Get real. IF systems like that really were available, or if day trading really was that easy, wouldnt everyone be a rich day trader instead of being a statistic in the 90 percent of all day traders fail club? IF you cant be truly realistic regarding this, truly believing and understanding the odds against you THEN you do not have a chance. You would really be best off giving up on this idea about day trading, and save yourself a lot of pain and money.

Over the last nine years, I have known and worked with many traders, and over this time have seen the unrealistic expectations, and problems with their approach towards trading, where people who possibly had a chance to be successful were actually done before they started. I have thought about writing a book about this. The book would not be about how to day trade, but instead, it would be about how to learn how to day trade the key word being learning NOT trade.

It Cant Just Be About The Money

How can learning any new skill start with a total focus on the end result, instead of how you plan to achieve that result. That would be no different than trying to put the roof on a house before you built the walls, or expecting to receive your college degree the day that you begin classes. Talk about unrealistic expectations these are impossibilities as are any get rich quick trading schemes. Yet many come into day trading as what I refer to as a job replacement trader, this is a trader who tells me the following: I know I need to spend the time making a trading plan and properly paper trading it before I start trading real money, but I cant, I just got laid off from my job and need to trade now to make some money. There is another statistic for the 90 percent club.

When I meet a new trader who has some interest in what I am doing, this is probably the most frequently asked question: how long is it going to take me to be profitable with your method? This trader has never traded real money yet, or has been losing at whatever trading that they have done, yet what they want to know is how long will take to be profitable with a new method. My answer to questions like these is to first ask my own question: what are you planning to do to learn this method, how can you possibly become profitable with any method before you learn it? I can remember one specific trader that I talked to 2-3 times before joining our group. In the conversations this trader told me how many thousands of dollars he had spent on trading systems, methods, and trading groups it was almost like he was bragging about it? He never learned how to trade, and he had never traded profitably. BUT once again the same question came up how long is it going to take? I told the trader my thoughts regarding this, while also saying that if this was the major concern that they would probably never learn it, and they really shouldnt join the group. The trader assured me that this time it would be different BUT it wasnt they never studied the training materials, but I would get an email every couple of days asking me when I thought they should start trading real money. And there is another statistic for the 90 percent club.

Trading just cant be about the money, especially from the beginning, but really at any point in your trading career. Trading is about the process; that process being learning a method and the related trade setups, the creation of what I refer to as a base setup plan. Does it seem logical, that you actually need something to trade before you get rich trading it? After this is done, start paper trading this plan in order to gain enough screen time and repetition that you can make adjustments learning your mistakes and misreads that you make in real time execution. Accomplish this, and then begin to keep profitability records of your paper trading, first trading for profitability, and then trading for proficiency where you concern yourself with the percentage of profit potential you are gaining, not simply whether you make a profit.

How long is this going to take to do? Who knows, but there sure arent any shortcuts. Actually, it probably wont ever happen. Paper trading to a proficient level really is a very difficult thing to accomplish, as traders arent willing to work hard enough, and with the necessary commitment, as there is no financial reward from paper trading. Furthermore, since there is also no financial risk, paper trading is quite often turned into a game and becomes of a waste of time, and creation of bad habits that become to hard to change. But skip the process altogether, because you want to start making all of that money that caused you to decide to become a day trader to begin with AND another statistic for the 90 percent club.

Introduction To Trading Psychology

I would guess that most everyone has had experience with some kind of real time performance stress before. Maybe it was a college final, or maybe it was related to athletics, maybe you had to give a speech, or maybe you were in a theatrical performance. Whatever the case may be, for myself, as well as anyone else I remember talking to, nothing was even similar to the feelings that were brought on by day trading real money real time. My background included athletics, and I can remember pitching in a state final baseball game, and I can remember last second free-throws in tournament basketball games it was a piece of cake when compared to starting to trade real money. Nothing can prepare you for risking your money on an unknown outcome, of which you have no physical control, while watching price bars that all of a sudden have seemed to start ticking at the speed of light with your heart racing and the inability to sit still and the dry mouth and the sweaty palms and the feeling like you are going to puke etc etc etc. Doesnt that sound like fun I will bet that get rich trading scheme didnt mention any of this?

IF you are going to get through these emotions known as trading psychology, and all the different fears and forms that it can take on, it is going to be involved with your preparation, repetition, and understanding of that base setup plan, along with the knowledge that you have been able to paper trade it proficiently. No, its not the same as real money, and you will still have to become used to executing real time BUT at least you do have the confidence in knowing that what you are going to trade does work, and on a level in excess of simple profitability. It will take time for these emotions to leave you, and maybe some never will, but that is all right. It is not necessary to eliminate all emotion to be able to profitably trade, it is necessary to control them, and being able to have the self trust that although you cant know what is going to happen, you can know what you are doing and that you will act as closely as possible to the intended plan. Does going through a learning process that includes paper trading still sound like a waste of time? No problem there is still plenty of room in the 90 percent club.

Work Ethic And The Fear Of Failure

Again I am thinking about that question how long is it going to take to profitably trade your method? I dont know, are you really going to work your hardest? The fear of failure can take on many manifestations. What I have seen quite frequently, is how this fear is related to the traders sense of self esteem and self worth that failing at this, failing at anything, will make them less of a person, and they cant risk allowing this to happen. Consequently, they never work their hardest at learning to trade. They wont put it all on the line, they always hold something back. Why? Because by doing this there will always be a built in excuse for failing IF I had really tried my hardest THEN I am sure that I could have done it. The result is obviously the same, but at least they dont have to blame themselves or take a hit on that precious ego. Is failing at learning to do something, and being a failure really the same thing? In my way of thinking, trying your very hardest and not being able to do something is just the way it goes some times. We arent going to be able to do everything we try, no matter how hard we work at it. Failure on the other hand is what I described failing because you didnt step up and try your hardest, instead you held back trying to protect yourself. You want to learn to day trade, check your ego at the door before you start or you too can join the 90 percent club.

Do You Still Want To Make Your Living Day Trading?

Have I talked you out of becoming a day trader do you still think this is a great get rich quick way of making your living? Although it wasnt my intentions to change anyones mind, if this is what has happened, then I am glad. Yes, trading can be lucrative, and yes, you can get rich trading, but you have such a long road to travel before this can occur. Many people say they know this, but they dont really believe it. They think that they will be different, they think that they will be the one that bucks these odds BUT then they wont go about it differently. If nothing else, it should be very clear, that if 90% of all day traders lose, then to have a chance at being successful, you obviously are going to have to approach this differently than the vast majority does. Go for it BUT focus on the process, have reasonable expectations of what is really involved, and then do what is necessary to learn how to trade that 90% club is far too big.

Related posts

• How to Day Trade for a Living A Systematic (0)
• Is Day Trading For A Living Your Cup Of Tea? (0)
• Day trader Versus Investor (0)
• A Few Tips For Day Trading the Stock Market (0)
• Your Stop Loss Is Critical When Day Trading Futures (0)

I will use myself as an example. In most years there are significant time periods during which my schedule of travel and other commitments prevents me being overly active in the markets. One particular year I added a six week trip between the end of May and the early part of July in to the mix as well. During the course of that year I did a total of about a dozen trades in the stock market. Want to know my return for that year? It was more than 200%.

Now you might be thinking that this is an anomaly. Its not.

Over about an 18 month period between 2002 and 2003 I was able to double the value of my retirement account trading stocks (I had to double it to make up for the beating the mutual funds I had been in prior to that had taken) necessarily using a much more conservative approach than in the example above. Again, that was done on a relatively small number of trades.v
Actually, I dont normally make that many trades in any given year. If I get very far above twenty its rather unusual.

Clearly, Im not a day trader. I do not get in and out of positions rapidly. My strategy is one I have formed over the years which allows me to find stocks with good upside potential that I dont have to constantly watch. The positions I put on are intended to be held for weeks, if not months. Thats the timeframe when the largest moves happen, so thats the timeframe I want to trade.

The strategy I use incorporates all three primary forms of market analysis fundamental, technical, and quantitative. That said, however, I can go through the stock selection process in a couple of hours, at most. If there isnt anything worth really looking at, the whole thing can be done very quickly.

Whats more, if I have active positions on I will generally not be looking to enter any new ones. In that case, aside from a little bit of checking up to see how the stocks are trading and if theres any important news, theres very little to be done. I can literally trade my system in only a couple hours a month.

Now you might be saying that Ive got a great system. Maybe I do. It certainly works for me given the constraints I operate under with my schedule. I dont consider it any major secret, though. In fact, I outlined it in detail in my book, The Essentials of Trading, so you are free to take a look at it for yourself.

The important point here is that I was able to develop a trading style and methodology that works for me. Anyone can do that. It is a question of making an honest self assessment and defining an approach that fits within the parameters you have for trading or investing in the markets. Maybe you can day trade, or maybe youre like me with limited time to dedicate to finding good stocks to buy.

Whatever the case, you have to do what works for you and realize that you can trade effectively regardless of how much time you have to put in to it.

Related posts

• Market timing with your mutual funds (0)
• How To Invest Wisely And Make Your Money Grow (0)
• Getting Started With Online Investing (0)
• Different Gambling Arenas For People At Different Income Levels (0)
• A Few Tips For Day Trading the Stock Market (0)

If you like working with other people’s money, then maybe day trading for a living is what you should be doing. This type of trading works daytime hours only, from the moment the stock market opens at 9am until it closes at 4pm in the afternoon, you can do a lot of trading in that amount of time. Or maybe you want to do day trading for livings with your own money, that way if you loose it, then you have no one to blame but yourself. However, it may be a good way to watch your money grow too. The following is the basic definition of what day trading is all about. Maybe it is your cup of tea, maybe not, only you can decide.

What is Day Trading?

Day trading for a living is when you take a position in the markets with a view of squaring that position before the end of that day. Day trading for a living mean a trader usually trades many times a day looking for fractions of a point to a few points per trade, however, by the end of the day he or she will close out all their positions. The goal of the day is to capitalize on price movement within one trading day. Unlike investors, the day trader will hold positions for only a few seconds or minutes, and never overnight.

What day trading really means.

The meaning of day trading is actually a misunderstood term. True day trading means not holding on to your stock positions beyond the current trading day, meaning your not suppose to hold on to your stock overnight. Trading this way is really the safest way to do day trading, this way one is not exposed to the potential losses that can happen if the stock marked is closed due to news that can affect the prices of your stocks. There are many people out there today who are not very good day traders, they are actually more like con artists just out to take your money. Because of greed, they will hold your stock overnight, setting themselves up for the catastrophic elimination of their capital. In day trading currency, the term day trading changes slightly. Because currencies can be traded 24-hours a day, there can’t’ really be any overnight trading. You can have open positions for longer than a day with active stop losses than can be activated at any time.

There are a few different types of day traders out there today, it can actually be subdivided into a number of styles.

Scalpers- This type of day trading involves the rapid and repeated buying and selling of a large amount of stocks within minutes or seconds. The goal here is to earn a small per share profit on each transaction while minimizing the risk.

Momentum Traders- This style of day trading involves identifying and trading stocks that are in a moving pattern during the day, in an attempt to buy such stocks at bottoms and sell at tops.

The advantages of day trading for a living is there are no overnight risks. Because positions are closed prior to the end of the trading day, news and events that affect the next trading day’s opening prices do not affect your client’s portfolio. Day trading for a living has a greater leverage on your client’s capital because of the low margin requirements as their trades are closed in the same market day. This increased leverage can increase your client’s profits if used wisely.

Related posts

• A Few Tips For Day Trading the Stock Market (0)
• Stock Trading – What Every Investor Should Know (0)
• Before you start stock trading: first think if it is (0)
• The advantages of day trading (0)
• So You Want To Become A Futures Day Trader (0)

Is it really possible to make a living as a day trader?

This question is asked over and over and over again by normal, ordinary people. The answer is simple: Yes, it is DEFINITELY possible! And, better yet, you yourself can do it! Sometimes people dont believe me when I say that they can become successful, full-time day traders, but its true. And Im going to prove it to you right now.

Before we get started, I need you to ask yourself one very important question: How much is a living? Many people want to be rich, but they fail to quantify what rich means to them. Are you rich if you have one million dollars? Maybe so, but if you told Donald Trump that he had one million dollars in his bank account, hed wonder what had happened to the rest of it! One million dollars to Donald Trump equals broke!

How to Make $150,000 Per Year
Since I dont want to get into a deep discussion about how much money is a decent living for you, lets just assume that you would be pretty happy if you were making $150,000 per year, and lets say that you are making this money with your trading. Does that sound reasonable?

Lets break it down: $150,000 per year would be $12,500 per month, or, if you prefer, $3,000 per week. This is assuming that you are taking two weeks of vacation per year.

So, would you like me to tell you how you can make that imaginary figure of $3,000 per week that $150,000 per year into a reality? Because I can. All it takes is smarts and strategies.

Start Small Set a Weekly Goal for Only ONE Contract
When day trading futures, options, or forex, you can use leverage and trade multiple contracts on a rather small account. If you are thinking about trading the futures market, then you can easily find a broker who will enable you to trade one contract of almost any futures instrument that is our there such as e-mini S&P, e-mini Russell, currency futures, interest rates, commodities, etc. on a $2,000 account.

I teach my students to set a weekly goal of $300 per contract. So, if you want to make $3,000 per week, then you need to trade ten contracts. Its possible that your broker might agree to let you trade ten contracts with $20,000 in your trading account, but if he wont or if you dont have $20,000 in your account at the moment dont worry. Just stick with me, and Ill show you how to get there.

How to Achieve Your Weekly Goal
The key element to trading success is having a sound trading strategy, and it must be one that works effectively in a variety of markets. You will dramatically increase your chances of success in trading if youre able to trade in multiple markets. Now, understand that when I say multiple markets, I do NOT mean different types of currencies! This is a common misconception. What Im talking about is TRUE diversification, which means watching the two U.S. Stock Index markets, one or two currency markets, commodities like the grains, interest rates, and/or a foreign index market, all at the same time. Here at Rockwell Trading Inc., we teach our students to watch six different markets every single day.

Another obvious key factor is profits; to achieve your weekly goal, youll ideally have a high average of wins per trade. It goes without saying that your average win should be at least 50% higher than your average loss, preferably even twice as high.

The strategies that I use and teach call for a profit target of $300 per contract and a stop loss of $200 per contract. Youll notice that the profit target is greater than the stop loss. Thats the beauty of it: all youll need is one win, and youll have achieved your weekly goal of making $300 per contract. ONE WIN!

Just as an FYI, this is why scalping is so much more difficult. Most scalpers try to make $10 – $20 per trade, so you would need 15 30 wins per week to achieve your weekly goal. Which do YOU think is easier? Making one profitable trade or trying to make 15-30 profitable trades?

Sounds Good, But What About Losses?
As everyone in trading knows, losses are a part of the business, and you cant avoid them. If thats something you have trouble accepting, then youre in the wrong industry. However, theres a huge difference between losing big on a regular basis and losing small in a controlled trading plan. Our trading strategies assume a certain amount of loss, and we prepare our students accordingly. You already know that you should keep your losses small; we simply teach you how to keep them smaller that your average wins.

Lets go back to the scenario I mentioned above: you have a trading strategy that produces $300 in profits for every win and costs you $200 for every loss. Now, if your weekly goal is $300, and if your first trade was a loss of $200, then you need to make two winning trades to achieve that weekly profit goal.

Let me take this a little farther and actually break it down for you: youve lost $200 on your one losing trade, and then you make $600 on your two wining trades ($300 each). Your net profit = $400. Goal achieved. Its as simple as that.

Of course, youre not always guaranteed a week with only one loss. Lets look at a week that started off with three losses. With three losses, you are now down $600 ($200 each). So, how many wins do you need to have before you achieve your weekly profit goal of $300? Three wins. Just three wins will result in $900 ($300 each). Subtract the $600 you lost on the losing trades from the $900 you won on the winning trades, and your resulting net profit is $300. Goal achieved. Again, simple as that.

Wait A Minute Youre Saying That I Will Achieve My Goals
With a Winning Percentage of Only 50%?
YES! Thats exactly what Im saying! Read the example above again: you lost $600 on three losing trades, made $900 on three winning trades, and came out with a net profit of $300. This means that you could pick a losing trade every other time and STILL achieve your weekly profit goals!

It gets even better: lets just assume for a minute that you do end up achieving an actual winning percentage of only 50%. Now, when you start trading again on Monday morning, what are your chances of having a winning trade? Since weve already established that you make $300 per winning trade, and since $300 is your weekly profit goal, your chance of achieving that goal after only the first trade on Monday is also an overwhelming 50%! You have a one in two chance of meeting your weekly profit goal in just one, single trade!

So if you DO achieve your weekly profit goal on the first trade Monday morning, what next? Stop trading for that week! Just enjoy life! It doesnt get better than that! Remember, you need to stick to your trading plan and your weekly goal. Do NOT enter into another trade once youve already achieved your weekly goal; the chance that your second trade may be a losing trade is too great, and you would be giving your money and profits back to the market. Overtrading and greediness are a traders downfall, so resist them and stick to your strategies.

How to Increase Your Winning Percentage
Ive just proven to you that you can achieve your weekly profit goal with a winning percentage of only 50%. But wouldnt it be wonderful if it was possible for you to boost your winning percentage to 60% instead, or even 65%?

Well, it IS possible, and heres how to do it:

Be picky. Seriously, when it comes to trading, being picky is actually a VERY good thing. Dont take the first trade you see just because it looks decent. Analyze your possible trade. Make sure that it fits ALL of your entry conditions and parameters.

As I said previously: you should be watching six different markets. Lets assume that you have a trading strategy which gives you one entry signal in the first two hours of trading. This would result in up to six entry signals per day, since you are watching six markets. Six entry signals per day add up to 30 entry signals per week.

Now, of course, there will be some days when youll only have 1-2 entry signals in the six markets; however, the chances are high especially if youre watching uncorrelated markets that youll get at least two entry signals per day, or ten entry signals per week.

Pay attention to your entry signals, and rely on them. You already know that youll meet your weekly goal with just one winning trade, so be patient. If there are no good trades on Monday, then simply wait until Tuesday. The same goes for the whole week. Dont push it! Wait until the market is ready to be traded. It WILL happen.

Waiting for YOUR trades on YOUR terms WILL increase your winning percentage. By skipping the trades with so-so entry signals, by taking only the best that the market has to offer, youll be on the right path to solid profits and success. Thats how it works.

Full Circle How to Make $150,000 Per Year
A quick recap: the first step towards financial success is to define your weekly profit target. Next, you need to find a reliable, straightforward trading strategy that will help you achieve your profit goal. When you enter into a trade and your trade hits either your profit target OR your stop loss, exit that trade immediately. Stick to your trading plans and strategies until you achieve your weekly profit goal, and then give yourself a rest until next week.

If youll think back to the case I gave at the beginning, in order to make $150,000 per year assuming a 50-week year and two weeks of vacation youd need to make $3,000 per week. At a $300 profit per trade, this means that you would need to trade ten contracts. Of course, this illustration can be applied to various amounts. If you wanted to make $225,000 per year with a weekly profit target of $300 per contract, for example, then you would have to trade 15 contracts, and so on, and so on.

If you dont have a trading account that lets you trade the amount of contracts that Im talking about yet, then now is the perfect time to start building it. Remember, be patient with your trading, be smart, slow, and steady. Trading success doesnt happen overnight, but with the right strategies and structure, you can achieve profitable results in a much shorter time period than you may have thought possible.

Plan your trades and trade your plan. THATS how successful traders make money.

I rest my case. J

Related posts

• So You Want To Become A Futures Day Trader (0)
• Expectations For Trading Or Investing Returns (0)
• Online Stock Trading, Is It Here To Stay? (0)
• Is Day Trading For A Living Your Cup Of Tea? (0)
• Finding a System to Day Trade the Futures Market (0)

The forex was traditionally a playground for the monolithic international banks and substantial corporations. Times have changed, however, and it’s now possible for the small investor to enter the speculative waters of currency trading. Forex trading has become a bit of a craze of late, especially since it is something available to anyone who owns a computer. And anyone who is willing to put in some training time can profit from forex trading. The forex market finds traders from all around the globe monitoring currency fluctuations, not unlike the way a day trader may monitor a stock’s fluctuation on the Dow Jones.

The lion’s share of forex trades involve the major currencies: the Australian Dollar, British Pound, Canadian Dollar, Euro, Japanese Yen, Swiss Franc, and US Dollar. In forex trading, a trader will pair two types of currency. Currencies are bought and sold simultaneously, for example the US Dollar and the British Pound. As it requires more of one currency to purchase another, that currency loses value. Not unlike stock trading, forex traders try to accumulate currency when it weakens in hopes of selling it when it goes up in value. Forex trading is not unlike the buy low, sell high approach found in stock trading.

The way a trader on the forex market exchange goes about acquiring currency is by giving a bid/ask quote, saying he is willing to buy, for example 1.6 marks per dollar and sell them at 1.625 per dollar. One must be a market trader to have access to this process. So most people who are forex trading on line buy the currency through a bank, where they’ll pay a commission, then have to figure the commission paid to the bank into the calculation of their spread, or profit margin, when they sell it.

Forex trading is not an easy path to riches. And some people have lost considerable money in miscalculating the market. With its increased popularity, on some days the forex market exchange can see more than one trillion dollars exchanged. Packages for teaching a new forex trader how to invest in the market can range in price.

Last but not least, trading successfully is no easy task. It is a process and could take years to achieve the desired results. There are a few things though every trader should take in consideration that could accelerate the process: having a trading system, using money management, education, being aware of psychological issues, discipline to follow your trading system and your trading plan, and others.

Related posts

• Beginning Forex (Currency) Trading (0)
• Beginners Overview of Foreign Currency Exchange (0)
• Interesting Facts About FOREX. (0)
• Forex trading an overlooked but very lucrative market. (0)
• Currency Trading: Understanding the Basics of Currency Trading (0)

Day trading is not investing. The day trader’s time frame of analysis is rather short: one day. Their only intent is to exploit the stock’s intra-day price swings or daily price volatility. Unlike stock investors, day traders do not seek long-term value appreciation.

Stock volatility is generally a rule of the market rather than an exception. Most stock prices move up or down in any given day due to a variety of external factors. Even if the market is relatively calm, there are always stocks that are volatile. Day traders seek to identify a stock that has a trend and then go with that trend. “Trend is a friend” is a common motto among day traders. Day traders seek to pick up a relatively small stock movement, 1/8 or more on that stock. If day traders are trading a large block of shares (that is, 1,000 shares per trade), then day traders will profit $125 from a 1/8 price movement. Conversely, if a day trader acquired 1,000 shares and the trader was wrong, which also happens, then the day trader will lose $125 from a 1/8 price movement. Volatility is a double-edged sword.

For expensive stocks that trade for $100 or more, a 1/8 or 12.5 cents movement is such a small relative price change that it happens all the time. Consequently there are plenty of day trading opportunities. It is not common to see a day trader executing many, sometimes as many as 100, trades in a single day. On the other hand, an investor’s time frame is much longer. Investors seek a much larger price movement than 1/8 to earn the desired rate of return. That takes time.

In short, day traders seek to extract an income from intra-day price volatility by trading the stock frequently, while the investors seek a long-term capital appreciation.

Related posts

• A Few Tips For Day Trading the Stock Market (0)
• So You Want To Become A Futures Day Trader (0)
• Is Day Trading For A Living Your Cup Of Tea? (0)
• How to Day Trade for a Living A Systematic (0)
• Day Trading or Investing for the Long Haul? (0)

When you know how to correctly read price and candle patterns you can identify the beginning of the next big wave and the most profitable entry for your trades. The price graph will also give you clues about when that wave is slowing down so you have time to tighten your stops and maximize your returns.

The markets today are providing us with great trading opportunities. The positive reaction to the interest rate news sent stocks skyrocketing, which made for some wonderful trades if you positioned in early. Many of those stocks, however, are due for a pullback. And what a perfect time to be trading because once you learn to identify the typical pullback, or retracement patterns, you can use those to enter trades before the next big run into earnings.

Here’s An Example:

A pattern that we usually see before a stock makes a run into earnings is a rectangle. A rectangle pattern is created when a stock moves up and down in a small range for a short period of time. This type of consolidation is more of a sideways move, during which time the stock doesn’t loose much of its value, but the options do become cheaper as the volatility decreases. An example of a recent rectangle is a trade we did in the two day Technically Speaking Workshop during which we bought calls on Freeport (FCX). This trade was done because the stock had just broken out of a rectangle pattern and, as you will learn in the Technically Speaking Workshop, we teach entering trades on the first or the second day of the move.

This trade was based on a contingency order at $92.50 on the Breakout Entry #1 seen below. This teaching method allows you the flexibility to trade as an end-of-day trader so you don’t have to be tied to your computer. The first entry was one that was triggered while unable to watch the markets. On the second day, there was an additional entry above $93 as the stock opened up outside of the rectangle. That is Breakout Entry #2, and is the pattern used to enter the trade in the Technically Speaking Workshop. As you can see below, FCX has rallied to a closing high of $108.67 – almost a fifteen dollar rally since entering the trade!

Another Example:

Another pattern that you might see as stocks pull back from the recent rally is a Flag pattern. This is similar to rectangle but one that is tipped on its side. With this type of pattern the stock pulls back in price and gives a better entry price into the trade. DryShips, Inc. (DRYS) formed just such a pattern this month as it retraced about ten dollars before heading to a new high. Below, you see the Flag pattern outlined in blue with the Breakout Entry #1 around $71. The second day provided another opportunity to enter the trade at around $75 before the stock rallied to a new all time high of $81.65 (at the time of this report). Depending on what day you would have entered the trade, this has been anywhere from a six to ten dollar upward move in the stock.

When you can properly identify pattern such as these and more you will have the skills needed to correctly read a price chart to determine when the retracement has ended and when you should enter a trade. That is how you enter trades near the beginning of the next big move.

Charting Your Way to Profits Online Classes.

Learn more about how to read price and candlestick patterns to enter the right trades at the right time and earn maximum profits.

Markay Latimer with Better Trades

Related posts

• Lack of a Trading Strategy (0)
• Making 200% In The Stock Market Can Be Easy (0)
• How to make money in the stock market (0)
• How to Day Trade for a Living A Systematic (0)
• FOREX, A Trending Market. (0)

Do You Hate Research? . . . I do!

I have always wanted to find an investment strategy that made sense. An investment strategy in which I do not need to know the intricacies of the market, predict market trends or follow specific stocks. How can I get the inside information of what is hot before the rest of the market knows? I can’t. Nor do I need to.

Plus, I don’t have that kind of time to commit to in-depth research. Like you, I have a regular job that I need to devote my time to. I am not a day trader; nor do I want to spend all of my free time on the computer doing research. Always following the stock market and getting stock quotes is not how I want to spend my free time.

I Avoid Individual Stocks . . . they are too unreliable!

Everybody wants to buy low and sell high. While millions of people do make money this way (and many millions loose money), I have found an easier and more effective way to use the market to my advantage. I do not trade in stocks. I do what I can to avoid individual stocks. And I consistently beat the market . . . month after month after month.

If not stocks, what’s the alternative?

Like many people, I got heavily involved in the stock market in the mid to late Nineties. Tech stocks were going through the roof and I, like everybody else, wanted a part of the action. It seemed an easy way to make money. Everybody was getting rich. You did not need a special investment strategy to beat the market.

During this time, I engrossed myself in the financial markets. I wanted to learn as much as I could without giving up my day job. I was trying to find the next best tech stock, IPOs and the occasional pre-IPO offering. But it was not until I discovered options trading that I discovered an investment strategy (The Yager Trading Strategy) that can work in any kind of market . . . Bull, Bear or stagnant.

That’s right…OPTION trading!

And I am not talking about stock options or writing covered calls. Options trading…I started selling options on S&P futures, using different methods and trading strategies. And I did well. VERY well.

Between July 1998 and January 2000 (a span of 18 months), from my option trading system, I turned an initial $25,000 investment into $167,615. That’s over 670% increase. And this was not paper money where you buy a stock and it has a certain listed value. This was real, taxed income. Profits collected on a monthly basis.

Market fluctuations and volatility have diminished greatly since then…reducing the premiums. Those types of returns are no longer available, but the option trading strategy is still very sound. I still consistently beat the market. Even the years the DJIA, Nasdaq and S&P were all down, I posted more than a 22% gain.

Learn the option trading strategy or see how to make money with this strategy. I describe the strategy and show actual recent trades on YagerInvesting. The information is FREE. No subscription required. This is a method for risk capital only.

For the preceding 12 months (May ‘06 through April ‘07) this is how my strategy, The Yager Trading Strategy, performed:

DJIA—–20.3%
NASDAQ—–14.7%
S & P 500—–17.3%
Yager Trading Strategy—–32.2%

Related posts

• Managing Your Risks In The Stock Market (0)
• Investments and How to Find Them (0)
• Forex trading (0)
• A Few Tips For Day Trading the Stock Market (0)
• Stock Investing Tip (0)

WHAT IS A DAY TRADER?

A Day Trader is someone who does four intra-day trades in five consecutive trading days. Let me address some terms here to help you understand this better:

Intra-day trade: A trade that is opened and closed in the same trading day (round trip).

Five Consecutive Trading Days: These are calendar days that the market is open, all in a row. For example:

If the market was open on Monday through Friday that would be five consecutive days.

Then we would have Tuesday through Monday for the next five consecutive days (unless Monday was a holiday in which case it would then be Tuesday through Tuesday.

Next, we would have Wednesday through Tuesday, and so on. The key is five trading days in a row.

HOW TO AVOID IT

One of my favorite students, Debi D, taught me to use a calendar to record my intra-day trades. By placing an “X” on the day

you do intra-day trades, (2 X’s if you do two, 3 X’s if you do 3 in that day) you can avoid accidentally getting to four by

looking at your calendar. Make sure you mark the days the market is closed on your calendar.

WHY DOES IT MATTER?

I thought it mattered a lot, but after my research for this newsletter, it appears there actually are some great benefits

being classified as a “Day Trader” if the $25,000 is not an issue for you. Basically there are two issues at hand:

ISSUE ONE: Your brokerage firm will likely impose the NASD requirements of maintaining at least $25,000 in your trading

account – and you have 5 days to comply. If you have this kind of money there is no issue! However, if you are starting out

with limited funds to trade it could be a big issue! One important note – always ask for one time of forgiveness! Many

students told me they did and the status was removed – so ASK! There may be a way around it, but I am not sure. From my

reading of the requirements, the penalty for not complying is that you are subject to cash only trades, (which are what we

were doing anyway with options)!

There is a really incredible benefit though if you are tagged a Day Trader and maintain the $25,000 minimum value in

your account. You may be eligible for day-trading margin, which is 4 times account buying power. WOW DO I EVER LIKE THIS

ONE!! This buying power may only be used intra-day and may not be held past market close. Orders exceeding Day-Trading Buying

Power will be rejected.

ISSUE TWO: Tax Consequences with the IRS

Actually upon my research into the IRS Publications it does not appear as bad as I thought. A tax firm specializing in trading activity, says:
o They allow a full deduction of all trading losses in the year they occur, thereby circumventing the historical $3,000 net capital loss rule.
o They allow full current expensing of trading expenses without limitation, thereby circumventing the limitation on miscellaneous itemized deductions.
o They enable the active trader to still take advantage of the beneficial long term capital gain rules.

o They enable the active trader to circumvent the restrictive “Wash Sale” rules normally applied to investors, thereby alleviating a huge record-keeping nightmare.

o They allow the active trader to deduct losses on open as well as closed positions.

Continuing on with my IRS research:

You would report your trader’s activity as a business on Schedule C of your 1040, possibly allowing all the deductions for your classes and tools, versus a limitation on deduction for passive trading that would have had to be reported on your

Schedule A with a 2% AGI limitation deduction. But here is the sweet deal: you can still elect to report your gain or loss on

Schedule D as a capital gain unless you made the mark-to-market election, (which has you claim the income as ordinary income on Form 4797 instead of Schedule D – see IRS Publication 550 for more information on this). Just to be safe, you better talk to an accountant that specializes in stock market trading. Being a retired accountant, I want to tell you that most accountants will not know how to treat your trading income properly – you need to understand this.

The proper classification of your investment activities is important to determine how income and expenses are to be reported.

Traders that buy and sell securities frequently can report their purchases and sales result in capital gain and loss, and their deductible expenses are trade or business expenses.

Happy Trading!

Darlene Powell with Better Trades

Related posts

• Is Day Trading For A Living Your Cup Of Tea? (0)
• Increase Your Trading Profits Using Better Trades (0)
• Getting Started With Online Investing (0)
• The Benefits Of Saving For Your Child’s School Finance (0)
• Stocks -What Key Factor Separates A Winning Trader From A (0)

The main question that most people ask when it comes to day trading is simple: is it necessary to sit at a computer watching the markets ALL day long in order to be a successful day trader?

The answer is no. Its not necessary to sit at a computer all day long. There are a number of factors to consider, but generally the rule of day trading is to trade when everyone else is trading. In other words, trade in the morning.

As with all financial investments, day trading is risky in fact, its one of the riskiest forms of trading out there. The stock prices rise or fall according to the behaviour of the market, which is entirely unpredictable. Day traders buy and sell shares rapidly in the hopes of gaining profits within the minutes and seconds they own those particular stocks. Simple to do in theory, harder to do in practice.

If you are constrained by a small amount of capital, you may not be able to buy large amounts of a stock, but buying only a small amount can add to the risk of a loss. And, obviously, it is impossible to predict with certainty which stocks will result in profits and which in losses. Even the best of traders must learn to accept both outcomes.

Its also important to know that in day trading, it is the number of shares rather than the value of shares that should be the focus. If you day trade, you WILL face losses, but even for the more expensive stocks, the loss should be marginal, because prices do not usually fluctuate to an extreme degree over the course of just one day.

The day trading industry deals in a large variety of stocks and shares. Here are just a few:

Growth-Buying Shares shares made from profit, which continue to grow in value. Eventually, these shares will begin to decline in price, and an experienced trader can usually predict the future of this type of share.

Small Caps shares of companies which are on the rise and show no signs of stopping. Although these shares are generally cheap, they are a very risky investment for day traders. Youd be safer to go with large caps and/or mid-caps, which are much more secure and stable thanks to a premium.

Unloved Stocks company stock that has not performed well in the past. Traders buy these shares in the hopes of generating profits if and when the stock rises in value. As with small caps, unloved stocks can be a risky choice for day traders.

These examples are NOT your only options when it comes to day trading stocks. The best way to determine which type of stock is right for you is to invest some time for careful research, a knowledge of market patterns, a solid strategy, and a disciplined trading plan.

The key to successful day trading is to be prepared. Know as much as possible about the industry before you begin actually trading. You need to learn to trade ONLY when the market gives the right signals, and ONLY when the volume of activity in the market supports a successful trading opportunity.

Related posts

• Is Day Trading For A Living Your Cup Of Tea? (0)
• How do you Maximise your Profits in Any Trade on (0)
• Believing these Six Myths will Slash Your Currency Trading Profits (0)
• An Introduction To CFD Trading (Part 1) (0)
• The advantages of day trading (0)