Happy New Near everybody!
Friday, December 30, 2011
Thursday, December 29, 2011
The market made a smooth upwards move today.
There was a big drop recorded but the bulls are determined to counter the bears threat.
And the market went up till the close.
A buy in the open and sell in the close is the trade of the day.
A classic trade that does not usually happened in this volatile market.
There was a big drop recorded but the bulls are determined to counter the bears threat.
And the market went up till the close.
A buy in the open and sell in the close is the trade of the day.
A classic trade that does not usually happened in this volatile market.
Planning for the Long Term
Are you interested in trading, but don’t have the capital to trade like you think you should? Even a talented, seasoned trader needs at least $20,000 to trade successfully. If however, you are a relatively new trader, you should plan on spending a fair amount of additional capital merely learning how to trade. In addition, it’s not enough to have $20,000 in your trading account. It must be $20,000 that you are willing to lose. Not that you would be happy losing, but it would not affect your life style. Losses are commonplace in trading, especially when first starting out. If you trade with scared money (afraid to lose $), you will always trade in a panicked state, never at ease. When you feel on edge, you’ll tend to make numerous mistakes. In any business venture, lack of capital is the primary reason for failure. Do you have $20,000 to spare? If you don’t, it’s all right. You don’t have to give up trading. There’s a lot you can do to get ready.
Ideally, it would be nice to be well capitalized and be able to learn to trade the markets like a pro, but not everyone has a spare dollars required. If you are like most people, you need to scrimp and save to build up the capital you need, and there’s no guarantee that your investment will pay off. There is however, no reason to feel disappointed. You can make a solid long-term plan. Many traders have spent years saving up capital and learning how to trade in order to capitalize on the market conditions that allowed them to make a killing.
Many people pursue trading, but as many trading coaches have observed, less than 5% seem to make it. It takes time and practice to master the markets. Many people think they can become an overnight success. But it often takes years. The difference between the ones who make it and the ones who quit in despair is a strong commitment to the field and a reasonable plan for obtaining success.
In many professions, a person must pay his or her dues before earning the right to say he or she is a seasoned professional. In business, a person doesn’t become a manager immediately. A law school graduate doesn’t become an instant partner. A medical student isn’t allowed to perform a difficult operation solo. So why should it be any different in the trading profession? It takes years of practice to become a profitable trader, and if you are like most people, you have a job already. You can’t just quit your job and pursue trading full time. You have to fit learning how to trade into your current life. It’s much like going to night school to get a graduate degree. You have to put in time and effort to study the markets and learn how to trade. In the end, it will be worth the time and effort.
What might a plan look like? First, you will need to save up trading capital. Second, you need to study the markets in order to develop an intuitive feel for how the markets move and what forces move them. Third, you have to be willing to make practice trades. The purpose of these trades is not to make profits, but to build up your intuitive skills. Fourth, you might also plan on spending money on trading books, perhaps a trading coach, or on classes to learn how to trade.
Don’t worry about learning to trade overnight. It’s going to take longer than that. Work at your own pace. It may be a while before you develop the skills to learn to trade profitably. Persistence is the key. Trading is an inherently rewarding endeavor. You should learn how to love trading, and develop a passion for it.
Once you learn to trade for the shear love of the game, you’ll be ready to tackle the challenges the markets offer.
Wednesday, December 28, 2011
Tuesday, December 27, 2011
Monday, December 26, 2011
Random thoughts from trading...
Since trading is an all alone endeavor, thinking independently and making own decision is the right way to approach the market.
Listening to others is the number one cause to lose your capital.
Trading and investing is like a job, full time presence is important otherwise you will get fired.
Trading takes time to learn and is a continuing process that's why patience is a must.
Trading is simple but it's not easy, that's why hard work and learning the market is a combination.
Learning the markets (based from experience) is important because as you reach the age of retirement or if you want to make/have your own business, you can do so at your own pace.
Trading is the right way to have a business if you don't want to deal with others, avoiding payrolls, no office/store rent, no employees/no helpers, just your own thinking (is your capital but of course you need "real capital").
Even if you are in the seventies, you can do trading at the same time help you to condition your "rotten mind?" by fighting Alzheimer's? and laziness (which is common to those retirees?).
Participating in the market gives you longevity because learning is a continuing process - helping to sharpen the mind's thinking.
Visualizing the future and thinking ahead of the curve can give you an idea what options you want to choose in the future - and trading is one of them or I should say is on top of them (options).
So for those who want to have a goal in the future... what do you want to be?...will you let your grand sons/grand daughters just pass by you in the aisle doing nothing...I guess you need to teach them how to do trading and investing by then...have a nice night!
Since trading is an all alone endeavor, thinking independently and making own decision is the right way to approach the market.
Listening to others is the number one cause to lose your capital.
Trading and investing is like a job, full time presence is important otherwise you will get fired.
Trading takes time to learn and is a continuing process that's why patience is a must.
Trading is simple but it's not easy, that's why hard work and learning the market is a combination.
Learning the markets (based from experience) is important because as you reach the age of retirement or if you want to make/have your own business, you can do so at your own pace.
Trading is the right way to have a business if you don't want to deal with others, avoiding payrolls, no office/store rent, no employees/no helpers, just your own thinking (is your capital but of course you need "real capital").
Even if you are in the seventies, you can do trading at the same time help you to condition your "rotten mind?" by fighting Alzheimer's? and laziness (which is common to those retirees?).
Participating in the market gives you longevity because learning is a continuing process - helping to sharpen the mind's thinking.
Visualizing the future and thinking ahead of the curve can give you an idea what options you want to choose in the future - and trading is one of them or I should say is on top of them (options).
So for those who want to have a goal in the future... what do you want to be?...will you let your grand sons/grand daughters just pass by you in the aisle doing nothing...I guess you need to teach them how to do trading and investing by then...have a nice night!
Sunday, December 25, 2011
The Truth About Trading - Part II
Part II
How Amateurs Approach the Market.
edited by Carl Futia
(original source unknown)
This post is for people who are
struggling with their trading, not being profitable and finding themselves
working extremely hard to no effect.
I found very interesting a
recent post 'Who uses stop losses?' and the various replies about how stops are
necessary, professional, business-like, etc. That post and the ensuing comments
confirmed what I already knew: the retail trading crowd thinks and acts like a
flock of sheep. Books and information about trading all say the same things.
They emphasize money management, tell you that it is stupid to average down,
tell you to use stop losses, risk 1% of your account, and other common
propaganda.
The interesting thing is that
people who talk about the value of stops, money management, etc. appear to have
gotten their ideas from a book. This include the authors of those same books! It
is a never ending process, a constant recycling of bad ideas. I think that those
who write trading books that explain how to trade aren't particularly good
traders themselves. Why? I think you must embrace uncertainty to succeed as a
trader. Those who write books, teach seminars and so forth are just trying to
find a way to make money with certainty because they can't trust their own
trading to do it or because they cannot live with the ambiguity and uncertainty
of constant involvement with the market.
These ideologies that trading
books offer are accepted as trading wisdom in the community of amateur traders.
I was fed all this when I was learning to trade. But I got lucky. A very
successful trader told me early on in my career that 95% of traders fail.
Therefore, to succeed he said that you have to do the opposite of what they do,
you have to think outside of the box. I've always tried to think in a unique and
different way from other traders and I believe this is in large part responsible
for my success.
- High probability setups +
Discipline = Success
- Always use stop loss orders.
Have a specific risk-reward ratio in mind. Know exactly what you will risk in
every trade
- It is stupid to have a
risk-reward ratio of less than 1:1
- It is stupid to aim for very
high win percentages
- The entry price is the most important detail.
Almost all amateur traders buy
into this ideology. Why? These rules produce the illusion of certainty in the
market place. You know your risk and that's it. There is no chance of
becoming emotional because you failed to use a stop and therefore busted out you
brokerage account. You don't have to worry about having to explain to your
husband, wife, or friends that you are not as big an idiot as you seem to be,
that trading is still something worth doing.
But in the market certainty
doesn't exist. Any rule that produces the illusion of certainty just makes it
easier to fail as a trader.
Admittedly I went through a
phase of having a set risk-reward ratio (1:2) and risking 1% of my account, thus
calculating my position size must be (x). My stop loss was frequently hit. I was
going nowhere fast.
I printed off all the trades I
ever did and analyzed them in detail, trying to find what went wrong.
I came to some
conclusions.
1. I'm buying high, I'm buying
on a higher close, buying in a late signaled uptrend rather than buying on
falling price.
2. Price is volatile. My stop
is getting hit. I can't forecast price fluctuations with enough precision to be
able to place a 5 pip stop loss.
I concluded that using a stop
loss represented my effort to predict the market's short run fluctuations, to
treat the market as if its movements were certain. But I couldn't do it.
I tried to move away from this idea and explore how I could trade without a stop loss.
I tried to move away from this idea and explore how I could trade without a stop loss.
During this learning process
the fact 95% lose was a uppermost in my mind. Whatever traders who were losers
wrote I would turn on its head and try to do the opposite. This was my way of
thinking outside the box. And I believe that you shouldn't follow the flock.
I began to see trading as an
art instead of as pure calculation. It is less about certain maths and more
about movement. It's about watching the market dance, letting it move up and
down without placing too much significance on any particular jiggle. I decide
that I just wanted to take a piece of these constant fluctuations and not try to
predict them.
I concluded that trading is not
about having a certain risk-reward, not about applying the same risk to every
opportunity, not about exiting at a pre-determined level. It is about making
adjustments as the market produces new information, as it moves move around on
your mental map of its behavior.
It's extremely hard to make
money from the common wisdom you find in trading books. But if you look past
such "wisdom" you can see trading doesn't have to be so complicated and
time-consuming. Volatility can produce profits for you without you having
to be a prophet! All the prop firm traders I know who are successful
understand and base their methods on this insight. All the successes I have had
in trading arise from this observation.
Professional traders win by
applying their own judgment and experience to judge the market's position on
their personal market maps and then letting the market's
natural volatility work for them. They don't waste their time
back testing strategies.
So how can you change your
current quest to trade for a living?
1. Read my previous post about
how to learn to trade, I seriously think if traders learn to read the markets,
they will be successful. Read the market, take in the new information is gives
you each hour and each day.
2. Try to escape from common
wisdom and general public beliefs. Start thinking outside the box, Start looking
into volatility, high win percents and try get past your human fears and
uneasiness with ambiguity. Don't use hard stops.
3. Average down and pyramid
with risk management.
4. Enter when price is
falling.... In an uptrend.
I strongly believe averaging down, as long as it isn't done due to fear or because you are losing (If done as a planned strategy) is an easy way to profit... That is from personal experience and it is expressed in my account balance.
Thanks for reading.
I strongly believe averaging down, as long as it isn't done due to fear or because you are losing (If done as a planned strategy) is an easy way to profit... That is from personal experience and it is expressed in my account balance.
Thanks for reading.
Glad to help.
It's Christmas and all traders/investors are enjoying their holidays.
Been browsing trading sites and news about the markets but most are all days old or a week and some are months old without any updates.
Probably most market participants got tired with usual up and down movement.
Can't blame the market participants for the market is a news driven direction.
Fundamentals at this time in the market just doesn't work as well as with technicals.
What work is the day to day market movement reaction.
Unless you can adjust with the unpredictable market movements and take advantage with the patterns, you can't participate with the opportunities that the market offers.
That's why day traders love the market (daily) for they can anticipate the market potentials.
Looks like some market participants got burned with the abrupt movements of the market, sometimes most big moves that affects the market happened overnight.
Most positions got stopped out during this session, that's why most traders/investors lose most of their investments.
As the year ends with a few trading days left, looking forward (next year) that volatility in the market will lessen.
Hope that economy will recover smoothly in the next coming year and the market will stabilize.
And all traders/investors can recover with the market anxiety.
Merry Christmas to all!
Been browsing trading sites and news about the markets but most are all days old or a week and some are months old without any updates.
Probably most market participants got tired with usual up and down movement.
Can't blame the market participants for the market is a news driven direction.
Fundamentals at this time in the market just doesn't work as well as with technicals.
What work is the day to day market movement reaction.
Unless you can adjust with the unpredictable market movements and take advantage with the patterns, you can't participate with the opportunities that the market offers.
That's why day traders love the market (daily) for they can anticipate the market potentials.
Looks like some market participants got burned with the abrupt movements of the market, sometimes most big moves that affects the market happened overnight.
Most positions got stopped out during this session, that's why most traders/investors lose most of their investments.
As the year ends with a few trading days left, looking forward (next year) that volatility in the market will lessen.
Hope that economy will recover smoothly in the next coming year and the market will stabilize.
And all traders/investors can recover with the market anxiety.
Merry Christmas to all!
Saturday, December 24, 2011
By John Mauldin:
• No benchmark to meet quarterly (or monthly), so you can have longer-term time horizons and different goals
• You can enter or exit a position without impacting markets.
• There is no public scrutiny of your holdings and no disclosures required, so you don’t have to worry about someone taking your ideas.
• You don’t have to limit yourself to just the largest stocks or worry about position size (this is huge).
• Cost structure, fees, and taxes are within your control.
• You can reverse errors without professional consequences – you don’t get fired for admitting a mistake.
• You can have longer-term time horizons and different goals.
And with those thoughts, good luck and good trading in 2012!
Individual Investors Have Certain Advantages Over Institutions
One final thought. Smaller investors do not realize that they possess quite a few strategic advantages – if only they would take advantage of them. Consider these small-investor pluses:• No benchmark to meet quarterly (or monthly), so you can have longer-term time horizons and different goals
• You can enter or exit a position without impacting markets.
• There is no public scrutiny of your holdings and no disclosures required, so you don’t have to worry about someone taking your ideas.
• You don’t have to limit yourself to just the largest stocks or worry about position size (this is huge).
• Cost structure, fees, and taxes are within your control.
• You can reverse errors without professional consequences – you don’t get fired for admitting a mistake.
• You can have longer-term time horizons and different goals.
And with those thoughts, good luck and good trading in 2012!
Friday, December 23, 2011
The market rolled and Santa bought the market in time for Christmas.
Buying the market in the open and sell it in the close is the right trade for today.
Though it's Friday - a usual profit taking day, what was left in the market are the investors.
Traders are already on a holiday enjoying their profits.
That's why the market went up smoothly, no volatility!
Buying the market in the open and sell it in the close is the right trade for today.
Though it's Friday - a usual profit taking day, what was left in the market are the investors.
Traders are already on a holiday enjoying their profits.
That's why the market went up smoothly, no volatility!
Showing the concluding trade that was just conducted.
The entry was at the bottom arrow and the exit was at the top arrow.
Notice the entry was at the R1 and the exit was at the R2.
A perfect classic trade of support and resistance.
A smooth trade, no noise!
Probably the HFT are already celebrating their Christmas loot.
The entry was at the bottom arrow and the exit was at the top arrow.
Notice the entry was at the R1 and the exit was at the R2.
A perfect classic trade of support and resistance.
A smooth trade, no noise!
Probably the HFT are already celebrating their Christmas loot.
Thursday, December 22, 2011
The American Dream
- Posted by Joe Fahmy
- on December 22nd, 2011
Who were they? Charles M. Schwab, president of the world’s largest steel company; Arthur Cutten, the greatest wheat speculator of his day; Richard Whitney, president of the New York Stock Exchange; Albert Fall, a member of the President’s Cabinet; Jesse Livermore, the greatest bear on Wall Street; Leon Fraser, president of the International Bank of Settlement; and Ivar Kreuger, the head of the world’s largest monopoly.
What happened to them? Schwab and Cutten both died broke; Whitney spent years of his life in Sing Sing penitentiary; Fall also spent years in prison, but was released so he could die at home; and the others—Livermore, Fraser, and Kreuger, committed suicide.”
—Donald McCullogh, Walking From The American Dream
My purpose for sharing this passage is not to depress anyone, but rather to remind us that there’s more to life than money. I realize that 2011 has been a challenging year for many traders and investors, but this is simply a reminder that family, health, spirituality, and many other things should come first before wealth accumulation. Make sure to spend time with your family and loved ones during this holiday season because that is where true wealth and happiness exists.
An even greater happiness comes from giving. Think of something that you can do during the holidays to help others, such as charity or volunteer work, and then go out and do it! Trust me, there is no amount of money that can replace the feeling of an enlightened and rejuvenated spirit. Wishing all my readers a Merry Christmas and a Happy Holiday Season!
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