Ten Fast Facts About The $SPY Chart

21 Sep
September 21, 2014

SPYChart2014

 

 

 

 

 

 

 

 

 

  1.  The long term stock market up trend is still firmly in place. 

  2. All time highs still being within striking distance is still a bullish sign.

  3. Quadruple witching caused much of the volatility Friday as traders settled contracts across markets.

  4. The 5 day ema being broken above and held is a bullish sign that could be a sign of even higher prices ahead.

  5. A close below the 5 day ema would be the first sign of losing momentum.

  6. The best odds for success and profitability in this market environment is still in buying price dips.

  7. The RSI at 63 gives more room for upside to the 70 RSI resistance level.

  8. Near term support levels in this market are a high probability at the 50 RSI and the 50 day sma.

  9. Being a bear in this market environment has been expensive. The market is simply being bought quickly at every opportunity.

  10. I am still long $SPY with a full position size going into Monday. My stop is a close below the 5 day ema.

 

5 Great Trading Articles For Weekend Reading 9/20/14

20 Sep
September 20, 2014

Weekend-Reading

 

 

 

 

 

Finding Opportunity Means Taking Shots: Same for Football, Same for Trend Following

Introductory RSI Post

Darvas Box, a classic breakout system, and its tweaks

Johnny Chan teaches trading

How Did ‘Sell in May and Go Away’ Work This Summer?

Top Trading Tweets of the Week

20 Sep
September 20, 2014

Top-Tweets-2011

 

 

 

 

 

 

The Five Dangers of Over Trading

18 Sep
September 18, 2014

 

 

Over trading is when a trader takes a trade based on fear, greed, desperation, or ego instead of a valid entry signal. Over trading is due mostly to wanting to be profitable so bad that impulses are driving decisions instead of a trading plan. If a trader has an edge over the markets then they want to take the trades presented to them, the more signals the better. If a trader takes trades that are not based on robust entry parameters the more trades they take the quicker their undoing and demise.

The Five Dangers of Over Trading

  1. For smaller accounts over trading can rack up large commission costs that can eat into profitability.

  2. The bid/ask spread is an expense that pays the market makers at your expense. The more you trade the more you pay.

  3. The more you trade the more you can be front run and gamed by High Frequency Traders. You can beat High Frequency Traders with Low Frequency Trading.

  4. Trading too much gets you into bad entries when you should have been waiting for good entries. Entries have to be based on signals and risk/reward ratios not the emotional chasing of gains.

  5. Over trading is bad trading. Generally over trading is the external results of bad internal self controls. It is the epitome of not having a trading plan, lacking discipline, and not following a trading plan. Over trading will cause you to lose faith in yourself as a trader with the discipline to follow a plan. Over trading can lead to mental ruin only take the right trades that meet your own guidelines and trading plan based on homework and research.

 

A Trader’s Stop List To Get to Profitability

17 Sep
September 17, 2014


A big part of trading is to stop doing the wrong things. Even if you do the right things and don’t stop doing the wrongs things you will not be profitable in the long term. Doing the right things as a trader can make you money but doing the wrong things can lose you even more money. Here is a stop list for those traders that want to be profitable.

A Trader’s Stop List To Get to Profitability

  1. Stop trading so big that your emotions over ride your original trading plan.

  2. Stop hoping a losing trade comes back and just get out when you are proven wrong.

  3. Stop asking others for trade opinions and start developing your own methodology.

  4. Stop trading until you have done the homework to ensure you have an edge.

  5. Stop fighting trends in your time frame.

  6. Stop entering trades based on hope and exiting trades based on fear.

  7. Stop confusing yourself with so many methods and start choosing one that fits your personality.

  8. Stop trading markets you do not fully understand.

  9. Stop following gurus and start following the price action.

  10. Stop trying to predict the future and start trading the present moment chart.