day trading advice from Tiger Woods

What advice could Tiger Woods possibly have for you as a trader? What could he possibly know about hitting a bid or getting out of a bad trade? When has Tiger ever felt the pressure to pay the bills with his next trade?
 
I would hope it is safe to assume that anyone reading this is savvy enough to know who Tiger Woods is. He is the worlds #1 golfer by a mile and he is projected by Forbes to become the first billionaire athlete by 2010.
 
If you ever hope to be successful, and hopefully enormously successful you absolutely positively need to take the advice I am about to give you. Study successful people. Not just successful traders. It doesn’t matter if it is a grand master at chess, a violinist, a professional athlete, a dancer or a cook or a single mom raising 6 kids.
 
I am not talking about learning what they do; I am talking about listen to what they say about how they got there, what kind of effort it takes to get there, and what it takes to stay as one of the best. I am sure you want to succeed as a trader. I am sure you want to earn more money than you ever thought possible. I am sure you “want” it. Well I am here to tell you that wanting it is not enough, sorry to throw cold water on your face but it’s the truth.
 
You need a burning desire. How do you know if you have burning desire? Are you willing to get a part time job while you are learning to pay your bills? Do you go to the office every day early and stay late every day to ask questions of those who are succeeding? Do you faithfully keep a journal every day?
 
When you were a kid did you practice because you wanted to or because you had to? Winners never have to be told to try a little harder next time. Winners never have to be asked to stay late to practice.
 
Do you go to the bookstore in your spare time or do you watch 6 hours of TV? Let me tell you a universal truth, how you spend your spare time is how you will spend your future.
 
One of the best places to read about success on a daily basis is Investor Business Daily, the “leaders and success” page in the front section. I have a shoe box full of these articles that I go back to once in a while to get re energized.
 
So what does all this have to do with Tiger Woods? In case you aren’t a golf fan, last week he won the US OPEN (one of the 4 major events in golf) with a torn ACL ligament in his knee and two stress fractures in his other leg.
 
Although that was impressive, that’s not the point I wanted to make. I was watching the interviews with him on the Golf Channel after the match and here is the quote that struck me. “I basically spend the entire tournament trying to minimize mistakes until a few good opportunities present themselves.” To the casual observer this probably didn’t mean that much, to me, well I almost fell off my chair.

Tiger Woods just explained how to be a successful trader. Tiger Woods says the secret to his success is minimizing mistakes. Spend your day following your plan, and a few trades will end up presenting an opportunity for a better score (profits). In the mean time as the day unfolds just minimize mistakes and stay in the game. Pay attention to those who are successful, if you are aware you will get clues.
 
One last quote to leave you with, one of my favorites. It was to Maria Callas, the most renowned opera singer of the 1950’s. A young aspiring singer walked up to her and said “I would give my life to be as good as you.” Callas casually looked at her and responded “I already have.” Think about it that is pretty profound.
 
Pete Renzulli is a full time day trader, trading author and mentor located in NYC. To receive his weekly newsletter “Keystone Trading Journal” and the valuable report “two simple secrets for finding the easiest stocks to make money in each day.” click here

day trading for a living

Sometimes it can just be a tweak here or there that can make a difference in a traders career. Last month I had a conversation with a trader who was struggling to make consistent money. As a matter of fact he was losing money steadily, his trading was all over the place.

We did an analysis of his P&L and I couldn’t believe what I saw, he traded over 100 stocks this month and we still have a week left in the month! One of the topics you will very rarely see in a trading book is to learn the personality of the stocks you are trading. Why you ask? Isn’t a chart set up just a chart set up? Well, yes and no.

One of the biggest secrets of making consistent money is understanding when to use more leverage. Contrary to rookie trader belief is trading the same share size every trade. When you learn the daily characteristics of how order flow is traded intra day you will know the scenarios to step up your size and just as important when to pull it back.

I told this trader to pick a sector or two and to pick 5 stocks he trades no matter what. So basically he was watching about 15 stocks for the entire month. His first reaction when I told him to do this was that he would be “too restricted.” I told him have faith.

I am happy to report this month he will take home a trading check but more importantly he is understanding how to run his trading business with confidence. He is focused.

online trading: Are you trading to make money?

I know the subject line of this post sounds ridiculous but bear with me for a minute and I will have you thinking real hard about your trading. Online trading can be the most expensive but productive psychotherapy you will ever have. Ask yourself why you have chosen to become a stock trader. I am willing to bet $1 you will say to make money, to become wealthy, to pay my bills etc.

Well let me ask you another question: Do you make capital preservation your number one priority or do only focus on how much money you can make on a trade? Trading is a marathon, not a sprint. You must preserve your energy (capital) to last in this business. I have seen it time and again, new traders (any trader without a PROVEN track record) fund an account with $10,000 and lose 40% of their capital in the first month. Why does this happen with so much consistency?

Most traders enter the trading arena trading to prove themselves right. They don’t trade to run a business. Let me ask you a question: If you owned a local deli, would you spend 40% of your funding buying roast beef? Would you spend 40% of your capital on that much roast beef if you have never earned that much return selling roast beef before? Of course not.

The reason losses become so large is that new traders believe they need to know what is going to happen next to make money consistently. So what naturally flows from this thought process is that when they make a decision to enter a new position, they do so with the incorrect assumption that “know” what is going to happen so they put the trade on.

What happens next which incidently probably WILL happen 60% of the time, the trade will move against the trade and has reached a stop loss point. Now here is what makes the difference between a trader who is trading to make money and everyone else: A trader who is trading to make money will exit the trade without any hesitation. A trader who is NOT trading to make money will hold onto the trade because he is “right.” This is the zone where small, reasonable losses that are a natural part of the business become career ending.

This first of course asumes you ALWAYS have a predetermined stop loss BEFORE you enter every trade. If you do, monitor your trading today and pay attention if you are trading to make money or if you are trading to prove your brilliant analysis.

Profitable traders don’t trade to be correct, they trade to make money. The only way to do this is to keep losses small in relation to the risks taken. One more good question we teach in our Equity Trader 101 course is this: If you are ever not sure about a position you are in ask yourself this: “If I did not have this position, would I want it?” The first answer that comes to mind will always be what you feel in your gut about the position. Good trading!

http://www.keystonetradinggroup.com/

stock trading: finding the easy trades

I am sitting here at my screen managing risk for over 500 traders. It still amazes me how many traders make their job as hard as possible. The biggest errors I see on a consistent basis are fighting the trend and picking tops and bottoms.

When I bring this up to those traders in meetings the answer is usually the same, I want to catch the big moves. I have news for you, good trading is very boring. You as a business owner (yes you own a business if you are a trader) should be concerned with making your equity grow consistently. You should not spend your day looking for homeruns. They are far and few between to rely on to earn a consistent living.

Find a trend! Spend your day and your homework time looking for an obvious bias to trade. Then trade that bias and only that bias. Do no countertrend trading at all untill you can be consistently positive

http://keystonetradinggroup.com/

stock trading: not a collapse

As an online stock trader you are always looking for an obvious opportunity. You are hoping to wake up one morning and have the market hand you money on a silver platter because the bias of supply or demand is so tilted to one side it’s juts a matter of how many shares you get and how long you are going to hold on. Yesterday was one of those days. It was a day to clean up and pay your rent.

One of our newer traders who is trading firm capital reached his intra day stop loss 20 minutes into the open. The market basically drifted sideways for the first 45 minutes before starting its decline. He wasn’t patient, there was nothing to do yet. He blew an opportunity to have a big personal day because he wasn’t disciplined. Always remember you are not being paid by the hour as a trader, you are being paid by the month. I will be having a talk with him this morning, I hope he went home mad. It’s the only way to improve.

Getting back to yesterdays collapse. If you were watching CNBC you would have thought they were brodcasting a funeral. You always need to kep the big picture in perspective. The market has not had a significant pullback in almost two years. Yesterdays 300+ point decline was long overdue and we are probably not doen going down. We did the second most volume in NASDAQ history yesterday which suggests a significant distributions day. Housing starts were down and believe me, the sub prime mess has not even begun to be felt, those houses in potential foreclosure will not hit the market until next spring. Yesterday was a blip in the big picture. Keep it in perspective.

http://keystonetradinggroup.com/trading.htm