0Posted by Michael Glass on February 26, 2012 at 12:02 pm
Why do 90%
Day Traders Fail?
It is often quotes that over 90% of all Day Traders Fail. The obvious question is WHY? Why do 90% of all Day Traders Fail? Well to start, you have to look at what exactly brought the investor to the stock market. Was it a sound plan with achievable objectives? Or was it a hot tip they received from a friend or saw on TV. My p oint is that many traders have their fingers burnt because they did not take the time to define why it is exactly that they are investing in the stock market.
That same trader will unrealistic goals now heads to Google to look for the Legend of the Holy Grail. They search day after day looking for some magical indicator or trading system that will remove all risk from traders. Of course, their are trading gurus promising just that. Buy my system and I’ll show you a cant miss trading strategy that anyone can replicate. If it is truly this easy, again I ask, Why do over 90% of all investors fail?
The answer? Consistent and profitable traders are aware that the key to success in trading is NOT found in a technical indicator or trading system. Instead they understand to be successful in the stock market that you must develop a trader’s mindset. You must be able to handle the emotions o both winning and losing trades.
0Posted by Michael Glass on November 22, 2011 at 7:05 pm
How to Develop
Routines for Trading
In our previous post, we discussed the importance of developing trading routines. A Trading Routine could be considered a checklists you create to help you become more productive and more organized. Trading routines can also help you maximize your Return On Investment on each trade. In the end, we hope the routines outcome will produce habits of success.
We also described the three important routines every trader should develop: PreMarket, Intraday and AfterMarket. Today, we are going to focus in on how to develop a PreMarket Routine for Trading. Your routine should help you accomplish the following tasks:
Getting yourself up to date on the market; • Assessing your portfolio;
Getting ideas as to what stocks might be ‘hot’ that day;
Knowing if your positions have any new news that could cause volatility;
Being ready to trade when the market opens at 9:30 AM EST
Developing your pre-market routine is crucial to your success as a trader. Pre-Market routines help you locate new trading opportunities and plan your day so that you are not spending market hours devising new strategies but rather using your resources properly and following through with trading plan. Watch the video below for more resources on how to develop your premarket trading routine.
0Posted by Michael Glass on November 17, 2011 at 8:50 pm
How to Develop Your
Own Trading Routines
Intraday Trading Routines
A trading routine help to search out potential trades and get the information that is critical and/or important to that potential trade. Developing a trading routine goes hand in hand with being a focused and disciplined trader. We use these checklists to help you become more productive and more organized. Trading routines can help you maximize your ROI on each trade. Their outcome is to produce habits of success.
There are three types of routines every trader should consider:
PreMarket Routine – Preparing for the current market day
Intraday Routine – Adjusting for the current market climate while looking for new trades
AfterMarket Routine – Summarizing the events of the day and begin to prepare for the next trading session
Here are somethings you should consider including in your intraday trading routine:
Be aware of daily Economic Releases
Be aware of daily Earning Releases
How are the sectors of the stocks you hold or are watching performing, any changes?
0Posted by Michael Glass on August 6, 2011 at 4:22 pm
Weekend Stock Market
Here is our Weekend Stock Market Technical Analysis Trading Plan for Saturday, August 6th. In each video update , we attempt to identify high probability trading setups for the next week. We also look at the key market moving events of the past week including recently signed US Debt Ceiling deal and renewed debt concerns for Spain and Italy. We then pull up the charts to identify key technical analysis price levels for the S&P 500. We then look to see if some of the market leaders are pulling the market higher or lower (Apple, Amazon, Google, Goldman Sachs, Netflix and Priceline). We also try gain insight to the market’s future direction by looking at the charts for The Dollar, Gold and Crude Oil. Finally, in our education spotlight, we begin our book study using the book The Intelligent Investor by Benjamin Graham. Today we talk about what is NOT required to be an Intelligent Investor.
0Posted by Michael Glass on July 30, 2011 at 3:24 pm
Weekend Stock Market
Here is our Weekend Stock Market Technical Analysis Trading Plan for Saturday, July 30th. In each video update, we attempt to identify high probability trading setups for the next week. We also look at the key market moving events of the past week including the stock market pricing in the possibility of a debt ceiling increase. We then pull up the charts to identify key technical analysis price levels for the S&P 500. We then look to see if some of the market leaders are pulling the market higher or lower (Apple, Amazon, Google, Goldman Sachs, Netflix and Priceline). We also try gain insight to the market’s future direction by looking at the charts for The Dollar, Gold and Crude Oil. Finally, in our education spotlight, we continue to look at what separates winning and losing traders. Today we look at the importance of being able to distinguish between high and low risk trades.
0Posted by Michael Glass on July 9, 2011 at 12:31 pm
Developing a Trader’s Mindset
Part 2 – Emini Junkie
I am often approached by new traders looking for advice on how to change their trading results. My response is usually about the fact that trading alone is pretty easy. The hard part to trading is developing a trader’s mindset. It is often said that over 80% of all day traders fail.Anyone can go out on google or visit a local Barnes & Nobles and find a book or website on the latest technical indicator or trading system. However, what separates those traders who can go out consistently and make a profit in the stock market and those who are losing everyday is the ability to not only recognize opportunities in the stock market, but to be in full control of your emotions and make proper decisions about what they perceive may happen.
New traders are using in search for the Holy Grail. They are looking for the magic bullet that will instantly change their trading results over night. In the book, Trade Your Way to Financial Freedom, Dr. Van Tharp described the Legend of the Holy Grail as the ability of a trader to manage the internal struggle between profits and losses. Not an indicator, not a guru, not a trading room, but the ability to control your emotions on your wins and your losers.
Developing a Trader’s Mindset is the key for both new and seasoned traders to become profitable. A Trading Mindset helps you to not only recognize candlestick chart patterns as they develop, but it also helps have the discipline to wait for the pattern to confirm. It helps you to trust your proven trading system because you have backtested the setups. You know that you can have a positive expectancy about your trading results. So, I decided to go out an interview some of the traders who have impacted my trading results and share them with you all.
Our second installment in our Developing a Trader’s Mindset Interview Series brings us to Emini Junkie. His goal is to help individuals build wealth through an online trading education and mentorship program focused on the S&P Emini Futures, Gold Futures and Options Trading. I chose to interview Matt because of his great Trading Plan and Trading Room. Much of what I believe about Market Internals, especially $TICK, comes from what he has taught. I was humbled that he graciously agreed to be interviewed and think you are going to love what he shares.
1Posted by Michael Glass on July 5, 2011 at 11:29 am
As you begin to prepare for trading and setting up your trade plan, there are some elements that
you will need to have a firm grasp on before you get started.
A. What are your goals?
B. Are you going to be a long-term investor or a short-term trader?
C. How much money are you planning to invest?
D. Do you have the necessary resources to invest?
E. What is your risk threshold?
F. Do you have the base of knowledge you need for the investments you’ve chosen?
G. Will you invest in stocks, bonds, or options or other markets?
Initially we’ll take each of these topics individually to help you create your own personalized
Before you can begin setting up your trading plan you will need to make sure you have a
clear understanding of the goals you are setting for yourself. Keep your goals realistic, investing/
trading is a business. You should establish long and term goals and you should revisit your goals
often to see if they have changed and if they have what you need to do to meet your new goals.
B) Are you going to be a long-term investor or a short-term trader?
The answer to this question will be one that you must answer before you begin your
investment model. You may find that a combination of the two will be the most suitable for
your long term goals. Long-Term investors may find it easier to invest in stocks and bonds,
while a short-term trader may opt for either lower priced (higher risk) stocks or options or even
futures trading. You must evaluate the risk/reward of each investment you choose. Remember
that setting these expectations early is fine, but you must always go back and review/revise if
something isn’t working the way you originally anticipated.
C) How much are you planning to invest?
The amount you plan to invest at any one time will significantly impact your trading
plan. As a general rule of thumb, regardless of how solid your trading plan is (or will develop to
be) you should never plan to invest more than you can comfortably lose. The stock market (like
many other things) is not a guarantee of a profit and from time to time it is possible to lose 100%
of your investment.
D) Do you have the necessary resources to invest?
This goes back to the above statement of not investing more than you can afford to lose.
It would never be recommended that you invest all of your savings into the stock market (unless
you were investing in 100% guaranteed investment return things like a money market account),
so that if you lose your investment you will have no reserves. Carefully plan your investment
amount and ensure that you will not suffer irreparable financial problems if you should lose your
E) What is your risk threshold?
Our ability to tolerate risk varies at different points in our lives. Those in their 20’s to
30’s with a long way to go until retirement and sufficient financial means may have more free
cash to invest than the investor in their 40’s to 50’s with a home, children headed for college,
and closer to retirement. Your individual tolerance to risk will dictate what your threshold will
be. Pure growth stocks offer individuals a higher risk for a potentially higher reward, while
purely income investments will offer a lower risk but potentially a lower reward as well.
F) Do you have the base of knowledge you need for the investments you’ve chosen?
Before you consider investment in any type of vehicle you will want to fully research
what you’ve selected whether that is a stock, bond, annuity, option or future. It is critical that
you gain a base understanding of the trading cycles, dividends (where applicable) and what the
tax ramifications of your investment(s) will be. You may want to start off with a combined
portfolio of investments and you will need basic knowledge of each component of your
investment portfolio before you begin so that you will understand the variations as they occur in
your portfolio to assist you in changing your strategies in your trade plan.
G) Will you invest in stocks, bonds, or options or other markets?
Whichever investment vehicle you’ve selected, you will want to build your trade plan
around that investment. If you are considering a variety of investments, you will want to identify
each of them in your trade plan and identify what your goals are for each of them, how much you
want to invest in each and what you are looking for in terms of growth.
0Posted by Michael Glass on June 16, 2011 at 5:20 pm
I. What is a Trading Plan?
A trading plan should be considered a map. Similar to a map that you would use on vacation, a trade plan should point you in the right direction (like a compass). A
trading plan establishes and defines your route to success by identifying parameters to help you reduce errors.
II. Components of a Trading Plan
A Trading plan, like a map has components. While a map has a scale, interstates, a compass and lists capitals, a Trading Plan has components as well
III. Types of Trading Plans
There are different types of maps (sector maps, scan maps, basket maps and weather maps for instance) and you should have varied trade plans depending on
your investment objectives.
IV. Effective use of Trade-Plans
Just as maps allow a traveler to get to their final destination, a well thought out and followed trade-plan should provide consistency in your trading and help you
reach your goals.
a. As a professional, you would never consider attending an interview unprepared, nor would an athlete fail to prepare for an event. As an option trader, you need to be well prepared.
b. A trade plan (like a map) will allow you to see patterns and adapt your trading.
c. A Trade Plan should help you to recognize patterns, correct and improve on any mistakes you might make.
d. A Trade Plan is like a checklist or a routine that helps you determine where your investment and helps you determine what your next step should be
A Trade Plan is a tool that encourages continuous learning
A Trade Plan allows fine tuning as you compare success and failure
A Trade Plan provides a tracking system
A Trade Plan is a valuable training tool
A Trade Plan is a valuable trading tool
If you purchase 1,000 shares of IBM stock at $100.00 and then estimate that $95.00 is your best technical support level, you need to take action at $95.00 A Trade Plan allows you to be a trader instead of a holder. A solid Trading Plan allows you to plan, not pray!
0Posted by Michael Glass on June 13, 2011 at 12:38 pm
Instructional Video Curriculum
Series 2 – Trading Plan Components
One of the most popular saying of investors is, “Plan Your Trade, Trade Your Plan.” This is because too many investors come to the market unprepared and blow out their accounts within six months. That does not mean that all traders, both experienced and new, eventually have to pay their trader’s tuition. However, the profitable trader understands that the key to making money in the stock market on a consistent basis is to develop a trading plan.
Having a trading plan that has been backtested and proven allows a trader to have a positive expectancy about their trading results. They know that is not about one or two winning or losing trades. Instead, it about a pool of trades. They understand that over time that their winning trades will outweigh their losing trades. More importantly, they know that the results of the winnings traders will be more than the losing trades. Having a trading plan is all what being a High Probability Trader is all about.
We have put this portion of our Instructional Video Curriculum together to help you begin that process of forming your trading plan. In order to do we, we have divided a trading plan in to 5 components. The first is just an introduction to trading plans and then we share our 4 key components of a trading plan
If you are not seeing the videos, it is because you are not a subscriber. You can learn more about becoming a subscriber to our Instructional Video Curriculum by Clicking Here.