Teach Talk Trade Day Trading & Technical Analysis

Traders love to talk about their trading.

It’s much more comfortable for most traders to talk about what COULD BE rather than WHAT IS.

They love to talk about some chart setting up, their view of the political situation surrounding the stock or market…. whatever.

We all know that talk is cheap.

Intellectually, we know that the chart says everything we need to know, but as emotional beings, we are always looking for the “insight” or the “intuition” to put us a step ahead of everybody else who are all looking at the same charts we are.

If we don’t have the “eye to the future”, maybe a trading friend has it.

Sometimes all you have to do is call up a trading buddy and say, “Hi, how are you today?” What you’ll get in return will be, “Boy, have you seen the ’so-and-so’ chart today?

If that breaks the XY level, it’s going to really take off!” He continues, “And with that unstable political situation, this could really be a big trade.”

Why should we care?

We shouldn’t.

I guess we could take a look at the suggested chart and apply our trading parameters to it….. and if it passes scrutiny, well, that would be alright to trade, right? Yeah, OK.

You have to watch yourself, though. You see, you can have a tendency to want to MAKE a trade fit.

After hearing all about the great fundamentals, you can (subconsciously) view the chart with “I wanna buy” eyes, meaning that you can tell yourself that an almost-confirmation is close enough (with all those fundamentals going for it!).

That’s the danger.

It’s always best, I think, to come across a trade yourself. You see a price falling….. and falling….. gosh, when will it bottom? Your system says, “Don’t guess, be patient”.

Here’s one of my favorite expressions:

“I’d rather be out of a market (or stock) wishing I was in, than in a market wishing I was out.”

So, the market has a nice reversal day…. new low during the day with a higher close. Getting close to a buy, but not yet. The price goes higher for a few days and then starts to come back down.

It’s looking good.

The low holds, the market breaks the rally high and BOOM, we pull the trigger and we are in.

The system rules.

THAT’S the way to take a trade.

Every trader (you, included) has his or her own agenda. Only you know what works for you, system-wise and emotion-wise.

Trust in your tested trading system. It will serve you if you stick to it.

People think I’m crazy when they hear me talking to myself.

My close friends know that I’m just getting good trading advice!

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Energy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

Trading Tips in this Volatile Market….

 No matter what the trading  environment that you are in, all good traders know that the key to staying in the  game is maintaining a good risk & money management strategy. While most traders will simply define risk management as “loss control”, there is really more to it. Risk management should be the constant modulation of risk exposure to a constantly changing market. What is this exactly?

Most traders will set their entire risk management strategy to setting and adhering to “stop losses.” But this falls far short of what risk management really is. Risk management strategy just using simple stop losses would be equivalent to saying “I am safe in my car because I have brakes.” Needless to say, the “brakes” are only part of an entire system of managing risk in a constantly moving environment such as street traffic. The markets are similar to the streets. There are far more actions we can take to minimize risk besides the brakes: there is steering, controlling the throttle, the path you take, “your trip preparation,” mapping your route, the times you drive, the amount of driving you do, not driving while “under the influence,” there are so many factors that affect risk levels, that we cannot possibly reduce the entire risk control strategy down to “brakes,” or in the case of trading, “stop losses.”

How we make and lose money is the end result of our interaction with the market. If we do not interact, we neither win nor lose. If we interact too much or too little, we assume higher levels of risk. Risk management should be the constant “adjustment” of our risk exposure based on market conditions and our very own performance.

How can you modulate your risk exposure? There are 3 primary ways:

* SIZE: How large or small our positions are, based on our account values. The more we expose our account, the “larger” the exposure.
* FREQUENCY: How often we are in-and-out of the market. The more frequent we trade, the more we are exposed to the markets motions over time, the more risk we assume. Also, commission costs become a factor that significantly affects risk levels as we increase frequency.

* DURATION: The longer we are in each trade, the more opportunity the market has to travel, the higher our risks will be.

To properly modulate your risk you have to assess and adjust all three areas of exposure - size, frequency and duration. As you increase one, you must compensate by lowering another.

The biggest single error most traders commit is to place too much of an emphasis on one area of risk exposure while ignoring the other areas. In the end, by ignoring some of the other exposure areas, a trader is left watching his trading account dwindle in size as the losses mount.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Energy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

Repay Loans????

When a loan isn’t repaid and is only followed with another, larger loan… it’s not really lending, is it? Besides, even your grandchildren would be able to calculate this rate of interest (3.95%) is less than the present, official rate of inflation and far less than any bank could borrow money with in the markets today – that is, if they could borrow at all. Don’t you wish there were an entire federal agency dedicated to erasing all the mistakes you’ve made as an investor with collateral-free, below-market-interest-rate loans, which need not ever be repaid?

 How long can this game continue? We don’t have a crystal ball, We only know as long as the Fed continues to pump huge amounts of money into the banking system at interest rates far below the market rate, buying hard commodities – especially gold – is very likely to be a great bet.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

Monday, 31-Dec-2007

Wednesday, 02-Jan-2008

Thursday, 03-Jan-2008

Thursday, 27-Dec-2007

Friday, 28-Dec-2007

Here I will talk about risk management in developing an online trading plan.  One area is position sizing.  Yes position sizing, do you hear me POSITION SIZING!  You have heard in real estate, location, location, location, well one mantra in online trading is position sizing.  In working your online trading plan, you will back into this area.  If you plan is realistic in its overall scope, your position size will be determined by  the plan and not some size out of your head.  When your position size is too large relative to your account size, you will engage on an emotional roller coaster.  Your online trading plan will crumble fast.  By limiting your  position size so that you are risking only a small fraction of your online trading portfolio on each trade, you are managing the emotional impact of profit and losses as well as managing your risk.  This is a part of money management also.  Many online traders are under capitalized and trade sizes that are too large for their portfolios.  They do this to generate income, their trading plan is most likely not thought out.  The emotional ups and downs will eat the trader alive, thus causing poor risk management which leads to lossesPlease take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Energy issues ) & The Mechanical Monkey where we discuss our mechanical trades.