Archive for February, 2008

February 14th 2008

Trading Like I Don’t Care

Want to know how I trade the same setups day in and day out? How I consistently execute my trading plan? I trade like I don’t care.

It’s really easy to do. All you need to do is trade small.

So you say, “Well wait a second, I need to make money”.

If you can’t consistently trade your plan, you are never going to make money. If you are learning, you need to trade the smallest lot your broker will allow. It shouldn’t be about making money. It should be about learning. How can you make any money, if you blew your bankroll before you knew what you were doing?

So you say, “The commissions will eat into my equity!”…Big deal, call it tuition. I’d rather pay my tuition in commissions than losing trades.

You might say, “That’s boring”. Exactly! Trading should be boring. The only reason I have been able to trade over the long term is because it has become boring. I don’t get excited from the risk or price movement because no one trade will make or break me. I do get excited from the research and from talking about it, hence the blog about trading ideas.

Imagine yourself trading one share of stock each day for a year. You might end a couple pennies down or up each day. But over the course of a year, the fluctuation in your account is minimal. I don’t know anyone who would give a damn about making or losing a few pennies. When you’re learning that’s how it should be. You become emotionally detached from your trading and you don’t blow your account balance.

I do want to clarify one thing. Trading small doesn’t mean being careless. A trader once told me that I should be the hardest boss I’ve ever had. It’s true. I spend an inordinate amount of time on research and analysis. Trading like you don’t care doesn’t mean slacking off. Even though one bad trade may not break you, a hundred bad trades will.

You become a good trader with experience. You get experience by staying in the game. If you’re not getting the results you need to stay in the game, you need to trade small so you can.

6 Comments »

February 12th 2008

Here’s an Easy Way to Consistent Trading

My first attempts at trading were comical. Looking over my first journal makes me laugh out loud. The indecision, the myriad of trading methods, the money I lost. It was a farce. I tried anything and everything I could think of to be successful. I should have stopped before I even started. It would have saved me thousands.

But I wouldn’t have learned what I know now, and I wouldn’t be able to share it with you. Want to avoid my mistakes? Would you like to trade with a chance for success? Here’s my quick tip: Get consistent.

How you ask? Whether you’re a fundie or a technician like myself. The easy way to get consistent is focus on one setup.

I have traded for almost 14 years now. I trade a total of 5 setups regularly. I could make a living on one. One is all you need, but you need to master it.

You only have so much time. You need focus. There’s so many ways to make money in the market. If you want to be a consistent trader. Do yourself a favor. Focus on one setup.

11 Comments »

February 11th 2008

Trading Ideas for 2/11

My personal bias is still bearish. I think we have more to drop, but I would like to see the general market consolidate. There are some interesting patterns forming in the weekly time frame. These negative, longer-term price patterns affirm my bearish outlook.

2008-02-08-ntgr.png
Bear Flag

2008-02-08-rimm.png
Breaking down through support here would be significant as price will pierce the daily 200 SMA as well as the weekly 50 SMA.

2008-02-08-fmcn.png
A symmetrical triangle. Technically, it could go either way, but the head and shoulders pattern formed over the September to January time frame and the overall general market leads me to believe we’ll see lower prices.

2008-02-08-pcar.png
I could go either way on PCAR. The daily chart looks like a double bottom where a bounce gives me a target of 47. The longer term weekly chart is a bear flag.

6 Comments »

February 8th 2008

Link Love Friday

Looking for a few good price patterns?

With credit markets going bust I would expect more interest in lifestyle deflation.

Happiness or Success? Choose one.

I still use Bollinger Bands.

Here’s a good article on Building a Trading System.

Short Term Markets warrant Short Term Trades
.

Do men and women have Different Investing Styles?

Are you Addicted to Trading? Or are you just a Chocoholic but for Booze?

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February 7th 2008

Sitting on my hands again…

The market continues its downward spiral. For a week or so, I thought there might be a light at the end of the tunnel. A few long trades later I determined the light was a freight train. More trades once we get a breather.

Instead of trading you should get caught up on what’s going on with Conan…

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