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Archive for May, 2008

stock trading: follow the money

May 16, 2008 1 comment

When short term trading for a living it is imperative that you keep on top of the strongest and weakest sectors. Your objective is to be involved in the most recent order flow. A traders job is to identify accumulation or distribution by institutions and then trade the ensuing short term momentum. When you get good at spotting these footprints you should be able to ride those trends for easy profits for a few months.

A good example of this is money was flowing out of the financials, the downtrend was obvious and the shorts were a piece of cake. Since January however the industry has been a very difficult read while oil services and technology has been hot and order flow much easier to read.

Sometimes as a full time trader it is easy to get comfortable with a stock and a particular sector and that is good. You will know when to push your share size. However we recommend that you keep an open mind and follow the strongest and weakest sectors during the day and especially at the close every day. You will see a pattern emerging weekly as the same industries appear over and over. it may give your trading business a nice boost of potential opportunity. This is the same method we teach in our Keystone Platinum program.

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