The best explanation gets five chart requests annotated by me in July!
Monday, June 30, 2014
What is Your Best Trade of the First Half of 2014?
With 6 months in the books, I would like to know what your best trade was during this amazing first half of the year. Tell me the stock, your stats, why you entered and exited the trade. You can leave it in the comments or email me.
Thursday, June 26, 2014
The Minimalist Swing Trading Setup
I often get asked about my setup for swing trading. I wish I had an extravagant answer. I love looking at pictures of trader setups that show 6 stacked monitors feeding every bit of data a person could ever want, but I follow a minimalist approach to trading.
My stock trading setup:
1. One 27 inch "all in one" computer.
This is a good mix of portability and power. I prefer not looking at a small screen all day, so I traded in my laptop for a bigger screen that still provides portability. The screen has a high resolution so I can split it when needing two sites up at the same time without having to tab back and forth. For instance, when I want my focus list and charts up from TC2000 and my broker in view at the same time.
2. One iPad
I recently added this to the setup only for blogging and the Trade Report. Here I view member emails and social media like twitter. I like to keep this separate from trading. I also use it to read when I have down time.
That's it. It is simple yet has everything I need to trade effectively. The best part is it keeps me from information overload, which can be a nightmare for swing traders.
What is your stock trading setup? I want you to share in the comments below.
If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.
If you like this article, follow me on twitter and retweet.
My stock trading setup:
1. One 27 inch "all in one" computer.
This is a good mix of portability and power. I prefer not looking at a small screen all day, so I traded in my laptop for a bigger screen that still provides portability. The screen has a high resolution so I can split it when needing two sites up at the same time without having to tab back and forth. For instance, when I want my focus list and charts up from TC2000 and my broker in view at the same time.
2. One iPad
I recently added this to the setup only for blogging and the Trade Report. Here I view member emails and social media like twitter. I like to keep this separate from trading. I also use it to read when I have down time.
That's it. It is simple yet has everything I need to trade effectively. The best part is it keeps me from information overload, which can be a nightmare for swing traders.
What is your stock trading setup? I want you to share in the comments below.
If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.
If you like this article, follow me on twitter and retweet.
Monday, June 23, 2014
How To Fight Your Survival Instinct To Become A Profitable Trader
Thousands of years ago, we didn't have the luxury of walking into a grocery store and easily fulfilling our base needs. We lived in the state of nature, fighting off the elements and other predators, and could not pass up on something that was right in front of us in order to wait for something better. That something better might not present itself. Thus, we are wired to take what is immediately front of us.
This manifests itself in trading. Once we get the smallest of profits, years of evolution tells us to take that nut and pack it away. A trader must fight this survival instinct. Continually taking small gains before a trade has time to work for you is the road to ruin. You can pick the greatest stocks the market has to offer, but if you are cutting your profits short, your account will die a slow death.
Fight this survival instinct by having a plan before entering the trade. Set your stop, set your target, and forget about the trade until either the stop or entry is hit.
If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.
If you like this article, follow me on twitter and retweet
Wednesday, June 18, 2014
The One True Golden Rule of Stock Trading: Smart Risk Management
I became a successful stock trader once I focused on managing risk instead of a stock picking. Risk management is the golden rule of stock trading. As George Soros said, "It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you're wrong."
I took these words to heart. I will not trade a stock unless I have a 2:1 risk ratio. What this means is if I risk one dollar, I must have a reward of at least two dollars or I do not take the trade. In other words, if I buy a stock at $100, and my stop is at $98, my target must be at least $104.
My trade results back the benefit of smart risk management. Members of my nightly Trade Report receive an alert every time I enter or exit a trade. Since the Report started on May 13, I have made 14 trades. My win rate is exactly 50 percent. You would expect that I am breaking even, right? Wrong. I am up $7,543 in just over a month (and that does not include the +$4000 YELP trade, which I am still holding). My average win is +$1628 while my average loss is only -550. I am getting 3:1 on my trades.
How did I get these results? By having a plan before entering the trade and making sure I always have at least a 2:1 risk ratio before entering a trade. It's all about risk management, the one true golden rule.
What is your Golden Rule? I want you to share in the comments below.
If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.
If you like this article, follow me on twitter and retweet.
I took these words to heart. I will not trade a stock unless I have a 2:1 risk ratio. What this means is if I risk one dollar, I must have a reward of at least two dollars or I do not take the trade. In other words, if I buy a stock at $100, and my stop is at $98, my target must be at least $104.
My trade results back the benefit of smart risk management. Members of my nightly Trade Report receive an alert every time I enter or exit a trade. Since the Report started on May 13, I have made 14 trades. My win rate is exactly 50 percent. You would expect that I am breaking even, right? Wrong. I am up $7,543 in just over a month (and that does not include the +$4000 YELP trade, which I am still holding). My average win is +$1628 while my average loss is only -550. I am getting 3:1 on my trades.
How did I get these results? By having a plan before entering the trade and making sure I always have at least a 2:1 risk ratio before entering a trade. It's all about risk management, the one true golden rule.
What is your Golden Rule? I want you to share in the comments below.
If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.
If you like this article, follow me on twitter and retweet.
Friday, June 13, 2014
Revisiting A Setup That You Must Know: The Gap Fill
Receive a free 7 day trial to my nightly Trade Report, perfect for swing and part-time traders
Back in late May I analyzed PETM to demonstrate the development of a possible breakdown-pullback to gap fill setup. This setup can take time to develop, but can be quite profitable when it does.
Notice that since that time price has bounced back up to the bottom of the breakout bar, This is common. In time, I expect to see the gap get filled. If it does, $62 will be an excellent short entry. The gap-fill is a simple, yet profitable strategy.
Back in late May I analyzed PETM to demonstrate the development of a possible breakdown-pullback to gap fill setup. This setup can take time to develop, but can be quite profitable when it does.
Notice that since that time price has bounced back up to the bottom of the breakout bar, This is common. In time, I expect to see the gap get filled. If it does, $62 will be an excellent short entry. The gap-fill is a simple, yet profitable strategy.
Saturday, June 07, 2014
Wednesday, June 04, 2014
10 Keys to Success For Part-Time Stock Trading
Before I became a full-time trader, I traded part time around a demanding job, family obligations and social life. Here are the most important tips that I used to successfully trade part-time around a job. These tips worked so well that I now trade full-time.
1. Keep it simple
Technical swing trading is not complicated. It is all about risk and trade management, price action, support and resistance levels, and volume. Indicators and setups just reflect what we see, and often we make trading more complicated than it needs to be. Stick to one or two indicators and a handful of setups that you know inside and out. That's all you need. Everything else is a waste of time.
2. Create a routine
Create a simple process that speeds things up and keeps it simple. Do the same thing day after day. I got to the point where I would spend no more than an hour going over charts, watchlists and my focus list for the next day.
3. Take smart shortcuts
Figure out smart ways to cut time. Create scans in charting software that can spit out stocks with your favorite setup, rather than manually flipping through thousands of stocks, create tight watchlists which you can analyze in less than 20 minutes. Follow or subscribe to someone you respect and trust that mirrors your trading style.
My Trade Report is patterned after exactly what I used to take with me to work when I traded part-time. It includes market analysis, my focus and watchlist that I use to trade, my current and past trades, alerts, and trader education. Feel free to check it out and see if it can help you with this free trial.
4. Find a mentor
Every trader makes the same mistakes. I have mentored dozens of students and see the same mistakes over and over again. Trust me, even the great ones once made the mistakes you are making.
A mentor can help you identify and cut down on those mistakes, and hone in on what works and what does not. If you are interested in me as your mentor, contact me at Singhjd1@aol.com.
5. Become an Expert
There is a mistaken assumption that part-time traders are not experts at what they do. Just because you are trading part-time, does not mean you are slacking at the job of trading. Put in the time to get good at what you do. Study, analyze and reflect. I'd rather be an expert part-time trader than a full-time hack.
6. Focus on the process
Making money in trading is all about understanding probabilities, reflected in our risk and trade management. Even when you have a setup that has an 80 percent win rate, you will go through draw downs where you are on the 20 percent side of the math. Focus on the process and whether or not you executed the trade correctly. For a short period of time, the results are irrelevant. In time you will get back on the right side of the probability.
7. Use technology
Make use of technology that makes things easier and faster. There is plenty of free or cheap charting software. The small investment is well worth the hours it will save you. Use your phone or tablet to make trades while at work. Set up alerts for buy and sell signals. It has never been easier to trade.
8. Have a plan
Going into the trading day, you must have a plan. If you have a focus list of 5-10 stocks, only watch those and stick with your entry points. Know exactly where you will exit, both for gain and loss. You should not have to think when looking to trade. Thinking is done before the trading day.
9. Do not micro-manage positions
One of the biggest stumbling blocks for swing traders is over-trading and not letting your stops and targets work for you. Use the fact that you have another job or responsibilities work for you. Don't watch every tick. You came in with a plan and now you must stick with it. Enter, set your stop, target and forget about the trade.
10. Review your trades
At the end of the month or quarter, review all of your trades. Identify what worked and what did not. Analyze whether luck was not on your side or if was a mistake you made. You will learn more from trade reviews than any book you can find.
A free 7 day trial to my nightly Trade Report, perfect for swing and part-time traders
Follow me on twitter
1. Keep it simple
Technical swing trading is not complicated. It is all about risk and trade management, price action, support and resistance levels, and volume. Indicators and setups just reflect what we see, and often we make trading more complicated than it needs to be. Stick to one or two indicators and a handful of setups that you know inside and out. That's all you need. Everything else is a waste of time.
2. Create a routine
Create a simple process that speeds things up and keeps it simple. Do the same thing day after day. I got to the point where I would spend no more than an hour going over charts, watchlists and my focus list for the next day.
3. Take smart shortcuts
Figure out smart ways to cut time. Create scans in charting software that can spit out stocks with your favorite setup, rather than manually flipping through thousands of stocks, create tight watchlists which you can analyze in less than 20 minutes. Follow or subscribe to someone you respect and trust that mirrors your trading style.
My Trade Report is patterned after exactly what I used to take with me to work when I traded part-time. It includes market analysis, my focus and watchlist that I use to trade, my current and past trades, alerts, and trader education. Feel free to check it out and see if it can help you with this free trial.
4. Find a mentor
Every trader makes the same mistakes. I have mentored dozens of students and see the same mistakes over and over again. Trust me, even the great ones once made the mistakes you are making.
A mentor can help you identify and cut down on those mistakes, and hone in on what works and what does not. If you are interested in me as your mentor, contact me at Singhjd1@aol.com.
5. Become an Expert
There is a mistaken assumption that part-time traders are not experts at what they do. Just because you are trading part-time, does not mean you are slacking at the job of trading. Put in the time to get good at what you do. Study, analyze and reflect. I'd rather be an expert part-time trader than a full-time hack.
6. Focus on the process
Making money in trading is all about understanding probabilities, reflected in our risk and trade management. Even when you have a setup that has an 80 percent win rate, you will go through draw downs where you are on the 20 percent side of the math. Focus on the process and whether or not you executed the trade correctly. For a short period of time, the results are irrelevant. In time you will get back on the right side of the probability.
7. Use technology
Make use of technology that makes things easier and faster. There is plenty of free or cheap charting software. The small investment is well worth the hours it will save you. Use your phone or tablet to make trades while at work. Set up alerts for buy and sell signals. It has never been easier to trade.
8. Have a plan
Going into the trading day, you must have a plan. If you have a focus list of 5-10 stocks, only watch those and stick with your entry points. Know exactly where you will exit, both for gain and loss. You should not have to think when looking to trade. Thinking is done before the trading day.
9. Do not micro-manage positions
One of the biggest stumbling blocks for swing traders is over-trading and not letting your stops and targets work for you. Use the fact that you have another job or responsibilities work for you. Don't watch every tick. You came in with a plan and now you must stick with it. Enter, set your stop, target and forget about the trade.
10. Review your trades
At the end of the month or quarter, review all of your trades. Identify what worked and what did not. Analyze whether luck was not on your side or if was a mistake you made. You will learn more from trade reviews than any book you can find.
A free 7 day trial to my nightly Trade Report, perfect for swing and part-time traders
Follow me on twitter
Monday, June 02, 2014
You Must Short SPY When This Indicator Tells You It's Time
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This chart is as clear as day. When Telechart's T2120 (which measures the ratio of 26 week new highs to new lows) hits 95, it is time to short SPY. We are at 85 right now. Ten more points and we have an easy short play.
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