The market made a nice move today.

Buying at the consolidation and selling at the top is the easy trade I can see for today.

Quite choppy early in the trading day but as the trading day unfolds, it's all in the bag.

The market did not do anything today except to move sideways.

An ugly market range if I may conclude.

Not much to do except to watch the market move in a zigzag/choppy mode.

A choppy boring Friday trading day!

The market just move sideways today for traders got tired making money the past four days.

Probably they're on the sidelines taking a break toasting their profits with drinks.

I don't see any opportunity to trade as of this post.

We'll keep watching.

The market did not do anything today except to move sideways.

It got tired/burned from yesterday's big upside.

It paused for a little bit and both participants are watching each others back who's going to move where.

No convincing trade setup for today except some scalping which are good for quick traders.

How To Trade Successfully

That's the four words every aspiring, novice, struggling wannabe' traders trying to find out.

There are lot of ways to trade the market as there are many instruments to trade of.

Like the individual stocks, bonds, currencies, commodities, futures, other European markets, indexes, etc.

As you go along with your trading endeavor, if you treat it seriously, you will encounter lots of obstacles in finding the right way to trade the market.

Since you are looking for the quick buck to make in the market, you are jumping from any instruments to trade.

Then you realize that trading the market is not just like that.

That's where you have/need to search for some help/solutions how you can beat the market.

Subscriptions, chat rooms, alerts, newsletters, blogs recommendations, and the likes won't help since the market moves on a different time frame.

Plus the market is more on human psychology than predictions.

Trading successfully lies mainly from trader's own understanding about the markets.

This can be acquired through years of watching how the market works. It takes time.

Taking all the ideas of reputable traders and mold them into your own way is the right approach to trade the market successfully.

Other than that, your own psychology about the market matters too.

And finding the right instruments (niche) to trade the market is important.

Mastering/familiarizing few instruments to trade the market will give you an edge.

The market made a stunning surge today due to positive reports coming from the Fed.

After it opened high in the regular open, it leaps vertically when the Fed reports came out late in the afternoon.

A sign that the market is on the bull run.

The market rallied today as soon as it surge in the open.

A sign that the bulls are in the momentum.

Buying after the pullback in the open is the best setup for the entry and just ride it from thereon till the close(?).

That depends on your time frame.

But as the great trader, Bernard Baruch profess, "I make my money selling early".

For this "posted by", trade "in-between" is the preferred  setup which offers the low risk.

The whole market struggled today with only the Dow who made a slight convincing move.

And the rest (Nasdaq, S&P, Russell) were all traded in a range that looks like they all came from heavy drinking holiday binge.

The market might be in a tight consolidation moves in the coming days or maybe weeks.

The only opportunity are the short time frame traders take advantage of.

How To Start Keeping A Journal

At some point you have probably already read somewhere about the importance of keeping a trading journal. In other words, taking time each and every day to write down and store your thoughts, observations and actions concerning the market and your trading activities.

This exercise is done not only to keep those stored for future reference, but also as a self-evaluation tool to track your development. Given the complexity of the market, it is impossible for most us to recall simply from memory what we’ve learned, how we’ve acted in certain situations, and more importantly the best tactics to employ in specific market conditions and situations. In fact, the more and longer you trade, this task become even more challenging. A big part of trading successfully is learning how to use and take advantage of your past experiences and remembering lessons learned.

If you ask most successful traders they will tell you that keeping a journal can be helpful. However, the reality is that most traders don’t keep one. For example, when interviewing traders that have applied for my
mentorship group, I often ask them to send me copies of a journal entries for various time periods so I can see what they’re keeping track of every day and how organized they are in doing so. Would it surprise you that most cannot provide those samples? And, those who do, the journal looks like it was recently made up. In sum, this easily separates out the jokers from those who truly are doing what it really takes to achieve long-lasting success in the markets.

So, why don’t traders keep good journals or not at all? In my view, part of it is certainly time. We are all busy enough working our own strategies and keeping focused conditions and trades that adding yet another daily task is tough things for us to do. Another big part I think has to do with the basic fact that some of us just don’t develop the habit. Most of us have routines and if you don’t add journaling to it at some point, there there will never be enough time in the day to do it!

Looking back, I was very fortunate. Early on in my career before agreeing to mentor me, my first mentor asked me to start keep a trading journal for an entire month. He didn’t tell me what to put in there, just simply to “write down in a paragraph every day what you learn each day.” Simple and straightforward and every day since 1994 I have been doing exactly that!

This also raises the third issue I see – most traders don’t really know or understand really what a trading journal should include and so they don’t even begin. Since most successful traders won’t openly share their methods with strangers, you won’t find many helpful samples out there to work with as a starting point. Moreover, if you ask a 100 traders what things to include in a journal, you’ll get 100 different responses. Since everyone trades differently and operates in different time frames, your journal must reflect that as well.

So, if you are one of the traders that understand why it could be important to keep a journal OR you are at least willing to try it for a period of time to start the habit to see for yourself if it can be helpful, here are five tips to help get you started:


Make The Commitment: To help start and maintain the habit, make the commitment that for every day for at least one entire quarter with no exceptions you will write a journal entry. It needs to be daily at first to start the habit so you’ll need to update it on weekend as well. To avoid running out of time daily to do it, make the journal entry the very first thing you do every day before anything else. I would also encourage you to set a reward (i.e. a carrot) you really want (i.e. golf outing, new gadget, etc.) as long as you keep that daily commitment for an entire quarter.
Start Slowly: Put and stick to a ten minute time limit on all journal entries. Yep, actually set a timer on the time you spend. Many think they must spend 30 minutes or even hours journaling out everything which is why they never have the time and quickly abandon their commitment to try it. In addition, long journal entries will not make the process helpful as you’ll be just as reluctant to review them later on. After all, who has the time to reread a bunch of long-winded rambling garbage? No me, that’s for sure and I doubt you have the time either. So, in just a few sentences, you should be able to write out everything you need to keep for that day. Be concise, clear, and only put in items you think are worth remembering. Before you write every journal entry, think first of how you might later use these notes to develop an edge. This will help you know what to include and what to leave out.
Be Organized From The Start: Create an organized, logical structure from the start. Making random comments in a journal without any overall structure is not going to be useful. You want to be able to review these journaling entries after some time has passed so organize it in a manner that makes sense to you with this in mind. From the day one, you need to figure out what each journal entry should include and how plan to organize your daily thoughts. I’d recommend using a bullet format at first to make sure you’re concise and to the point as well. Concise, clear entries are much better than long-winded journaling notes that you won’t have time to read/filter later on.
Make It Fun: If you don’t actually enjoy the process of keeping a journal chances are good you will stop doing it. Fortunately, there are lots of online services now like Evernote and others that help make journaling fun, easy to do from anywhere on just about any device, not very time consuming and also secure. At first, I would not recommend that you do a open blog, post notes on twitter, etc. for all to see and comment upon. This is only just for you and no one else!
Share It: If you have a trusted mentor or trading buddy or just someone you respect who trades successfully, you need to share your journal with him (or her) and ask for feedback and suggestions on making it better and things to include based on their experience. While most successful traders are reluctant to share their own journals, you will still find many are willing to provide feedback on your journal and offer helpful suggestions. Seek out that help after some time passes and you have already established a consistent journaling routine.

Like most things, the most difficult thing is just to get started to develop the habit in your daily routine. These five recommendations should help get you past that point. If you make and stick with your commitment to maintain a trading journal, in time you will gain a powerful tool in your trading weaponry. Through the years, many of my best trades have come following reviewing my notes of prior situations and setups that I am facing once again. In many ways, that has proven to be a valuable edge for me and, if you do the same, in time you will discover this as well.

Once you do and you find out that the process isn’t as awful or as difficult as you currently might think or fear, then it is time to actually improve your journal and focus so that it really will help you. At first, it is ok just to do what it takes simply to develop the habit. After that, I would highly recommend reading the following trading journal suggestions from my friend Dr. Brett N. Steenbarger. He offers some terrific ideas on what a trading journal should and should not include to help you make the most of this exercise!

From Kirk Report

A choppy (boring?) market trading day with not much opportunity to make a decent setup.

Guess the participants are gauging each others throat looking first who's going to swallow the unpredictable market thrust.

And from there, they're going to take the market rewards.

Are You Setting Yourself Up For Failure?

by: Bill Zimmer

Friday, March 9th, 2012 at 9:39 am

I’m quite sure many of you have been confused and frustrated by the markets in recent times. During these times we need to avoid the big pipe dream, the pure hope, the thinking we have to make money today. Many if not all of you have a plan, a goal in mind on where you wish your trading to take you. Be careful how you define your goal. Perhaps your goal is to make $100,000 this year in the markets and that’s wonderful, however if you break it down into too finite a goal you will defeat yourself. Breaking down the $100,000 into roughly 250 trading days per year equals $400 per day or $2,000 per week, approximately $8,333 per month. Sounds great and easy, doesn’t it? However, there is a flaw in this thinking?

Setting a goal based on earnings every day (or week or month) and you will feel compelled to trade. What if the markets don’t move very much? What if everything is quiet waiting for a piece of news? It may be better to stay out of the market completely rather than fail at what could be a low probability trade. Another problem – what if you fail to make your $400 today due to a lack of opportunity (let’s not even consider a losing day). Now the next day you will feel compelled to attempt to make $800 to make up for your no profit day, then $1200 and so on. Your stress level will be elevated and you may well begin a never-ending cycle of frustration and disappointment.

Setting a more appropriate goal will probably relieve the frustration. It’s great to have a rough idea of how much money you want to make, but setting a specific dollar amount that you must achieve on any given day (week or month) is very often a hindrance. If you are new to trading and the most you have made is $15,000 in a year, then setting a goal of $100,000 is probably very unrealistic. You are setting yourself up for failure? Perhaps, an increase of 20% is more appropriate. Because if you fail to reach your goal, you’ll feel frustration and disappointment, and may start trading based on your emotions, the death Nell of many a good trader.

Professional’s know how to patiently wait for the opportunities to come to them. They don’t impose their will on the market. And that’s what traders are doing when they set a performance goal in terms of a specific dollar value over a specific period of time. Winning traders patiently wait for market conditions where they know they can excel. They understand that the same quiet market will handsomely reward them if they are patient. It’s also useful to remember that all that really matters is performance across a series of trades. Many traders can lose 60% of the time, then happen upon a winner of many thousands that offsets previous losses accrued across a series of trades.

When you are setting goals, it’s vital that you keep them in perspective. Set goals that are equal to your skill level. As your skill level improves then reset your goal. Shooting for goals that are beyond your skills will frustrate you more than motivate you.

And please remember that you can’t impose your will on the market. You don’t know what market conditions will be until you see what they are. And if optimal conditions aren’t there, you can’t do much about it. You must accept what the market is willing to give you, which may mean patiently waiting for conditions to change. By doing so, you may not profit every single day, but over the long run, you’ll be a consistently profitable trader.

The market made an initial surge in the open but bow down early noon till the close.

Lack of bullish conviction from the participants.

Probably it's Friday, a profit taking day.

Two trades are probable here, buying in the open and close it around 11:00 am. ET.

And the second is to short the market after the first long trade and cover it in the close.

Simple trade setup but it's not easy, don't you think so?

I guess it is, but proper concentration and using multiple time frames will help to catch the trade.

The market finish high today and it formed a saucer pan? pattern.

Looks like it might fail two hours before the close but went up vertically afterwards.

Nice setup if you were able to enter at 12880 level and close it at 12930.

The market is back on track again after dropping 200 points plus last last Tuesday.

The market gap up in the open then drops after an hour or so to make room for the profiteers.

It is forming a (little) cup with a handle as of this posting in the futures market.

Buying at the consolidation is the most appropriate to enter as far as I can see.

Futures markets are on the rise from this overnight session.

The market gap down when it opened late in the afternoon and continues its upward momentum as of this posting.

Let's see if its going to maintain its upward trend in the regular open.

The market made a dramatic revenge today from yesterday's tumultuous pounding by the bears.

This time the bulls are always ready to counter any attack the bears they are trying to bring in the table.

One good trade today is at the consolidation level 12780 that leaps vertically from thereon.

Buying at that level and selling at the close is the trade for today.

The market made a stunning surprise reversal today when it sank yesterday from the deep hole.

A sign that the bulls can easily? turn the tide against the bears.

The market was not able to make a reversal when it drops hard due to European and world economic concerns.

Not much opportunities to trade in this kind of market environment.

The market drops hard due to European and world economic concerns.

The biggest drop in the market from the bull trend the past three months as reported.

I don't see any possible trade (as of this moment and till the close) from this chart.

Might as well watch the market and stay on the sidelines.

Face Regret Head On

by: Bill Zimmer

Friday, March 2nd, 2012 at 9:47 am

If you are not in the habit of following sound money management principles and risk analysis then you face actual harm. For example, you commit too many dollars into a single trade and it goes awry - you lose much more than you should have, and it’s painful. More than being painful, you come to regret having made the trade in the first place. A very normal human instinct is to not only avoid pain, but to avoid pain at all costs. Regret can be incredibly painful and will make otherwise good traders avoid even putting on a trade for fearing the regret of another loss.

If we put too much ego on the line with any decision, the hurt and the regret intensifies. If we put a lot of work into a trade we have also then put a lot of self-identity on the line along with our money. With all this work into this particular trade we really become convinced we are right. If it turns out that we are wrong it suggests to us that we are just not as good as we thought we were. Nothing could be further from the truth.

The easiest way to avoid feelings of regret is to avoid making decisions. If we do not make a decision then we can’t be wrong and we won’t feel regret. However, if you do not make decisions you also cannot make profits, which is our goal. It is better to learn to face regret head-on.

The best way to cope with regret is to accept the fact that it is an emotion. An emotion that you will be facing as a good trader. If you have a written business plan (trading is a business) you know that losses are part of this business, as they are in every business. If you take the proper precautions however, you will keep those losses small enough that being able to deal with regret should be somewhat easier. As time goes on and you see your plan working; regret will become easier and easier to face. A useful thinking strategy is to remind yourself, “I’m making more out of the potential loss than it deserves; it is not going to be as unpleasant as I’m thinking it will be.”

Another way to minimize regret is to try impersonalizing the trade. Think in terms of probabilities, “This is just one of many trades. The outcome of this single trade means nothing. The big picture is all that counts.” By reminding yourself of this simple fact, you’ll minimize the potential regret, should you lose. Also it’s important to remember that a single losing trade (or even a few losing trades) doesn’t mean that you have poor trading skills; it may just be a run of bad luck. What is the point in making the outcome of a trade symbolic of your skills as a trader? It’s Not! And, most importantly, never put your self-worth on the line with your money. You’re a professional. The outcome of the trade should not influence the positive view you have of yourself as a person. Don’t try to avoid regret. Face it head-on. You’ll feel more free and powerful.

The market went down in the open yesterday and made a slow reversal to finish barely below its open price.

A sign that a bearish reversal is now on the move?

I guess that's what the sentiments of most participants.

The chart below was a relatively familiar formation.

After the market drops from the open it climbed up slowly in the ladder type fashion.

Buying at the consolidation at the bottom and selling at the close was the best trade I can see.

Using multiple time frames plus kind of reading the market minds will help you make that kind of trade during this market turbulent moves.

Otherwise, you will get clobbered if you just trade for the sake of trading.

BENTLEY EXP 9F

“Traders who continue to spend their money looking for the holy grail, the best indicator, or that secret winning method unfortunately miss the secret of winning. The secret lies in your own ability to understand the market that you choose to trade and your own ability to develop the strategy to capitalize on the opportunities that you have learned to identify.” – Dr. Keppler

Trade Your Own Way

Trading is not all about practice (live trading), you also need to be emotionally balance.

When we mentioned emotionally balance, you should be ready to put trades with reasons and purpose.

Not trades that are impulsive and no clear understanding in reference with the current market environments.

Putting unnecessary trades will affect you emotionally when at the end of the day you notice the summary of your account is on the negative side.

And you cannot refrain basing from your P&L because trading is all about making a profit.

And as you go along with your journey in trading, the problem of trading technique is not the issue anymore.

Whereas, initially while you are still on the learning stage you are looking for the shortcut to make money.

But after a while, you will realize that putting trades is not the issue.

It's all about the whole picture that includes market environments, minds of the participants, and your own psychology about the market.

It will take years to learn all of these, but through patience and perseverance - nothing is impossible.

Trading is like building a house in an earthquake prone areas, you should have a trading foundation that is solid and strong.

To sum it all, trading is all about your own understanding about the market and your own way of making trades.

It cannot be imposed on you, you have to find your niche and own way to trade.

No one can help you to make money in trading because other traders too are busy making money in their own way.

They cannot (and will never?) tell that to you, even to their love ones?

That's for sure!

The market did not make any positive move today except that it stays/plays below its previous close.

It formed a small cup with a handle early but it failed.

Then it formed a big cup with a handle around noon time to finish where it opened in the close.

If you're just patient enough to wait for the pattern to emerge, you can make a good trade in the latter.

The market did not make any big move today, almost similar from yesterday's range.

It surge early in the open and made some slight predictable patterns from thereon.

A saucer pan/cup with a handle at around 11:00 am. ET.

And a little head and shoulder between 1:00 pm. to 2:00 pm ET.

If you are basing on a multiple time frame, you can easily figure it out the formation.

Sold YM (Futures) at 13000 for a gain of 15 points.

Target price was met and the pattern succeeded, cup with a handle.

The market is forming a cup with a handle pattern.

Bought YM at 12985 with a target at 12996.

Let's see how it goes.

The market struggled today and just zigzag its way till the close when it opened slightly above its Tuesday's close.

It is struggling to get off from the 13000 level.

I guess it might struggle further till next week.

A bull trap is in the offing?

That's what everybody is expecting.

The market formed an inverse head and shoulder or a cup with a handle pattern today when it drops at around 11:00 am. ET.

Was expecting the market to rally when it reach the critical level but it failed.

Lots of programs are contemplating on that 13000 level.

So that is where the battle is, let's see who's going to prevail.

Trading Performance Evaluations

As I am completing the four week program of the TopStepTrader.com Combine - that allows you to trade in their firm, provided you are going to meet their trading criteria.

Below are my lists based from my performance as I described and evaluated my sub-par performance to the best (or worst?) I can recollect.

Though there are no excuses (as a trader we must be responsible for all the outcomes in our trading), below are my notes as lessons and for future improvement.

1. There is significant emotional effect trading one contract (which I am used to) as compared to three or five contracts and you are tempted to trade more contracts to possibly meet the required profit of $5,000+.  Made lots of mistakes in trading big contracts because of the eagerness to meet the criteria and did a lot of scalping which I paid dearly because of (always) getting hit with the stops (and keep on re-entering the market without clear cut plans) that led me to pay more commissions. The lesson here is that I should not pay attention first with the target profit and should just have concentrated in putting good quality trades. This is the most common lessons aspiring traders commits, looking first for the money/profit instead of making a good trade setups.

2. I did not watch myself very well and I traded for the sake of trading which is a big no no in trading. Failure to watch yourself in trading is like "sleep walking in the railroad track" - that will kill/ruin your trading career. This is what you call "over trading", which I partly described in the first list.

3. Staying too much in the market? (partly because I sleep and breath the market)! Problem of not getting breaks in the market is like a "drug addict" looking just for fun and "going to heaven?". I should have learned how to pace myself in the market and make/treat it seriously as a business and not just for (partly) entertaining. Need to learn how to differentiate the market in a businesslike manner. This is what you call "staying balance in the market". I should have treated the program in a calm/relaxation manner (not overemotional and impulsive to make trades 'for the money'?).


4. Failure to adhere to the plans and did not exercise "iron" discipline. Should have stop trading when I should have. This is what you call "know thyself". Not knowing yourself and the limitations you absorb in analysing the markets and pushing yourself (to make more trades) to the limit is like punishing yourself to the fullest extent of your intuitive function (which according to IDT class, our brain function cannot process/perform 100%, just make your own conclusion please)? Also, fighting the tape is included here, like the temptation of putting trades to make it right instead of letting the markets do its 'wants'. Is that the ego?, yes it is wannabe' trader!


5. Not fully focus and motivated to the real purpose of the program, i.e., put some trades that are not necessary and without purpose.


These are the main reasons (seems they are all redundant?) based from my own analysis regarding my performance in the Combine program. I just don't know what my scout would rate my performance and I am looking forward to try it again.


The Combine program is a good challenge for any aspiring traders in improving one's skills. It will help develop your analytic performance in putting trade setups.


All in all, I find my experiences in the program as challenging, helpful, educational and fun.

Study And Practice

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The Kirk Report

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Study & Practice Posted: 28 Feb 2012 12:49 PM PST Here is a question recently received from a member… Q: I am a new trader with roughly nine months of experience. I work full-time and trading for me is very much a part-time hobby. For the past few months and since becoming a member, I have been devoted an average of one hour per day toward learning how to trade using both your site and a trading simulator. In your opinion, how should I properly prioritize my time between reading and learning (via your strategy reports, notebook, chart shows, recommended links and books, etc.) versus actual practicing (time spent on simulator) to gain the skills I need as quickly as possible? While I’m making very good progress as my results in my simulated trading are seeing steady and significant improvement, I would like to know your thoughts and whether you have any recommended rules of thumb to share with me. A: I must start by congratulating you on a number of things including the fact that you devote as much time and effort as you do, that you already understand the difference between learning and practicing to acquire trading skills, and that you’re using simulated practice trading at this stage of your early learning curve before putting real capital in play. I cannot praise you enough for the approach you have adopted especially during this early-stage of your learning curve. So, great job! It has been my experience, both personally and in my mentoring of other traders, that skill development in trading comes primarily from experience. While you can spend hours and hours reading and studying terrific books, magazines, blogs, tweets, and so forth, if you are not also then taking what you learn from those and actively applying them in real live market situations, then you are not doing what is necessary to get the experience you need. Trading successfully, unfortunately, is not a skill you can acquire by being a passive learner. As a rule of thumb – for every hour of study, you should be practicing at least the same amount. Those who I have personally mentored on average when we start out working together have shown that for every hour of practice, they typically spend about five times that same amount in study. That’s far too much unless you are just starting out and know almost nothing about how the markets operate. Unquestionably, at the very beginning you’ll certainly have to be devote a lot of study time than those with any level of experience, but the faster you ramp up the time and effort devoted to real practice the better off you will be. In fact, at first you won’t even really understand how to apply what you learn through books, blogs, etc. because you haven’t previously gained the experiences that put those lessons into proper context. For example, I can stress the importance of risk management to new traders and weighing technical setups in terms of probability analysis, but until they’ve been taken to the woodshed for a real beat down in the market, they won’t have a clue to its significance. This is why both practice and study must occur simultaneously. Through my mentoring, I also often have a unique perspective in this same regard as I track and watch their progress very closely. For example, I have a member now in my mentorship group, Eric, who averages over 80 simulated trades every single week. Another member, Timothy, who has similar amount of experience and skills to date with Eric in comparison only makes an average of 3 trades per week. Which one do you think will go through the learning curve more quickly and develop more skills? Of course, it will be Bob providing that he also finds time to dedicate an equal amount of concentrated focus figuring out why certain trades worked well and which ones did not and why. This is why you must engage in what is called “concentrated practice,” not just trading around randomly (a problem often seen in those who use simulators versus real capital in practice). So, on both accounts, there needs to be an equal balance here between both study and practice. Both must be present in equal amounts for proper skill development. Finally, once you acquired the skills and knowledge to produce profitable results in simulation, then you must move quickly into trading with real capital. As you will soon discover, while trading simulators will help you build skills rapidly at first, you won’t really know whether your strategies can actually work until you put real capital in play. A lot of methods look terrific on paper, but in practice they don’t work because emotion and stress becomes part of the equation. And as you’ll later learn, that’s really the most challenging part of trading once you have acquired basic skills and knowledge to trade well.

Be Adaptable!

The market barely moves today and not much edge to find a viable trades except to scalped it.

This is the problem while in the process of trading especially if you have no clear plans based from market conditions.

Unless you are a swinger, you don't need to panic making some gains when the market opens.

As a day trader, you need a clear cut plans what the market conditions brings.

You just don't need to trade for the sake of trading, and not confuse yourself that trading is for entertaining.

Unless you are doing it in simulation, but if for real there is a significant effect that affects your mind because of the involvement of emotions.

And learning to be adaptable based from current market environments is important.

The market made a dramatic reversal when it drops hard in the open.

A classic cup with a handle pattern if you are basing from multiple time frames.

This is a classic buy low sell high Wall Street common modus operandi.

The bulls are really determined to buy the deep whenever the bears tried to tumble the market.

The market continuous its bullish trend.

Let's be aware that a correction (profit taking) might happen anytime soon.

That's for sure!

About Trading From Charles Kirk

As an avid follower of Charles Kirk, I am sharing few essential notes about his trading that I've just taken from his latest interview.

* He began trading with a $2,000 deposit in 1993 and now trades with a $3 million dollar portfolio.

* Since 1999 he has been a self-employed, full-time independent trader.

* He said that in trading, "no matter how much effort you devote to your trading, success is never guaranteed."

* He mentioned that his edge, "comes from a combination of my work ethic (i.e. no one works harder or longer than I do), lots of experience and skill (I have been doing this for almost 20 years), and mental/psychological discipline (I have learned how not to fight myself or the market and/or trade out of ego)."

* "I am still a technical pattern focused trader - in other words I search for price pattern setups that offer good risk/reward properties and I trade those patterns as they develop."

* "In a market like this, you have to look for the patterns that setup and trade those patterns. In essence, keep it focused on the price action and the patterns that develop and not much else."

* "Professional traders know that it is not what you trade that is important, but how you trade it."

* "My focus is on price action, patterns that develop from it, and constantly searching for the best low/risk, high/reward opportunities while managing my risk at all times."

* "To trade successfully, you have to be street smart and that only comes from experience and working/developing your very own trading strategy."

* "Trading is observation, pure and experiential.'

* "Trading is more about knowing when not to trade, than it is about trading."

These are just few notes, to find out more about him, click UNDER RESOURCES. I highly recommend his site for the invaluable trading education he provides.

Probable Trade Setup

In this chart, I am showing a trade setup based from my own understanding in the market.

This is just for educational purposes and trading is about pattern recognition.

Once you learn how to recognize a pattern, you don't need those fancy indicators.

So let's begin a trade!

In this chart, I am showing the DIA, similar to the YM futures.

The market made a crazy move last Friday, even though it moves that way I find one probable setup that states below.

The two arrows are the entry and exit, and this is a short trade.

As you can see from the first arrow, it formed what they call the bear flag.

That's a sign that the market is now on a bearish trend.

The Entry: $129.65 - for a short sell

The Exit: $129.35  - for a cover

Gain: +$0.30 cents per share (that's a sure trade, if you sold short (you borrow from your broker) a 1,000 shares, that's equivalent to $300.00 in a span of half an hour?).

Not bad for a day's watching the market, isn't it?

What's That Pattern?

Sometimes the market gives you a puzzle that you can't ever imagine how the h??? the market is giving.

Like this Friday's early trading as shown below.

By just looking at it, unless you are a computer HFT or a Quant maybe - you can possibly trade it.

But for a discretionary, it needs a lot of guts and a suicidal to trade it?

That's where you can exercise discipline.

If the market showing you that you can't figure it out and you don't know what is giving you - "then don't do anything" as one great trader profess (Jim Rogers).

Stay on the sideline, find other instrument that you are capable to trade but don't make it a dozen.

Unless you are a fund manager, you can diversify.

But as a trader, just explore from a few probable instrument that you can master/familiarize and stick with it.

Don't be jack of all trades, master of none!

How To Trade The Markets?

A classical "v" pattern formation happened today in the market or an inverse head and shoulder? or a cup with a handle maybe?

Anyway you want it to make your own pattern recognition/formation it doesn't matter as long as you can trade and make money out of it, no question.

In the market, following others to make a trade is an exercise in jeopardy/futility as far as this "posted by" is concern.

That is why I am a follower of my own understanding of the market (when it comes to putting trades), except maybe in market psychology and trading money management.

In this chart shown today, if you are a graduate of Bachelor of Science in Prediction (BSPr, I just don't know where in the world's university is offering that), you can buy the market when it drops after the open for a long position and go somewhere else, take a nap maybe.

Then wake up/come back in your trading table and sell the market 1-minute before the close and you made a good trade.

Sometimes (or most of the time?) the market gives you a simple tradeable pattern but lo and behold, you cannot make money or you cannot trade it.

The answer to that is about psychology, emotions, fear, nervousness, getting involved in the market tick by tick that gives your nerve/pulse rate that the blood pressure monitor cannot recognize anymore.

That's how in the market, if you don't pay attention to yourself and reflect it the way the market works - it's just a waste of time sleeping and breathing with the market.

And to solve this kind of problem, getting involve in the market is vital coupled with discipline and management.

But practicing trading skills is non-negotiable, that is - if you want to be a better trader!

The Common Trading Mistake Nobody Wants to Talk About

by Darrin Donnelly on February 21, 2012

Traders often suffer from "Grass Is Always Greener Syndrome."

Jack Schwager interviewed dozens of the world’s most successful traders for his famous Market Wizards series of books. In The New Market Wizards, Schwager summed up THE critical element that separates good traders from bad traders:

“When asked to explain what was important to success, the market wizards never talked about indicators or techniques, but rather such things as discipline, emotional control, patience, and mental attitude toward losing. The message is clear: the key to winning in the markets is internal, not external.”

Few successful traders would argue with Schwager’s point.

Those who have survived the trading wars year after year will tell you how important the emotional elements are. They’ll tell you how hard it is to persevere during a brutal drawdown, how they learned the importance of staying humble during a winning streak, how the real money is made by having the discipline to wait for just the right moment, etc.

Even beginning traders learn quickly how brutal the emotional side of trading really is.
Not surprisingly, the demand for help with these internal factors has created a large industry of books and services focused on helping traders master their emotions.

These books and services have benefited many traders, myself included.

But through the years, I’ve found one common and devastating psychological issue consistently ignored. It’s what I call the “GIAG Syndrome.” That is, “the Grass Is Always Greener Syndrome.”
This GIAG Syndrome is actually an “effect” of all the internal “causes” traders struggle with. It’s a RESULT of worry, stress, fear, lack of discipline, and anxiousness.

It works like this. A trader hits a losing streak, suffers a drawdown, or just gets plain bored with his recent trading. So, he goes searching for an answer to his “problem.” This answer, the trader believes, lies in finding a new system, guru, or overall trading philosophy.

Instead of trying to solve the internal issues that are creating this urge, the trader erroneously thinks that the problem is the system. The day trader becomes a swing trader, the technical trader becomes a value trader, the stock trader becomes a Forex trader, and so on. Whatever the trader was doing before is no longer working and the new system or guru that has caught his attention would be a much better fit, so he thinks.

This is a losing battle because the trader is trying to solve an internal problem with an external solution.

Ironically, a lot of the well-intentioned books and services that aim to help traders with their internal game actually end up ENCOURAGING the trader to go down this “grass is always greener” external path. They tell traders to go out searching for the system that is just right for them. They tell traders, “There’s one strategy out there that you are meant to trade and once you find this perfect fit, you’ll be effortlessly in-sync with your internal bliss.”

Unfortunately, this causes traders to embark on a never-ending search for the system that fits just right; their own little “Holy Grail” of trading. And thanks to all the financial news and aggressive Wall Street marketing, there will always be an endless supply of trading systems with greener-looking grass just around the corner.

But isn’t there some validity to this advice? Isn’t it extremely important for the trader to find the right system that fits their lifestyle and their personality?

Absolutely. But chances are, you’ve already found it.

Sure, you don’t want to blindly jump into some unproven and over-hyped trading strategy that you stumbled upon when surfing the Internet or browsing a magazine. A little common sense and a lot of thorough research is a must before committing yourself to a trading system.

However, if you’ve been seriously following the markets for any longer than a year or so, chances are high that you’ve looked into a few different strategies and found the one you’re most comfortable with. At the very least, you’ve found the overall trading philosophy that is most appealing to you.

You won’t hear many “gurus” tell you what I’m telling you, which is to stop trying new systems.

The reason you don’t hear this is obvious. Like many other traders, I offer a newsletter that adheres to a specific system (the “Darvas System,” in my case). If you’ve stumbled onto this article, you may in fact be open to trying a new trading system. Yet, here I am telling you that trying a new system – even if it’s MY system – is highly unlikely to solve the trading problems you’re dealing with!

Regardless of this fact, I think it’s hugely important to acknowledge this problem among traders.

To sum it up: If you’re not getting the trading results you want, the system you’re already trading is more than likely NOT the problem. The problem is much more likely to be internal, which can’t be solved by changing your external strategy.

Sure, you want to be certain you’re trading a strategy that has been proven to work and not something being sold right next to the snake oil ads. But once you’ve found a strategy you like and you know it works, stick with it.

Don’t blame the system when you should be blaming yourself.

4 Lin-sane leadership lessons

By René Shimada Siegel | Inc – Wed, Feb 22, 2012 1:26 PM EST

In business terms, Jeremy Lin is the underdog that took on the 800 pound gorilla and won. Here's what entrepreneurs can learn from him.

Lin-sanity, they call it.

On Sunday, February 20, the Knicks played the defending-champion Dallas Mavericks. Jeremy Lin was again on fire, scoring 28 points with 14 assists and five steals, and leading the Knicks to a 104 to 97 win. In business terms, we could think of Lin as the start-up that has the determination, drive, and ingenuity to take on the 800 pound gorillas in its market -- and win.

After all, as recently as January 4, Lin had posted this to his Facebook page: “Everytime i try to get into Madison Square Garden, the security guards ask me if I’m a trainer LOL”

Every once in a while somebody like Lin comes along and defies all the stereotypes. They deliver in such a spectacular and graceful way that you can’t help but admire them. How has this young man inspired so many in such a short time? And as business leaders, what can we learn from him?

Passion and drive trump genetics and environment. What’s the NBA-sized goal for your business -- and do you have the drive to get there? Nobody ever expected Jeremy Lin to become a world-famous basketball player. Yet he was determined,and patient, against remarkable odds. His parents are of Taiwanese and Chinese descent, both 5 feet 6 inches tall. Lin managed to graduate from high school without being offered any athletic scholarships, and didn’t make the All-Ivy League First Team until his senior year at Harvard. Against all odds, he worked hard and never gave up on his dream of playing in the NBA.

Maintain focus. Despite all the Lin-sanity, Jeremy has not been distracted by the hype and attention, at least so far. He remains humble and spiritual. After a loss to the Hornets, Jeremy posted, “gotta learn from my mistakes and move on to the next one.” He’s always focused on improving his game, working with special coaches to hone the style of shooting that lets him drop a three-pointer over Mavericks star Dirk Nowitzki—who towers over Lin by nine inches.

At Harvard and even now, Lin has heard bigoted jeers about his Asian heritage. Believe it or not, ESPN used the headline “Chink in the Armor” on its mobile site after Lin had nine turnovers in New York’s loss to the Hornets. “I don’t think it was on purpose or whatever, but they have apologized and so from my end I don’t care anymore,” Lin said in a TV interview. For entrepreneurs, the lesson is clear: Never let ignorant non-believers get in your way.

Share the glory. Jeremy is not only humble, he’s very smart. Despite all his talent he’s the first to recognize the importance of a team. As an entrepreneur, you may be fortunate enough to be singled out for your success. It’s critical to recognize the people who enable your success and keep it on track every day.

Lin’s a generous player who makes his teammates better, sharing the ball and the glory. “This team is so unselfish and has so much heart,” he posted on Facebook. “Love playing with them!” Does your team know how much you love playing and working with them, too?

Avoid personal fouls. In business it’s tempting to charge ahead recklessly. Many professional athletes disrespect their opponents, bad-mouthing them and throwing their weight around. But Jeremy plays with focused determination, a team approach, and a humble and passionate nature -- the same characteristics that inspire customers and employees.

Now I’m no basketball player -- and a few inches shy of 6 foot 3 -- but I do know smart business owners can achieve amazing feats of success when they play heads-up ball.

The market made an early reversal when it drops in the open.

The bulls are so determined to overcome the bears overwhelming pressure to bring down the market.

Alas, whenever they bring down the market, the bulls are always ready to counter.

Like in today's market as shown from the chart, you can see the bulls determination to react forcefully  whatever the bears are trying to bring in the table.

Two trade setups are viable today, one when it made a reversal at around 10:00 am. ET.

The other when it consolidates at the range 12960 level.

If you are basing on a shorter time frame say 1-min. chart, it formed a cup with a handle pattern.

So You Wanna' Trade Without Capital?

Been three weeks into the "Combine" trading program of the TopStepTrader and I find their program  very important in developing how to become a discipline trader.

It monitors your performance and tracked your trading records that will help you correct your mistakes and what areas are you going to improve.

Been trading for a while and been looking/searching for years how can I possibly trade without capital and at last I stumble into their site and I find their program encouraging and real.

You just have to adhere with their trading criteria and will not only help you become a better trader it will also shape your trading career in the future.

I highly recommend TopStepTrader (click on the link under THE RESOURCES) for those aspiring futures trader and find out their Combine program.

The market made a u-turn again after it drops in the open.

Short sell in the open and buy long in the consolidation are the two sure trades today.

But trading and spotting them needs a lot of patience and concentration.

5 Qualities of All Great Traders

By Guest Author - February 21st, 2012, 7:30PM

1) Loss cutting: Trading has this amazing historical footnote: If you study the great traders throughout history, they all share the same statement as their number one rule: CUT YOUR LOSSES! Capital preservation “keeps you in the game.” It is especially important once you understand the math: a 25% drawdown requires a 33% gain to get to break even; Down 33% means you need to rally 50% to get back to square one; As we saw in 2008-08, a -50% loss requires a +100% gain to get back to even. In sports “Defense Wins Championships.” The same goes for stock trading. Most traders need to focus more on defense.

Even Warren Buffett understand the traders credo: “The first rule of investing is don’t lose money. The second rule is don’t forget Rule No. 1.

2) Confidence: There is nothing worse than seeing a great opportunity but not having the courage to “pull the trigger” and execute the trade. Freezing up due to fear does NOT happen to great traders. These thoughts don’t even enter their mind because they are confident in their plan. They know wht they will do if the trade goes their way, and perhaps more importantly, they know what to do if it goes against them. Confidence cannot be taught. It comes from making decisions, taking action, and learning from experience.

3) No ego: Successful traders may have big personalities, but they separate their ego from their trading. They might have serious conviction behind their positions, but when the market proves them wrong, they don’t argue with it. They simply move on and accept it.
Two things I never argue with: the stock market and women. Both of them are smarter than me, and both are always right! (BR: Spoken like a married man)

4) Consistency: The best at anything are the best because they are consistent. Michael Jordan isn’t considered the best basketball player ever because he scored 30 points ONCE in a game. It’s because he averaged 30 points per game over his ENTIRE career.

Traders should not obsess with their day-to-day profit & loss. Rather, they should shoot for consistent positive months, quarters, and years with minimal draw downs. You do not want to be the “boom and bust” trader who does well in a strong market but gives it back during market corrections. These guys are a dime a dozen and typically get blown out of the market at key pivot points (Last cycle, I knew a few who became mortgage brokers — how is that for timing?)

5) Students of the market: Successful traders NEVER get complacent. They are always eager to learn, constantly looking to improve their skills.
One way to improve is through post analysis of your trades. It is important to look at your numbers and make sure your losses are smaller than your gains.
For technical traders, studying your entry points and looking at charts that worked (and didn’t work) is part of the constant learning experience of becoming a confident and consistently profitable trader.
~~~
Fahmy holds seminars for active traders who want to improve their returns. Readers of the Big Picture who are interested will get a $500 discount on the full day event. Go to TradingBigWinners.com and enter the promotional code: “bigpicture500” for the New York (3/3) seminars. I will be discussing trader psychology and cognitive errors at this seminar.

After the market made a u-turn when it opened high, it just stay idle/sideways within the 13000 level which is the highest points since 2008 as reported.

It formed a head and shoulder pattern, a sign that a bearish trend is in the offing at around 1:30 pm. ET.

Trading the market for long when it made a u-turn and shorting the market at 1:30 pm. ET are the two viable trades that can be initiated.

But trading them needs a lot of patience.

The market made a u-turn after it went up in the open only to go down due to early profit taking.

Taking the advantage at buying low selling high was the right trade today by taking/anticipating the trade when it consolidates at the bottom.

The market gap up as shown from this chart in the Globex market due to positive news coming from China and the looming decisions from the Greek parliament regarding their debt dilemma.

I have this convincing sentiment that it will continue its upward momentum come regular open tomorrow.

Trading and Psychology, What Traits Equate to Success?

Guest Post by Tom Cleveland of Forex Traders

Investors and traders alike are instructed early on in their training that success depends on three fey factors – knowledge, experience, and emotional control. While the first two items can be approached in a straightforward manner, the latter factor, the psychology of dealing with risk and reward when real money is on the line, is one of those “muddy snowballs” that no one quite knows how to handle or master in a step-wise fashion.

As a result, we listen to what is necessary to cope with the issue, but do we really “hear”? When we trade from our emotions and then ride a “loser” for all it is worth, we know that we have violated the cardinal rule of trading. Yes, we abandoned out trusted system, we cancelled our stop-loss order, and we were sure the fundamentals favored our position. The market, however, did not agree, yet we continued to hold onto our position, refusing to accept a loss until it was so large that we had to gulp and exit.

Sound familiar? Psychologists would tell us that investing has nothing to do with feeling like a loser, but everything to do with how we manage decisions related to risk and how we decouple that experience from the concept of loss. If we must view risk in a different way, then what characteristics support that type of thinking? Here is a brief list of psychological traits that successful traders possess:

1) How do you handle mistakes? If you were shamed early in life, then mistakes may threaten your personal sense of self. Successful traders understand that mistakes are part of the game. Mistakes do not reflect on your inner core. The errors are due to actions in the market. Your role is to accept them and adjust quickly, not take them personally. Learn from them, and move on;

2) How do you approach decisions? If you enjoy the intellectual challenge of interpreting the nuances of your trading system and how it applies to current market conditions, then you are a step ahead in the game. Focus on the components of the decision at hand, and try not to be overly concerned with the potential for loss;

3) How do you deal with denial? Some denial is actually good, if it allows you to concentrate on the decision in front of you, rather than become overly consumed by the fluctuations in the market. Your faith in your trading system and routine must trump any undue feelings of anxiety about what you may lose. Confidence will accrue if you follow your process;

4) Do you trade in isolation? Trading can be a highly individualized activity, leaving little room for diffusing emotional tensions. Studies have revealed that many investors handle the concept of loss better if they share strong emotional ties with another person. Having a reliable relationship bond with someone else can actually improve your creative activities by providing emotional support for you sense of self;

5) Lastly, do you feel like an outside observer? Many successful traders actually regard themselves as somewhat different than the general population, following the beat of a different drummer, so to speak. They have developed confidence in their own abilities, and, although they are not loners, they are not followers either. They have learned to trust their own judgment and display a modicum of skepticism.

“Know thy self” is the mantra to follow before embarking on any active trading regimen. If the traits above ring true, then stop questioning your ability and focus on your trading system and logical decision-making process.

Be Selective In Putting Trades

The market (YM) made a dramatic move upwards today only to lose its momentum and stay idle (choppy) halfway through the trading day.

It tightly consolidates from thereon without any clear indication where it is heading because the two other core index (Nasdaq, NQ and the S&P, ES) made a dramatic drop after they surge in the open.

For most three hours or so into the trading, you can't get any idea where or what trades you are going to initiate, either a long or a short.

That is where patience and sitting tight is the virtue in trading.

If you are patient enough, you can trade YM at around 1:00 pm. ET. for a long trade.

You can spot the consolidation between 12:00 noon to 1:00 pm. as you can see from the chart and the obvious small body bars that consolidates tightly.

Placing too many trades without any clear picture is one cause that depletes account because of commission costs, thus it is necessary to put trades that are highly probable and be selective.

Trade What You See And Not What You Think

The market went up clearly Thursday and by just looking at it (the chart below), buying at the open and selling at the close is the crystal clear to trade.

But when you are in the market tick by tick, you cannot spot the outcome the way you can conclude as shown from the chart.

That's where you as a trader, it is important to read the market's mind, and not imposed how your (as a trader) mind/will imposed to the market.

That's exactly what happened with my trades, kept imposing how "my mind" will work where the market goes - not the other way around (let the market do its thing, and ride with it).

Trading is simple but its not easy!

That is, if you let your "own" mind play by yourself imposing your will where the market goes is an exercise of bad trading practice.

So next time around, trade what you see and not what you think!