Edition 680 - June 23, 2017
Hesitating Before a Trade
by Professional Trader Andy Jordan
Educator for Spreads, Options, Swing/Day Trading, and
Editor of Traders Notebook Complete and Traders Notebook Outrights
There are any number of reasons why a trader hesitates before a trade. The main one is lack of planning. Without a plan, there is no degree of confidence a trade will be successful, it’s all wishful thinking. Unless they are outright gamblers, traders usually have a strong need to protect their assets and avoid risk. This is especially true for beginning traders. It can take a long time to build up sufficient capital for serious trading. By that I mean sufficient capital to be able to trade for a living. It is quite understandable to fear losing all or part of your initial capital. Beginners tend to seek absolute certainty before taking a risk, and gaining true confidence in you ability to trade successfully can take time.
When it comes to short term trading, there isn't very much time for long deliberations. Market conditions are in continuous flux. Decisions need to be made relatively quickly, and if one waits too long to execute a trade, he or she may miss a significant opportunity. The reasons for hesitation are everywhere, and traders must be aware of them, and create a plan to prevent them.
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© by Andy Jordan. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Chart Scan with Commentary - Measuring Bar
by Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
I have shown you how it was that a #1 and a #2 point could both occur on the same bar. This week I am revisiting that chart with some additional information.
In my book Trading Optures and Futions I wrote that one of the ways to know when prices are in consolidation is through the observation of a measuring bar.
One of my students, who lives in Brazil, was kind enough to send this chart. The doji bar labeled 1-2 is a measuring bar. What it demonstrates is that we have consolidation when: following the measuring bar we have at least four opens, four closes, or both, all falling within the range of the measuring bar. On the chart above we see that as of the time I received the chart, prices were in consolidation for 8 days.
Another characteristic of consolidation is found when prices have formed both a 1-2-3 high formation followed by a 1-2-3 (I, II, III on the chart) low. The Law of Charts dictates that when prices are in consolidation, the trader should AVOID taking Traders Tricks ahead of the breakout of a #2 point. The reason is that the expectation from a 1-2-3 formation is some sort of consolidation.
© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Trading Article - Developing a Trading Style
by Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
Master Traders develop a style that is a reflection of their education and character. Most individual trading styles are either positional or combinational and, rarely, a synthesis of both. However, there are other styles.
Positional traders take x amount of positions within a specific price area where the market is thought to be favorable to their trading strategy. This may occur on short term weakness when the longer trends are bullish. A known risk is assumed for a specific profit taking area. Positions remain until the losses or profits are taken or the price action analysis negates the trading strategy.
Combinational traders do not have the patience of positional traders, and want immediate profitable results or will exit the market quickly. These traders add additional orders as the market moves their way, building up large positions for fast two- to six-day price moves, then take profits and exit the market.
A third type of trader is a system trader, who adheres to a trading system discipline.
A fourth type of trader is the method trader. Methods differ from systems in that a method can be traded either as a system with no discretion, or traded with discretionary intervention. A method allows for a trader to be able to change parameters. A method gives full-disclosure of all its parameters and the logic behind the method. It should be realized that both systems and methods are based not so much upon a rationale as they are upon pure statistics, i.e., when a certain setup or pattern occurs, and you behave in a certain way, the result is statistically in accordance with the probable outcome.
The complete trader is able to combine all or parts of the above approaches with his own style. Trading mastery combines observation, scientific knowledge, good judgment, intuition, and creative instincts with decisive action.
© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Instant Income Guaranteed - KNX Trade
Philippe Gautier: Administration and New Developments
Developer: Joe Ross
On 31st May 2017 we gave our IIG subscribers the following trade on Host Marriott Trust (KNX). We decided to sell price insurance as follows:
- On 1st June 2017, we sold to open KNX Jul 21 2017 30P @ $0.45, with 50 days until expiration and our short strike 10% below price action.
- On 12th June 2017, we bought to close KNX Jul 21 2017 30P @ $0.20, after only 11 days in the trade, for quick premium compounding.
Profit: $25 per option
Margin: $600
Return on Margin Annualized: 138.26%
We have also added new types of trades for our IIG daily guidance since 2016, "no loss" propositions with unlimited upside potential, still using other people's money to trade.
Philippe
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© by Joe Ross and Philippe Gautier. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Video - Manual Backtesting Pitfalls
by Professional Trader Marco Mayer
Educator for Forex and Futures, Systematic Trader, and
Creator of Ambush Trading Method, Ambush Signals, and AlgoStrats.com
In this video, Marco talks about some of the most common pitfalls when doing manual backtesting. So if you ever wondered why your actual trading results don't match with the manual backtest you did, this is for you!
© by Marco Mayer. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
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