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Stephen@newtraderu.com

Archive for the ‘Uncategorized’ Category

PostHeaderIcon Ten Things That Cause Traders To Battle On Social Media


 Pickbattles

 

 

 

 

 

 

 

 

 

  1. So many arguments are caused between traders on social media simply because they do not understand the others time frame. I have seen long term investors who were bullish on a companies fundamentals argue with a day trader taking a technical short trade set up to the down side for a trade that would last maybe a few hours. Take the time to learn some ones time frame if you want to question them about their trade.

  2. The most battles come from simply someone giving unsolicited advice to another who did not ask for it. I have seen newbies that likely never traded over a few hundred dollars in position sizing in their life give advice to a retired millionaire trader who use to manage money professionally and appeared in a Market Wizard book. Generally the only people that give traders they don’t know unsolicited advice on social media are the ones that have no business doing so and just want to inflate their own ego.

  3. Traders with strong different opinions about the future price action tend to argue. Perma-bulls and perma-bears can really go at it. Since they have no crystal ball or time machine it is best to let the chart settle those arguments as it unfolds.

  4. Traders that have an almost religious fervor for their specific style of trading tend to battle other infidels that do not agree. I have seen many huge battles between day traders and trend followers even though both are profitable traders they condemn the others style and method and believe only their way is the right way. There are as many ways to make money in the market as there are profitable traders. As long as all their winning traders are bigger than all their losing trades over the period they need to be profitable in who is anyone else to question their methods?

  5. Jumping to fast conclusions about someone before really getting to know the facts about the trader or a specific trade is a bad start, it is best to ask questions first and not pick battles until at least the attacker has any idea what they are even attacking specifically.

  6. Trying to sit in judgment on someone is a great way to start a battle.

  7. Attacking someone publicly can get a battle going quickly.

  8. Exposing a fake will get you in some of the biggest battles on social media. Fakes like to keep that a secret.

  9. Giving out false information or ignorant information on social media will bring out some trading police that will battle you. My readers let me know about every typo in my blog.

  10. Traders on social media that spout off about things they know little about will be kept honest by the ones that are experts on that subject. They will publicly correct the ignorant, misinformed, and fakers.


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PostHeaderIcon 15 Great Websites & Blogs For New Traders


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Here are fifteen websites and blogs that I have found useful over the years and think the traders that run them do an outstanding job. Almost all are packed with tons of free learning materials and information, you can look at each one so you can find the ones most useful for the type of trader you are and the method you are using. You will find different time frames, markets, and methods in these sites and many also touch on the importance of risk management and the psychology of trading. A little something for all types of traders. I have found great value in all of these sites and believe you will too.

www.paststat.com

www.weissmansignals.com/

www.trendfollowing.com

The Option Scientist

www.seykota.com

www.donttalkaboutyourstocks.com

www.MarsCapitalPartners.com

www.sharptraders.com

www.sassyoptions.com

www.mellatrades.com/trades/

www.ChartPattern.com

www.chartyourtrade.com

www.bigwavetrading.com

www.DarvasTrader.com

www.thechartist.com


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PostHeaderIcon 10 Fast Facts About the $SPY Chart


 

  1. The long term and intermediate term trend are both starting to become range bound here.

  2. 100 day ema hold and bounce last week was bullish short term.

  3. 50 day ema broken to the upside again was bullish.

  4. 5 day ema has almost crossed over the 21 day ema which could lead to a short term trend up.

  5. 50 day sma and 100 day ema are still both sloping up along with short term moving averages.

  6. $187 $SPY is the near term resistance on the chart and if that breaks then the all time high is next up as resistance. A close under the 50 day sma will be a sign of a broken up trend.

  7. It is time to be cautious with so much rotation into the energy, consumer staples, and utility sectors of the equity markets.

  8. The market continues to be resilient with all the Ukraine headline risk, ‘buy the dip traders’ are still alive and well and the market is still biased long as oversold plunges are bought.

  9. Some leading stocks setting up at buy points via Chart your trade. Individual stock charts are beaten down but not broken yet. In a strong down trend individual stocks will not be setting up to the long side.

  10. One crack in the bull’s horns –> Caution For Long Stocks When Long Calls Fail

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PostHeaderIcon Ten Quick Questions to ask Yourself Before Every Trade


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  1. What is the overall direction the market is moving with in your time frame and the larger time frame?

  2. What time frame will you be trading with your next trade?

  3. What is your entry signal and what is its historical performance as a winning set up?

  4. How much money will you risk on this trade?

  5. How big will your position be for this trade?

  6. How will you know you are wrong and stop your loss?

  7. How much profit do you believe is possible if it moves in your favor?

  8. How will you know when it is time to exit with a profit?

  9. What is your ratio of reward versus risk?

  10. How many trades will you have on at any one time?


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PostHeaderIcon Top Trading Tweets of The Week


Top-Tweets-2011

 

 

 

 

 

 

 

 

 

 


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PostHeaderIcon The 10 Elements That Create a Winning Traders ‘MENTAL EDGE’


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While having a great trading method is a good start and managing risk is a must for long term survival the element of a strong mental edge is a must for a winning trader. The ability to manage stress, losses, losing streaks, the ego, and even big wins will determine a traders long term survival with all other things in place.

Here are ten things that make up a mental edge for a winning trader:

  1. The discipline to follow their trading plan regardless of their emotions.

  2. They are patient with winning trades and  impatient with losing trades.

  3. They have the perseverance to not quit at the height of their own frustration.

  4. They are mentally and emotionally balanced whether winning or losing.With the best traders you can’t tell if they’re winning or losing.

  5. They have the ability to use logic & reason above emotions in difficult market environments.

  6. They are mindful of their ego and self and are able to overcome strong impulses.

  7. They stay focused with a strong work ethic and do many hours of research to build systems and methods.

  8. They have a strong passion for trading that gives them the energy to keep trading even through many setbacks.

  9. They are able to filter the noise from other people and ignore it and instead focus on the price action, the chart, and their trading system.

  10. They don’t believe everything they hear, they do the homework to see if it is really true.


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PostHeaderIcon 10 Good Things That Are Bad For New Traders


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This blog post came from a suggestion from  Andre Du Preez and many ideas were added by my facebook traders group. Thanks to all that added value to this post, Simon Goodchild, Brian Chang, Scott Gibbons, Harry Lamborn, Lisa Wareham, Stephen Doubell, Luis Pereira, Matthew Smith, and Joey Gueits.

10 Good Things That Are Bad For New Traders

  1. Making money too quickly when first starting out as a trader leading to an inflated ego and not really learning how to trade. Usually just benefiting from a market environment that rewarded the new traders specific trading behavior.

  2. Moving a stop loss then the  market turns around and the new trader makes a bag load of money and bad behavior is reinforced. Counter trend trading in the long run by lowering stops is a formula for eventual disaster no matter how many times it is rewarded in the short term.

  3. Making a big win on an untested and not clearly defined trading method. Their wins can not be replicated and were possibly just luck.

  4. A big lucky win, or worse, two big lucky wins. This encourages taking big risks in the future which will likely lead to big losses that give back those winning profits.

  5.  100% profit in UVXY and think its a long term investment.

  6. They’re trading in the direction of a bubble and think they’re geniuses. When the bubble pops they will have no idea what to do.

  7. Successfully trading a paper account and not understanding the problems and obstacles of emotions and ego when real money was at stake in a real trading account.

  8. Money comes too quick and easy so they are set up for failure when the market changes and it becomes difficult to be profitable. Quick and easy success sets up most new traders to quit when the going gets rough becasue they are not use to losing at all.

  9. Averaging down in a losing trade and it rebounds and rewards the new trader, this teaches the new trader a terrible habit that will eventually blow up their account when a trend is in place that does not revert to the  mean until it is too late for the traders account.

  10. Using an untested strategy that has a high win percentage and confusing it with positive expectancy. Due to the confusion, scaling the risk sizing to “oh crap, that loss is half my account”.

  11. Having a huge profit in a growth stock or a bubble but not knowing how or when to exit and lock them in.

  12. Confusing a bull market for brains.


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PostHeaderIcon 10 Things A New Trader Must Have If They Are Going To Survive


 survival_guide

 

 

 

 

 

 

 

 

 

 

 

  1. A decision on what specific markets to trade.

  2. A developed robust trading system to trade that fits the traders personality and risk tolerance.

  3. An understanding of the expected winning percentage of trades in the system and maximum expected draw down of your trading system.

  4. Defined entries that tell the trader the price level to enter that has the best probabilities of success.

  5. A defined price level that the trader will exit because it will show the trader they are wrong.

  6. A position size based on the stop loss exit level to limit the risk exposure in any one trade.

  7. An understanding of the total risk involved in having mulitple positions on at the same time due to correlation and volatility.

  8. A trader must be in touch with what different types of trading does to their emotions and ego whether it is the time frame or position sizing.

  9. A realistic expectation of returns is crucial to keep your resilience up as a trader and persevere and avoid trading too big in a search for riches or too much.

  10. An understanding of how your system performs in different market environments does a lot to help get through mentally trying times or losing streaks.


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PostHeaderIcon 10 TOP TRADING SKILLS


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  1. Admitting that you are wrong the moment price action tells you that you are and getting out of a bad trade.

  2. Being patient and waiting for your entry signal and the patience to let a winning trade go as far aw it wants to before you exit.

  3. The discipline to trade the same regardless of how you feel at the moment.

  4. Following a trading plan instead of your ego.

  5. Trading in the direction of the trend in your time frame.

  6. The work ethic to do the homework on what works in trading before you put any money at risk.

  7. The passion to love the game enough to do what you have to do to break through to success.

  8. To accept your financial losses as tuition and the price of doing business not a blow to your abilities as a trader.

  9. Listen to those that are far more advanced as traders than you are.

  10. The perseverance to keep trading until you are successful at it not when you just want to quit.


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PostHeaderIcon 10 Fast Facts About the $SPX Chart


 

 

  1. While the long term up trend is still in place we are entering into a small normal correction here so far.

  2. With the 100 day ema being lost the next long term support level is the 150 day ema from the last bounce.

  3. The best oscillator I have seen to watch for index swing trades on daily time frames is the 14 period RSI. Over the past four years after a cross below the 30 RSI of the $SPX on the daily chart has been a winning trade on the bull side with a long bias in short term time frames. This is a key area for shorts to cover, swing traders to go long, and dip buyers to buy.

  4. Next week the probabilities are that at some point the $SPX touches the 5 day ema as it is currently very overextended and the ‘rubberband’ of price only stretches so far  on equity indexes.

  5. Down trends in equity indexes are not as smooth as they are in individual equities or commodities because as a whole down moves in equities as an asset class is fighting against the historical consistent uptrend. Down trends and even bear markets are interrupted a lot by rallies back to key resistance levels and reversions to the near term means like key short term moving averages.

  6. Short covering  is a big driver of rallies after a sell off so momentum back up and gap ups at the open can trigger shorts buying back and covering. Short covering rallies generally have a lot of surprising momentum.

  7. Seasonally April is a strong month for stocks before the old “Sell in May and go away” begins.

  8. If the 150 day ema is breached and we have an outlying plunge outside of the norm then 1780 and 1740 have pockets of support.

  9. I am looking to trade much smaller here than usual with the increase in volatility and the changing nature of this market.

  10. I am looking to tighten my time frames to lock in nice profits that are given on the short or long side.

  11. The 5 day ema and the 50 day sma are areas to watch for to see if they are now resistance levels if we are in a down trend these levels will likely be sold into.

  12. Momentum stocks are out of favor and $XLP and $XLU are new hiding place for money managers that are holding equities.

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