outside of a couple hours. Volatility is extreme, indecision is running high, and prices are ripping back and forth ’round the clock.
Stated otherwise, it’s really hard to manage risk effectively in a tape like this. It’s a scalper’s dream, but if that’s not you, this is a time to sit still. Let the dust settle, and be patient. Big opportunities are going to result from this.
Do you just head for the couch and flip on the TV with a bag of Cheetos? No!
Work on your game. Clean out your watch lists. Study your trades. Read a great trading book. Get inspired for greatness. Practice Winning. Do anything that will make you better. But don’t just sit around.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
A Good Market
August 6, 2011 at 7:15 am
Every trader is different from the next in our timeframe or directional bias or risk tolerance. That’s what makes a market, so it’s a good thing. We’re also each unique individuals, so it’s no surprise we might each have differing definitions of our favorite market conditions.
Regardless of what your ideal market looks like, it may only come around a couple of times per year. You’ll of course need to make the most of it when those conditions are present, but what about the rest of the time? Isn’t it important for us to capitalize on a good market?
Of course it is, but not everyone understands what that looks like.
Today I want to point out a post from the archives that’s every bit as pertinent to current market conditions as it was when it was first written. Check out this post for a few items to watch for that’ll improve the trading conditions when they arrive – and they will arrive.
Here’s the post:Â What Makes a Good Trading Market?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Embracing Market Changes
August 5, 2011 at 7:15 am
The market is ever-changing, both in what it fixates on and in how it moves. At times it’s earnings, at other times it’s politics, and still other times it’s the economy. Sometimes it sprints, sometimes it crawls, and sometimes it jumps back and forth across the same line to get nowhere.
As traders, it’s this constant change which actually provides us with serious opportunity. The long-term buy-and-hope type doesn’t have a different approach for profiting from a momentum market vs. a sharp correction. You as a trader do, so embrace that!
When it’s time to adapt, be willing to do it. The same old patterns might not work, so at times you’ll need to modify what you’re looking for and go with something a little different. Experience will teach you this, but right alongside that is your ongoing willingness to listen to the market and identify what’s working.
I want you to check out this post from the archives where I talk about Profiting From Market Changes – you’ll learn from it.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Let Your Trades Go
August 4, 2011 at 7:15 am
Trading on certain timeframes requires that we monitor every tick, gauge the momentum, and continually modify our management of the trade.
For most traders, however, more of a hands-off approach is far better. Whether it’s a job that prevents fixating on the screens, or simply an aversion to that high a level of activity, many traders choose to operate on a timeframe that doesn’t require their nonstop full attention.
When I’m swing trading, there’s a tool I utilize that makes all the difference in the world. It allows me to take a set-it-and-forget-it approach to my trades so I can set them up and let them go. It helps me prevent interfering with my positions so that my original trade plan can fully develop.
Just as you should, I already know from the outset of my trade what I’ll risk if I’m wrong and where I’ll ring the register if my target is reached, so with those pieces of the equation already known, all I need to do is plug them in.
Read this post for an explanation and a video I made explaining how I trade with Peace of Mind.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Two Homebuilders to Watch
July 28, 2011 at 9:22 am
Homebuilder stocks have suffered for some time now, with most of them unable to make any lasting progress on bounce attempts. Many of them have been trending lower, but there are a couple of standouts I’m keeping my eye on.
TOL is the first, as it has been creating higher lows for the past year, grinding its way higher without really showing any momentum yet. It’s been caught in a range for the past few months, but is bouncing from support here and has room to work higher in the short term. Currently, there’s a pretty big wedge setting up on the chart, so I’ll be particularly interested to see which way it gets resolved. If it’s to the upside, it may be the start of some better price action as the stock again heads higher. Earnings are due out August 22nd according to Yahoo Finance.
Here’s a closer look at the daily chart:
PHM is the other, as it has been creating both higher lows and lower highs for many months now. In the near term, it has room to bounce within this wedge. On a longer-term timeframe, it could gather upside momentum once it clears the downtrend line, currently at the $8.30 level. It reported earnings this morning, so the news flow should be clear for a little while.
Here’s a closer look at the daily chart:
These are the kinds of setups I take a look at for position trades lasting weeks to months. The sector itself remains under some pressure, but these are the two in the group I’d consider on the long side if support continues to hold.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
