TheStockBandit University Has Launched!
March 12, 2009 at 9:14 am
There is a lot to be thankful for right now if you’re a trader. But if you’ve been part of the buy-and-hope crowd throughout the past 16 months, it’s been a tough ride – and might not be over yet.
Ignoring account statements sure isn’t the most responsible way to react right now, and yet it’s probably incredibly common. Those familiar with that mentality are quite likely rethinking their approach, especially given the fact that the S&P 500 has actually lost 40% over the past decade.
Index funds, schmindex funds.
As a trader for the past 11 years, I’ve come to appreciate the flexibility that trading offers. I wasn’t full-time initially, and yet I still recognized the aspect of defense which trading offers – a luxury that the buy-and-hope crowd knows nothing about.
During that time, I’ve run across many people who know a little about “the market” but very little about trading. Things like hardware, software, lingo, order types, psychology, money management and much more are just not the kinds of things that automatic investment plan types are familiar with. So when the market takes an all-out beating like it has since the 2007 top, many in the longer-term crowd would consider becoming short-term but simply don’t know how.
Learning About Trading
All along, I’ve been providing a premium service for those who are swing trading and day trading, but those who don’t understand trading to begin with are not going to benefit from it. They need a trading education.
There’s a huge information gap between investors and traders, so I set out to bridge that gap with the creation of TheStockBandit University.
TheStockBandit University is a 4-week course set up in an on-demand video format to teach those with the desire to learn about trading.
To clarify…
This is not a what-to-trade course.
This is a course for the aspiring trader seeking some trading education. It is designed to take you from 0 to 60 in the trading realm in just 4 short weeks. It’s there to equip you to start taking control and stop getting shredded in this (or any other) bear market.
Stop by the homepage and check out the intro video for more information on how to learn trading if you fall into that category. Because remember, the idea isn’t to invest but to Trade Like A Bandit!
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]
Thanksgiving in March (For Some of Us)
March 10, 2009 at 7:50 am
The market was only down a few points Monday, and yet to many that probably feels like a gain. That marks the 13th session of the past 16 in which the S&P 500 lost ground. Can you say hammered?
With every benchmark index having undercut important milestones (read: 52-week lows) and the habitual selling pressure of late, the mood has been sour to say the least. And bold claims are being made by some about just how low this market might go. Dow 4000, Dow 1000.
Give me a break. I’m not saying those levels won’t be seen – they might. But the predictions are pointless and there just is no magic formula to determine where this decline will ultimately carry. What is important is that the trend is down, and it must be respected.
The conditions right now epitomize the old adage that “bear markets don’t scare you out – they wear you out.”
No Pain, No Gain?
Although the real spooky capitulation kind of fear has yet to be seen, disgust and disinterest are the dominating emotions right now. Stocks are in the dumps and investors have found it beyond difficult to locate a good place to put cash – if they still have any.
It’s at times like this, among others, that it’s sure nice to be a trader. Stocks are on the move daily, and we as traders have the flexibility to go either direction in search of profits.
The one-dimensional mindset of buy-and-hold simply doesn’t afford the advantages which traders enjoy, especially during times like this. So while it may not be real thrilling to go home in cash every night as we’ve been doing for such a long time now, the alternative is to be “invested” and feel the pain of a bear market day after day.
A Sigh of Relief
The day will come when stocks move higher once again (for more than just a bounce), but right now it’s imperative that you and I protect our capital while the Street weathers the storm. Patience pays in this game, and right now there’s just no technical reason to be making big bold bets for anything beyond the near term. The uncertainty gauge is pegged, and that means we’ve got to stay cautious and selective for now.
So I’m very thankful to be a trader right now. Hopefully you are too.
And if you’re of the longer-term mindset and you have some cash on hand, you might be thankful for the fire sale prices you now have access to. But just don’t fall in love – there is not yet a technical reason to trust that the correction is over.
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]
Steep Trend Lines Beg to Be Crossed
March 9, 2009 at 12:41 pm
This market is ugly – as in really hideous.
Fear & Panic aren’t really even the appropriate words at the moment for this price action. It’s more like sheer disgust.
Would-be buyers are trusting that they’ll see lower prices (almost by the day) to put their cash to work, so what’s the hurry? And at the same time, bears who will eventually cover aren’t having to tiptoe around – they’re strutting. Likewise, they sense no urgency for needing to exit short sales.
Such is the nature of a downtrend.
From the Mood to the Technicals
But as is often the case, there is a technical threat of a short-term reversal. And it isn’t based on the oversold indications which are quite prevalent right now. Simple is usually better in technical analysis, so in this post I’m just going to point to a couple of trend lines which are looking a bit too steep.
It’s important to note that the steeper a trend line tends to be, the more likely (and the sharper) a short-term reversal becomes. So this is no prediction, but watch for a cross of these trend lines in the coming days should it happen to occur. If it does, it just might produce a playable bounce. (Notice I said bounce.)
A Look at the Charts
Up first: the DJIA. Keep in mind this trend line is descending daily, so it changes daily. At the moment though, a push back above the 6760 area would clear it. Have a look:
StockFinder Chart courtesy of Worden
Next: the S&P 500. Here again, the trend line descends daily and therefore should be double-checked to determine its exact value. For now, a push back above the 700 level would produce an upside break and might result in a tradable bounce. Here’s the chart:
StockFinder Chart courtesy of Worden
I hope your trading week is a good one!
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]
Always Be Prepared
February 12, 2009 at 8:50 am
Over the holidays, I encountered a door to door salesman while visiting family. He was 23 years old and his name was Mike. He was selling a cleaning product, and I mean he sold it!
Every single rebuttal thrown at Mike was overcome with ease. Sometimes those replies were educational, sometimes they were entertaining, but Mike was ready for anything. With it being the holidays and therefore plenty of time to spare, it became sort of a fun challenge to banter with him and watch his skill. He knew his product inside and out, and he proved it with confidence.
I was most impressed by Mike’s preparation. Anything we threw at him, he had a solution for it. He was great at his job, because he had made it his craft.
How Do You Treat Your Trading?
That encounter with Mike proved to be a valuable reminder to me that I’ve got to be prepared each and every day for whatever the market delivers. You do too if you have plans to pull any money out of the market on a given day.
The prepared trader doesn’t know what he will face each day, but he doesn’t have to. He can handle it. Mike didn’t know which rebuttals his customers would offer, but he still knew how to work through the situation. Hard work, persistence, and a refusal to quit when the road gets tough…these are all the ingredients for honing a skill that will pay you over and over.
Those frustrating losses, the weeks when you keep fighting and adapting – sometimes just to break even – that’s what strengthens you and becomes a tremendous source of confidence that you’ll feed on in the future. It’s the long days when you grind it out, win or lose, and you still stay after the bell to review your results and keep searching for ways to improve.
Look In the Mirror
Success in this world does not come easy, and anyone who tells you otherwise is misleading you. Whether it’s a great salesman, a world-class athlete, or a top trader, they all have one thing in common – they work for it. Even if they’re naturally talented.
So as you reflect on your trading of late, have you been adapting? Have you made an effort to determine what’s working best and what’s proving to be costly? Are you hoping that success will find you, or are you preparing in a way that enables you to go get it?
The thing about day trading the markets is that every day is gut-check time. We find out quickly whether or not we ‘have it’ on a given day or if instead we’re funding someone else’s efforts. The latter is a huge motivating factor to show up with our best as often as possible.
The first 6 weeks of the year are coming to a close, and I hope you’re making great progress. But if you aren’t, then sacrifice a little extra time to get back on top of your trading. It’ll be worth it. Put in the effort to get prepared, and commit to doing it day in and day out. That alone will make the difference.
And in case you’re wondering, yes, I bought from Mike.
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]
Trading Attitude Goes a Long Way
January 27, 2009 at 12:39 pm
Recently I spoke with a trader who was really struggling. Not only were his results not up to his standards, but more importantly, his attitude was pitiful.
One comment he made really stood out to me about how he was approaching his trading – and how he could alter it for better results. After taking a couple of small hits in failed trades, he remarked:
Accuracy is important to me. It means everything to how i look at the market the next day and how i look at myself in the mirror at night.
I think we all deal with that to a degree as traders, and especially us guys tend to equate recent trading results with how we think of ourselves. Not deep down inside – I don’t mean that, because many of us have values rooted elsewhere – but our day-to-day mood is often impacted by our trading results.
That’s common across many professions, but full-time traders probably have it even worse since we can keep score every second of the day and know where we are and where we want to be, and often times there’s that discrepancy which causes some frustration.
That’s where huge mistakes can creep in if we let them, as we increase size or trade frequency based on our desire for quick gains rather than when the charts necessitate it.
Two Solutions
I think zooming out on the timeframe of self-evaluation is key. Instead of responding to every tick with an “I’m a genius” or “I’m an idiot” mentality (which can be so exhausting), why not look at your results from a week to week or month to month basis? The daily swings, particularly in this market, can just be too much of a roller coaster sometimes – both in an account and emotionally.
Another way to keep your attitude in check is to accept that you’ll be wrong, sometimes often. That’s not to say that you need to expect failure at all. However, as a trader, your job is to manage risk effectively first and foremost, and that means when you find yourself on the wrong side of a trade, it’s often wise to return to the sidelines to reevaluate it. Getting back in is fast and inexpensive – if you deem it necessary. Taking a string of small losses might reduce your accuracy percentage, yes, but the goal of trading is to be profitable. Too many traders tend to quickly forget that.
Check It
The aforementioned trader has already come a very long way from when we first met, ridding himself of his former style of operating primarily on hunches. Moving toward a more methodical approach has already shown him a huge improvement in his results, and it’s been fun to watch. But as with most Type-A personalities, he’s in a hurry to reach lofty goals – and I can’t blame him. He’ll get there if he will stay on track.
What’s most important at this juncture for him is that he checks his attitude on a regular basis. Just as he defers to the charts when making decisions and periodically monitors his P&L, he’s got to get into the habit of objectively gauging his mentality. When he’s patient and prepared, he’ll be far less-likely to allow his short-term results to dictate his mood. But if he falls back into the mindset of living and dying by every trade he makes, the road will get a lot longer and much more difficult.
As with so many other things, in trading it’s your attitude which can make the biggest difference between success and failure. When your attitude is in the right place is when you’re going to see the most growth – both personally and in your account.
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]
Know Your Method
January 20, 2009 at 11:29 am
For nearly a year and a half, I’ve been blessed to be a dad. It’s been an awesome experience, and I have really learned a lot (though I still have a long way to go).
During the same time, I’ve been able to observe my wife in her role as a mother, and it’s really amazing how quickly a mother knows what their child needs! I had heard of a mother’s intuition, but witnessing it first hand really puts it into perspective.
I think mothers start out with an innate ability, a talent, to determine their child’s needs. And yet there are still the elements of practice and experience which enhance the natural talent that was there to begin with. It takes work, but the combination of talent and effort produces quite a skill.
Similarities Abound
Trading isn’t any different in that regard.
As traders, each of us start out with some kind of talent. It may be that we take quickly to reading the tape and gauging momentum, or it might be that we realize very quickly just where the boundaries of our comfort zones are when it comes to risk tolerance. Whatever it happens to be, generally it isn’t long before we start to build a method around our needs.
And what’s so nice about trading is that’s entirely possible in the market – since there are so many ways to seek out profits. We truly can custom-build a method which is fully-suited to us.
Once we get to that point, and if we want to trade responsibly, then one of our biggest obligations is to understand our method backwards and forwards. We don’t have to know everything about the market or be able to predict what’s going to happen next. Anyone who tells you otherwise just hasn’t traded much. All we need to do is keep our eye on the ball and continue to monitor and adjust the way we’re trading in order to achieve better results.
Worthwhile Effort
Just like a mother’s watchful eye on her child, our ongoing effort to remain aware of everything that’s taking place can lead to a great understanding of our method. As a result, we quickly learn when to adjust and how to go about modifying our approach whenever necessary.
What would it mean to you if you understood your method well enough that you could make small adjustments on the fly and right away improve your results? It would be huge, wouldn’t it?
As the newness of the year begins to fade and early resolutions fall by the wayside, take a stand for your trading. Make a commitment – a goal – right now to become sharp enough that you pick up on subtle changes in the trading landscape which warrant your attention.
Learn to detect when the environment is not ideal for your trading, so that you will know when to adapt or back down. And then when you see opportunities to do so, make those small adjustments so that you can stay on top rather than falling behind.
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]
Market View Video – January 19, 2009
January 19, 2009 at 11:35 am
It’s always a good idea to start out the trading week by checking out the big-picture view and a look at the major averages. After all, they do have the biggest influence on how individual stocks move!
So as you start to consider what and how to trade this week, be sure to stop by and check out the Market View video over at TheStockBandit.TV.
And as always, Trade Like A Bandit this week!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
