Trader's Corner

Kerry,

I would like to thank you for a great service! You have fantastic video consultations and really inspired me, I am more inspired than ever before.  Your service helped my equity to grow. I doubled the amount of bonuses on the SpikeTrade and will  win Bank Robbery Award 3rd month in a row.  What I was missing before was what strategy to use in what market condition. This helped me a great deal. Also I adjusted entries/exits based on your ATR channels and Triggers. This minimized the number of emotional/impulsive trades. This minimizes my capital drawdowns and increases equity curve.

Thanks,

Vlad

Trader's Feedback

Hi Kerry

Ever since I have started taking lessons from you, I'm doing reasonably well in the markets.

In Indian tradition you can't do well in any sphere of life unless you have a mentor. You have become my mentor.

In the last one month exceedingly well.

Thanks and best wishes!

Saty

Traders feedback

Kerry, 

 

I just finished rereading Master the Markets for a 2nd time. I feel like it has allowed me to paint such a different story when looking at the charts. I hope you offer this book to all your clients. 

 

Again, thank you. 

 

S. 

 

 

Hi Sash,

 

Yes it is a book in my top 5 favorites and recommend reading.

 

Glad you found it helpful. 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!

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

 

 

 

 

 

Traders Feedback

Kerry,

I have been reviewing your new videos (particularly on market view). These are really very succinct and much easier to follow. The short format of the videos is excellent, because attention spans can be relatively short for some people. I am now getting a far better understanding of what daily bearish divergences mean in a market with strong upward momentum (on weekly) and I take particular notice of the McClellan Summation, McClellan Oscillator and NH-NL. Previously, I was looking to sell everything on the first sign of negative divergences, but it is now clearer what the daily bearish divergences mean (caution, and sign of potential correction, which is healthy), but definitely much more significant if they appear on weekly data. The McClellan Oscillator is at a very low level right now, so it will be interesting to see indices action over the next day or so.

I am also seeing the benefit of your patience waiting for the right setup and focus now on a small number of trades with better setups. This has made a significant improvement to my trading, and is a particularly important discipline as I progressively take larger positions relative to what I was doing 12 months ago. You may recall that we discussed gold on our last conference and I have been accumulating Ozzie gold stocks on weakness over the last 8 weeks and today was significant payback day for them (or the first of a few more?). I have become much more selective about what I trade and when I enter/exit and don’t mind waiting for a bigger pop, particularly if my risk margin is small. Although we don’t talk every week, you will be pleased to hear that the benefit of your experience is rubbing off on me, although I haven’t bought a sports car yet!

It has been a real challenge to learn to trade in a variety of different markets and I get the impression that a lot of American traders just stick with their own market, or use ETF’s that hold foreign content if they feel adventurous. I see real benefits in trading the US and ASX markets because of the benefit of knowledge that you get from one market which can be applied to the other in trading strategies. The Australian market, while not exactly an emerging market, is much less mature than the US markets and fires particularly well when the greenback weakens and commodities rise. Not sure if you are still interested in trading the ASX or using CFD’s, but if so, I can show you a lot more when we meet. CFD’s are a magic tool provided you apply the same risk management rules for normal equity and I will use them more and more as my trading develops.

Keep up the great work.

Regards

Graham

Trader Results

Kerry,

I’d worked with financial advisors to manage my money over the last 15 years, and realized after 15 years of paying management fees on an annual basis, that I was about break even… When the market corrected for me over 40% on a $1M + portfolio, I knew it was time for me to learn to trade my own money. My financial advisor ignored 6 months of downward movement before I finally squealed and started to look hard at my statements. His response was ‘the market will recover’. I was 100% invested in Mr. Market. This was my catalyst for realizing that financial independence isn’t financial independence if you are relying on others to handle the money necessary for financial independence. I was still dependent on my financial advisor to perform, and communicate what was happening, how we were doing, if I could spend my money. That said, I paper traded for 3 months after reading Trading for a Living, and did ok, having some wins and losses. When I started trading real money in November of last year, the initial losses and inexperience helped me understand why so few people learn to trade for themselves – the emotional swings were brutal. We began working together in March of this year when I realized I had to develop a system that works for my schedule as a full time consultant, father of two small children, etc.

Here is my equity curve since I began trading with you in March. Having a system to trade doesn’t make me an overnight better trader as much as it exposes my flaws so I can focus on them and become a better trader. Having no system meant I had no areas of resistance or support to based my decisions, I was doing well, and then doing poorly, but I could understand why? In following your simple trend trading system, I’ve realized that when I do something really dumb, I can immediately figure out why it was dumb (poor money management, impulsive trade with no plan, ignoring the basic rules (buying a full position at the 1 ATR instead of the -1, etc.). This means I don’t have to make the same mistake again, and if I do, I get to go back to the same short series of 3 questions?

1) Did you have an entry plan? (price action, position size, technical agreement

2) Did you have an exit plan? (price action, position size, technical agreement)

3) How will you explain this trade to your wife? (my accountability partner). I am trading a $250,000 account, and I write myself a check every Friday for my work week performance. My wife asks me how I did, and telling her I wrote a check is not something I like to explain… I’ve found this for me is the ultimate accountability and keeps me out of risky trades when I realize I may go from receiving a check to writing a check, I net out my account every Friday back to $250,000 through receiving funds, or contributing funds.

Thanks for all your help… I’m pretty sure I’d be in a different position this year without your help and coaching. As of this last week I’m up 17.22% since we started working together in March and I’ve only traded the WPT positions and a few select stocks in the financial services industry where I have some experience. I’ve learned that for me my biggest losses were in order: short trades, trades without a plan (impulsive), and trades where I transitioned from a specific trade plan to hope as my primary strategy…

I have a long way to go, surviving numerous jumps from my ground floor office window after making really bad trade decisions, but overall I’m starting to believe that this is something that can be learned if you are willing to master one system completely before you find another shiny object – the mind wants to move to something else to avoid seeing how hard it is to simply follow your very simple trading rules. That’s the discipline for me, execute this flawlessly – and in doing so exorcise all my personal trading demons.

Regards,
Todd B.

Trade Results

Kerry,

First I have to say a BIG thank you! Last year I lost over $40,000 dollars gambling in the markets. I say gambling as I had no trade procedure to follow. I realized this after contacting you to help me with my trading losses. Prior to our first few calls I thought I had a trading system. Your work help me indentify I was not following my own rules and allowing the market to spin me in circles. This was in the fall of last year and I closed my brokerage account as you may recall. I simulated trading after we had worked together refining my trading process and began trading live again first of this year. Attached is my equity curve. I struggled early in the year but since have learned to keep all my losses minimal and avoiding the disastrous losses.

I am far from recouping my $40,000 loss, but I feel I have more control over my trading than ever. I started this year with a $50,000 account and risking 1% on my trades and I am up $7,000 for the year. My win ratio is 62% and most importantly my maximum drawdown is $1460. My return this year is equivalent to 24% on an annual basis. This is by far the best I have ever done, plus I feel more relaxed and calm when I have trades on. I set a goal to try an average $1,000 per month this year. If I can accomplish this I will increase my risk by ½%.

I trade fewer stocks that I scan from a custom built list that you help me indentify. There are weeks that I have very little to trade and sometimes nothing at all. This has been difficult to learn and to remain on the side lines during these times. You can see it reflected in my equity curve.

Bottom line is I am hitting my goal and I am positive with a nice return on a small account while I feel 2000% more relaxed.

Thanks again for all the help and I look forward to our working together in the reminder of the year.

Regards,

Robert

Robert,

Thanks for the comments and allowing me to post to the blog. It has been a pleasure working with you and I look forward to your growth and success as a trader. As a Traders coach, one can only suggest possible improvements. The trader implements them and see’s them thru to success. You deserve the credit more than I for achieving your new found success. I wish you the best in achieving your goals and if I can ever assist in any way, please let me know.

All the best,

Kerry

Opening Gap Post Comment

Hey Kerry

A few weeks a ago you posted a couple of questions from one of your clients (Dan) regarding trading the opening gap. I really got a lot from these postings and since last Monday have successfully traded the Australia 200 Cash $5mini contract gap opening every morning I've had the opportunity. I'm making $50 - $150 in 6 - 12 minutes. I'll begin trading 2 contracts this week and as I feel my competence and confidence improve I'll increase my position to 3 contracts in the coming weeks. This has had the positive effect on my swing trend trades in the last week also. You never know when you post something on the blog just how it may influence another trader.

Ryan

Discipline Exercise made the difference

In all the books you read and all the advice you get from Traders, the number 1 thing you hear is, Be Disciplined. What does that really mean, and if you're not disciplined, how do you become disciplined. I have found being disciplined as a trader is very different than being disciplined at work, the gym or other things in life.

Discipline and focus is what makes you a good trader, but how do you get there?

I have spent the last 2 years learning technical analysis, swing trading and after the market crashed last year, learning to day trade. I was no longer willing to take a trade over night after the crash. Now I'm focused only on day trading and trying to develop a system that works. My biggest obstacle is I am not being focused and disciplined to my system. The system works fine, as long as I remain in control of impulsiveness to make trades that my system does not call for.

In October of 2008 I was day trading SPY and DIA and a few stocks. I typically made about 10 to 20 trades a day and usually had losing days or small winning days of $ 20 or $ 30. Losing days were in the 100s occasionally getting into disastrous losses of $1000 in 1 day. The worse the day went, the more I would raise my position size. This always resulted in bigger losses. This had to stop. It was driving me crazy.

I kept thinking, if nobody knows about these losses, I'll make the money back quickly and it will be like it never happened.

What I did do?
I started sending my results each day for review to Kerry, no matter what those results were.
For a time I would send a screen capture of my TradeStation screen to prove I didn’t trade for the day if there were no trades.
I had to make myself accountable to someone, otherwise I would cheat and who would know?

Each day Kerry would send me a critique of my day. He would review positive points of the day and what needed improvement. During this time I had a few days of high trade count and big losses. The advice on how to handle bad days was a key turning point. This helped to not throw you off your plan for the next trading day. Each day I would consider the previous day’s advice, and little by little, my results started to improve. I started to understand what discipline is for a trader and why it works.

Today I am much more relaxed as I trade, I focus only on making good entries and managing a trade well once I'm in. I keep my position size small and concentrate on making good trades, not making money. I make a few trades a day, at most about 6 trades. For the month of March I have traded 13 days and 11 were profitable. I have become more confident about what I will and will not do, and it improves my decision making thru out the day.

We hear all the advice and little catch phrases about how to become a good trader, but I say, you have to live it to really know what it is to be a disciplined trader. Once you are there, you will understand and it will be the only way you will ever want to trade. Working this closely with Kerry has been a turning point for me.

Thanks!
Tim H

Traders Corner

Kerry,

As this seems to be "Equity Curve Week" I thought mine may also give some encouragement. The interesting point is that it was back in August that I decided I needed to review what I was doing and seek some guidance from you. You can hopefuly see the results since then (and it has been a tough time in the markets over this period too of course). The percentage gain is relatively small but that is purely because my work is keeping me very busy and so I have been trading very lightly and so have missed numerous signals.

Trading is now nowhere near as stressful as it used to be. I know exactly the game that I am playing even if I don't play it as well as I could.

One interesting point is that the trades I have been making since August have been almost identical to those I made before. The difference is that my entries are now well defined rather than me just blindly buying the market. Trading really is a typical case of where a chain is only as strong as the weakest link. In my case the weak link was my entries.

Still a long way to go of course but the direction is the right one now.

Regards,

Chris

Traders Corner

I love getting feedback from clients and fellow traders. Here is another email I just received today. Jeff is wonderful guy and a good friend, not to mention a good stock picker. I always pay attention when Jeff mentions a stock. Here shared an email this morning and I asked him to elaborate on the difference in his trading, here is his reply and many thanks for letting me post to the blog.

Hi Kerry,

Here is my equity curve for January. My picks have gotten better, but I have also been more consistent at taking profits. You’ve played a big role in these results. Thanks!

These are the main reasons for my results ( December was also good and I was profitable for 2008 ).

1) I spent much more time on a short list of about 10 favorite stocks and really got to know how they trade and what is and is not out of character.

2) I focus much more on support and resistance on all time frames. I tend to sell as we approach resistance and if we keep going, I don’t worry about it. I’ve always had a tendency to kick myself if I get out too early or if I don’t get out and it drops! That leaves a narrow margin where I’m not kicking myself. Now I’m focusing more on my account goals rather than “being right.”

3) I also like to buy closer to support so my stops can be below that support. I’m also using volume much more to determine if the short term trend is running out of or gaining steam.

4) I am trading smaller with proportionally wider stops so I don’t have to be as precise in my timing.

5) Probably the biggest thing is that I’ve really cut back on questioning myself. There have been many times where my analysis suggested I enter a position but I would talk myself out of it. The same applies to exits. I would see a stock hit a ceiling and stop going up and I was afraid I would sell and be wrong. Now I sell and if it goes up further, no big deal.

Jeff

Equity curve minus impulsive trades

In working with a client today we reviewed the recent equity curve. In doing so we indentified those trades that was not traded based on an indentified strategy. I suggested that he take his equity curve and remove any trades that were impulsive and re-plot the equity curve, keeping only those trades that were made based on an indentified set of rules. Here are the results and his comments. Hi Kerry, I've omitted some of the trades that we determined as impulsive or no strategy trades... Attached is the result.. I've printed it out and it is hanging on my wall now, to remind me what is possible and what can happen if I impulsive trade again. Wessel

Trader's Corner

I just received this comment from a client, I asked his permission to share, so here it is. Keith had a tremendous habit of over trading. He never really over traded from over exposure, but his broker had to love him. I am sure Keith received a Christmas gift from his broker each year. I asked Keith to allow me to share this info and he agreed. When we done his account analysis we found that over half his losses were due to commissions alone. It is called churning ones account. The losses were never that huge, but the losses were many as Keith traded about 20 times more than necessary, never really riding a winner nor riding a loser…just churn and burn. It is very stressful way to trade and a guarantee that one will not make money at this game. Keith has worked hard as he has stayed in touch on a very regular basis. I honestly told him one day that I expected him to give the game up. Keith proved me wrong and has persevered and stayed in the game. I can attest it was not easy and Keith spent a lot of time revamping the way he thought and his approach to trading. Honestly it was like watching a drug addict go thru detox. I wish Keith much success as I do all the clients I work with. Trading is a difficult path to take. It is very rewarding when one finds his/her own. All the best to Keith, and hope some of you find his message as up lifting as I do. _________________________________________________________________________ What a difference in a year... Here are the key points and it may seem so simple, but what a huge impact it has made in my account. Thanks for all the help! I trade less because I have learn to be more patient for my type of trades. I truly understand the type of trader I am and the condition I need for my setups to work. I established written trading rules to follow and have memorized them. I never feel the need to impulsively trade. I know exactly what I am looking for. I manage my time using alerts so I don't stare at the screens. I have learned that's it's OK not to have a trade. Rather than watching every move, I have alerts to tell me when to watch the screen. If I have no alert, I never look at the chart. I am always assessing risk and not profits. Many times this alone has kept me out of several bad trades. If I do not like the risk, I let the trade go without me. My equity curve tells the story and I can determine more quickly when I have a trader issue and need to reduce size. I look forward to updating my equity curve each and every week. I do the 5 largest loss exercise once a quarter. I don't wait for a year. Most of what has helped has nothing to do with a new strategy or indicator. I can't believe how far my trading has come along. I was ready to give up on trading, but your encouragement to implement these simple tools have turned my trading around 180 degrees. I never had a winning year until now. All of these improvements have come from your videos and phone consultations. The one week personal visit was invaluable. That visit alone is what made me realize just how much I was over trading. I always thought a trader was suppose to be trading all the time and always looking for the next opportunity. After spending a week with you and seeing how profitable one could be making only 3 or 4 trades per week was an eye opener. Learning to stop over trading and correctly position size is incredible. I trade less, make more money on my trades that do work, and spend less time. I almost feel guilty at times. Your analogy of having a boss come in and telling me to take the day off for doing such a great job was idea. Now I listen to the boss (Mr Market) if he tells me to take the day off... I am out of here. Thanks for all you do, I likely would not be trading today had it not been from your encouragement and willingness to persist I get control of my trading issues. Prior to this past year, my biggest one total for trades was 57 (yes 57 trades in one day) it would take me 6 months to have that many trades now. On average I am making 5 -7 trades a week. My goal is if I can prove to myself I have a positive equity curve for another year like this past year, I will increase my trading size to full positions. I now have a 5 year plan in place, as I have 5 more years before I plan to retire. Then I plan to trade full time. I feel I am prepared to work my plan and feel in control of trading, rather than my trading is controlling me. Many Thanks! Keith P

Trading is about Consistency not racing to a Finish Line

Many of you have heard me talk about Consistency. The success of a Trader is how consistent they become in their trading.

I would rather have a nice consistency to my trading rather than a roller coaster ride of huge profits and losses. I have done both and I definitely prefer consistent.

A client that works for Disney had one of their cartoonist draw a picture with this saying. It was a wonderful surprise when I got back from traveling for two weeks.

I am posting a pic here and taking it to be framed today. I thought I would share with all.

Many thanks for the pic!