Today’s Trading Lesson…
Top 12 Trading Skills You Need To Master
- Understand all types of orders: More money is thrown away by retail traders because they use market orders for every trade. Learning how and when to use limit and “stop” orders is a must.
- How to decide on a trading concept or trading business to open: We might believe we can trade everything under the sun, but the reality is we all have limited resources and experience. When you scatter these resources your trading produces inconsistent results at best.
- How to determine necessary education or continuing education: Professional athletes have coaches. Why would traders think it’s not necessary? Invest in yourself. Be honest where you are starting and find what you need.
- How to write a trading plan: Getting your strategy and money management organized doubles your chances to succeed. The hard part of making consistent money is completed before the market opens.
- How to convert your trading plan into a game plan: Easily my biggest mistake my first few years trading. We want to find trades that match our strategy and ignore everything else. This allows us to focus our resources on the best ideas that match our goals and strategy.
- How to write a trading journal, how to USE your trading journal: Learning from others is great. Learning from yourself amplifies the lessons. Watch this 3-part video series on what to write in your trading journal.
- How to scan or evaluate ideas (both before the market and during market hours): Some stocks are great ideas, but nt all of thoise ideas are a good trade idea at that moment. This skill is the essence of tape reading. Understanding when the odds of accepting the risk, justify the reward.
- How to determine proper risk for your resources: Position sizing must be a part of your trading plan. A key concept here should be a plan for when to increase or decrease risk per position. Knowing this before-hand makes accepting risk on each trade easier, and less stressful.
- How to manage leverage. Some trades simply have better odds. Those high-probability trades should get you sitting up in your chair and make the hair on your arms stand up. You must know when to put on your big boy pants.
- How to manage scaling in and out of a trade: Trade expectation should determine trade management. Some trades are cash flow, some trade are “build a position” and hold longer. You must have strict criteria that identifies the difference.
- How to read the general market: It’s easier to make money when you trade stocks in sync witht he market. This means you need a system to determine when order flow is heavy across the majority of sectors. Then you need to interpret market internals to spot moments of extreme enthusiasm.
- How to understand liquidity and volatility “ATR” and momentum: The delicate balance between risk and opportunity is unique for each trader. Be honest about your risk tolerance in respect to your resources and goals. If his equation is wrong for you, trading becomes a nightmare of emotions on every up-tick or down-tick.
On the Tape Today...
$HD 11-23-16 (Click to Enlarge)
$HD $130 breakout sets up a swing trade long to the $136 resistance. Looking for a $130.50 buy-stop today with a stop-loss in the $129.50 area. *Note- this is a breakout trade, not an order flow or momentum trade. (see chart)
$JPM clean bull flag with melted candlesticks. Looking for a $78.75 buy-stop with a target to sell @ $80.25. If the stock trades below yesterday's high scale back on shares until the bulls hold that level.
$NKE broke the selling order flow which began mid-August and continues to produce short-term higher-lows. Swing traders building a position long with an initial target of $55.
$PM bear flag after momentum break down and solid resistance at $90. Looking at that level for an entry to sell-short with a target to cover @ $87. If the stock trade higher through $90, a solid trade is catching the short if and when it trade back below $90.
T Harv Eker | Secrets of the Millionaire Mind
Opinion: Stocks at all-time highs calls for extreme caution
Investors have good reasons to be worried about stocks right now. Let’s start by taking a look at the most recent technical and sentiment indicators:
Technical indicators (daily chart)
S&P 500 is above its 50-, 100-, and 200-day moving averages = Bullish
MACD (S&P 500; 19,39,9) is above the zero line = Bullish
MACD (S&P 500; 19,39,9) is above its signal line = Bullish
S&P 500 support @ 2,146 (50-day moving average)
II survey: (Nov. 15) 51.0% Bulls; 23.5% Bears = Bearish
AAII survey: (Nov. 16): 46.7% Bulls; 29.6% Bears = Neutral
VIX: @ 14.17 = Bearish
RSI: (S&P 500) @ 63.96 = Neutral/Bearish
The market wanted to party last week and it got its wish. It made an all-time high that resembles a rocket ship arc on the chart. Most recently, stocks have gone sideways.
The bull case is that the market has broken through resistance levels and zoomed higher. Typically, that is bullish, especially if major institutions are participating. Unfortunately, institutional participation has been lacking, which is a red flag.
Another red flag is the excessive bullishness by the financial media as reflected in the sentiment surveys. The CBOE Volatility Index […]
Continue Reading on marketwatch.com
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 11-23-16 | $DE Earnings Today
Stock Indexes Quiet, But Urban Outfitters Skids Late
U.S. stock indexes tacked on small gains Tuesday, as the market lingered near recent all-time highs.
While the indexes haven’t been rising in long strides, a number of stocks have been making aggressive moves up or down. In the S&P 500, apparel and accessories retailer Urban Outfitters (URBN) was one of the day’s best performers only to undo it after hours.
The stock sprinted almost 5% higher in twice its average volume in the regular session.
Continue Reading on investors.com
Tape Reading the SPY ETF
$SPY “well-bid” now for four consecutive days, but volume continues to decrease. So many reasons for the decrease in shares traded. The stock market needs a rest. Thanksgiving and a long weekend.
The bottom line for us remains the same, continue to look for longs, as long as your stock is well-bid. If institutions continue to be holding support, no reason for us to fight the big money.
If (when) the market finally gets hit with profit taking, you must be ready with a list of shorts. It’s imperative you learn to recognize when the short becomes the correct trade for a day.
Game planning for potential short sales means you are a good, prepared trader. Better to have the list and not need it, than to need it and be caught looking for ideas a half hour after the market opens.
Stocks in Play: $DE research on finviz.com
John Deere (DE) Earnings News : Deere & Co. Earnings: What to Watch
Deere & Co. is scheduled to release its fiscal fourth-quarter earnings before the market opens Wednesday. Here’s what you need to know.
EARNINGS FORECAST: Wall Street analysts expect earnings per share of 40 cents, down from actual earnings of $1.08 last year, according to Thomson Reuters.
The farm and construction equipment maker didn’t offer a fourth-quarter profit forecast, but in August slightly raised its projected net income for the fiscal year ended Oct. 31, implying earnings per share of about $4.25, compared with $5.77 in 2015. Analysts expect the company to earn $4.32 a share for the year.
Read More on WSJ.COM
Earnings: DE Projected To Post Q4 Profit Amid Ongoing Agriculture Slump
John Deere DE -0.31% Co. has been weathering one of the toughest agricultural slumps since the Great Depression, analysts say, but its perseverance in protecting profit margins has helped keep it from falling into the great abyss that some farmers and other machine makers have experienced over these challenging three years.
Among the world’s largest makers of agricultural, construction and forest machinery, diesel engines and drivetrains used in heavy equipment, as well as lawn-care gear, DE is reporting Q4 and full-year earnings results ahead of the market’s opening Wednesday.
In the previous quarter, DE soundly outstripped Wall Street’s expectations despite double-digit declines as the global markets for farm and construction equipment continued to drag overall results. Some 70% of its revenues are gleaned from agriculture and turf equipment operations […]
Continue Reading on FORBES.COM
Stocks to Trade 11-23-16 | Wednesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: X, ADNT, RH, ACIA, NUE, LULU, TSLA, WNR, CHTR, LW, TSO, HD
Negative last 20 and 5 trading days | closed 2% lower from the open: lly, agn, abbv, srpt, etp, hca
Quarterly Order Flow:
Bullish Stocks to Trade: X, ADNT, NUE, ADI, WNR, KSS, BA, LVS, UNH, VLO, CAT, UAL, NVDA, LRCX, CVX, JWN, URI, PNC, WDC, PSX, GS, RCL, PRU, ADSK, BHI, STT, COF
Bearish Stocks to Trade: mdt, hca, agn, aem, amgn, cvs, nem, hcn, fslr, cci, vtr
2x Normal Volume: MDT, ATVI, V, CTSH, DLTR, MPC, TSN, ETP, ADI, ROST, MNST, WFC, URBN, NVS
Inside days: baba, kr, gps, dis, rrc, esrx, twlo, unp, cat, jnpr, wynn, jwn, akam