Trader Education Recap | Week of 11-7-16


How to Adjust Share Size for Changes in Volatility

Great traders have share size adjustments clearly outlined.

How do you determine share size per trade? Is it documented in your trading plan? Day trade and risk go together, it’s tough to say one without the other.

The problem for most new day traders is they never learn to adjust risk with volatility. A $500 risk is not the same in every stock or from day-to-day.

Stocks have different volatility, known as average true range. This is the amount price action fluctuates from high to low (on average). New traders should assess risk tolerance, capital and decision making ability and coordinate these resources with volatility.

Read the Complete Lesson — >>

$NFLX Weekly Chart

How to Accelerate Your Trading Success

For some, trading and adversity go hand-in-hand. Every emotion manifests in one trade. Our ego and financial reality takes over and we “NEED” each trade to earn a profit.

It doesn’t have to be that way. Yes…there is an easier way.

How many positions do you trade at once?

When I started trading in April 2000, the common wisdom sound like this, “find a good trade and get size. It’s better to have one big position…”

I believed it, the guy sounded smart and he was persuasive. It’s bullshit. Here’s why-

Trading is about probabilities, not whale hunting. Sure it sounds great to hit a big trade, and then brag about it. The problem with this advice is risk and sample size.

You are accepting incredible risk on a one-shot trade. This guys focus was on the profit side, and how much we could potentially earn if that one trade worked out. It was basically all-in.

A huge problem with this concept, especially for new traders, is […]



Why Most Traders Struggle and Lose Money During Stock Market Volatility


There is a delicate balance traders need to assess, before choosing stocks to trade. The balance between; profit potential and risk.

How much can I earn, in exchange for the risk I need to accept?

Struggling traders choose volatility, as the only criteria. The desire to make money takes control. This is like driving without brakes. This type of trading gets your heart pumping, but doesn’t keep you safe.

Most traders struggled, or lost money, because their criteria is random. Successful trading is structured. If this, then this… This applies before the trade AND during the trade.


Too many trading opportunities this week?

You’re not alone in that thought. Every coaching client had the same question, especially yesterday when it became clear the stock market was holding, the bid and buying was the right choice.

To handle too many signals triggering at the same time you need a progression from best, to the rest. You need criteria that says “this is my best trade, this is next, and so on.

Today’s video explains the concept in detail. Feel free to post your questions or comments.

How to Day Trade the Best Stocks and Adjust to Market Conditions

The current stock market volatility has some traders in heaven, and some traders feeling like a pinball machine.

Financial stocks are exploding, technology stocks are imploding and the general indices are short-term overbought!

What the heck is a trader to do?

Do you trade your stocks and ignore the market swings? Or do you focus on trading stocks in sync with the swings of the general market?

Today’s trading lesson provides some clarity so you create a winning game plan and have the conviction to trade it with discipline.


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