Rules are Important
1. All successful traders use methods that suit their personality; You are neither Waren Buffett nor George Soros nor Jesse Livermore; Don't assume you can trade like them.
2. What the market does is beyond your control; Your reaction to the market, however, is not beyond your control. Indeed, its the ONLY thing you can control.
3. To be a winner, you have to be willing to take a loss;
(The Stop-Loss Breakdown)
4. HOPE is not a word in the winning Trader's vocabulary;
5. When you are on a losing streak -- and you will eventually find yourself on one -- reduce your position size;
6. Don't underestimate the time it takes to succeed as a trader -- it takes 10 years to become very good at anything; (There Are No Shortcuts)
7. Trading is a vocation -- not a hobby
8. Have a business/trading plan;
(Write This Down)
9. Identify your greatest weakness, Be honest -- and DEAL with it
3. To be a winner, you have to be willing to take a loss;
(The Stop-Loss Breakdown)
4. HOPE is not a word in the winning Trader's vocabulary;
5. When you are on a losing streak -- and you will eventually find yourself on one -- reduce your position size;
6. Don't underestimate the time it takes to succeed as a trader -- it takes 10 years to become very good at anything; (There Are No Shortcuts)
7. Trading is a vocation -- not a hobby
8. Have a business/trading plan;
(Write This Down)
9. Identify your greatest weakness, Be honest -- and DEAL with it
10. There are times when the best thing to do is nothing; Learn to recognize these times (Nothing Doing)
11. Being a great trader is a process. It's a race with no finish line.
12. Other people's opinions are meaningless to you; Make your own trading decisions (The Wrong Crowd)
13. Analyze your past trades. Study what happened to the stocks after you closed the position. Consider your P&L game tapes and go over them the way Vince Lombardi Bill Parcells reviewed past Superbowls
14. Excessive leverage can knock you out of the game permanently
15. The Best traders continue to learn -- and adapt to changing conditions
16. Don't just stand there and let the truck roll over you
17. Being wrong is acceptable -- staying wrong is unforgivable
18. Contain your losses
(Protect Your Backside)
19. Good traders manage the downside; They don't worry about the upside
20. Wall street research reports are biased
21. Knowing when to get out of a position is as important as when to get in
22. To excel, you have to put in hard work
23. Discipline, Discipline, Discipline !
11. Being a great trader is a process. It's a race with no finish line.
12. Other people's opinions are meaningless to you; Make your own trading decisions (The Wrong Crowd)
13. Analyze your past trades. Study what happened to the stocks after you closed the position. Consider your P&L game tapes and go over them the way Vince Lombardi Bill Parcells reviewed past Superbowls
14. Excessive leverage can knock you out of the game permanently
15. The Best traders continue to learn -- and adapt to changing conditions
16. Don't just stand there and let the truck roll over you
17. Being wrong is acceptable -- staying wrong is unforgivable
18. Contain your losses
(Protect Your Backside)
19. Good traders manage the downside; They don't worry about the upside
20. Wall street research reports are biased
21. Knowing when to get out of a position is as important as when to get in
22. To excel, you have to put in hard work
23. Discipline, Discipline, Discipline !
Remember this: When you are doing nothing, those speculators who feel they must trade day in and
day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.
day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.
Don't take action with a trade until the market, itself, confirms your opinion. Being a little late in a
trade is insurance that your opinion is correct. In other words, don't be an impatient trader. - J.L.
trade is insurance that your opinion is correct. In other words, don't be an impatient trader. - J.L.
A few strong names
A list of names that have remained fairly strong as the markets pulls in. Still building a watch list, but here are a few...
CAT
DE
APA
APC
EOG
CNX
DO
GPOR
WYNN
RL
UA
LULU
CAT
DE
APA
APC
EOG
CNX
DO
GPOR
WYNN
RL
UA
LULU
First Solar
FSLR is setting up for a move higher. Short term measured move is to about 200.00
Don't Worry Be Happy
“Go placidly amid the noise and haste, and remember what peace there may be in silence. As far as possible without surrender be on good terms with all persons. Speak your truth quietly and clearly; and listen to others, even the dull and the ignorant; they too have their story. Avoid loud and aggressive persons, they are vexations to the spirit. If you compare yourself with others, you may become vain and bitter; for always there will be greater and lesser persons than yourself. Enjoy your achievements as well as your plans. Keep interested in your own career, however humble; it is a real possession in the changing fortunes of time. Exercise caution in your business affairs; for the world is full of trickery. But let this not blind you to what virtue there is; many persons strive for high ideals; and everywhere life is full of heroism. Be yourself. Especially, do not feign affection. Neither be cynical about love; for in the face of all aridity and disenchantment it is as perennial as the grass. Take kindly the counsel of the years, gracefully surrendering the things of youth. Nurture strength of spirit to shield you in sudden misfortune. But do not distress yourself with dark imaginings. Many fears are born of fatigue and loneliness. Beyond a wholesome discipline, be gentle with yourself. You are a child of the universe, no less than the trees and the stars; you have a right to be here. And whether or not it is clear to you, no doubt the universe is unfolding as it should. Therefore be at peace with God, whatever you conceive Him to be, and whatever your labors and aspirations, in the noisy confusion of life keep peace with your soul. With all its sham, drudgery, and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy.”
| — | Max Ehrman |
The ends justify the means...
Never get into something you can’t get out of by the closing bell. Every trade you make, you’re looking for the exit point. Always keep your eye on the exit point.
Don’t ever take anything at face value. Because face value is the biggest lie of any market. Nothing is ever priced at it’s true worth. The key is to figure out the real, intrinsic value - and get it for much, much less.
One minute you have your feet on the ground and you’re moving forward. The next minute, the ground is gone and you’re falling. The key is to never land. Keep it in the air as long as you fucking can.
You walk into a room with a grenade, and your best-case scenario is walking back out still holding the grenade. You’re worst-case scenario is that the grenade explodes, blowing you into little bloody pieces. The moral of the story: don’t make bets with no upside.
Don’t over think. If it looks like a duck and quacks like a duck - it’s a duck.
Fear is the greatest motivator. Motivation is what it takes to find profit.
The first place to look for the solution is within the problem itself.
The ends justify the means, but there is only one end that really matters, ending up on a beach with a bottle of fucking champagne.
Don’t ever take anything at face value. Because face value is the biggest lie of any market. Nothing is ever priced at it’s true worth. The key is to figure out the real, intrinsic value - and get it for much, much less.
One minute you have your feet on the ground and you’re moving forward. The next minute, the ground is gone and you’re falling. The key is to never land. Keep it in the air as long as you fucking can.
You walk into a room with a grenade, and your best-case scenario is walking back out still holding the grenade. You’re worst-case scenario is that the grenade explodes, blowing you into little bloody pieces. The moral of the story: don’t make bets with no upside.
Don’t over think. If it looks like a duck and quacks like a duck - it’s a duck.
Fear is the greatest motivator. Motivation is what it takes to find profit.
The first place to look for the solution is within the problem itself.
The ends justify the means, but there is only one end that really matters, ending up on a beach with a bottle of fucking champagne.
Questions to Ask everyday
Be critical and patient when entering trades
What is my game plan?
Is it a “take your trade” type trade?
Is it a A,B, or C type trade?
Is the stock in play today? (Large opening gap, percentage wise)
Is there open space for the stock to have a move?
Is it trading above average volume?
Is it a leader or laggard of its sector?
What did the stock do after the first hour? Gap fill or not?
Did the stock have a gap open yesterday?
Did it fill the gap?
What does the daily chart look like?
What does the 30 minute chart look like?
What is my game plan?
Is it a “take your trade” type trade?
Is it a A,B, or C type trade?
Is the stock in play today? (Large opening gap, percentage wise)
Is there open space for the stock to have a move?
Is it trading above average volume?
Is it a leader or laggard of its sector?
What did the stock do after the first hour? Gap fill or not?
Did the stock have a gap open yesterday?
Did it fill the gap?
What does the daily chart look like?
What does the 30 minute chart look like?
What does the 15 minute chart look like?
Timing in on the 1/5 minute ?
20 Rules
1. Create a game plan and stick to it! You should have a reason for entering each trade and always have a stop-loss price and a level to take profits before you enter a position. In the long-run, discipline is the key to consistent success.
2. You must learn to adapt quickly to changes. If a short-term trade isn’t working, don’t hesitate to switch sides. The market and stocks can change very quickly, and you must be able to change with them. Don’t be stubborn!
3. Don’t get married to trades! If a stock isn’t working for you and you are losing money, you don’t have to make it back in that stock. Likewise, don’t force a trade in a stock only because it has made you money before. Always just trade the best set-ups.
4. Do not try to bottom fish or pick tops. The trend is your friend; when you find it, follow it. Don’t trade with a bias because you think something should or shouldn’t happen, let the stock tell you what its next move will be. Trying to identify tops and bottoms is a losing way to trade in the long-run.
5. Accept losses, they are part of the game! Prepare yourself mentally and emotionally for this eventuality. Try to limit losses when you are not on top of your game and take a break if you need one.
6. Keep it simple. If a trade is working for you, stick with it!
7. Stay confident and positive. Don’t hesitate to take a step back or ask for help if you are not feeling good about your trading.
8. Be consistent with your game plan, size and execution. Don’t make a winning trade in 300 shares and a losing one in 1,000! Keep your tiers consistent and stick to your game-planned trades.
9. Stick to your trade, believe in your preparation! If you like a trade set-up, stick with it until it works or is no longer compelling. Even if it doesn’t work the first couple times, be patient and keep it on your radar.
10. In a losing trade, if you have an out, get out! The first stop is the cheapest stop in a losing position. Do not give into the temptation to let a losing stock run, because you will usually end up getting killed. Small losses are part of trading.
11. When you are wrong, admit it and move on. Don’t waste time with a trade that is no longer compelling.
12. Give your trade time. If you believe in the trade, wait for it to play out and stick to your game plan.
13. Never let a winning trade turn into a losing one! Take profits when you can, you can always get back in later.
14. Try to capture the full move of a stock. While it is important not to let winners turn to losers, you will make your good money from capturing larger moves. It is ok to give a little back if you have made a lot on a trade, but know when to let it go.
15. Recognize the type of trade it is. If it is a swing trade, don’t impulsively get out. If it is a quick trade, don’t get greedy. If it is a slower moving stock, be patient. If you are on, push yourself. Always be aware of the type of trade you are in and act accordingly.
16. If you are feeling good and happy about your day, it is ok to relax and enjoy the money. Don’t turn a great morning into a losing day. Catch yourself, it’s not worth it. In addition, if you have a bad morning and make it back to flat or a little green, call it a day and declare victory! If you push it, you are likely to end up back with a losing day.
17. Trade the same way whether you are up or down. Traders tend to press when they are down and get careless when they are up. Stick with what got you there.
18. Trade stocks that are in play. Don’t trade something just to trade it, make sure there is a catalyst. Volume is a trader’s best friend.
19. Stick with winners and don’t add to losers. Make sure you capture big moves in winning trades and get out of losing trades quickly.
20. Trust yourself! You will always make more money trading your own strategy than someone else’s.
2. You must learn to adapt quickly to changes. If a short-term trade isn’t working, don’t hesitate to switch sides. The market and stocks can change very quickly, and you must be able to change with them. Don’t be stubborn!
3. Don’t get married to trades! If a stock isn’t working for you and you are losing money, you don’t have to make it back in that stock. Likewise, don’t force a trade in a stock only because it has made you money before. Always just trade the best set-ups.
4. Do not try to bottom fish or pick tops. The trend is your friend; when you find it, follow it. Don’t trade with a bias because you think something should or shouldn’t happen, let the stock tell you what its next move will be. Trying to identify tops and bottoms is a losing way to trade in the long-run.
5. Accept losses, they are part of the game! Prepare yourself mentally and emotionally for this eventuality. Try to limit losses when you are not on top of your game and take a break if you need one.
6. Keep it simple. If a trade is working for you, stick with it!
7. Stay confident and positive. Don’t hesitate to take a step back or ask for help if you are not feeling good about your trading.
8. Be consistent with your game plan, size and execution. Don’t make a winning trade in 300 shares and a losing one in 1,000! Keep your tiers consistent and stick to your game-planned trades.
9. Stick to your trade, believe in your preparation! If you like a trade set-up, stick with it until it works or is no longer compelling. Even if it doesn’t work the first couple times, be patient and keep it on your radar.
10. In a losing trade, if you have an out, get out! The first stop is the cheapest stop in a losing position. Do not give into the temptation to let a losing stock run, because you will usually end up getting killed. Small losses are part of trading.
11. When you are wrong, admit it and move on. Don’t waste time with a trade that is no longer compelling.
12. Give your trade time. If you believe in the trade, wait for it to play out and stick to your game plan.
13. Never let a winning trade turn into a losing one! Take profits when you can, you can always get back in later.
14. Try to capture the full move of a stock. While it is important not to let winners turn to losers, you will make your good money from capturing larger moves. It is ok to give a little back if you have made a lot on a trade, but know when to let it go.
15. Recognize the type of trade it is. If it is a swing trade, don’t impulsively get out. If it is a quick trade, don’t get greedy. If it is a slower moving stock, be patient. If you are on, push yourself. Always be aware of the type of trade you are in and act accordingly.
16. If you are feeling good and happy about your day, it is ok to relax and enjoy the money. Don’t turn a great morning into a losing day. Catch yourself, it’s not worth it. In addition, if you have a bad morning and make it back to flat or a little green, call it a day and declare victory! If you push it, you are likely to end up back with a losing day.
17. Trade the same way whether you are up or down. Traders tend to press when they are down and get careless when they are up. Stick with what got you there.
18. Trade stocks that are in play. Don’t trade something just to trade it, make sure there is a catalyst. Volume is a trader’s best friend.
19. Stick with winners and don’t add to losers. Make sure you capture big moves in winning trades and get out of losing trades quickly.
20. Trust yourself! You will always make more money trading your own strategy than someone else’s.
One Trader's Rules
1. Only Trade Stocks That Are In Play.
a. Volume is a Traders Best Friend
2. Learn to Adapt Quickly To Changes
3. Create A Game Plan And Stick To It
4. Stick To Your Trades And Believe In Your Preparation
a. Always Add Prices To Alerts
5. Recognize The Type Of Trade
a. Scalp
b. Swing
c. Momentum
d. Etc…
6. Stick With Winners & Don’t Add To Losers
7. Except That Small Loses Are Part Of The Game
8. Do Not Try To Bottom Fish or Pick Tops
9. Stay Confident And Be Positive!
10. On A Good Day, It’s Ok To Relax And Walk Away
Some Common Problems...
Overtrading- be aware of time and volume in a stock- don’t always think a move is about to happen. Sometimes moves will come at random times of the day like 12:30 but you will see volume to help you know the move is real
• NEVER average down
• Pairing out of your position- in either situation of taking profits or hitting out for a loss. If you are in 400, you should set tier size to 100 shares or 200 shares and hit out based on your own judgment. If you know for certain you are wrong hit out all at once, otherwise wait to get more information
• Hitting out too early and missing the move- don’t be as quick to hit out when you are on the right side of a trade- let the stock work for you more. Just because one bid is getting hit or one offer is being paid doesn’t mean you need to exit the trade immediately. No matter the trade, the stock never looks perfect the
whole time- there are always areas of uncertainty- in this case hit out of some but be quick to buy back in
• Stop constantly flipping back and forth between long and short - if you are doing this it means you have no clue what is going on and no conviction in what you are doing. It’s ok to do it once or twice to get a feel for what is going on, but more than that means you are just guessing.
• When a stock is in a range don’t initiate a position in the middle of the range because it can turn any second. Instead get in at the extremes of the range and add more if it breaks out or something significant happens in the stock to make you think it is an actual move
• Get the best price available in the stock by using either ECN or SDOT- don’t be lazy
• Pay attention to getting the best entry- if you are in from a better price you will be more likely to hold the position longer if it is the right way. This is a result of good timing and patience- don’t overreact to every little thing that happens in the stock and think that it is time to get involved- stay disciplined
• Reevaluate what you are doing wrong after a couple trades in a row do not work out instead of doing the same thing over and over
• Do not get emotional with stocks- if you are wrong just get out and stop doing the same thing thinking that you are right and the stock is wrong
• NEVER average down
• Pairing out of your position- in either situation of taking profits or hitting out for a loss. If you are in 400, you should set tier size to 100 shares or 200 shares and hit out based on your own judgment. If you know for certain you are wrong hit out all at once, otherwise wait to get more information
• Hitting out too early and missing the move- don’t be as quick to hit out when you are on the right side of a trade- let the stock work for you more. Just because one bid is getting hit or one offer is being paid doesn’t mean you need to exit the trade immediately. No matter the trade, the stock never looks perfect the
whole time- there are always areas of uncertainty- in this case hit out of some but be quick to buy back in
• Stop constantly flipping back and forth between long and short - if you are doing this it means you have no clue what is going on and no conviction in what you are doing. It’s ok to do it once or twice to get a feel for what is going on, but more than that means you are just guessing.
• When a stock is in a range don’t initiate a position in the middle of the range because it can turn any second. Instead get in at the extremes of the range and add more if it breaks out or something significant happens in the stock to make you think it is an actual move
• Get the best price available in the stock by using either ECN or SDOT- don’t be lazy
• Pay attention to getting the best entry- if you are in from a better price you will be more likely to hold the position longer if it is the right way. This is a result of good timing and patience- don’t overreact to every little thing that happens in the stock and think that it is time to get involved- stay disciplined
• Reevaluate what you are doing wrong after a couple trades in a row do not work out instead of doing the same thing over and over
• Do not get emotional with stocks- if you are wrong just get out and stop doing the same thing thinking that you are right and the stock is wrong