3 day trading tips you can use today

 
Keep it simple to earn consistent money. Sometimes in this internet age it can be very easy to have information overload. When you have too much to choose from it can feel like you have all the tools in the box but no idea how to use them.
 
These tips are a few of the key ingredients of our trading plan.
 
Share size comes last! Too many traders initiate trades with the same share size all the time no matter the volatility of the stock or the market conditions. Your first consideration should be how much I am willing to risk per trade; this is a specific dollar amount. Next decision is the stop loss based on charts or any other criteria you use. Be sure to allow the stock to sufficient room to breathe, never place your stop at the exact number. When you know risk amount and stop loss parameters, then you allocate shares.
 
Be prepared for the open. You must have a prepared plan before the market open. You must know which stocks you plan to trade long and which ones short. It amazes me how many traders I mentor that basically “wing it” the first 45 minutes. On top of that which of the stocks in your morning list are the cream of the crop?
 
If you have a list of 10 stocks which are trading in sync with the market? Are any of them consolidating the last few days that would setup an easy breakout trade? Those are the ones you can’t miss. Order flow is easiest to read in the morning and you should get solid follow through. Take advantage of it by being ready. Our traders have the first 60 minutes mapped out for them; it is just a matter of reading the order flow letting the market play itself out.
 
Have an idea but not an opinion for the day. What is the difference? If you have an opinion you will only see what you want to happen, or to put it more bluntly you will only see one side of the market. The side you want, the side that validates your brilliant analysis. When this happens you will be caught off guard if it doesn’t unfold the way “you knew it would.” That translates into bigger losing trades.
 
If you have an idea you have a bunch of “if-then” scenarios mapped out in your head for both your stocks and for the market. You have a game plan for what “should happen” but you will trade what actually does happen. I know this sounds insanely obvious but I can tell you most plans go out the window as soon as the bell rings. Remember having a plan and following it is how you repeat success.
 
One last point, on any given day you may have 4 stocks to short and 6 stocks to go long. It may be common for 8 out of the 10 to not act according to plan. That is fine let those trades go, you only need those two to play out to make a great living.

http://keystonetradinggroup.com/concepts/keystoneplatinum.htm 

day trading: the best advice I ever got

When a new trader comes into the stock trading business they very often have the misguided view that you have to “be right” to make money. As a day trader your goal is to make money from very short term price fluctuations. The term day trader itself implies that you will limit your profits. You have chosen to not expose yourself to over night risk. There is nothing wrong with this, you have a plan thats good.

The part of the equation you must be very focused on is making good money when those short term oopportunities present themselves. You must be ready. So wile you are trading in this short term window you must manage share size aggresively all day and every trade. Day trading is not a passive activity, you must be procative with share size on every trade.

What was the best advice I ever got? “Have the right share size at the right time.” Push your share size on good trades and be very procative cutting back share size when the trade stalls out or does not do what you expected in a reasonable amount of time.

Until next time Have a great week.

http://www.keystonetradingconcepts.com/keystoneplatinum.htm 

day trading: keeping busy

The market since Jan 08 has not exactly been on fire. The majority of my friends that trade stocks for a living have all said the same thing, “gotta grind it out right now.” Ok so that being the case what should a new trader be doing while the market is in a funk? Of course new traders are hungry to place trades and earn enough money so they can quit their night jobs, but what are they supposed to do when literally nothing is obvious for hours at a time?

Ask questions to the senior traders or mentors you have. Cycle through stocks or sectors you normally don’t trade but see if you can spot order flow. Spend time looking at price action, what is the phase you are in? Trend or pause? Are you in break out mode because you are consolidating or are you trending?

Look for swing trades. Look at daily charts and see if any swing trade from last night followed through. If it did could you have built a nice position that you could be sitting on right now?

The point is this. Do NOT sit there bored complaining the market isn’t moving!! You should be at your desk at least 8 hours every trading day, use it wisely. Use it to learn. Remember a very important fact that most people in this industry have a hard time understanding, you are not being paid for your time. You are not being paid dollars per hour by the market. You are earning a living for your skill as a trader.

We are always looking for new talent to trade our capital. If you think you have what it takes to trade as a professional trader send us an email inquiry info@keystonetradingconcepts.com

 

stock trading for a living: are you a trader or investor?

This might seem like a simple question for a stock trader but take some time and really think it out. My definition of a trader is a someone who takes risk soley based on price and volume. My definition of an investor is someone who speculates based on the current price of a stock that it is a value compared to what it is “worth.”

The reason for taking risk in both of these instances will be vastly different. The risk parameters for each will be very different. The more crystal clear your business plan is in regard to defining an edge, risk and trade expectation the easier it will be for you to follow your plan flawlessly.

day trading lessons

I see it happen over and over again. New traders sit down at their screen with a list of 75 stocks they can’t wait to get involved with. They have every indicator on their screen that money can buy. These are the traders who ultimately never make money. They think they need to know the most and they think they need to watch everything to make steady money (thinking if they are not watching as many stocks as possible they will leave too much money on the table).

Your job as a short term stock trader is to find those pockets of opportunity during the day where you can make your living. Ultimately those pockets are opportunities are where you can use more leverage because the trade”lines up” well. It is very hard to get the gut feeling it takes to use additional leverage if you do not know how the stock trades.

The only way to learn this is to watch fewer stocks that are liquid enough to manage your risk but have enough intra day movement to earn a living. It can be a basket of unrelated stocks you trade every day (how I trade) or it can be the large cap stocks from a specific sector. This method of stock selection has proven itself over time.

Learn the stock, increase leverage, then add another stock and repeat.