Once you understand how mental accounting errors can hurt trading results, it is helpful to identify patterns in your own thinking and trading which can be challenged with personal strategies. While a blog entry cannot attempt to identify and correct these errors, I can challenge you to identify your own thoughts and seek out further…
I wanted to post a lunchtime chart of the QQQQ’s which had the best 5-minute New Momentum High and “two trade” Impulse Buy set-up I’ve been describing. The DIA and SPY had almost identical impulse buy setups. Remember, after a new momentum high, wait for a pullback (ideally to a key moving average) and play…
Quick: What if I gave you $1,000 to invest however you wanted right now? It’s your money now – free. Would you put it on a speculative option play and try to double it within a week? Now, ask yourself, would you be likely to make the same speculative decision if forced to use your…
While there are various ways to increase your potential for profit in the market, I am submitting five categories to begin altering your trading behavior to increase potential profits. Hold your trades longer than usual Increase position size (concentrate capital) in fewer stocks Decrease position size but trade highly volatile stocks (those with high beta,…
You can increase your risk-taking ability and overcome fears by analyzing your actions and asking empowering questions, as explored earlier. Here are a few questions which can further help with your analysis and motivate you to make a difference once you understand more about what keeps you from taking risk. These questions are designed to…
I wanted to draw attention to a conversation taking place between Jordan and I in the Comments section of the post “March 14th Analysis” In it, Jordan asks me to clarify points concerning momentum divergences and the “Impulse Buy” pattern which illustrates the “Momentum precedes price” example. I also wanted to note a new chart…
Today was a consolidation day, and one with very choppy action that whipsawed many traders, myself included. It was difficult to find direction today, and I suppose the story will be similar tomorrow as it is Options Expiration Friday. It is actually a “Quadruple Witching” Expiration Day, so my recommendation is to take the day…
Wow! What a day! The Dow fell 150 points and then rallied 200 points almost without looking back! Oh what a day to be a day trader! Today was nauseating for swing traders, though. Today also pierced both bulls and bears! I’ve been very cautious in this market but decided to be aggressively short yesterday…
As posted earlier, to achieve higher rewards (profit), you must take on more risk (uncertainty). But how do you know how to analyze your risk-taking behavior? In short, it comes from taking risk and writing down your responses – physical (sweating, increased heart rate, shaking, etc) and emotional (doubts, fear, negative thinking, anger, etc). You…
I am trying to keep this site educational in nature, and not inject too much analysis into the blog, but it has been requested that I provide a little more updates on market action. As a disclaimer, please keep in mind I do not offer trading advice – all charts are posted for educational purposes…