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.
Saturday, February 25, 2012
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?
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?
Friday, February 24, 2012
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!
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!
Thursday, February 23, 2012
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!
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
Traders often suffer from "Grass Is Always Greener
Syndrome."
“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.
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.
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