Funny old day, not so much around. Here’s something different — a trade I didn’t take. At first sight it looks like a good setup, but with volume dropping away, yesterday’s low hanging ominously just above the likely entry, and a general lack of momentum, I stayed out. As it turns out, there was a bit of profit on the table. Again, following the rules means missing out on some winners, but more importantly it keeps us in the game so we’re around to pick up easier, bigger wins (see below)…
Like this one on Facebook. A ten minute trade netting over $400 in profit. Could have been more, but a highly volatile price led to a conservative approach, scaling out half at a time. And yes, bars not candles for this one, because bars rule.
Also note that there was a great easy short available at the end of the session, good for another few hundred dollars profit. Personally I was long gone by then because, you know, I’m lazy. But it was clearly signalled and there for the taking.
Nothing spectacular, but there’s a good living to be made from quick simple trades like these if you stack a few up each day. Certainly possible to hit $1k+/day if you are consistent and above all, patient. Most aren’t, which is why most fail. Oh, and it’s another bank stock.
A couple of yesteraday’s trades. Funny old day. Trades often don’t go the way you think they will. QCOM, a staple of my core watchlist for longer than I care to remember, looked set to reverse within minutes of entering, so I took an early exit. Yes, holding could have produced a bigger profit, but it’s all about following the strategy. Better to put a few dollars in the bank and live to fight another day than hold out and hope it keeps going. Trading is not a get rich quick method, it’s a get rich slow one.
BAC did a bit better, making us a solid few hundred dollars profit with an easy trade that just sort of petered out at the end. That’s because it was a relatively late trade. Normally I like to try and be done by lunchtime. Like I said, funny old day.
Just a point of order, as I’ve only recently restarted this blog after the old one got lost in a server move: trades posted here are not a complete record of my trading day, only a selection to demonstrate what’s possible, what’s dangerous, what’s intersting, and sometimes what’s boring.
I’m often amused when my non-trading friends tell me that they could never play the markets for a living because they couldn’t cope with the risk. They say things like, “Aren’t you worried you’ll lose it all one day?”, and “What happens if there’s another stock market crash? You could get wiped out!”
These well-meaning but faulty assumptions come about for two reasons. The first is a lack of understanding of exactly what I do as a day trader. The second is a flawed idea of risk.
The Oxford English Dictionary defines discipline as the practise of training people to obey rules or a code of behaviour. Trading successfully is all about obeying rules (following a trading plan), and the reason most struggling traders fail to make consistent profits is because they lack the discipline that the occupation requires.
With 2018 drawing rapidly to a close, this is traditionally a time when we look back at what we’ve accomplished in the year. If you’re the forward thinking kind, you probably also look forward to your plans for the coming year.
Day traders who are new to trading stocks often find that watching a number of different symbols at the same time can take some getting used to. This is especially true for those who may already have experience of the futures market where it is not uncommon to spend the entire session watching only one or two charts. Keeping an eye on multiple charts is not impossible though, it just takes practise and a structured method.
I’ve been working with a struggling trader, helping him to discover where his difficulties lie. Sometimes when we are in the thick of things, it can be hard for us to see for ourselves what might be obvious to others. Having someone look in from the outside can be a real benefit. In this particular case, the problem was one that is all too common among many who are relatively new to the business of day trading. The trader was stuck in a variation of the destructive cycle of the grail hunt.