TheStockBandit.net

The Market Wizards books by Jack Schwager are must-read books for traders of all kinds. These books are loaded with interviews with top traders, and it’s interesting to learn how the featured traders made it to the top of their profession.

One of the featured traders is Ed Seykota, who reportedly was up 250,000 percent between 1972 and 1988 – very much a wizard! Ed’s interview is filled with great insights as to what drives traders, and his play on words in many cases proves to be accurate. One quote that Ed makes is:

“Be sensitive to the subtle differences between ‘intuition’ and ‘into wishing.’”

I think this guy’s gut is telling him to BUY……dinner.

What great advice! As traders, we all fight the internal battle between what our “gut” is telling us and what we want to happen based on the positions we are holding at any given time. An experienced trader should allow intuition to play a part in the decision-making process when trading, but it certainly is a fine line between what our gut tells us and what our opinions leave us hoping for!

Keep Ed’s quote on your mind and always be aware of what it is that’s driving your next trading decision. Remember, HOPE is not a trading strategy!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

With the market closed, it’s good to be able to do some catching up. Here’s a slew of links I’ve recently run across which you might find interesting while passing time on a quiet Monday.

The End of Boredom

Mr. Rubik would be proud

On again, off again….Make up your mind already!

iPod on the road

Mel Gibson and Danny Glover would be proud

Daring to be Great: Trading Lessons from the “Splendid Splinter”

Getting Comfortable with Uncertainty

Jay Z would be proud

Two Year Old called for Jury Duty

Attention scalpers

We must protect this house!

I just lost my appetite

But will they sound as good as the classics?

Also, SeekingAlpha is offering transcripts for Conference Calls this earnings season.

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Among the trading tools that I use, Trade-Ideas Pro is right up there among the most important. The folks who run Trade-Ideas are dedicated to providing an excellent product at an affordable price, while making continual improvements and enhancements.

Every morning before the market opens, I fire up my Trade-Ideas Pro and it couldn’t be simpler. I load a couple of watch lists and in about 20 seconds I am ready to trade. I run a few Trade-Ideas windows for different purposes and timeframes, and throughout the day T-I provides me with not only new trade ideas (no wonder they named it that!), but it gives me excellent information regarding the strength or weakness of my existing trades, allowing me to better determine my exits.

One of my favorite features among the dozens offered is “Relative Volume.” It’s important for me to be able to monitor Relative Volume as a new swing trading position is hitting highs so that I can see just how strong a stock may be. Hitting highs is one thing, but a stock hitting highs on something like 5.4 times the normal volume for that time of day tells me I should stay in because of the increased activity and interest in that stock. A lower reading like 1.2 Relative Volume says that volume is only 20% higher for that time of day than normal. I view a reading like that as a signal that the stock may not make a lasting move, and that it may be time to take some profits off the table. The Relative Volume is a tremendous help to me when determining whether I should expect a continued move or if it’s time for me to move on.

To my friends at Trade-Ideas, keep up the great work on the excellent trading product! To everyone else, if you aren’t using Trade-Ideas Pro, you should be!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Chart patterns work the same on an intraday basis as they do on a daily chart. Today I was watching GRMN, which had been weak all day and was nearing the lows of the day. I actually was waiting for a breakdown to short sell the stock, but once the lows held, I noticed a familiar pattern – the triple bottom pattern. Immediately I bought the stock and set my stop loss for the low of the day. Momentum began to build as the shorts started to get squeezed, and I had quite a nice winner on my screen. While I didn’t catch the entire move up, I did catch a big piece of the move and it was great for my P&L.

Triple bottom patterns aren’t just found on daily charts - they can also be found and traded on an intraday basis.

Be sure to apply well-known chart patterns to your day trading as well as your swing trading. Being a flexible trader with a willingness to change directions when your original thesis is proven wrong can pay off very nicely!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

I used to commute to a day trading office until about 2 years ago. It was good for a while but my needs changed. While I did enjoy interacting with other traders on a daily basis, it was harder at times to concentrate on the market with the sounds of a busy office. The occasional sounds coming from upset traders banging on their desks or yelling was plenty annoying. Others seemed to do more visiting than they seemed to trade. Making the move to a home office saved me some time and gas money, but it really made me a better trader.

Learning to rely on yourself as a trader is an important and ongoing lesson. While I would encourage a beginning trader to surround himself with more experienced traders, there are a number of advantages to flying solo once the learning curve passes.

Bang your head, not your desk!

I turn on CNBC some mornings just to catch up on some headlines while I am getting set up for the trading day, but once the bell rings, I rarely leave the TV on. I find the endless opinions (valuation schmaluation) to be distracting and not useful for my style of trading. Plus, their idea of “breaking news” is often too late. Instant messenger is another line of communication I typically cut off for the trading day. In the past, I’ve spent trading days chatting with other traders, but in the end I’ve found it more distracting than helpful. At times a good call was made that I might have missed, but having one more window to focus on seemed detrimental to my tape reading and trading results. Now my typical day is extremely quiet with nothing but a snoring dog and an occasional phone call which can easily be dismissed. Much better!

Cut the noise and simplify your approach with just a few nightly swing trading stock picks. Sign up for your 2-week free trial and find out which stocks I’m focusing on today!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com