From a struggling day trader…
“Everything I did today was according to my trading plan, but then I got short, it ran in my face, I got long and it went down, and I didn’t make money. This is a trader who’s struggling with one of two things.
- They’re either struggling with their strategy or,
- Their conviction to follow through on the strategy.
So, assuming you have a strategy, then it’s a question of believing that your strategy works over time.
To think like a winning trader, you have to believe, it’s imperative to believe in your edge over time.
Not on a trade-by-trade basis. To get the trading results, to get the desired goal that you have, you have to judge your results over time.
“I personally have gone through everything you’re going through right now, and the best advice I can give is this; Number one: don’t trade anymore than 300 shares maximum, ever, until you can string together two consecutive months, at least, of net profits.”
Now, here’s what comes back. Well, how am I supposed to make a living? Well, here’s the thing. Everybody’s going to have a trader tuition that they pay to the market. Everybody. How much that tuition costs is up to you. Do not size-up until you can generate revenue.
Now, I was very specific in here. I said a couple of months. If you feel like you know what you’re looking at, give yourself a couple of months to show you can generate revenue. Not I had a good day and you’re skipping out, months. Different periods, different volatility, different conditions.
Now you start to develop that confidence bank up here, where you start to say, you know what? That was a lot of trading. That was eight weeks of training, maybe I’m on to something here, and now you start to develop the conviction.
Next, number two: Intraday trading specifically. Don’t be so quick to add to a position. If you’ve worked a good trade, and the stock, let’s just say for argument sake, has a dollar ATR, a dollar average true range, and you worked the order, you were patient on the entry, you got the right price, and now the stock is 75 cents in your favor and you have these delusions of grandeur in your head that it pushes up and up.
This is the trade; I’m going to make all of my dreams come true on this trade. You know what? Make a dollar on the trade.
You don’t have to add and get maximum trade size and keep tiring into.
Make money. Earn while you learn.
Don’t be so quick unless you have an unbelievably perfect storm of the broad base market, the sector you’re in, and the stock, all doing exactly the same thing and there’s a lot of money flowing in or out.
Pete’s Day Trading Notes:
- In case you are wondering, the current momentum rally is confusing a lot of day traders. Just wanted you to know you are not alone.
- Oil bounce remains intact.
- Neutral on FB. All key moving averages sideways.
Stock Market Today: Map of the S&P 500
(click the map for a full view)
–> Top 25 Proprietary Trading Secrets
Stock Market Rally Nears Resistance 2-18-16
Here’s the Problem With the Stock Market’s Recent Rally
Now the bulls are in a bind.
U.S. stocks jumped Wednesday, notching the first three-day rally of 2016 and giving the S&P 500 its biggest three-day percentage gain since August. But there’s the rub: Stocks never got “cheap” on a price-to-earnings basis and look more expensive now then they were when the market peaked in May 2015.
During the whole bull run from March 2009 until May 2015, the bulls kept telling us equities were cheap, based on their favorite measure: the price-to-earnings (P/E) ratio. Their argument was that even though the S&P kept ascending, P/E ratios looked relatively modest versus their historical averages.
That argument never made much sense to anyone not looking for a rationale to sell folks more stock, whatever the price. But it passed for science on Wall Street.
Continue reading on fortune.com
It’s a bird…it’s a plane…it’s the stock market!
Stocks have been on fire since Friday. The Dow has gained a whopping 794 points in just the last three days. The Dow’s surge has cut losses for this year by almost half.
“There’s a good chance we’ve put in the lows for the quarter,” says trader Tim Anderson, managing director of MND Partners.
— Timothy Anderson (@TJAnderson1) February 12, 2016
A mere five days ago, the Dow was down more than 10% for 2016. It was ugly. Nearly all investors were losing money.
The Dow is now off 5.6% for the year. That’s still not pretty, but it’s not as bad.
The S&P 500 and Nasdaq have also jumped. The S&P 500 just put in three straight trading days of over 1.6% gains each day. Any move over a percent is considered substantial.
The current stock market rally is encouraging because it's broad-based, but it has yet to prove itself: Cashin https://t.co/itZcS8jUtp
— CNBC (@CNBC) February 17, 2016
Chart Reading the SPY ETF
SPY price action continues its momentum assault higher as day traders question why. The $SPY is set to open near the $194 resistance. This should spell the end of the rally, the only question is- do we see a few days sideways or do short-sellers come back from vacation.
(click the chart for a full view)
Technical Analysis | Charts of Interest
$KORS on finviz.com
#KORS | Michael Kors Holdings Ltd. continues to hold the gap higher from earnings and is no flirting with a $52.50 breakout once again. The reason this trade is attractive is the “room to go.” The profit target is just below $62.
(click the chart for a full view)
Stocks to Trade 2-18-16
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: TRGP, HP, PXD, CAR, MUR, APA, HES, ETP, NBL, CTXS, EXPE, EOG, GPOR, HOG, KMX, CVX, NWL, SKX, UA, SWKS, BWA, QCOM, FB, DAL, KJN, DRI, AET, INTU, UNH, BBBY, MCHP, ADI
Negative last 20 and 5 trading days | closed 2% lower from the open:
Quarterly Order Flow:
Bullish Stocks to Trade: CVX, OXY, KORS, INTU, PSX, DLTR, UNH, DOW, TXN, FAST, KMB, PM, LULU, HON, CB, CAM, TSN, PEP, XOM, K, MMM, WMT, ADT, CHRW, AEM, NEE, DUK, ED
Bearish Stocks to Trade: cern, dvn, agn, amt, wnr, atvi, tso, nvs, hfc, vlo, axp, ea, low, hcn, esrx, rcl, aig, wdc, gs, mpc, uri, vtr, lly, twx, abc, amzn, ccl, ctsh, kss, met, ba, vrtx, cop, lgf, adbe, lnkd, lnc, crm, myl, tsla, scty,
2x Normal Volume: DVN, GILD, ADT, NVDA, CERN, RAX, FTI, MGM, SCTY, TRGP, TMUS, CXO, YELP, NOW, SABR, CNC, CPB
Inside days: adt, wmt, aig, vlo, hrl, rost, ar, tso, ppl, gpor, df, nee, cms, amt, str,