That is another thing I left out. For NOW, stay out of the first 30 minutes. Personally, I make most of my EASY money starting at 10:30 eastern. By 10:30, all the chaos is gone. You have trends, you have levels / setups. Spend the first part of the morning finding where money is moving. If you want to get in, you wait for the charts to show you an entry. When the charts begin to set up, you then look at your level 2. See what exactly is going on out there. Use the level 2 to time your entry. I am not going to give level 2 lessons. You will learn it in time. That being said, you want to go into tomorrow morning with ideas of where to look. Tomorrow there are a GRIP of plays. First you have a gangload of stocks reporting before the bell. These will all be in play. Second, you have the impact (if any) of the unrest in the Middle East. Now remember, last time, when Egypt occurred, the market sold off a LITTLE, and then bounced back. Keep that in mind. EVERYONE is going to be looking at the following, they will all definitely be in play. 1. Watch the metals. Gold / silver. If the market reacts to the Mid East, you can expect action in the GLD, GDX, GDXJ, SLV, and then all the individual mining stocks. 2. Watch Oil. Watch the USO and OIH. See if oil is moving. Then go and find stocks. Oil should get a boost from the unrest. 3. Watch the UUP. Set up a futures chart. Watch the dollar. If the market reacts to all this, the dollar should go higher, oil should go higher, and gold should go higher. Whether stocks sell off or not.... who knows, who cares. You are looking for action in the names that WILL be impacted by the news. Gold, Silver, Oil, Dollar. If the dollar is going up, gold is going up, oil is going up and the market is going down, you should know EXACTLY what is going on, and now you can trade with a good understanding of current market psychology. Lesson 1 in reading the tape. What if gold is going up, the market is flat, and oil is flat? What if gold goes up, oil is up, market is down, and then oil begins to reverse, or gold begins to reverse. If anything strays away from what should happen, that is an indicator to help with your decisions. The guys you trade with should help you in reading the tape. Don't be afraid to ask questions. Traders LOVE to talk markets, we are all addicts. Drinkers love to drink, traders love to trade, talk trading, dream about trading, etc. Now, this is why you shouldn't get involved in the first 30 minutes as a new trader. Tomorrow morning, the dollar could GAP higher, oil can GAP higher, the metals can GAP higher. Don't ignore the gap. If you enter long GLD off the open, and the gap begins to fill, what do you do? Add? How much of the gap will fill. What if we trade in a range (the market can't decide yet). You end up buying, selling as it drops. Buying as it pops. Selling as it drops. Don't get caught in the range game. Maybe you buy a gold miner from the open, since they might be under your $30 limit. What if that gold miner goes OPPOSITE to gold! Do you add or take losses? ----- The safest game is to let a trend define, and find a good entry into that trend. Be a smart, rational trader, not a cowboy. You can trade off the open later in your career when you can absorb more risk. The important thing is to KNOW where to be looking. You want to build a morning routine that allows you to zone in on market activity. That is what you should be doing before you trade.... finding potential trade opportunities.
Another potential sector I'll be looking at this week are defense stocks. I am not 100% they will move, but I'll be watching them, in case they do.
ksmetana, Great read. Thanks very much for your help. And thank you everyone else as well, ElecEquity and others. I'm sorry that I have offended a few. It was never my intention.
And I'll agree to that too. I'll agree to that. I'll also agree that I am closely watching the USD/CHF currency currently long the USD/CHF currency as a test. I do not trade currencies and am just monitoring this one to see how it behaves. I'm anticipating a spike but also just watching to see what it does because I never watched it. I'll also agree I'm short the ES futures in my hypothetical account. Unfortunately, I couldn't open these trades in my real money account because my market wasn't open. (I trade nadex real money and futures on sim -- still learning the differences). Update, I am currently long USD/CHF on my real money account too.
I'm certain I missed quit a few "by name". In my haste, I didn't review all 13 pages of this thread to identify names. I'm sorry.
Today is a prime example of why you need to let the market show its hand. Gold did not gap and go. Oil did not gap and go. The best trade today was on the short side of the market. Had some morning losses from gold and oil, then produced a great day shorting stocks. Of course, I made all my money after 10:30 eastern.
I am getting killed on the loss limit I have had to set for myself. Started the day by shorting LDK at 14.6. I was forced out. Each time I get in again, I am forced out. If I had been allowed a larger short term loss, I would have profited hugely. Currently it is at 13.82