If you like the movie "A Few Good Men" as I do and are fan of Jack Nicholson as I am, you will delight in Upside Trader's rendition of the courtroom scene in the movie. See it here, copy and paste if the link doesn't work...
http://www.upsidetrader.com/2010/04/28/you-cant-handle-the-truth/
Wednesday, April 28, 2010
April 28th - Days End
Here is the days-end post from my efforts in the market. Actually, I had only one additional trade beyond the one posted this morning, given my attention to mattters other than trading.
I watched AIG at the EOD, finding a point where momentum seemed to be ebbing and presenting a good opportunity for a paper-trade long. The 3:40 pm candle had a long lower wick but a relatively narrow body... (ie. it couldn't sustain its price drop for the full five minutes) and then the 3:45 candle hesitated to move lower than the 3:40 low. A realization that this all occured with increased volume (3:40pm candle) at a minor support area made the decision to go long easier. Further, I just had a gut feeling that there would be some profit taking by the shorts after the $1 drop from the 2:25 pm candle high.
I took only nine cents out of the twenty-two cent closing pop. Even so, it was an acceptable pick of direction reversal.
April 28th - Morning
I had a chance to log into the markets this morning for a moment before doing some work on my construction project. I had a day-job appointment set up and after arriving at my customer's home at 8:15am, she promptly received a last-minute call to report to work on her day off. So, my appointment was postponed. But, there is plenty to do on my home construction project today... drywallers are finishing up on Friday and the insulators finish today. I have a multitude of things to do before the Mid-June deadline.
With regard to yesterday's EOD trade in TV, my trade idea continued successfully into the open this morning, in concert with the market overall. It is further validation that attention to and an understanding of the overall markets pays dividends when playing individual stocks; restating the utterly obvious.
This morning, it was back to the practice account with a momo trade in FAZ. I took a short in the direction of the prevailing move and exited when I felt the momentum change. Too bad I didn't reverse and go long, from what the chart shows now... That tactic will come later, one must learn to crawl before learning to walk.
Now, it's back to "real" work :-)
Saw it, Liked it, Reprinted it...
Ove at FNG, I mentioned in the comment section of one of Scott's recent posts about how important his posting of successful trades is in terms of allowing us to associate with excellence by reading them and visiting his and other traders' sites. A much more eloquent and valuable post at Dr. Brett's site ( http://traderfeed.blogspot.com/ ) today emphasizes the same idea in the final two paragraphs... I am seriously going to miss him when he stops posting soon.
Tuesday, April 27, 2010
What Competent Traders Need Most
I've written quite a few posts to attempt to guide beginning traders. But what if you're a trader who has reached the stage of competence? Now you can consistently cover costs and sustain modest profits. How do you get to the next stage of expertise, where you can make a solid living from your trading?
What many competent traders do is try to magnify their modest profits by trading more instead of by trading larger. Because they have modest account sizes, they cannot size their trades significantly, so they try to put on more trades. Such overtrading takes them out of their niches of competence and leads them to lose money.
Those traders don't recognize that they may already have the skills to become excellent traders. After all, a trader who can make $200/day trading 5 lots in the ES futures could be making $2000 a day trading 50 lots, not a bad six figure income. Given the liquidity of the market, the trades that work with 5 lots by and large will work with 50 lots. It's just a matter of growing into that size. The actual trading doesn't have to change significantly.
Probably, this issue occurs in other areas of business. The successful local restaurant might have all the makings of a powerhouse chain of eateries, but without access to capital and a managerial talent pool, that growth never happens.
That is why access to capital is key for the competent trader: either capital one has saved up or that one can access through trading for deep-pocketed firms.
The second thing that competent traders need is access to expert traders. A beginning trader, like a Little League ball player, can benefit from coaching from a more experienced person. It doesn't take an expert to coach a rookie. But once athletes becomes college stars, they require hands-on mentoring from coaches and mentors with expertise. It is not too unusual to see self-made competent golf players, traders, or singers. It's rare to see expertise develop in relative isolation.
That is because expert coaches and mentors help to mold and accelerate learning curves, to make the most of a person's talent. If you've reached a stage of competence, it is vital to use online resources, personal networking, and/or access to trading firms to learn from pros. Look at the history of great achievers in business, the arts, sciences, and sports: even the self-made greats stood on the shoulders of giants.
Tuesday, April 27, 2010
What Competent Traders Need Most
I've written quite a few posts to attempt to guide beginning traders. But what if you're a trader who has reached the stage of competence? Now you can consistently cover costs and sustain modest profits. How do you get to the next stage of expertise, where you can make a solid living from your trading?
What many competent traders do is try to magnify their modest profits by trading more instead of by trading larger. Because they have modest account sizes, they cannot size their trades significantly, so they try to put on more trades. Such overtrading takes them out of their niches of competence and leads them to lose money.
Those traders don't recognize that they may already have the skills to become excellent traders. After all, a trader who can make $200/day trading 5 lots in the ES futures could be making $2000 a day trading 50 lots, not a bad six figure income. Given the liquidity of the market, the trades that work with 5 lots by and large will work with 50 lots. It's just a matter of growing into that size. The actual trading doesn't have to change significantly.
Probably, this issue occurs in other areas of business. The successful local restaurant might have all the makings of a powerhouse chain of eateries, but without access to capital and a managerial talent pool, that growth never happens.
That is why access to capital is key for the competent trader: either capital one has saved up or that one can access through trading for deep-pocketed firms.
The second thing that competent traders need is access to expert traders. A beginning trader, like a Little League ball player, can benefit from coaching from a more experienced person. It doesn't take an expert to coach a rookie. But once athletes becomes college stars, they require hands-on mentoring from coaches and mentors with expertise. It is not too unusual to see self-made competent golf players, traders, or singers. It's rare to see expertise develop in relative isolation.
That is because expert coaches and mentors help to mold and accelerate learning curves, to make the most of a person's talent. If you've reached a stage of competence, it is vital to use online resources, personal networking, and/or access to trading firms to learn from pros. Look at the history of great achievers in business, the arts, sciences, and sports: even the self-made greats stood on the shoulders of giants.
Subscribe to:
Posts (Atom)