Author Archive for Jeff White

I’m A Loser

May 21, 2007 at 7:57 am

It’s tough to admit it, but I come clean in this week’s Free Newsletter over at TheStockBandit.com and say that I am a loser.

We all go through stretches of tough trading, but if you know what you’re doing and you manage those losses properly, it’s amazing what can happen.

I’ve said before that trading is a numbers game, and this week I offer the proof of it, so be sure to stop by and read this week’s Free Newsletter for more thoughts on the topic.

By the way, you can sign up for the free newsletter on the Free Newsletter page at TheStockBandit.com and we’ll notify you every time one is published. An opt-in form is provided at the top of the page which puts you in full control of your email subscription at all times.

Trade well this week!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

A New Look and Some Revisited Lessons

May 20, 2007 at 5:28 pm

Hope you like the new look here at TheStockBandit.net – I am excited about it!

As we wrap up the weekend, here’s a few links you might find of interest from this week last year. Of course, there’s also the Market View page at TheStockBandit.com which was updated today (and every Sunday evening).

There’s no substitute for preparation in trading.

Traders who keep a detailed journal can learn a lot from their results, and StockTickr Pro is an affordable and excellent choice.

Some are odd and others are entertaining, but I’ve always found it interesting to hear the superstitions of traders.

Trade well this week!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

Shifting Market Exposure

May 11, 2007 at 8:26 am

This market has made an incredible run, and we’re finally starting to see some profit-taking. However as traders, we sure don’t have to predict where things are headed as long as we let the charts be our guide. That’s great news if you’re not the owner of a crystal ball, and it also means our market exposure can shift naturally.

If you’re trading from chart patterns, your market exposure will shift naturally if the market trend begins to change. That’s a beautiful thing, because bullish patterns emerge during uptrends and bearish patterns will surface during downtrends. It means there’s no need to predict what’s going to happen next.

That’s exactly how we swing trade at TheStockBandit.com. By sticking with the best technical setups, we not only reduce our risk per trade but we also find that we’re naturally hedged at turning points and always trading in the direction of the prevailing trend.

Case in point: this week we closed out some very nice gains in long-sided trades like AKS and ONAV, and also added a little short exposure when another bearish pattern was confirmed. It’s interesting how just locating the high-quality setups and letting them confirm will shift exposure naturally when the market changes.

So remember, there’s no need to predict. There’s no need to be a rip-snorting bull or a growling bear. Just let the setups show you whether you should be long, short, or in cash!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Will the Market Rest?

April 29, 2007 at 6:25 pm

The market indexes have for the most part gotten rather extended in the short-term, with the big-cap averages leading the way. Some quality follow-through since the upside breakout has been very positive to see, but at this point the next best thing could be a rest.

Can the buyers stay away for long enough to allow some consolidation to set in? No telling for sure, but with plenty of economic news on this week’s agenda and still lots of earnings reports to roll in, this would seem to be a good opportunity.

The bulls could even keep things going with some rotation into small-caps while the big averages rest, so just because a rest seems due doesn’t mean the market needs to give much back. Be sure to check out this week’s Market View page over at TheStockBandit.com for a closer look at the indexes tonight before you start your trading week.

Trade well this week!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Recovering From Losing Trades

April 13, 2007 at 10:02 am

As traders, we all go through stretches which are not-so-fun! But as they say in other realms of life, it’s not how you fall down that counts – it’s how you get back up.

One of my biggest losing trades came in EPIC a few years ago. The stock had some good momentum and lots of activity one particular day, so I bought some for a day trade. I went pretty big to begin with, and the more I watched it the more I liked it. It was moving my direction and I was feeling pretty good, so I added some more. Well, out of nowhere about an hour after my entry the thing went into freefall. Too late to check the news, the damage had been done!

I decided not to panic, and I also decided not to add….2 things I’m very glad about. Anyway, the downside slowed and the stock bounced back slightly, but I still closed it out for what was a big loss to me at the time. I went home that day from the trading office pretty disappointed that the previous couple of weeks’ gains had been wiped away with that one loss. It bruised my ego, dinged my account, and most importantly, it confused me.

Choosing How to Respond

As traders, we can’t control the news flow or what happens to the stocks we’re trading – only how we respond to it. I had gotten into a trade in size which I was confident in, and I got blindsided by an avalanche of selling. Sometimes it’s a headline, sometimes it’s a downgrade or a warning, but it’ll happen from time to time if you trade long enough.

Using Pain As A Positive

After mulling it over for the evening, I finally decided it was an isolated event and out of my control. I also decided the next day to pick up where I had left off 2 days ahead…making money. By the end of that month I had recovered fully and put my account back to new highs, which put my confidence even higher. What had felt like a major negative in the short term, ultimately turned into a great positive and a source of strength going forward. I became a better trader because of it.

So the next time you take a hit that isn’t the result of a poor decision or blowing your stop, don’t freak out. Don’t add just because you’re down. And don’t decide you’re a bad trader! DO look for a good spot to exit, take your medicine and clear your screen. It’ll help you clear your head, and you can come back when you’re ready to resume with the right mentality.

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Setting Stop Loss Levels and Profit Targets

April 3, 2007 at 10:25 am

The perfect entry is a lot easier to find than the perfect exit. Just look at your last few trades, because while you might be able to pick out a well-defined chart pattern to determine a trade entry, it’s never quite as easy to nail the exit. (Which is another reason that cleaner is better when it comes to charts.)

When speaking of exits, it’s important to always remember that perfection isn’t required to do well in trading. To turn steady profits in our accounts, we don’t have to sell the top. What we DO need to strive for is giving ourselves the best chance for a timely exit, win or lose.

When to Update Stops and Targets

I set key levels for my nightly swing trading candidates in the evening, including both stops and targets. The market is obviously closed, and that’s no coincidence. I’m in the right frame of mind and I’m unbiased (in the case of new positions). I am also unable to immediately act (in the case of existing positions), which removes emotion from the equation. That means I get to think through what I need to do, without the concerns or the pressure of a market which may be fast on the move!

Benefits of Evening Adjustments

Updating stop loss levels and targets in the evening (outside of market hours) can do wonders for your psyche, which in turn can do wonders for your trading. You make your decisions in a level-headed state of mind, you set your conditional orders, and you let your game plan play out. Setting my stops and targets outside of market hours has made the trading sessions much more relaxing for me, without diminishing the importance of my trading.

Now, I’m certainly not saying that your trades shouldn’t be important to you. They should be – it’s your money on the line! A subscriber of my service recently mentioned this to me via email, noting that they “are always worried” about their positions. Put it this way…..while some level of interest/concern in your trades is healthy, if you’re too anxious about it, the trade is probably too big. That is another topic altogether, but the point I’m trying to make is that if you feel like your decision-making could stand some improvement, consider setting your key levels outside of market hours. You’ll find your level of stress is lowered and you’ll have greater confidence in your trades because your job during the regular session is purely about executions – not fretting over when to buy or sell!

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

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Trading Lessons & Worden TeleChart

February 8, 2007 at 10:20 am

In my previous post, I discussed the importance of learning from our trading mistakes to become better traders, citing one way we learn at TheStockBandit.com is through the Trade of the Week lesson. In this post, I want to show you a way to learn more from trades of your past – by keeping them separate and tracking them in TeleChart.

I’ve been a user of TeleChart since 1999, and I’ve never regretted paying for this great product. I talk a lot about the importance of using a charting program if you’re an active trader (an absolute MUST!), so I’ll leave that for another discussion (even though I still believe it!). What I want to point out here is how to use TeleChart to learn from your past trades, so let’s get to it.

Learning From Others

At 7pm ET after every market close, I do one last update of TeleChart for the final end-of-day data. I use their real-time charting service, called Platinum (find me on TCNet anytime, I’m TheStockBandit), so when the market closes I already have the ending numbers for the day. However, there are occasional minor changes in data from the exchanges after the closing bell, so the 7pm update includes the official closing levels and volume totals.

The 7pm update also includes an incredibly underrated feature – The Worden Report from Don Worden. Don has been in the market for many decades, and his trading experience is most likely greater than yours and mine put together. His nightly report alone is worth the price of their software, and I rarely miss his posts to see how he is viewing the current market conditions. In addition to his post, there are often trading lessons provided via submitted notes from other TeleChart users to Don, along with his response to them. While many of these contain over-complicated formulas for locating trade ideas which I ignore, there are some real gems that show up when other traders share their own trading lessons.

One recent idea was submitted by Sir Fertile Sources, who suggested something revolutionary yet unbelievably simple: create a separate watch list for stocks you have sold! Soon after, Sir Major Lessons added another layer to the idea by creating separate “sold” watch lists depending on the conditions which generated the sale (abysmal loser, stop loss hit, stop loss hit for a gain, booked substantial gain). The idea is to be able to quickly review those stocks which you have held and see not just how they are doing now but also how you may have improved upon your exit.

TeleChart Notes

The Notes feature in TeleChart is highly underrated. Pull up any chart on any timeframe within TeleChart and click ‘N’ on the keyboard. A dialogue box pops up with an instant capture of the chart as it looks right now. Enter your thoughts (the note) and click ‘OK’. You’ve just made a note which will forever be tied to the current chart view, allowing you to return at any later date and review your note. This is perfect for the “sold” watch list…..once you’ve sold your stock, simply enter a note, save it and move on. Later when you want to review it, you’ll see exactly what you saw when you made your sale, giving you an instant visual comparison to the current chart.

Notes are a one-click feature of TeleChart, allowing you to capture the chart and store your thoughts along with it. (The actual window can of course be resized).

WatchList Tracking

The WatchList Tracking feature of TeleChart is often overlooked. This is an excellent way to track a portfolio or even just a WatchList such as the “sold” WatchList. WatchList tracking will do exactly what it says – track every individual component in the list and even provide averages for things like percent change and number of days. This is ideal for the “Sold” WatchList, as the program will immediately and automatically begin to track your old stocks and you’ll be able to pull them up at a glance at any later date to see how well or poorly they have performed since your exit.

WatchList Tracking in TeleChart is done automatically, which really streamlines the past-trade review process.

Keeping it Simple

Every trader who is looking to improve can find great lessons in trades of the past. Trading can get real complicated if you let it, so take the easy approach to improvement when you have the chance. This new learning approach is already simplifying how I review my trades, letting me get to the application of lessons much faster. I hope it works for you just as well!

Take a free 30-day trial of TeleChart 2007 and see what it can do for your trading. I did, and I’m still using it 8 years later.

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

[tags]Stock Market, Investing, Stock Trading, Stock Charts, Chart Patterns, TeleChart, Worden[/tags]