Archive for April, 2009

Preview call for May 4th one day workshop

Thirty minute preview phone call for our next eight hour one day work shop.

To listen to the call click here.

To learn more about the workshop click here.


day trading a change of trend

Day trading offers plenty of opportunity throughout the week. The best part to me personally is no over night exposure. I can sleep every day no problem. The argument for over nights is the extra P&L you get if you are on the correct side of an extreme opening. In other words you could not have gotten that price in the morning.

The easy trades or easy money when short term trading is when multiple time frames are in sync. In other words your intra day charts have similar order flow as the daily and weekly charts. These are the opportunities you want to use additional leverage and hold on to trades longer.

Today’s market offered a little bit different picture. For the last six weeks the order flow has been obvious buying pressure, no matter what was going on intra day it was just a matter of where you would get long for a new trade. Any short sales were basically shoved right back in your face. This was especially true if you shorted an intra day break down early in the day.

Today we were down sharply in the morning on earnings from Bank of America. During our morning meeting we noted the last 6 weeks and said because none of the shorts have been working lets wait till 10am EST to determine if the morning gap down would hold. We felt very strongly if the market was still lower by then we had a pretty good chance for follow through.

On a day like this you must alter your expectation for follow and understand you are now trading with momentum and not order flow. This simply means that BEFORE the trade you have determined that you will have less tolerance for price fluctuations and book profits as you have them.

Bad News?

When bad news no longer causes the markets to sell off, this typically means that their is strength and usually means we will trade higher. The sentiment of the markets has changed drastically over the last 4 weeks. We have opened lower on quite a few mornings yet, the market trends higher throughout the day. The finacials which were responsible for the market carnage have been leading the way.  It is during these times that you must put your opinions aside and can not justify that we have come to far to the upside and we must sell off. Following the intra-day order flow is how you generate large trading profits, not be doubting what is occuring in front of  you. Don’t get me wrong, It is truly hard to believe that sentiment has not only changed, but there not many tradeable pullbacks to get long. Stocks are exploding to upside with little or no pullback.  As earning season gets underway, it will be interesting to see how the market reacts to news that just can”t be all that good.  Remember, if we do not sell off on bad news, more than likely we will trade higher. We are looking at the next resistance in the Dow at about 8300.

Don’t fight the tape. Pay attention to the Order flow!