Bank Index Negativly Diverged Nov 1st by: Kerry

Banks negatively diverged from the SP500 and did not participate in the recent rally to new highs.

They now have formed lower highs. This along with weakness in small and mid caps show why this market has been so thin and market breadth so weak.

When we have these type conditions, most long strategies are not following thru. Only a few stocks are working and many of those have been difficult to find good risk reward entries.

All the best!

Kerry 

Trader's Feedback

Hi Kerry,

I want to wish you  a Happy Thanksgiving and many thanks for everything. My trading has become less stressful and much more manageable thanks to your guidance. I am posting my November equity curve and proud to announce it is my best month thus far. I am only trading a $40,000 account and I am up about 5% for the month. Prior to working with you I had never experienced a winning month. I always managed to keep my losses small but each and every month I would lose a few dollars. I know I have much more to learn as a new trader, but I finally feel I am on a path of understanding and proper direction.

The dip in my equity curve this month was a very impulsive trade and it cost me. Had it not been for that one trade I would be up over $3,000 dollars for the month.

It only takes one trade to diminish your results. I now have that trade posted on my wall to remind me that impulsiveness takes away from one’s hard earn profits.

I am taking the remainder of the month off for the Holidays and will use the time to relax and take my mind off the market. I am looking forward to December to continue my new found discipline and see what my trading brings me. My goal is to trade near impulsive free for the next 3 months. I will allow myself to have 1 impulsive trade per month as I do not feel my discipline is strong enough currently to eliminate all my impulsiveness. Compared to a few months ago I am 10 times better than I was before and now had my first winning month. With only a few days remaining, no need in risking my profits and will go experience some much needed down time.

Thanks again for great advise and help.

Warmest Regards,

Jim P.

 _________________________________________

Jim,

Always great to hear about other’s successes and their growth as a Trader. Best wishes and Happy Holidays!

Over Trading and Impulsive Trading creates stress.

Reduce Stress, Increase Profitability

Those of you that are Spike Members will have read this in SpikeSpeak, but I wanted to share ti with all my clients this evening and post to the Trade blog.

The best time to look for trades is when the market is closed.  Do your research when it is not flashing, gyrating, and trying to seduce you.  It is next to impossible to make good decisions while listening to the intraday noise. This takes years of practice and immense discipline.

Intraday monitoring reminds me of the Greek story of Odysseus.  As Alex reminds us in “Trading for a Living”, Sirens were sea creatures of Greek myths who sang so beautifully that sailors jumped overboard and drowned. When Odysseus wanted to hear the Sirens’ songs, he ordered his men to tie him to the mast and to put wax in their own ears. Odysseus heard the Sirens’ song but survived because his system would not let him jump.

The market acts like those sirens.  It seduces us to enter trades we should not make, and we see our mistakes only after the fact.  It pays to tie yourself to the mast and put beeswax in your ears, so as not to fall prey to the beautiful singing and dancing of the market.

I had to tie myself as a trader because I used to have an issue with jumping on anything that moved. There used to be days I would have 20 to 30 trades, but nothing to show for them. By end of the month I could have over 400 trades, and can you imagine the commissions?  I would earn a gold-plated Christmas card from my broker.

Several years ago I decided to limit the number of stocks that I monitor intraday to 10. I set alerts to look at them when they reach levels where I must make go / no go decisions based on my chosen strategy. I am forbidden to look for more trades during the day. I either get a trade out of my 10 monitored stocks or I don’t trade that day.

Furthermore, I go through my analytic process every night, and if I cannot do my nightly homework, I am not allowed to trade the next day.  This prevents impulsive trading when I want to watch the markets hear the Sirens.  I do not have a mast in my office, and so figuratively I tie myself to a chair and put beeswax in my ears.

Trader's Corner

Ditto Ian’s thoughts, I sit down every night and watch your report to see how you played the day.

 

This week I’ve been paper trading the system by putting in the setups for the WPT, and then day trading the 9 minute chart, every day has been net profitable, and I can compare what I did during the day to what you did to see how I can refine.  My confidence is rising again, and I hope to start back with real money again J.

 

Todd

 

 

Trader's Corner

Kerry

 

I was just listening to the Market & WPT video reports and thought how important they are to me (and I'm sure to many others).

 

Both the market internals and individual stock discussions are extremely useful.

In particular I like the individual trade discussions as it gives us all an insight in to what we should be looking for from our trades.

Although the WPT system may not be what everybody trades their is enough 'meat on the bones' for us all to learn something. It may be just a small comment that lasts a few seconds, but that small comment can ignite a spark and give us that 'aha' moment that eventually (hopefully) leads to a refinement in our trading.

 

Many thanks

 

Ian F

 

 

 

 

 

Gold Market Update

As we mentioned a few days ago that Gold appeared to be getting over extended in the short term (daily) and intermediate term (weekly). Both time frames had approached their 3ATR’s.

Yesterday Gold futures market formed a V1 sell trigger. It now looks like it wants to make the next pull back. How far is anyone’s guess. Make sure you have a plan according to your time frame.