In Trading, It is Also Important To Watch Yourself

The market drops today even though there are some positive news about the Greek problem, Chinese pledge and some economic calendar events.

But for some other reason, the market went south and the unfavorable minutes of meetings that came out from the Fed.

Today's market was a bit tricky to trade.

The market leap vertically in the overnight session and drops like a falling debris from the outer space.

Unless you have a crystal ball or a psychic that can predict where the market goes, it's all about riding it and anticipating where to find a good location to trade.

In this market environment, it's not enough just to analyze the market itself.

It's also about watching yourself how you will react and exercise good psychological judgment when and how you get involve in the market.

Unless you can psych yourself mentally, getting involve in the market without any plans and purpose is like torturing yourself to hell.

That's why in trading, it is important that you are mentally prepared, be alert, and most of all - be disciplined!

Following your plans without discipline is not enough to trade well.

Though trading cannot be perfected, it's all about how you manage yourself mentally too.

Trading is not just about putting trades, watching yourself how you react with the market movement cannot be overlooked.

An Ugly Valentine Trading Day (No Love For The Market)!

An ugly market trading range today.

Other than choppiness, the market went down from positive open and did not recover.

It still getting buried from the mud (as of this posting) and there's no clear indication it will rise up.

Same story from yesterday's trading range.

It's another "scalping" type of trade for the market.

This is the type/kind of market that is supposed to be studied carefully before putting trades, unless you are seasoned enough, you will get burned totally without recognition.

Trading 'recklessly' today is an exercise in futility, and if you don't practice discipline, you will be the loser.

Just wait for another day, anyway the market will always be there.

The important thing is you can still trade the next day.

Wait for the market to settle down (if it will settle?), or when the conditions suits your personality in trading.

Practice like a doctor to trade well

By Jeff White

Struggling traders are always asking about various indicators or whether they should be watching 15-minute candles vs. the VWAP. They'll give their left leg just to gain some kind of an edge, but they're missing the boat when it comes to lasting improvement. If only trading could be easy!

Trading itself is not a complicated subject. You can certainly make it complicated by piling studies onto your chart or reading the endless opinions of analysts, but none of that translates directly into profits. In order to get those, there's one thing you have to do. At the risk of stating the obvious, let me remind you of the incredibly simple goal for any trader: to sell at a higher price than you buy.

For whatever reason, that just isn't fancy enough for some folks. Complicated, to them, is better. Never mind the notion that the difficult part of trading boils down to doing just two things very well - closing out bad trades quickly and staying in good trades as long as possible.

It's no surprise that the great traders are continually fixating on how to do those two things better. They care not about making their charts look prettier or how they can add another screen to their desktop or relying upon some software enhancements to help them turn the corner. All that matters to the best traders is to focus on the things which add to their bottom line. Naturally, they spend their time honing the two skills of exiting losers and staying in winners.

Remember to Practice

I know a few doctors, and each of them refer to their business as "a practice." They're highly qualified, they've been through years of formal education, they've passed intense exams and they've for years been called "Dr."

So why do they say they practice medicine ? Because they're constantly learning. They're still being educated - not in a classroom, but through real-life patients who are counting on them for help in healing. Yes, they embrace the challenge, and yes, they have seen many of the same cases before. But it doesn't stop there, because for them for them to succeed they must rely partially on what they've already been taught, while keeping an open mind for what may work better with reduced risk to the patient.
Traders would do well to adopt a similar mentality.

Maybe you've attended the market's School of Hard Knocks, or maybe you had a mentor show you the ropes. Your background as a trader is somewhat important, but it's not everything. It might make you some money this month, but in a few months or a couple of years, if you haven't figured out how to make adjustments in a changing market, you're done.

Instead, consider the following mindset. Each day, what if you prepared as fully as possible and then executed your plan with complete discipline? Those are important tasks which every trader should be doing. But it cannot stop there.

In addition to those basics, what if you continually asked yourself how you could have detected signs of trouble in your losing trades sooner in order to trim those costs of doing business? And perhaps most importantly, what if you constantly looked for ways to stick with your best trades longer? Don't you think you'd see some consistent growth not only in your account, but also in the intrinsic rewards of better trading?

I'm confident you would.

With that in mind, approach your trading carefully. Use indicators as confirmation of what the price action is already telling you. Alignment of the indicator stars may never happen, and even if it does, that will only provide you with an entry for your next trade. Think big picture, and always keep in mind what's most important in your trading - both in the near term and for the long haul.

I can tell you it's not a magic bullet, it's not a faster PC and it isn't some fancy software that gives you red and green arrow signals. You just have to reduce the damage of losing trades as much as possible, and maximize the winners. Plain and simple, but it takes practice.

No Need To Be In The Market All The Time!

The market made a nice move early in the Globex market only to chopped it up in the regular open.

Unless you can read the market's price action, you will get burned and will turned your pocket full of dust with your trades.

Profit taking was the order of the day when the market opened that lasted for almost the whole trading day.

I didn't find any highly probable setups to trade today unless you scalped the market which will make your head turned spinning due to choppiness.

Today's market are for the highly sophisticated energized traders boosted with adrenaline induced monster decisions.

Unless you have that kind of qualities, your trading will get massacred.

That's where discipline counts in trading, you cannot just be in the market all the time.

As they said, trading the market all the time are for the fools and the gamblers.

The market (YM Futures) gap up from this Globex market as is opened in the afternoon.

As I mentioned from my Saturday's post, it might bounce.

And partly due to the positive action coming from the Greek parliament.

Let's see in the regular open if it will continue.

10 Steps To Building A Winning Trading Plan
By Matt Blackman | Investopedia – Fri, Feb 10, 2012 3:51 PM EST

There is an old saying in business: "Fail to plan and you plan to fail." It may sound glib, but those who are serious about being successful, including traders, should follow these eight words as if they were written in stone. Ask any trader who makes money on a consistent basis and they will tell you, "You have two choices: you can either methodically follow a written plan, or fail."

If you have a written trading or investment plan, congratulations! You are in the minority. While it is still no absolute guarantee of success, you have eliminated one major roadblock. If your plan uses flawed techniques or lacks preparation, your success won't come immediately, but at least you are in a position to chart and modify your course. By documenting the process, you learn what works and how to avoid repeating costly mistakes.

Whether or not you have a plan now, here are some ideas to help with the process.

Disaster Avoidance 101
Trading is a business, so you have to treat it as such if you want to succeed. Reading some books, buying a charting program, opening a brokerage account and starting to trade are not a business plan - it is a recipe for disaster. "If you don't follow a written trading plan, you court disaster every time you enter the market," says John Novak, an experienced trader and developer of the T-3 Fibs Protrader Program.

Once a trader knows where the market has the potential to pause or reverse, they must then determine which one it will be and act accordingly. A plan should be written in stone while you are trading, but subject to re-evaluation once the market has closed. It changes with market conditions and adjusts as the trader's skill level improves. Each trader should write their own plan, taking into account personal trading styles and goals. Using someone else's plan does not reflect your trading characteristics.

Building the Perfect Master Plan
What are the components of a good trading plan? Here are 10 essentials that every plan should include:

Skill Assessment
Are you ready to trade? Have you tested your system by paper trading it and do you have confidence that it works? Can you follow your signals without hesitation? Trading in the markets is a battle of give and take. The real pros are prepared and they take their profits from the rest of the crowd who, lacking a plan, give their money away through costly mistakes.

Mental Preparation
How do you feel? Did you get a good night's sleep? Do you feel up to the challenge ahead? If you are not emotionally and psychologically ready to do battle in the markets, it is better to take the day off - otherwise, you risk losing your shirt. This is guaranteed to happen if you are angry, hungover, preoccupied or otherwise distracted from the task at hand. Many traders have a market mantra they repeat before the day begins to get them ready. Create one that puts you in the trading zone.

Set Risk Level
How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things aren't going your way.

Set Goals
Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a dollar loss per share, your goal should be a $3 profit. Set weekly, monthly and annual profit goals in dollars or as a percentage of your portfolio, and re-assess them regularly.

Do Your Homework
Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the S&P 500 or Nasdaq 100 exchange-traded funds up or down in pre-market? Index futures are a good way of gauging market mood before the market opens. What economic or earnings data is due out and when? Post a list on the wall in front of you and decide whether you want to trade ahead of an important economic report. For most traders, it is better to wait until the report is released than take unnecessary risk. Pros trade based on probabilities. They don't gamble.

Trade Preparation
Before the trading day, reboot your computer(s) to clear the resident memory (RAM). Whatever trading system and program you use, label major and minor support and resistance levels, set alerts for entry and exit signals and make sure all signals can be easily seen or detected with a clear visual or auditory signal. Your trading area should not offer distractions. Remember, this is a business, and distractions can be costly.

Set Exit Rules
Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals, but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don't want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don't take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.

Before you enter a trade, you should know where your exits are. There are at least two for every trade. First, what is your stop loss if the trade goes against you? It must be written down. Mental stops don't count. Second, each trade should have a profit target. Once you get there, sell a portion of your position and you can move your stop loss on the rest of your position to break even if you wish. As discussed above, never risk more than a set percentage of your portfolio on any trade.

Set Entry Rules
This comes after the tips for exit rules for a reason: exits are far more important than entries. A typical entry rule could be worded like this: "If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here." Your system should be complicated enough to be effective, but simple enough to facilitate snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult if not impossible to actually make trades. Computers often make better traders than people, which may explain why nearly 50% of all trades that now occur on the New York Stock Exchange are computer-program generated. Computers don't have to think or feel good to make a trade. If conditions are met, they enter. When the trade goes the wrong way or hits a profit target, they exit. They don't get angry at the market or feel invincible after making a few good trades. Each decision is based on probabilities.

Keep Excellent Records
All good traders are also good record keepers. If they win a trade, they want to know exactly why and how. More importantly, they want to know the same when they lose, so they don't repeat unnecessary mistakes. Write down details such as targets, the entry and exit of each trade, the time, support and resistance levels, daily opening range, market open and close for the day and record comments about why you made the trade and lessons learned. Also, you should save your trading records so that you can go back and analyze the profit or loss for a particular system, draw-downs (which are amounts lost per trade using a trading system), average time per trade (which is necessary to calculate trade efficiency) and other important factors, and also compare them to a buy-and-hold strategy. Remember, this is a business and you are the accountant.

Perform a Post-Mortem
After each trading day, adding up the profit or loss is secondary to knowing the why and how. Write down your conclusions in your trading journal so that you can reference them again later.

The Bottom Line
Successful paper trading does not guarantee that you will have success when you begin trading real money and emotions come into play. But successful paper trading does give the trader confidence that the system they are going to use actually works. Deciding on a system is less important than gaining enough skill so that you are able to make trades without second guessing or doubting the decision.

There is no way to guarantee that a trade will make money. The trader's chances are based on their skill and system of winning and losing. There is no such thing as winning without losing. Professional traders know before they enter a trade that the odds are in their favor or they wouldn't be there. By letting their profits ride and cutting losses short, a trader may lose some battles, but they will win the war. Most traders and investors do the opposite, which is why they never make money.

Traders who win consistently treat trading as a business. While it's not a guarantee that you will make money, having a plan is crucial if you want to become consistently successful and survive in the trading game.

The market drops hard due to concern regarding the Greek debt problem.

The chart shows you can make a quick short entry in the open and exit at around 10:00 am. ET. for a nice profit.

Other than that, I don't see any other potential setup unless you scalp the market in a shorter time frame (1 minute).

Though if you are patient enough and you glued your (red?) eyes the whole trading day, you can possibly make a trade at the last hour for a long trade.

I can see the market might bounce early Monday possibly in the Globex market.

The market drops like a bomb today due to usual Greek debt problem.

The Greek problem is always the real culprit when the market drops hard.

That has been the cause since last year.

For today's trade, a good location to place an entry is in the reversal.

I can see an inverse head and shoulder pattern here, but the target should be carefully keep an eye because the volatility is at high range.

Quick reversal happens in just a blink of an eye.

Aim and Shoot the Right Target

As the picture shows, shooting or aiming for the right target also applies in trading.

Like in today's trading range, the market zigzag and if you cannot find the right entry you cannot make a trade (target).

Aiming for the right entry or looking for the right location to make a trade is similar in hitting your target as what the man (Liam Neeson) is aiming.

In today's trading, I find two good locations that are probable to trade.

The first one is a short trade when the market formed a head and shoulder pattern.

And the second one, a long trade when it formed a cup with a handle pattern.

Same story from yesterday's trading.

Manoj Bhargava, the Man Behind 5 Hour Energy

By: Mark Hanna
Posted on: February 9, 2012 at 2:30 pm
Tags: 5 Hour Energy

Manoj Bhargava.
Who?
Yes that is what I said too…
While this is a private company, I found it to be a fascinating story since it is always interesting to hear where these out of the blue blockbuster products come from. I had no idea it was a local story as well. I had heard Detroit Lions coach Jim Schwartz was at the Super Bowl, on the dole (i.e. pitching) 5 Hour Energy and it seemed like a strange connection, but now I see why he was a choice (again, local). Believe it or not I've never imbibed any sort of energy drink such as Monster or Red Bull, nor have I touched this 5 Hour Energy thing – but apparently I am in the minority as these are huge sellers. It's a long write up in Forbes – some snippets below:

• In eight years 5-Hour has gone from nowhere to $1 billion in retail sales. Truckers swear by it. So do the traders in Oliver Stone’s 2010 sequel to Wall Street. So do hungover ­students. It’s $3 a bottle, and it has made Bhargava a fortune.
• His company, Living Essentials, is the biggest player by far in the ­energy-shot market, and not because 5-Hour is so delicious. Chalky cough syrup is more like it. The reason Bhargava has won is that he plays tough. Sitting in that cemetery are a dozen or so neon copycats with names like 6-Hour Power and 8-Hour Energy. Each has been sued, bullied or kicked off the market by Living Essentials’ lawyers. In front of each are little placards with a skull and crossbones drawn in felt-tip pen. Bhargava points at the gravestone of one of his late competitors and says with a chuckle, “Rest in peace.”
• The privately held Living Essentials doesn’t report revenue or profits, but a source with knowledge of its financials says the company grossed north of $600 million last year on that $1 billion at retail. The source says the company netted about $300 million. Checkout scan data from research firm SymphonyIRI say that 5-Hour has 90% of the energy-shot market. Its closest competitor, NVE Pharmaceuticals’ Stacker brand, has just over 3%.
• Yet Bhargava, 58, is so under the radar that he barely registers on Web searches. His paper trail is thin, consisting primarily of more than 90 lawsuits. This is his first press interview. Colleagues and acquaintances uniformly describe Bhargava as “humble,” and he seems proud of his frugal lifestyle: his ancient flip phone, his cheap office furniture, the modest two-story home he shares with his wife and 20-year-old son. Yet, over vegetarian lasagna at Antonio’s, his favorite strip-mall Italian joint off Detroit’s Twelve-Mile Road, Bhargava says, apropos of nothing: “I’m probably the wealthiest Indian in America.”
• The rise of 5-Hour began in the spring of 2003, when Bhargava found himself at a natural products trade show in Anaheim, Calif. At one booth the sales reps peddled a 16-ounce concoction claiming to boost productivity for hours. Bhargava took a swig. “For the next six or seven hours I was in great shape,” he says. “I thought, Wow, this is amazing. I can sell this.”
• Right away, though, he knew 16 ounces wouldn’t sell. He didn’t want to compete with Red Bull, at the time new to the market. Nor did he want to share fridge space with Coke or Pepsi. “I thought, If I’m tired, am I also thirsty? Is that like having a headache and a stomachache? It didn’t make any sense.” He glanced at the ingredients label and made a mental note. Six months later his version was on the shelves, two ounces of ­caffeine-infused B vitamins such as niacin mixed with acids like taurine.

The market almost finish where it came from in today's trading.

It drops from the high open after an hour or so and just recover late in the close.

It formed the classic cup with a handle pattern.

Trading today's market was a little bit tricky if you are not particular with the pattern formation that are developing.

From the first hour, it formed a head and shoulder pattern, a sign that a bearish signal is on the way - and it did.

And from between 11:00 am. to 12:00 noon ET., the cup with handle formation is developing - and it did.

Those are the two setups that should have taken into account in trading today.

The market drops today from the positive open.

The Greek problem was the culprit today from the market reversal.

Also some profit taking opportunity was the added factor in reversing the market upside momentum.

Careful trading should be taken into account while trading and also pattern recognition should always be observed.

Well Funded Traders vs. Underfunded Traders

In this piece, I will post something regarding the above. I am referring to the regular retail traders who do trades in their own places/home offices, in the Starbucks cafe, (and not the institutions).

Comparing the two traders above, the following are my observations:

Well Funded Traders:

They have funds enough within their capacity to deal with the margin and have confidence on how much they can allocate with the number of contracts/shares they can trade.

You don't feel much about the volatility movement because you can put a wide stop, thus minimizing your number of stops that are getting hit or getting triggered.

Have much leeway on how much you can allow from your buy price to your stop price - and this is a great help on the part of the traders since this is about confidence and the emotional impact it develops while in the trade.

Underfunded Traders:

For the underfunded traders, there lots of disadvantages.

First, you cannot trade that much because of limited funds and are afraid of the loses especially when volatility is at high range.

You are prone to putting tight stops, thus you are always subject to getting hit often - one cause that depletes your (minimal) account (and more commission costs).

Your emotional part is prone to your trading concentration because of uneasiness - you have no confidence to trade even though your parameters or edge are on your side.

These are just few observations, but there are advantages and disadvantages on both sides too (vice versa). That all depends on how you treat trading.

There are some underfunded traders who are discipline and have plans. They use their time in learning while building their capital.

It would be better that way to trade first on a few amount that you can afford to lose while learning.

Build first your knowledge on how the market works, and when you are ready to trade, you have already the idea in trading.

But the important thing is you should be in the market - develop your skills.

Actual trading is more important than theory.

You can read all the expensive books ever written by great authors/traders but if you don't practice trading - you will end up losing your capital, time, and your mind too (if your are not paying attention).

Developing traders should be in the market action, and you must sleep and breath the market all the time!

Puplava: listen to what the markets are saying

 

Puplava: listen to what the markets are saying

While catching up with Chris Puplava's latest market update last night, I had to stop and share some of his words with our followers on Twitter.

Read the opening of Chris' article, "Stop Talking and Start Listening!". You'll find some worthwhile comments on interpreting data and the importance of maintaining accountability in one's market calls.

"...Far too often investment managers and economists spend more time espousing their views and then defending them until eventually proven right (“I was just early”), rather than spending more time analyzing their assumptions and being honest enough to say, “I WAS WRONG!” and then moving forward.

Part of the problem is that they create a view and then find evidence to support their views rather than starting from the bottom up by collecting an exhaustive amount of data and then summarizing the collective message rather than their views.

Basically, listen to the message of the markets and then interpret those messages rather than telling the markets what they should be doing. What the market IS doing is far more important than what you think the market SHOULD be doing..."

This is an excellent summary of one of the biggest problems I see in the 24/7 cycle of market commentary and trading. People have become too enamored of their own market view/"thesis" and too concerned about the risk to their reputations to come out and admit they're wrong.

Of course, if you are tied to a certain view or position and can't admit you are wrong, it could have an adverse effect on your trading or investing returns. Some people may hesitate to cut their losses on a bad trade or reverse their position (say, by going from short to long on a certain security or asset) if they've anchored themselves to a privately held or publicly expressed view.

Now that blogs and real-time social networks have allowed us all to become "mini-pundits", the risk of spouting off in public and ignoring the message of the markets has shifted down from media stars and big-name fund managers to the rest of us.

But guess what? That also provides us with an opportunity to face the music and occasionally admit we were wrong about something, which may actually help build trust with our audience (and in ourselves) in the long-term.

Because let's face it: no one wants to listen to someone who is never wrong and is always (magically) right. Why? Simple. Such people don't exist, oracles and sages of mythology aside.

Now back to the macro view. Despite some well-known recent calls for recession from ECRI and others, Puplava feels the markets and economy are in "bullish harmony" and are sending us a message that there is no bear market or recession ahead. Take a look at the article and examine the arguments for yourself.

And remember, hold yourself accountable for your own market actions and judgements. Try not to impose your views on the market, and try to be flexible in your trading, especially when it comes to admitting you are wrong about something. Your thinking and your results might improve!

Posted by David Shvartsman at 5:11 PM

The market made a nice move when it opened below from its previous close.

It maintained its momentum from thereon and the bears are not that quite happy.

Might be a sideways move come tomorrow's trading?

If it is, scalping is the way to make a trade!

The market open below from its previous close due to some concern from the Greeks debt problem but the participants overcome that concern and turn around the market trend.

A sign that the market is now resilient from any negative problem?

I guess the market might break again before the close.

Let's see!

Stock index futures signal dip in early trade

NEW YORK | Tue Feb 7, 2012 6:02am EST

NEW YORK (Reuters) - Stock index futures pointed to a dip at the open on Wall Street on Tuesday, with futures for the S&P 500 down 0.06 percent, Dow Jones futures down 0.05 percent and Nasdaq 100 futures down 0.05 percent at 5:30 a.m. ET.

Greek leaders faced crunch talks on Tuesday to secure a new bailout and avoid a chaotic debt default, caught between European Union demands Greece accepts painful reforms now and a national strike against more austerity. Prime Minister Lucas Papademos negotiated through most of the night with Greece's EU and IMF lenders.

"Most people do not know how to start and build a business, or how to invest in stocks or other financial vehicles, or for some reason they never bother to learn." - TRADING OUTLET

The market was able to make a decent finish even though it gap down in the open.

A little bit choppy almost the whole trading day and the only way to make a trade is to find a setup intended purely for scalping.

Though there seems a setup in the middle part for a good high finish, other than that the market was purely for scalping.

The market gap down today due to concern from the Greeks debt problem.

It is now on the sideways mode as of this posting.

There is a tendency it might just stay that way (today's close) until any positive sentiments coming from the participants.

The market is on a downward trend from this Globex session.

Looks like the market is going to pause from the jumper trade last Friday's positive jobless reports.

Move On

Friday, February 3, 2012 at 03:45 PM

“The market doesn’t know your emotions or care about your portfolio. The market is moving on. And so should you.” – Terry Savage

One of the most challenging aspects of trading is learning to understand and appreciate that our constant desire to be right and smart in the markets will always cloud our judgment and too often work against us at the most inconvenient times.

In this current bull stampede, there are unfortunately too many traders and investors who are short or sidelined and now in desperate need for the market to move lower. How do I know this happening? This past week alone I received dozens of emails from those who expressed utter confusion and disappointment in why I’m not paying much attention to a number of bearish factors (i.e. low volume, overbought conditions, VIX readings, earnings/data not surpassing expectations, Baltic Dry Index, poor February seasonality, etc.) My reply in every single case was the following:

“The price action remains positively firm and our job is to be aligned with the price action as long as it remains that way. While that doesn’t mean we ignore the risks or think this market is somehow has magically become invincible, we have to constantly align our positions in the direction that offers the great probability for profit. In this environment that means you stay opportunistically bullish until we see that change. And, don’t worry – I’ll be here to help you see that change as soon as it happens.”

The challenge, as all of us will learn soon or later learn, is that Mr. Market doesn’t listen or care about anyone’s else opinion but his very own. This is especially true when we are wrong and not following his hidden and often very confusing agenda. Mr. Market often acts like a rebellious teenager and does exactly what he wants to do, when he wants to do it, and at the same time pays no respect for anyone who disagrees with him or believe he should act logically or within reason. In fact, a recent tendency is for the market to do exactly the opposite of tendencies we’ve seen so many times before. This is why you must place so much importance on what the market is actually doing rather than what you think it should do.

In truth, we’ve all been there, haven’t we? I know I have. In fact, more times I can even recall or really care to admit. I have also wasted and missed far too many opportunities by devoting precious time and energy looking for reasons to justify mistakes I have already made hoping that somehow that will make it better or help me to overcome my disappointment in my bottom line performance. Unfortunately, that never works and, even worse, only increases the pain and lengthens period of poor performance. This is not good especially if you are trying to make a living from trading!

While I know many of you don’t want it, here is some free advice for those who were positioned wrong for the past few weeks and who are significantly under performing so far this year. Your job right now is not to spend a moment longer asserting you were just early (which is the equivalent of being wrong in this game) but rather own up to the mistake and then figure out why the mistake was made. After you do that, it is just as important to figure out what lessons there are to be learned so you don’t repeat the same mistake again. In simple, ask yourself this – what could you have done differently or better to have profited more since this rally began? That’s the question to ask right now. Once you have your answer, then move on.

In my experience, that’s what winners do that losers do not. And, since we all desire to be winners, that’s what you need to do right now to get back on track especially if your among the many who have been left in the dust in this bull stampede!

Courtesy from Kirk Report

The market finish high today due to positive jobless reports.

A positive sign that the economy is recovering and expect the market participants will start to accumulate positions soon.

The market went up today because of positive jobs report.

And continue to hold on up to this posting.

Nice to trade early in the overnight session, you can catch the big move.

"To be a successful trader, you have to develop iron discipline, acquire an edge over markets, and control risks in your trading account." - TRADING OUTLET

The market is on the sideways from the open then drops through mid-trading day.

Looks like the market is suffering from exhaustion and needs some breather.

A choppy trading today where the play is to scalp the market opportunities.

Unless you can watch/read the markets, you cannot make a trade.

Watching the market movement intently and reading the minds of the markets is where you can make a good setup/trade.

It takes a lot of patience!

Stern Advice: 5 reasons to start day trading now

(Reuters) - We all know what we are supposed to say about day trading: It's horrible, a scam, a vestige of the 1990s tech boom, and just for naive chumps.
But still, there are days when it would be nice to lock in a big win, or pile into a favorite stock when it seems to be beaten up.

In an era of flash crashes, computerized trading, whipsawing volatility and sell orders that cost less to execute than it takes to buy a gallon of milk, why should you stick with the old buy-and-hold strategy? It seems a bit out of date. You don't have to party like it's 1999, but you can be a little more active around the edges.

That's the view of Richard Schmitt, an adjunct professor of retirement planning at Golden Gate University in San Francisco, a long-time retirement consultant, and author of "401(k) Day Trading: The Art of Cashing in on a Shaky Market in Minutes a Day" (Wiley, 2011). Schmitt has been moving his own retirement account money in and out of the market on a daily basis since 2008.

"The beauty of doing it in a retirement plan is that trades don't trigger immediate taxes," he said. Trades within 401(k) plans, individual retirement accounts and Roth IRAs don't trigger capital gains taxes, though many 401(k)plans do limit the frequency with which you can trade.

Here's Schmitt's system: "Near the end of each day, if the market is lower, I'm buying. If it's moving higher, I'm selling." He suggests investors take 1/1000th of the value of their portfolios, and link that amount to the daily percentage change in the Standard & Poor's 500 stock index.

So, if you have $150,000 in your retirement account, you would trade $150 for every percentage point move in the SP500. You'd do that near the end of the day, by moving that much money out of a stock fund or exchange-traded fund and into a money market mutual fund.

"It's a lot like rebalancing, in that when you become overweighted in an asset class like stock, you will sell some," he said. "It takes the rebalancing concept to an extreme."

Schmitt concedes that his plan could hurt investors in the event of a long raging bull. But he expects stocks to be volatile, yet in a narrow trading range, for years to come. That would be one reason to adopt some day trading habits.

Here are others:

-- It's cheap and easy. In the old days, buy-and-hold strategies made the most sense because it could cost hundreds of dollars every time you bought or sold a stock. Now you can make $8 trades in an online brokerage account in moments.

Mutual funds used to come with big sales loads and exit fees. Now you can buy and sell the entire market, in the form of a total market exchange traded fund, for pennies. Many 401(k) plans offer brokerage windows in their plans, through which you can do this.

-- The big boys do it. Hedge funds and institutional investors are using computer programs that swoop in whenever the market crests and pull their profits off the table. That's why you can be watching your profits grow slowly and steadily and then whoosh!... they are wiped away.

-- You have more information than you used to. You can watch the market in real time. You can see if shares have moved up or down for days in a row, or if there's a big move starting at 3 p.m. on any given day. Using your knowledge of history, you know the market doesn't move unrelentingly in any direction for days and days in a row.

You can see if the index or stock you've been buying and selling moves into a different valuation territory.

-- You can do it gradually. Day trading doesn't have to mean sitting at a computer all day and buying and selling large lots of shares on minute moves. It can mean being a little bit more aggressive around the edges, about buying more on bad days and selling more on good days. One tried-and-true technique called 'value cost averaging' does that in a moderate way.

In value cost averaging, you invest in a mutual fund or ETF on a regular schedule; say biweekly. Instead of investing the same amount of money per period, as you would with dollar cost averaging, you increase the amount of money you put in when the share price is down, and decrease the amount you put in when the share price is up. Say, for example, you were putting in $100 on average every two weeks. If the share price fell 3 percent in those two weeks, you'd add 3 percent to your contribution, and invest $103. If the price rose 5 percent, you'd put in $95 instead of $100.

Over time, you'd commit more money during lows and less money during highs. That won't protect you from a meltdown like we had in 2008-2009, but it will help you manage your costs and risks with a long-term investment.

-- You can manage your risks. If you've made a killing, you can take some money off the table. But one of the biggest risks to long-term investors who day trade is this: They'll be out of the market when it takes off. To protect yourself from missing out on the all-important rallies, remember to buy back in when things look bleak. And to do your "day trading" with a portion of your funds and not all of them.

(The Personal Finance column appears weekly, and at additional times as warranted. Linda Stern can be reached at linda.stern@thomsonreuters.com; Linda Stern tweets at www.twitter.com/lindastern.;

"The future is bright for the intelligent, informed, patient speculator." - TRADING OUTLET

The market made a big move early in the Globex market and no way (as far as I can see) to make a trade in the regular trading hours.

As I said in my previous post, it will stay flat/sideways and I was right.

Unless you can trade in the Globex (overnight session) market, you cannot catch the big move.

Big moves in the market usually (as always?) happens in the overnight session.

Stocks Best Start Since 1994 Tops Commodities

 

By Rita Nazareth - Jan 31, 2012 11:18 PM PT

Equities around the world are off to the best start in 18 years, topping gains in commodities and handing investors January’s best returns, as U.S. economic growth shows signs of accelerating and European leaders move closer to a solution on the region’s debt crisis.

The MSCI All-Country World Index rose 5.8 percent including dividends as banks and mining companies rallied 9.3 percent or more, according to data compiled by Bloomberg. The Standard & Poor’s GSCI Total Return Index of metals, fuels and agricultural products added 2.2 percent, the most since October. Global bonds climbed 0.6 percent and the U.S. dollar fell 1.1 percent.

Almost $3 trillion has been added to stock values and European shares ended a five-month bear market as economists lifted forecasts for U.S. gross domestic product. Reports showing American unemployment and Chinese inflation declined, while German investor confidence jumped, pushed up equities as the U.S. Federal Reserve pledged to keep interest rates near zero percent through 2014.

The market went down today from the high open due to profit taking as well as negative consumers and housing reports.

A short sell in the open is the best trade to make a profit in today's market.

No way to make a long trade unless a position for a swing if you can spot a good entry at around 12:00 noon.

Expect a flat trading day come tomorrow?

Let's see!

"It cannot be said to often that in speculation and investment, success comes only to those who work for it. No one is going to hand you a lot of easy money. And if there was an easy money lying around, no one would be forcing it into your pocket." - TRADING OUTLET

A profit taking day today from the market and also the negative reports that came out regarding economic results for the housing and consumers.

The market is oversold considering the market rallied with low volume, most participants are already taking their long positions.

Expect a flat trading in the days ahead combine with extreme volatility.

The market made a u-turn (cup with a handle/inverted head and shoulder pattern?) today when it opened at the bottom.

A very good feedback coming from the participants.

Some profiteers made a killing early in the open but were not quite successful to finish them off (the longs).

The end result was that the close price almost able to beat the open price, not bad and there is still a positive conviction for this market.

"To be an effective trader, we need to be passionate about what we are doing. In the world of trading, passion can be our lifetime to profitability." - TRADING OUTLET

“To be a successful trader, you have to be able to admit mistakes. People who are very bright don’t make very many mistakes. In a sense, they generally are correct. In trading, however, the person who can easily admit to being wrong is the one who walks away a winner. Besides trading, there is probably no other profession where you have to admit you’re wrong. In trading, you can’t hide your failures. Your equity provides a daily reflection of your performance. The trader who tries to blame his losses on external events will never learn from his mistakes. For a trader, rationalization is a guaranteed road to ultimate failure.” – Victor Sperandeo

Mark Twain’s Guide to Living an Awesome Life: 7 Essential Tips

The man who doesn’t read good books has no advantage over the man who can’t read them.”


“Name the greatest of all inventors. Accident.”

“Clothes make the man. Naked people have little or no influence on society.”

Back in 2009 I wrote an article with some great quotes from Mark Twain – lecturer, satirist, humorist and author of classic books like The Adventures of Huckleberry Finn and The Adventures of Tom Sawyer – and it became a favorite for me and many readers.

A sequel to Mark Twain’s Top 9 Tips for Living a Kick-Ass Life has been in my ideas folder for some time. But today I have completed it.

I hope you’ll find the result, these 7 essential tips from Mark Twain inspiring and helpful.

1. The secret of getting ahead…

“The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and then starting on the first one.”

This is a very good tip and one of the best ones I have ever discovered and used to handle procrastination.

When you start to look too far into the future any task or project can seem close to impossible. And so you shut down because you become overwhelmed or fearful (of success or failure) and start surfing the internet aimlessly instead.

So instead, break that task into small and practical steps.

Then just focus on taking the first step today. That is all you need to focus on, nothing else. By taking the first step you change your mental state from resistant to “hey, I’m doing this, cool”. You put yourself in state where you become more positive and open, a state where you may not be enthusiastic about taking the next step after this first one but you are at least accepting it.

And so you can take the next step. And the next one after that.

Until you have arrived at your destination and completion.

2. Less talking, more doing

“Action speaks louder than words but not nearly as often”

“There are basically two types of people. People who accomplish things, and people who claim to have accomplished things. The first group is less crowded.”

It’s often easy to talk but developing the habit of being a person of action is quite a bit harder.

Being in the habit of breaking down your task into smaller pieces is one of the most effective things you can do to take more consistent action. Two other habits that work very well for me are to:

• Start your day with a good morning routine. This is probably the most important factor for how much action I take during a day and how the day turns out in general. A good start often leads to a good day. A bad or indecisive start often leads to a pretty mediocre day.
  So create a morning routine with a good breakfast, perhaps a short work out or a short meditation and other things you find gets you off to a great start. Then add doing the most important task of your day at the end of that morning routine.
  Or if you, like me, may feel low in energy, unmotivated or have extra inner resistance to taking action on some mornings then start small and do something easy and simple.
• Take one small action right away to get the ball rolling. What is one thing you can do to pretty much make sure that something will get stuck on your I’ll-do-that-when-I-have-the-time list for a long time? Read about something and get excited about it. And then do nothing about it or tell yourself that you will take action tomorrow.
  Instead, take one small action today, as soon after you have read about whatever you are excited about. Make a plan, book an appointment, do something concrete.

3. Be courageous in the face of fear

“Courage is resistance to fear, mastery of fear – not absence of fear.”

Being courageous can be difficult but if you want to live the life you want to live then sometimes you have look into the face of fear and get going/keep going anyway.

And although it is rarely easy to be courageous I have found a few ways to make it easier.

• Ask yourself: what is the worst that could happen? Really think about. Don’t just think about it for a few seconds. Sit down with a pen and piece of paper, your laptop or cellphone. Write it all out and think about what the realistic worst-case scenario would be. Then write down a plan for how you can come back from such a scenario.
  This step brings clarity, defuses fuzzy fears and helps you realize that you can most often bounce back pretty quickly even if the worst-case scenario somehow becomes reality.
• Share your fear with someone. By sharing your fear you can relieve inner pressure. By just keeping it on the inside it’s easy to build it up into this massive nightmare and extremely dangerous thing.
  By sharing and by getting some input from a levelheaded friend or family member he or she can help you to alleviate the fear and inner pressure. And you can gain a much healthier perspective on things again.
• Accept the fear. It is a natural impulse to try to deny the fear when shows up in your life. Perhaps you try to not think about it, you try to push it away. I have found that in many cases it is actually better to just accept that fear is here right now (although it can be hard to sometimes convince your brain that this is a good option).
  By doing so you stop feeding more energy into the fear and you stop making it strong. After a few minutes of fully taking in this uncomfortable feeling and accepting it then it starts to lose steam. It just seems to float away – or at least becomes smaller – and you feel more open and centered.

4. A good compliment is a wonderful thing

“I can live for two months on a good compliment.”

Compliments are awesome. But make sure you make it a genuine one. Make sure you really mean it or it may have the opposite effect as your insincerity shines through. Find something a bit unexpected – like great taste in old soul music rather than looks – and something that is important to the other person and make a positive, appreciative comment about that.

5. Keep positive company

“Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.”

I have mentioned this many times. But it bears repeating.

Spend more time with positive people, books, music, movies and websites. Spend your time in an environment that lifts you up. And spend less time or no time with the negative sources out there. Make a conscious choice and start to shape your environment instead of just going along and reading, listening to, watching what people in general or people around you may be in the habit of consuming.

6. Focus on what is truly important for YOU

“Many a small thing has been made large by the right kind of advertising.”

Like with your environment it is important to make a conscious choice to focus on what is most important in YOUR life. And not on the things that various companies may tell you are the most important things.

Like I mentioned little more than a week ago, a note with the 4 most important things in your life smartly placed where you will see it every day – in your workspace etc. – helps you to keep your mind consistently on your top priorities.

And if you want a couple of practical tips that will help you to declutter your ad/information intake then:

• Ask yourself: is this useful? If for instance a TV-show or magazine isn’t bringing me anything useful – fun, fascination, useful tips etc. – then why am I spending my time on it? It’s kinda easy to just fall into a habit of doing stuff or consuming things without really having much of a reason for doing so.
• Find out what you really like to do. That will probably be more interesting that surfing the internet or TV-channels randomly. And so these less exciting things just tend to fall away from your life as you find – or spend more time with – things that you really like to do, like for instance a new hobby.
• Shut off the sound during commercials. And talk to the person beside you on the couch. Or read a couple of pages. Or record the TV-show or movie. Then skip through the commercials.

7. When emotions are exploding… wait.

“Time cools, time clarifies; no mood can be maintained quite unaltered through the course of hours.”

It’s easy to make bad decisions when you are full of negative emotions. And it is very easy to become riled up, angry or defensive when you, for instance, receive some criticism or when someone is attacking you verbally. This is not a good position to be in to fire away a reply if you don’t want to wind up making the situation worse.

And to lash back at this person or to not be the better person here can really hurt your self-esteem. It might feel good for a while to do so but it is a dirty high that comes with a hangover of feeling worse about yourself and subtle or not so subtle self-destructiveness.

But how do you control the impulse to attack, overreact or make a hasty decision?

• Remind yourself of the potential consequences. I don’t want to hurt myself, my self-esteem or make bad decisions with negative consequences. By repeatedly reminding myself of these potential consequences thoughts about those consequences will also often pop up automatically when I receive criticism or when I am angry.
• Count to at least 10 and take a few belly breaths. Then respond. This simple way of calming yourself down and regaining some perspective can save you a lot of trouble and help you avoid saying something you can’t take back. It’s a good approach to avoid creating unnecessary problems and to cool down just a bit and to feel more balanced before you reply or take action.
• Accept how you feel. If you have a little more time than under a minute then take a look at tip #3 again and try to accept how you feel to lessen the big emotions more quickly.
• If possible, wait until tomorrow or at least later today. By then the most negative feelings will most likely have lost their steam and you can see things with more clarity and cool. And take action in a better and smarter way.

Courtesy from The Positivity Blog.

5. Second job: Futures trader
Details: A recent survey conducted by TopStepTrader, an international scouting agency that recruits and trains futures traders, found that more than half of the workers surveyed conduct futures trading as a second job. "With the markets open 23-24 hours a day, there is a lot of flexibility and profitability in this career as a second alternative job," says Michael Patak, president and CEO of TopStepTrader.
Potential pay: According to TopStepTrader, part-time traders that trade lightly can earn an estimated $2,000 a month, while active part-time traders can average up to an estimated $4,000 a month.

A profit taking happened today in the market.

But the Nasdaq was not, it rallies mainly due to tech stocks positive sentiments like the AAPL (Apple).

The market opened on a positive note but runs out of steam to propel the bullish traction from yesterday's Fed trading day.

I guess a profit taking is on the way till tomorrow.

But the bullish trend is still intact.

"To be successful in the markets, you have to make the initial conscious commitment to being the best you can be and to love every moment of what you are doing." - TRADING OUTLET

The market made a nice turn around from the negative open and finish on a high close.

A positive Fed trade mainly due to favorable actions coming from the Fed itself.

Bulls are roaring in pandemonium and the bears are in the dark.

As I mentioned earlier in my post, the chart below looks identical from the open yesterday.

Might finish same as yesterday, in between the open and the low of the day.

The market is descending as shown from the Globex overnight session.

Seems a repeat from yesterday's trading session.

"Any professional field requires commitment and willingness to go through successes and failures. The failures can be the greatest teachers. Study the failures to develop into a better trader. Perseverance will be the key to a successful trading career." - TRADING OUTLET

The market drops in the open and did not recover from its opening price.

It recovers a bit but stayed flat on his "belly" till the close.

A tough market to trade!

Exited at 12605 for a loss of 5 points...chart doesn't look convincing for a breakout...

Trade did not work out, got stopped out for a break even...will get it again at 12610 with stop at 12600...

Will put sell limit at 12641...let's see if it's going to work...

Moving the stop to break even at 12610...