Day Trading
November 29th, 2009 at 10:17am
Under Day Trading
Stuart McPhee discusses about the trading plan and support and resistance with the Money Show.
Stuart:’We start out we make a lot of intuitive decisions, we lose a lot of money and then somewhere along the journey we work out, I think I need to go back and start from the basics again. Maybe this trading plan is a little bit more serious and a little bit more vital to our success. We don’t do that at the beginning we think we will be ok we make decisions every day of our life. We rely on instincts and intuition, but at some point we need to have a plan to protect capital.’
Tom: ‘And I think some people get successful when they have a plan and then they revert, they stop having a plan. Do you see that too?’
Stuart: ‘Yes you do. Every now and again you do. It’s that confidence and confidence is so vital in a trader but overconfidence is not. And the plan will stand you in good stead for many, many years. The plan evolves, it changes, markets change. We adapt we are very flexible human beings. Yes we have to evolve that plan. But the over confidence, I’ll be OK, I don’t need a plan I think we’ve seen throughout history a number of well-known people have moved beyond a trading plan have blown everything and wondered why. I’m just a big advocate of having a plan and sticking to it.
Tom: ‘You teach people a lot about having a trading plan and one of the most important ingredients you feel is the psychology of trading, which most novice traders don’t even consider starting out.’
Stuart: ‘Absolutely not. I couldn’t agree more. The last thing we consider when we start trading is how our mind will play a role in our trading success. I think only by trading and making some mistakes and losing money do we fully appreciate how our mind plays such a vital part in our success. And I think it boils down to one thing. The majority of trading decisions, if not all the trading decisions we make are counter intuitive.
Well this is a real challenge to us because all through our life in fact throughout the history of man we’ve relied so much on our instincts and in fact humans have evolved over the years through our instincts. So we very much rely on our instincts through everything we do every day. Trading you cannot do that. Everything we do is against our instincts, is counter intuitive, so clearly that leads us to discipline and doing what we have to do rather than what we want to do is probably one of the most important attributes successful traders have. Discipline and having a suitable trading plan are key ingredients for any trader to attain trading profit.’
By writer
November 29th, 2009 at 10:17am
Under Day Trading
End suffering to master traders in the securities market when double tops and double bottoms form. Keep reading to discover how you can make thousands of dollars when double tops and double bottoms form.
Every rally in the securities market arrives at a level wherever adequate bulls consider it and pronounce I have attained a lot of profit, and I could attain yet more profit, only I would prefer to take my profits off the table. Charts top out once adequate bulls get their profits, whilst the revenue from fresh bulls is not sufficient to replace what was drawn out.
Bulls who just bought in are mad as they came in too late. They are trapped. Their profits are melting away and turning into losses. Should they just stay in the stock and hope it comes back or sell for a loss? If enough bulls decide the stock has overshot to the downside, theyll step in and buy. As the rally resumes, more bulls come in. In real time prices advance to the point of their previous high, and that is where you should anticipate sell orders to reach the market.
There are always bruised and beaten warriors who got trapped in the previous sell off and take a blood oath to get out if the market ever gives them another chance.
A reflection of this position happens in the securities market at market bottoms. The market falls to a new low at which enough bears start taking profits by covering shorts and the market rallies. Eventually that rebound stalls out and prices begin sliding down once more, every last eyeball is on the former low-will it withstand the selling? If bears are stronger than bulls, prices will break below the first low, and the downtrend will continue. If bears are weaker than bulls, the downward move will stop near the previous low and create a double bottom bounce. Your other technical indicators will help you figure out which of the two possibilities is more likely to occur.
Whenever you see a stock climb to its previous high, the first question in your mind should be will the stock climb to a new high or form a double top and head back down. Technical indicators like volume, MACD, RSI, and stochastics can be a great help in answering this question.
If the volume, RSI, and stochastics start falling as the stock approaches its previous high, then it is likely that a double top pattern will form.
When a stock falls to its previous low, a double bottom is most likely to form when the volume, MACD, RSI, and stochastics are rising.
For more helpful advice from master stock traders go to stock market trading tips and for great technical analysis and free stock picks visit stock market picks
By writer
October 28th, 2008 at 10:04pm
Under Day Trading
One of the various methods of stock trading is Swing Trading Stock. In fact, this method has far more advantages than the other trading formats. Swing Trading Stock when compared to other methods like Day Trading or Position Trading can be found to lay mid way. Briefly, in the Day Trading method, a trader needs to stare at the stock price for the entire day and on the other side of the fence, the trader has to wait for months and hold his position before he could make some profit by using the Position Trading method. Both the trading methods viz. ‘Day trading’ and ‘Position Trading’ has some drawbacks which defeats the entire purpose of stock trading. Day Trading is almost like getting involved in a full time job where the trader spends the entire day by staring at the stock prices chart! In the second variant you cannot realize your potential profits for months and in short, it is the money long forgotten! The money that a trader invests in the stock market gives short term returns to the trader and the money remains spread in the market only for few days or a week or two.
The traders must provide enough attention so that they are able to recognize and judge the fluctuations in the market when they decide to choose Swing Trading Stock. The greatest advantage of this method is that it makes use of the oscillating feature of the stocks to derive profits even when the stock prices are not very high. The emotional factor is ruled out in the Swing method and hence, the method of trading stocks is always safer as compared to Day Trading. The only additional requirement is that the trader needs to be a bit systematic and disciplined in the trading approach. A newbie or a job holder or even a very busy person will always find this method of stock trading to be convenient!
By admin
October 27th, 2008 at 12:18pm
Under Day Trading
It may sound a little odd but Trading in Future is yet another form of investment which can give monetary profits and bring a certain amount of financial freedom. It is obvious that you will want to know the meaning of Trading in Future. The traders take a risk and trade by speculating the performance of a commodity in a certain future time. They can also trade on the future performance of agricultural products. Gold, oil, gas, silver, sugar, coffee, etc. are the examples of the commodities and agricultural goods on which trading is done.
More technically, Trading in Future simply means that you are reaching an agreement to buy a given amount of any commodity on a future date at a certain price. It is probably preferable to hit the square point of interest! In case the prices of those commodities go up before that date, you are a gainer and in case the price goes down then, it is a sad story for you! You must compulsorily conduct a research on the commodity on which you decide to do future trading. The commodity will have some history and on the basis of that history, you must try to speculate its future movements and then invest. There are a number of factors which drastically impact the behavior of the commodities (specially agricultural and live stocks) in the stock market. Such factors can be floods, strikes, droughts, labor disputes, storms, etc. There are certain advantages that you can come across by Trading in Future. Firstly, investing on the margin can empower you to control a large amount of commodity. Not the last one, the transaction cast is very low because of high competition in the market. Last but not the least there are tax benefits. It is left on to you how you want to invest!
By admin
