In addition to the ideas posted here about sticking to what works (morning trading) and studying your trade journal you might try the following: Examine your trades for the times when you did quick reversals, as in the string of losses. See if reversing is a strategy that pays off for you and under what circumstances. I personally have a policy against reversing when I am exiting a losing position as this has caused many a bad streak of trades for me. Also examine losses to see if they are grouped within a relatively short period of time. I have a 30 minute policy where if I have consecutive losing trades, and especially if those losing trades are against the trend (meaning I'm fighting the trend) I leave the room and put myself on the treadmill for 30 minutes (get away from that computer so I don't keep making the same mistake over and over), and relax and regroup.
???....recipe for mediocrity playing only one side, especially if you want to make a consistent income. A good short is so much smoother than a good long imo.
<i>Set a limit that you will allow yourself to lose in any given day.</i> Exactly! If you were trading someone else's money, this would be a hard and fast rule. You have received some great advice. Congrats on being smart enough to ask the question, and I hope you learn from this board. A small thing that I might add is to observe what the market did on the days in which you lost money trading in the "dead zone." The dead zone is often well-named, but sometimes the market will go sideways until 12 or 1 est and then make a big move. Perhaps you could amend your non-trading rules to make exceptions for when the market is behaving a certain way. If you make money when it is moving and it is setting new highs/lows at lunchtime, then maybe you would make money during lunch on these days. fwiw
I had jumped in the shower and was getting ready to go to breakfast (10:00 AM Arizona time). I came in and just saw the move on the charts. Cnbc, I'm guessing, had already ran the original story. I had already made my bad trades before I actually saw any news. I should have looked first. I follow about 24 stocks in 5 sectors, usually trading 5-6 of them per day, based on what their daily and 13 minute charts look like, sector action, and how they are acting during the day. All Nasdaq stocks. I'm not sure on your definition of scalping. I usually take a full position in based on a 3 minute chart, then pare out half at each move up/down on a 1 minute chart, as long as it looks good. I'm usually in a trade from 2-10 minutes total, for average .15-.5 per trade. Thanks everyone, for the insight. Good stuff. -Johnny
I very seldom reverse a postion. I trade off 1 & 3 minutes charts, but on setups off of 13 minute charts. There really shouldn't be a time when a good short changes to a good long on a 13 minute chart instantly, unless it's a failed breakout/down. I'm afraid my emotions got the best of me on this one. I hadn't really thought of not reversing as a rule, but I think I will now. -Johnny
The most profitable of our traders cannot manage to trade more than 3 or 4 stocks well at any time. I suggest that, after you do the "opening only" plays, that you follow just a couple of stocks...learn them well, see how the Specialist handles the orders, watch for "trade throughs" (how often, how much, etc.) and become an expert in how the stock acts. Then keep track of the MOC imbalances, how they are handled.....this will make your modest desire of $200 per day seem trivial. Trading is as "simple as you'll let it be, or as difficult as you want to make it"....DB
Don, I am only trading Nasdaq right now. I have tried to find a group of stocks which react well to the futures, with a few in each sector to trade depending on what group is moving that day. They still have their own personalities, but I doubt they are as consistent as listed stocks and their specialist. So I don't think I need to get to know each as well as I would if they were listed. The stocks act much differently depending on which MM has a big order that day and what tricks they use. Therefore I try to trade them more off of charts, volume, support/resistance. Like I said, I usually only trade 5 or 6 per day. I generally know at the start of the day which stocks I will focus on based on their daily charts (if something is breaking out of resistance, bouncing off of support, etc.) I like to have a couple of good short plays and a couple good long plays, and then trade those stocks based on what the market does and how they are acting. How many stocks does everyone else follow, especially Nasdaq traders? -Johnny
I am pretty new to this, but I have run across a few pieces of advice from others that sound like they fit my personality that might help you also. - If the ideal way to trade is to cut losses and let winners run, why wouldn't you extend that to the day timeframe by cutting losing days short and continuing to trade on days you were up since you are in tune with the market? (Note: this does not mean overtrade.) - Don't trade the DEAD ZONE in the middle of the day. This is easy for me. I am on the west coast and only trade the first few hours of the day before I go to work and the last half hour or so possibly when I come home for lunch. - Don't have more than one open position at a time, MAYBE 2. This is easy for me because my methodology involves not staying in a stock more than 30 minutes usually. - Don't overtrade. DON'T OVERTRADE. If there isn't a setup that matches your criteria, DO NOT TRADE. Hope that helps.
The rules for becoming a trader are well known. You can memorize the rules in a week. Having the will power to follow them is what separates the cream from the crop. Thankfully its almost impossible.
For me, trading is a business I enjoy doing. I canât imagine myself leaving the field of opportunities in the middle of the day and walking out it. If I have a bad day I reduce my risk and become more selective with the setups. It is amazing how many times you can turn a bad day around by reducing the pressure and maintaining the pleasure of trading.