Have you heard this? While it typically applies to Poker, I find it just as useful in trading. One of the biggest edges I have found is putting myself in the mindset of the trader sitting opposite of the position I am in or about to take. Are they feeling panicked? Are they feeling fat and sassy? There is the edge, as their sentiment may abruptly see a change. Whether it is a long term or a short term difference, the trend can abruptly change away from their feelings. When they quickly react, as most will, it provides opportunity.
It’s amazing to me sometimes how much impact emotions can have on trading. There are days when, despite having a plan and going after it, I end up adding into it and all of a sudden, I can’t manage my plate.
Continue reading Getting into a zone
Like any business, developing strategies that you feel comfortable with and competent in actualizing is critical for success. One strategy that I continue to develop is buying the washout, the panic…whatever you want to call it. In fact, so much, that is often my sole strategy for the day as I generally trade a maximum of two hours of the day. It is generally the quickest play and often the most powerful in producing results. Understanding the odds and reading your play is important, though, as this is one that can be disastrous if you are wrong and stubbornly hold on. From experience, this has led to some of my largest losses in the past. As with any play, ensure you enter with a solid plan given the size you take. For me, because I usually enter these with fairly larger size, it is crucial that I follow my rules. It is important to also recognize WHY there is panic. A stock that is dipping like this because it is gapping down after several days down while in a positive uptrend has great odds and what I like to see on the daily chart.
Continue reading The power of your strategy-RAD and SGYP
After some rather challenging trading today, I shut down my computer for some ocean therapy. With the vog thick here on Oahu, I opted for some simple beach workout time to ditch the stress.
As I walked onto the beach, I saw these signs posted by the lifeguards.
Continue reading Losing is part of the process
“But my philosophy is, the problem isn’t being wrong, it’s staying wrong, so I adjusted, and since then I haven’t had a losing month in five years'” — John Welsh
Earlier this morning I popped my head into the chatroom to see who was around and saw someone had posted this quote (right out of Momo Traders by Brady Dahl, a must read for anyone who is considering trading or is currently trading). I laughed out loud, as it was something that struck me as I had finished reviewing my December trading. This sounds so simple until you actually focus on doing it. Then true human nature and the inability we have sometimes to admit when we are wrong rears its monstrous head. I had run into this early on and when I realized I was relatively adept at noticing a potential bottom in a stock’s plummet. But trying to catch a falling knife can leave you quite bloody if you aren’t careful; a falling stock can just keep on falling regardless of how of it you buy. By being cautious and starting tiny in your play and then waiting confirmation can be the simply difference between a large winner or an even larger loser. Safety safety safety friends..
A few days ago I was talking with a trader who was trading the same stock as I that morning. While I exited with gains because my plan was a short term counter trend play, he mentioned he was staying in it despite it reversal. When I asked him when he had entered, he was several dollars away from where this stock was currently priced and heading in the opposite direction…a $40 stock that had started the month of December at $70.
Continue reading Ego can be your worst enemy
Nearly all the signs…Because nearly is in that sentence, what I saw here prohibited me from starting with slightly bigger size. It is important to remember that if you are starting out in a contrarian position to the stock’s current move, you need.to.start.small. I have experienced this so many times and it has taken some hard knocks and bigger than intended losers on my plate when I refused to admit I was wrong.
Continue reading DUST-ending the year on a great note
Aloha and welcome to my tiny space in the world. This page is me sharing with you my trading journey and life journey, wherever it takes me and whichever is the more exciting. I have two small goals:
#1. Dream really FREAKIN’ BIG
#2. Make #1 happen.
I, in no way, promise to make you money or entertain you…just here to share my thoughts and the look of opportunity as I see it in the markets. The word “simple” in my strategy is slightly tongue in cheek…for anyone who tells you anything within the markets is simple is feeding you a mighty big plate full of garbage. It is simple when you don’t overthink and follow your rules. Simple to say, but your success is truly contigent on whether you are capable of executing and following your plan. Plan your trade and trade your plan is something you will hear from every titan who is in the game and it truly is the best advice I have ever heard.