Thursday's Trade Setup

The market drops in the open due to unfavorable jobs report.

For today's trade on this 1-min. chart, the market consolidates from the S2 (support) line.

Notice the crossover MA's, and they are flat, a sign that something a reversal is on the way.

The best entry is from the support line, lower arrow.

And the exit is before the S1.

Analyzing How To Make Trade In A Choppy Market

Today's market marred by lots of chops and the only possible trade I can spot is the one I encircled.

But spotting it takes a lot of deep market reading and patience in watching the market.

By analyzing today's market, I can spot a quick trade "in-between" this choppy sideways move.

Notice I made a three horizontal lines showing the maximum low and high of the trading day.

And when it breaks the mid-range (lower arrow), we can enter a long trade with stop just below or in-between the two lower horizontal lines.

The exit is at the upper arrow by just projecting the equal distance from the middle line.

By watching the market keenly and analyzing the market from technical view, you can still spot a simple trade in a choppy market, like this one.

What The %&*$#@ Is This Chart

Shown is the 5-min. chart from yesterday's market and today's on going market action.

By just the look of it, it's hard to imagine where the market is headed for.

It's hard to figure it out what the market is doing right now.

This is the time not to do anything and just watch the market do its thing.

Tuesday's Market Action

The market gap up in the open only to reverse its move before noon.

To trade today's market is to buy in the open gap and sell before noon time when it starts to drop from the 10EMA.

The second trade is to short thereafter (the MA/EMA crossover) and cover from the R1.

Count down 3, 2, 1 to be a trader!

3) Focus on the psychology and mental skills that are necessary to succeed in the market. Learn to read the market charts in terms of the psychology of the other traders.

2) Learn about risk control in depth. What this really means, options available to you, how you can marry it up with your financial objectives in the market place etc.

1) Only when you have the above dialled in should you investigate ways of putting trades on in the most advantageous positions to generate the returns you are looking for.

I think if people were to count down 3, 2, 1 there would be many more successful traders.

What It Takes to Trade for a Living

by Darrin Donnelly on August 29, 2010

What it takes to be a great trader.

Trading isn’t easy, especially if you’re trading for a living.

No matter how simple, powerful, and proven a great trading system is, there are always going to be times when your fortitude is tested. There are always going to be times when the market chews you up and spits you out.

At such times, you have to make a decision regarding just how determined you truly are to succeed at trading. You have to ask yourself, “How much can I take and keep moving forward?” You have to look in the mirror and ask, “Do I want to quit?”

And that’s the way it should be! If it was always easy, everyone would be doing it.

It’s no secret that MOST of the greatest traders throughout history hit rock bottom before they became millionaires and billionaires. Everyone from Nicolas Darvas to Richard Dennis to Paul Tudor Jones have had moments where their accounts dwindled to the brink of despair and these traders had to ask themselves, “Can I go on or should I throw in the towel and move on to something else?”

Trading, like life, is all about perseverance. How driven are you? How focused are you? What are you willing to go through in order to succeed?

Throughout the summer, the market has been frustrating to Darvas traders (and all trend traders) due to its choppiness. Right when the market has shown signs of an uptrend, it has quickly reversed and humbled many traders.

This is nothing new, of course. Trend traders have been dealing with these choppy periods for more than 100 years and the data continues to show that, in the long run, the frustration endured during choppy markets is well worth it due to the huge rewards achieved during a trending market.
Of course, knowing this fact doesn’t always make it easier when you’re dealing with a roller-coaster market and getting stopped out of “by the book” trades.

But this is where we separate the successes from the failures. Most people will let their frustration get the best of them. They’ll throw in the towel and conclude that trading is just too difficult of a path to wealth.
But a few traders will persevere.

People like Nicolas Darvas, who endured nearly seven years of devastating setbacks when first trying to conquer Wall Street, will continue the game because they’re determined to win it. They won’t give up because they’ve seen how other traders traded their way to millions and, in some cases, billions. They’ll conclude, “If they can do it, why not me?”

That is the mentality it takes to achieve anything great in life.

When the going gets tough and the market gets rocky, I think it’s a good idea to reevaluate your goals.

Why do you want to be a trader? Why are you determined to win at this game?

Here’s a quick list on why I love trading and why I choose the world of trading as a profession. Perhaps you’ll agree with me on several of these points.

- The stock market is the ultimate vehicle for freedom and independence. ANYONE who works hard enough and smart enough can achieve financial and personal freedom in the stock market.

- The stock market is a place where no one can tell you that you can’t buy this or aren’t allowed to buy that; everyone has complete freedom to exercise their choices and take their shot at conquering the market.

- ANYONE with a brokerage account and a little cash can play their hand at the stock market and achieve unlimited success from virtually anywhere in the world. It doesn’t matter who you know, what color your skin is, what language you speak, what kind of education you have, what kind of financial background you have, what kind of neighborhood you grew up in, or what kind of family history you have. None of that matters! The stock market gives everyone the same opportunity to make their fortune and have their dreams come true.

- In the stock market, there’s no one way to make your fortune. Warren Buffett can make a fortune holding stocks for decades. Nicolas Darvas can make a fortune holding stocks for months. Buzzy Schwartz can make a fortune holding stocks for minutes. The stock market offers fantastic opportunity for speculators of all types to make their fortune.

- The stock market is a libertarian oasis. It is the great frontier on the grandest scale imaginable. It is an ongoing competition for the pursuit of dreams and total freedom. Everyone has an equal shot at making billions in the stock market. And there is nothing but willpower and perseverance standing in the way of anyone’s potential to do so.

- Trading offers the ultimate independence. YOU are the only one responsible for your success or failure. Every decision you make is solely up to you.

- Not only are all decisions up to you, but your potential success is unlimited. There is no cap whatsoever on how far you can go and how high you can climb!

- As a trader, you live a completely independent lifestyle. You can go anywhere, anytime, and live anywhere you want. You are in no way restricted by anything. As long as you have computer access, you’re good to go!

- And finally, trading is also the ultimate never-ending learning process. The hunt for the next great trade never ends! The more you read, research, and study, the better trader you will become. Trading rewards continuous intelligence expansion.

Anything I’ve left off? Anything you disagree with?

Every trader needs to ponder these questions to determine if they really have what it takes to make it as a trader.

14 Rules for Being YOU

Be yourself. Trying to be anyone else is a waste of the person you are. Embrace that individual inside you that has ideas, strengths and beauty like no one else. Be the person you know yourself to be – the best version of you – on your terms. And above all, be true to YOU – if you cannot put your heart in it, take yourself out of it.

Starting today…

Get your priorities straight. – Twenty years from now it won’t really matter what shoes you wore today, how your hair looked, or what brand of jeans you bought. What will matter is how you loved, what you learned and how you applied this knowledge.

Take full responsibility for your goals. – If you really want good things in your life to happen, you have to make them happen yourself. You can’t sit around and hope that somebody else will help you; you have to make your own future and not think that your destiny is tied to the actions and choices of others.
Know your worth. – When someone treats you like you’re just one of many options, help them narrow their choice by removing yourself from the equation. Sometimes you have to try not to care, no matter how much you do. Because sometimes you can mean almost nothing to someone who means so much to you. It’s not pride – it’s self-respect. Don’t expect to see positive changes in your life if you surround yourself with negative people. Don’t give part-time people a full-time position in your life. Know your value and what you have to offer, and never settle for anything less than what you deserve.

Choose the right perspective. – Perspective is everything. When faced with long check-out lines, traffic jams, or waiting an hour past your appointment time, you have two choices: You can get frustrated and enraged, or you can view it as life’s way of giving you a guilt-free breather from rushing, and spend that time daydreaming, conversing, or watching the clouds. The first choice will raise your blood pressure. The second choice will raise your consciousness.

Don’t let your old problems punish your dreams. – Learn to let go of things you can’t control. The next time you’re tempted to rant about a situation that you think ended unfairly, remind yourself of this: You’ll never kill off your anger by beating the story to death. So close your mouth, unclench your fists, and redirect your thoughts. When left untended, the anger will slowly wither, and you’ll be left to live in peace as you grow toward a better future.

Choose the things that truly matter. – Some things just don’t matter much – like the kind of car you drive. How big of a deal is that in the grand scheme of life? Not a big at all. But lifting a person’s heart? Now, that matters. The whole problem with most people is, they KNOW what matters, but they don’t CHOOSE it. They get distracted. They don’t put first things first. The hardest and smartest way to live is choosing what truly matters, and pursuing it passionately. Read The 7 Habits of Highly Effective People.

Love YOU. – Let someone love you just the way you are – as flawed as you might be, as unattractive as you sometimes feel, and as unaccomplished as you think you are. Yes, let someone love you despite all of this; and let that someone be YOU.

Accept your strengths and weaknesses. – Be confident being YOU. We often waste too much time comparing ourselves to others, and wishing to be something we’re not. Everybody has their own strengths and weaknesses, and it is only when we accept everything we are, and aren’t, that we are able to become who we are capable of being.

Stand up for YOU. – You were born to be real, not to be perfect. You’re here to be YOU, not to be what someone else wants you to be. Stand up for yourself, look them in the eye, and say, “Don’t judge me until you know me, don’t underestimate me until you challenge me, and don’t talk about me until you’ve talked to me.”

Learn from others, and move on when you must. – You can’t expect to change people. Either you accept who they are, or you start living your life without them. And just because something ends, doesn’t mean it never should have been. You lived, you learned, you grew, and you moved on. Some people come into your life as blessings; others come into your life as lessons.

Be honest in your relationships. – Don’t cheat! If you’re not happy, be honest, and move on if you must. When you’re truly in love, being faithful isn’t a sacrifice, it’s a joy.

Get comfortable with being uncomfortable. – Life as we know it can change in a blink of an eye. Unlikely friendships can blossom, important careers can be tossed aside and a long lost hope can be rekindled. It might feel a little uncomfortable at times, but know that life begins at the end of your comfort zone. So if you’re feeling uncomfortable right now, know that the change taking place in your life is not an ending, but a new beginning. Read The Power of Full Engagement.

Be who you were born to be. – Don’t get to the end of your life and find that you lived only the length of it; live the width of it as well. When it comes to living as a passionate, inspired human being, the only challenge greater than learning to walk a mile in someone else’s shoes, is learning to walk a lifetime comfortably in your own. Follow your heart, and take your brain with you. When you are truly comfortable in your own skin, not everyone will like you, but you won’t care about it one bit.

Never give up on YOU. – This is your life; shape it, or someone else will. Strength shows not only in the ability to hold on, but in the ability to start over when you must. It is never too late to become what you might have been. Keep learning, adapting, and growing. You may not be there yet, but you are closer than you were yesterday.