Getting into the forex trading business can be very complicated. It’s a lot to learn and you often don’t know who to listen to. On top of that, there are a countless number of different methods and approaches to investing out there that it can be difficult to know where to start. The following are 3 steps you can take as a new trader to get started on the right foot.
First Step – Pick a Strategy
There are many ways to trade. There isn’t just one way. So get it out of your mind right now that there is one magic [...]
From the category archives:
All Entires
Penny stock day trading can be pretty risky. It holds the same risk as any form of day trading, but penny stocks have the additional traits of being thinly traded, extremely volatile, and easily manipulated. Sometimes this manipulation is easy to spot, and you can actually trade in the opposite direction of the manipulation (usually shorting an inflated price). Whether or not you know how to spot and manipulate the manipulators, day trading penny stocks is a little different from trading the big boys.
There are many ways to define a penny stock. Some people assume every stock under $5 is [...]
If you are looking for ways and strategies on how to make your investments grow, then you need to broaden your horizon and explore other markets. This is basically the reason why most people go into international investing because they want the diversity and that foreign markets have to offer.
First, you have to know what you can gain out of investing in foreign markets. For one, you can expect differing economic cycles. If there is a downturn in the parts of North America, you can expect an adverse effect in the other parts in the world. So the market may [...]
There are several variations of the opening range breakout, and one of the most common is the opening gap reversal. Like any open range breakout, this day trading pattern consists of a breakout from a range that has been set up in the first hours of trading.
There are two variations of the opening gap reversal; the first is a gap followed by a failed attempt to close the gap resulting in the reversal and breakout. The second consists of a gap, followed by a failed attempt to continue in the direction of the gap which results in the reversal and [...]
There are so many secrets to day trading, it’s hard to keep track of them all. Lucky for you, I’ve honed these down into the top 4 day trading secrets.
Secret #4 – What You Do When the Market is Closed Matters Most
Sure, it’s great to be able to interpret data at lightning speeds, spot valid trades within seconds, and execute them flawlessly, but without proper preparation, you will never find those opportunities. Proper preparation includes spending up to an hour before the market opens sifting through market scanners, reading news feeds, and watching pre-market trading. It also includes some time [...]
If you’re short Amazon (AMZN), raise your hand and Tommy will come over and hit you on the head with a tack hammer.
There was no end to the stream of people getting killed trying to short this stock. I’ll admit, this was one of the stocks that I talked about day trading yesterday. I tried to short it Friday morning after earnings and a huge gap up, but I quickly turned it around for a 3 point gain. There was no way I was touching a short today.
There is NO reason to be short this stock right now. It is in uncharted territory [...]
Day Trading Mistakes Happen. Get Over Them and Move On
Have you ever seen the movie Groundhog Day? It stars Bill Murray as a disgruntled weatherman who’s pissed about his assignment to cover the events surrounding Groundhog Day in Punxsutawney. Due to a blizzard after the events he is forced to spend the night in this town that he loathes. He wakes up the next morning to find himself reliving Groundhog Day again. This happens repeatedly until he straightens his priorities and gets his co-star (Andie MacDowell) into bed.
Groundhog Day came in October for Me
Bill Murray spends the first few days [...]
An alliterative title and a simple message; trade the trend.
Sam of Tradersam’s Blog wrote a this post today about a website called Wordle. This program takes any block of text, including that from a website, and converts it into a word cloud. This allows you to visualize what the site might be about.
Trade the Trend
I decided to check it out for myself using ChartShark.com, and look what the largest two words are; “Trade” & “Trend.” Apparently, subconsciously, I’ve been really hammering this point. Trade the trend, the trend is your friend, don’t fight the trend. You can say it a million ways [...]
What do you do once you’ve entered a trade? Do you already know where you’ll exit, be it a win or a loss, or do you just meander along until you feel like exiting? Or, even worse, do you sit there and agonize over every single move in your stock; exiting too early or too late and losing loads of money along the way?
Micromanaging Your Trades
You’re bleeding cash. You watch every twitch and wiggle of the price and each move causes you a little more anxiety. You rationalize exiting early or a little too late and each time you either [...]
I am not a bull, or a bear, I am a shark. I trade without bias. This allows me to be fast and flexible with my trading decisions. The market continues to defy gravity, yet there are still people out there fighting the trend and attempting to be the first to predict the top.
We sharks don’t trade based on pre-conceived notions of what should be occurring, we trade and invest based on what is actually occurring right in front of us. We will continue to profit, and those who can’t accept reality will be eaten by the market.
You seem to think chart analysis is a lot more difficult than it really is. Instead of giving it a go on your own, you rely on the wisdom of us brilliant chartists to hand you money-making set-ups on your favorite stocks.
I am here to tell you, friend, that it’s not that difficult to do some basic technical analysis on your own. Let’s take a walk through the basics, shall we?
Connect the Pointy Bits
On a stock chart, you have peaks and troughs. In order to identify the trend of a stock, you simply find these peaks and troughs and connect [...]
Before ever entering a trade, you should already know how you are going to get out. The trade should be planned end-to-end, whether the plan turns out to be a winner or loser. In this post I’m going to discuss how to set stops to protect yourself from your biggest enemy, you.
Mental Stops
Mental stops are a questionable strategy. As a trader, the biggest battle you face is not against the market (you will lose that battle, I promise), it is the battle against your own mind. Any chance to eliminate your mind from the process of trading gives you an edge [...]
There is a lot of garbage out there clamoring for your dollars. This seems especially true in the area of trading. Everyone’s paid service will make you more money than the next. For every decent service there are 100 others that are completely useless. This is why it’s nice when you can find useful services that are provided absolutely free.
In “10 Ways to Build a Better Watch List” I described some steps you might take to find stocks to trade before the market opens. The following is a list of free resources that will help you through that process.
Briefing.com
Briefing.com is [...]
The market doesn’t care if you’re a bear or a bull. It doesn’t care if you think it’s oversold or undervalued. It doesn’t care about your fundamental analysis or your charting skills. The market will do what the market will do, with or without you. You are not in control.
Accept It
One of the worst things you can do is a trader is to start to feel like you’ve lost control of the market. You should never feel that way because you never had control in the first place. You can have all the indicators in the world telling you to [...]
Contrary to popular belief, day trading is all about losing. Winning is great, but it’s how you deal with the losses that will define you as a trader. If you can learn from every trade, win or lose, I can almost guarantee you will succeed in your trading endevours.
Better Trades
The first thing you should focus on is making better trades. Hold the winners longer, and cut the losers quicker. This approach will ensure that you become profitable long before you get your win/loss ratio positive. Even with a low risk/reward ratio of 1/2, you can lose twice as many times [...]
Last week, First Solar (FSLR) ran up significantly on news of a large deal for a solar power plant in China. The second day of the run was highlighted in my post about Opening Gap Reversals. That day saw a huge run up early in the morning and a slow burn back down to its opening price which formed the Long-Legged Doji in the stock chart above.
Long-Legged Doji
The long-legged doji is a specific form of the standard doji. While the doji signifies indecision, the long-legged doji shows that a deeper and more extended battle occurred between the bears and the [...]
I discussed the standard opening range breakout in my last post. Now I want to talk about a variation of the Opening Range Breakout . It’s called the Opening Gap Reversal
The Play
The chart above shows the opening range reversal that occurred when First Solar (FSLR) failed to fill its gap today. The standard mantra of traders is that gaps fill more often than not. I don’t know how true that is, but I do know lots of people believe that it’s true.
What happens when the market proves a lot of people wrong? You get a range breakout. The idea of [...]
The Opening Range Breakout is one of the simplest day trading set-ups to understand. The first hour of the trading day is the most volatile. Bears and bulls are battling it out in the stock market, trying to show you who’s going to be the boss for the day. This volatility creates a price-range you can trade from. Like all breakout trading set-ups, this is a great set-up because it offers a very low risk entry. If there is no follow-through on the opening range breakout, you should exit the trade immediately.
The Time-Frame
You are looking for opening range breakouts to [...]
I wrote here that I would provide a replay of the StockTwits and Data Junkies Closing Bell Ceremony. Well, here’s a quick overview of my time in NYC, the NASDAQ Closing Bell Ceremony, and the after party.
Getting There
As mentioned in my previous post, I took this crazy midnight bus to Chinatown. The trip there was rather uneventful, until the sun came up and I couldn’t sleep anymore. This is when I noticed that the driver was driving a busload of people through busy traffic as if he was rolling in a souped up Honda Civic. He was blasting past cars [...]
In just a few hours I will be boarding a crowded bus in the middle of the night for the 6 hour trip to NYC.
I am Going to NYC Because I am a Winner
Stocktwits and Data Junkies had a contest with 1 prize for 30 people. That prize was to join Stocktwits & Data Junkies in Times Square for the NASDAQ Closing Bell Ceremony. I ended up winning one of these spots, and I am headed out of here in t-minus 3 hours (I should probably start packing).
I am Taking a Bus for 3 Reasons
I’m a cheap bastard – If I [...]
The great thing about science is that it full of fun facts and formulas. The fascinating thing about trading is that it is not.
I pointed out a support level on Apple (AAPL) at 168.67 in another post. In that post, I also mentioned that I was long Apple (AAPL) above 168.67, and short below that level. Then, this morning, I tweeted a short trade even though the price was above 168.67 on my day trading charts.
“You’re a liar!” you might have shouted; “You tricked me! I went long because you said to go long!” I also qualified that statement [...]
I use this method regularly on stocks on my core watch list, and every time I pick a new “in play” stock to add to my watch list. You can use this method to identify overall trends as well as key levels to trade from.
I have chosen one of my core stocks, Apple (no pun intended), to use as an example. I always keep an eye on Apple because it has loads of volume, plenty of daily price range, and it makes predictable moves.
Starting with the weekly stock chart above, you can see that Apple (as well as [...]
There’s no doubt that day trading is dominated by males. Not in quality, but certainly in quantity. I’ve set up the “Battle of the Sexes” poll to determine just how lop-sided the community is. Perhaps I’m way off and the female traders will come out en masse to prove me wrong. I’d love to see that. In case you were wondering where this poll is, I have inserted the following arrow to eliminate any ambiguity. (It’s not there anymore because the poll is now closed) I have also inserted an “other” option into the [...]
