Limiting Risk - Profitable Day Trading Procedures

Tips and techniques from expert traders designed to make traders more successful and help them to eliminate/limit the risk involved in trading.

Introduction
The biggest concern about day trading is the high level of risk that is involved. Yet there are a lot of individuals who day trade. One of the reasons why this could be so is the potential of making a lot of money in a short time. A day trader must learn as much as possible about trading and practice as much as possible as they develop and implement winning day trading strategies. As a result, there is no shortage of websites offering some form of day trading service for a fee. If you intend to day trade you must be aware of the following caution.

Proven Strategies
However, here are some proven strategies a trader can use to limit his/her risk in day trading. These are summarized as per the video above:

Use or develop a proven systematic approach to minimize or eliminate the risk in day trading. This can be done with discipline and patience. This system does not have to be perfect. All you need is a 60% winning percentage with smaller loses than your gains. Always utilize stop loss. Do not hold any position over night.

Take the advantage by using a speedy/quick trading system. This helps in getting filled at the best price when you place market orders.

Trading Procedures

1. Find stocks that are actively trading...
2. Monitor the stocks that are beginning a trend...
3. Look for the set ups that you know that works best for you...
4. Be super-selective... then trade...
5. Trade as much shares as possible...
6. Exit a wining trade before it turns negative...
7. Aim to make 5 cents or more per share per trade...
8. If a trade turns against you, exit with a zero or a 2 cents loss per trade...
9. Do it again (1- 8).

Caution
According to the Federal Trade Commission, 'How-To' Products Promise Extravagant Profits, Few Risks, While North American Securities Administrators Association Says 70% of Day Traders Lose Money. Please visit the FTC at the link above. The information provided on this site is for educational purposes only and does not give trading, investment, tax, or legal advice.

The information presented here is not specific to any individual's personal circumstances. Because of the nature of financial leverage and the rapid returns that are possible, day trading can be either extremely profitable or extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Anyone who chooses to use the information here in real trading does so at their own risk and will be responsible for their gains as well as their losses.

Related Information: Learn to make new money and manage it at LaBorde Financial.com.

Top Money Making Candlestick Trading Pattern

A top swing trading pattern explained by Tom Willard

Introduction
This video explains one of the top swing trading patterns/concepts using candlestick charts. It's simply finding a trend and looking for a retracement based on simple fibonacci retracement concepts. Anyone can learn these simple technical setups quickly and put them to use immediately.

Short term trading includes swing trading and day trading. This top candlestick swing trading pattern is explained by Tom Willard for the swing trader. The swing trader may hold his/her position for more than a day and up to months if the stop loss is not activated. However, this pattern can also be used in day trading.

The rest of this article will explain how this top candlestick swing trading pattern can be used for day trading. In the video the candlesticks are on a daily time period. This same candlestick chart pattern can be found on a day trader’s desktop. However, these candles will be 5 minute candles.

The sample chart pattern in the video is made up of a combination of three of the four most profitable Momentum Minute Trading (MMT) set ups. The set ups are Platform Break Out; Ledge Break Down; The Pull Back; and The Come Back. But, on this sample chart in the video there are three entry points that could be applied in the Momentum Minute Trading style.

Platform Break Out
This is also referred to as Platform Break Up. Normally, the candles are rising gradually or going sideways before the upward break out. This break out sometimes come after a Bollinger Band Squeeze.  The buy long entry is made after the stock price break through the lower red horizontal line in the overall move on the chart in the video.

Ledge Break Down
The Ledge Break Down is expected after the formation of consecutive lowering/sideways candles that forms a ledge. Then, the stock price drops precipitously. This is the reverse to the Platform Break Out. In this case when the stock price drop down below a horizontal line drawn connecting the lower points of the candles that are moving sideways a sell short entry would be made.

The Pull Back
The Pull Back should be expected after a stock price ran upwards. As the saying goes – what goes up will come down, hence we have The Pull Back. A shell short entry will be made during the formation of the second red candle below the upper red horizontal line in the overall move on the chart in the video.

The Come Back
The Come Back is the reverse of The Pull Back. So, what goes down will come up. This kind is also referred to as a Retracement. A buy long entry will be made at the buy point (above the red middle horizontal line) on the chart in the video. This trade could be very profitable after several consecutive down candles.

All the best, I hope this helps.

How to Pick Your Own Stocks to Trade

The video above share some key points for picking stocks to trade. However, I did not review the program advertised and do not endorse it.

Introduction
Many traders have difficulties finding stocks to trade especially if they are new to the world of trading. There are no shortages of information about stock market trading. Below you will find information that gives a trader various ways to find stocks to trade that are free of charge. Your days of not having stocks to trade are over.

General Search
Go to www.barchart.com and scroll down to the lower half of the home page and click on "Top 100 Stocks". Or, click on "Stocks" on the main navigation bar, then click on "Hot Stocks" on the sub-navigation bar below "Stocks". Here you have some excellent lists of stocks to trade.

Enter "free stock screener" in Google and review the first page results. Enter your criteria in a screener to select your stocks. Some screners may be challenging if your are new to investing but Yahoo has some preset screeners. Market Watch screener is simple. In Market Watch screener, activate and enter your price range, volume range and sort by "change percentage" when you are asked how to view your results.

Go to www.google.com and search for “free stock picks” without the quotation marks. Review the results of your search. You may find some sample portfolios presented by investment advisers. Make a watch list of the picks from the various websites. Monitor the list and make your trades from that list.

Proven Stock Picks
If your are on howthemarketworks.com then go to the profile of the successful traders/investors and see what they are trading. Make a watch list of the stocks the successful traders are trading. TVIX, UVXY and UNXL are very popular with day traders because of the volatility of these stocks but there are much more stocks to glean from the leading traders. Monitor your watch list and make your trades from that list.

Go to http://www.thetechtrader.com regularly. click on "Charts of the Day" from the navigation bar. Watch the video with pen and paper in hand. Pick a few stocks and follow Harry Boxer's entry, stop loss and exit instructions. These are ongoing picks with more room to run further up or down. This info is FREE! The Technical trader offers a free trial of their service. If you like the picks you may subscribe to the service and day trade with Harry Boxer or you may just use their swing trade service. If you are a day trader pick those stocks with 500k or more volume. Swing/long term traders could use any of the picks.

Hot and Real Time Stock Picks
Go to http://www.freestockcharts.com when the market is open. >> Click on "Standard and Poors 500 Component" at the upper left hand corner of the screen... >> Select "US Common Stocks" from the drop-down list... >> Click the "Vol Buzz" tab... >> Pick your stocks to trade from the top 20 most active stocks presently... >> Click the "%Change" tab... >> Pick stocks from the top 20 gainers... >> Click the "%Change" tab again. This resort the list... >> Pick stocks from the top 20 biggest losers... >> Do the above at different times of the day to find more stocks to trade. Only choose those stocks in your price range with a volume of over 100k for long term traders and over 500k for short term traders.

You may register with Free Stock Charts to save your settings. Also, create a simple scan by clicking on the "Scan" tab. Select "Create a Scan" and give it a name. Change the list to scan to US Common Stocks. Add your conditions by entering price range and volume (greater than 5000 to filter out volume less than 500k). Click ok and sort by clicking on the "Vol Buzz" tab.

If you have access to a professional trading platform, those that I know of maintain a list of the top most active stocks, the biggest gainers and the biggest losers every day. From those lists you could choose stocks to trade.

I hope this helps.

Stock Picking Services for the Short Term Trader

This video  is an example of Harry Boxer of TheTechTrader.com explaining swing trading activities after the market closed on 10-16-2012. The company used technical analysis to provide stock picks for both short term and long term traders. Read on for information to get his current picks and market analysis.

Introduction
There are many stock picking services on the Internet. Some provide stock picks for short term investing, some for long term investing and others for both. Some may just provide you with tools that you can use to select the stocks you would like to trade. The bottom line is - you the trader will have to decide which trader you are going to be and which service you are going to use if any. Most of the services are very similar, but the differences are found mainly in how they present their information.

In this article, I will focus on day trading and swing trading stock picks by The Technical Trader. Swing trading is considered short term trading because traders hold their positions for less than a year. I have tried several programs, stock trading software, and stock picking services and I hate to say it but I did not find one service that meet my needs. As a result I develop my own trading style/plan. Nevertheless, all these services have good points and if any service meets most of your requirements, then that may be a good service for you.

Harry Boxer of The Technical Trader Stock Picks
The Technical Trader stock picking services are for both long and short term traders. Harry Boxer uses mainly technical analysis to pick his stocks, but he would also make comments about a stock that are about the fundamentals of the stock. His picks vary from penny stocks to expensive stocks so you have a wide range of price to choose from.

During the course of the day Harry would come online in a live audio/video presentation and give his daily day trading stock picks and swing trade picks. He would give entry, stop loss, and exit points. He would later give updates to his picks and you would see his screen as he uses technical analysis to explain and analyze his picks. Harry loves to draw trend lines and he explains them very well.

Free Trial
The Technical Trader also offers a free trial so potential subscribers may try before they buy. When you sign up to use their free service you must use a credit card. However, if you choose to cancel the service they will do so with no questions asked.

Picks Update And Market Analysis
Every evening, after the market is closed Harry would review his picks and the movers of the day in a video that is emailed to his subscribers. In this video he also updates his picks. Go to www.thetechtrader.com and click on "Charts of the Day" on the navigation bar to watch his latest video update.

Pros
In my view, The Technical Trader is one of the best stock picking service I have tried. In my personal plan I will be re-visiting Harry Boxer at The Technical Trader as my investing activities increase. I love his list of "Boxer Shorts".

Cons
My main concern with The Technical Trader also lies with all the other services I have tried. If you don’t have enough capital to invest in several opportunities then the service may not be for you. For example if you choose a stock to invest in from their picks and you get stopped out it may be a significant lost to a small portfolio. However, this and other risks are what you take as you enter into the world of stock market investing.

Stock Picking Services for the Long Term Investor

The video above explains VestorVest mobile app. The company cater mainly for long term investors although they have some short term investor services. In this article, a long term investor is defined as some one who holds his/her stock trading position for more than a day.

Introduction
There are many stock picking services on the Internet. Some provide stock picks for short term investing, some for long term investing and others for both. Some may just provide you with tools that you can use to select the stocks you would like to trade. The bottom line is - you the trader will have to decide which trader you are going to be and which service you are going to use if any. Most of the services are very similar, but the differences are found mainly in how they present their information.

I am going to use VectorVest as my focus in this discussion because a fellow trader ask me about it on howthemarketworks.com and I promised to write an article about it. Every service has their own perspectives and a plan or program a trader may subscribe to if the trader is comfortable with the approach of the service provider. Most of these services that I have tried have very strong points. If the trader's risk tolerance is compatible with the risk exposure of the service then that service may be for that trader. I was never comfortable with any one service and could not subscribe to all so I develop my own method for trading using various concepts that I am comfortable with.

VectorVest and the Value Investor
VectorVest provide a good service for the so-called value/long term investor. Their system is based mainly on fundamentals. To have access to their service an investor may subscribe to any of the various services they offer. Some could be useful for short term investing. This entails downloading a software program that is very easy to learn. VectorVest make several videos available to help the investor utilize the software. They believe in buying under valued stocks and that the price will meet the value in the near future. This premise does not take into consideration market or stock sentiment. In their defense, among the many searches available and investor may customize their search to select stocks that are responding to market sentiment.

Timing the Market
Timing the market is a popular saying of VectorVest and they claimed that they never missed a major market movement upwards or downwards. They tell you when to buy, what to buy and when to sell. Theoretically, this seems to be very good but you can buy a stock long and even though the market is trending up you could still lose money. However, your odds increase if you trade according to the current trend of the market. In a volatile market you could be in and out of the market in very short periods of time losing commission and capital. During the time I monitor VectorVest I must agree that they are excellent at market calls. As a subscriber you can also use their news letter to go back to verify market calls they made before you became a subscriber.

Back Testing
VectorVest provides one of the best back-testing software program. The problem is you do not make any money in a market that is in the past. Money is always made in the current market and going forward. Their reasoning is to use their market indicator charts to find an old formation that is similar to the current market trend. They will back-test that old period of time and use the information derived and apply it to the current period. There are so much problems that are inherent with such a practice that I do not have the time to get into them. For example, there could be a few dominating stocks in the old search and corresponding stocks may not be present during the current market search. However, here is a saying that investment advisers always use that you may me aware of: 'Past performance does not guarantee future results'. I used their basic software and manually simulate my tests because I believe their add on modules to automate back-testing was very expensive and I could not justify the cost.

Sample Portfolios
Many of their sample portfolios are started at $100,000. I was always skeptical with the returns in the older portfolios. The last time I checked the most recent portfolios were not doing as well. They believe in batch trading, where you trade the top ten stocks of your favorite search. If you are a small time investor this will not work for you. My risk tolerance can't handle this practice because oftentimes when you buy the top 10 stocks they reverse on you and may hit your stop loss on several stocks. I hated that. I did make some money on a cheap stock, Sketechers, that appeared on the front page of their stock viewer. I bought it in a single trade. To me diversification is over rated and seemed like a mutual fund trick to passify low information investors. Buffet always bought an entire company or a huge number of shares in whatever company he invested in.

Other Pros
VectorVest has a very good tool you can use to value your stocks/portfolio which is very informative and it is based on fundamentals. They offer a free trial of their programs for 5 weeks so you can test their strategies for your self. You only pay a small shipping fee.

My overall rating on VectorVest would be 'Moderate'. If you have some money and you can handle the risk exposure with the draw downs then VectorVest may be 'Good' for you.

Other Cons
I tried to use their program to day trade but it did not work for me. Their charts are not as flexible as those in other programs and the real time program is slow.

Other Information
They offer a module for options trading but I am not an options trader and it would be unfair for me to comment on it.

As mentioned earlier, before you chose a stock picking service or stock analysis software program please be comfortable with the risk exposure. Then, be consistent with your trading/investing. I hope this helps!

A Short Term Trader - You Should Be One!

Short term investment in stocks can be extremely profitable. It can be more profitable, over the years, than long term investing. This is because the rate of return on long term stock investment is typically not linear. Market volatility, market trends, and market reversal all affect stock prices, even of the most stable of stocks.

Introduction
In a previous article - 'A Long Term Trader - Do You Want To Be One', several reasons were discussed why I believe that a short term trader is a better choice that a long term trader. For this article, a short investor/trader is one who holds his/her position for less than a day. Therefore, in this discussion scalpers are included in the group generally referred to as day traders.

Once you make the decision to be a stock market trader or investor it is important for you to choose what type of trader you are going to be. Assuming you have made the decision to be a short term trader you must pursue a line of study that will make you knowledgeable and skillful in the area of trading you have chosen. This line of reasoning is applicable to all forms of trading.

According to Investopedia.com, a scalper is a person trading in the equities or options and futures market who holds a position for a very short period of time in an attempt to profit from the bid-ask spread. The key here is to trade large amounts of equities frequently and make just a few pennies per trade.

Traders are Gamblers?
Generally, in some quarters stock market investing is looked at as gambling especially if you are a day trader or trading options. There are few reasons why this opinion is perpetuated. Many new and unskilled people get into the market hoping to make it big without the proper preparation and lose a lot of money. Also, it is said that the insiders at Wall Street would like everyone else to be long term traders and left their positions at the mercy of Wall Street. All the major investment bankers refuse to talk to 60 Minutes about high frequency trading - scalping.

Become a Scapler
The reasons why you should not be a long term trader are the exact reasons why you should be a scalper - see the article mentioned above. One of the most important reasons to be a scalper is total control of your money. Long term traders will never be able to survive a crash. This brings me to the point of showing that the notion that day trading is more risky than other forms of trading is a major misrepresentation.

Here are some points to solve the issue of high risk that is frequently associated with short term/day trading. Firstly, there are different types of short term trading. I suggest that you become a skillful scalper. Scalpers money are in the market or exposed for very, very short term periods - from a few seconds to a few minutes. Which style of trading is less risky? One that is in the market all the time; one that is in the market for the day; or one that is in the market for a few minutes. Obviously, the answer is the scalper because of the short exposure.

Secondly, I am confident that a skillful scalper did not lose 33% to 66% of his investment during the subprime mortgage market melt down. Some long term traders did and they were about to retire - ouch!

Thirdly, if you studied the 'flash crash' of 2010 it would be evident that the skilled scalper is the only trader that would have benefited tremendously during that short time of nervousness in the market - stay tuned for how to benefit from a market crash. Traditional day traders may have suffered heavy loses during that time if they were on the wrong side of the market when it made that unexpected plunge downwards.

Finally, the current stock market environment calls for one to be a scalper. Many people who are in the market seemed to think that a crash of some sort is about to materialize. To survive any upcoming market volatility become a skilled scalper.

A Long Term Investor - Do You Want to Be One?

In this Edward Jones Perspective video, Investment Strategist Kate Warne makes the case for long-term investing and discusses these time-tested principles

Introduction
Generally, long term traders/investors hold their positions for a year or more. However in this article I am going to consider a long term trader as a person who holds his/her positions more than a day. This therefore, include those traders who consider themselves as swing traders. I believe that this modified definition is necessary due to these modern-day type of occurrences commonly known as 'flash crash', 'insider trading', fraud and 'hacking'.

Once you make the decision to be a stock market trader or investor it is important for you to choose what type of trader you are going to be. Assuming you have made the decision to be a long term trader you must pursue a line of study that will make you knowledgeable of the area of trading you have chosen. This line of reasoning is applicable to all forms of trading.

Fundamental Analysis
Go to investopedia.com and chartadvisor.com and learn as much as you can about stock fundamentals and at least the basics on technical analysis, respectively. A long term investor should focus on the story/plan behind the development of small and mid cap companies. Even some large cap may generate some interest due to management, unique products and/or service etc. In this case you purchase the stock of the company you researched and accumulate the stock over time, every time the stock price falls. Check out the blog post I wrote about Apple in Sept of 2007 at Investor Place Blogs.

Stock Split Strategy
Swing traders may study stock split strategies and implement their choice. Even though investing is risky, in a normal market environment you could make good profits with stock splits within a few months. My favorite strategy is buying stocks that are about to split. You monitor and research these stock split announcements at  The Online Investor and at Yahoo Finance, respectively.

You buy the stock before it splits. The more shares you get after the split the better. If the stock chart before the split was gradually increasing and lacks volatility the better. Hold the stock for up to a few months. In many cases if you did your research well you will double or almost double your money.

Obstacles and Concerns about Long Term Trading Success

Many traders adore Warren Buffet because of his success as a long term investor. I believe that what he has accomplished is remarkable. Given the distrust, greed, and immorality that are constantly showing their heads on Wall Street it is very difficult for a modern-day long term investor to replicate what Mr. Buffet has done. Frankly speaking, I just don't trust the market on the long term even though it has trended higher and higher over several years.

Therefore, given the above it seems logical to be a long term investor. Buffet's accomplishments and the history of the market are strong pros - in favor of the long term investor.

However, let us look at some cons that are obstacles that I can't get over to be a long term investor. First, to be such an investor you must have good tolerance for risk. I find it very difficult not to sell  when I see my stock price falling day after day. If you start with a small account and are faced with a series of stop loses in the beginning it could be very discouraging.

Secondly, insider trading and fraud are alive and well on Wall Street. Michael Milken paid a large fine but his family kept over half a billion dollars. The Enrons and the Worldcoms are alive as well so we heard of Bernie Madoff and the recent scams as discussed in the video above. Don't believe the commentators in the video who are giving the impression that the penalties are enough to halt insider trading and the mess on Wall Street. It was even legal for the members of our government to get rich on insider trading.

Thirdly, I do not believe any stats that comes out of Wall Street or the stats from our government. If the truth is known about the Federal Reserve Bank there will be an immediate international financial crash. The major accounting firms that audit the very large companies are not independent. If anyone believe they are, then I own the Brooklyn bridge and it is up for sale.

Fourthly, the Securities and Exchange Commission, the other security regulating bodies and our government are clueless about what is going on at Wall Street and on the Internet. This was shown in testimonies to Congress in the Madoff scandal and the recent 60 Minutes documentary of the $100 million stolen from the banks by hackers in 24 hours. The investment bankers and the hackers are so much smarter than the regulating authorities it is comparable to your kid little league team going up against the NY Yankees.

Finally, given the current financial environment of major insecurities a long term investor may wake up the next morning and find out that most of his/her portfolio if not all has disappeared overnight. Stop loss or diversification will not protect you against an overnight flash crash. In the latter part of 2008 when the subprime loans and credit default swaps became a part of our vocabulary reports show too many people who lost 33% - 66% of their retirement when they were about to retire.

Our best bet is to stay liquid and have accounts in various 'too big to fail banks'. In the interest of preventing a global financial catastrophe, the Federal Reserve along with the world governments will do what they always do to prevent such events from occurring.   

Seven Rules For Success vs. The BluePrints Of A Master Trader

In this short video Brian Tracy reviews what he believes are the 7steps to success for anyone, no matter where you are currently in life.

Introduction
I heard some sayings some time ago and the more I think about them, the more I see them fitting a trader who has failed. One saying says: 'If you fail to plan you are planning to fail'. Next: 'Proper planning prevents poor performance' (5 P's). And then: 'Plan your work and work your plan'. Wow!

Therefore in my journey - From Virtual Trading to Reality, the more I implement what I now call the 'The BluePrints of a Successful Day Trader', I realized that it is impossible to succeed if a trader does not take the following actions...

Plan!
A trading plan could be very simple and short or very long and complicated. I prefer a simple plan with details. In developing a plan it is a good idea to state your trading goal and then write down what you need to do to accomplish that goal. Incidentally, those writings are sufficient to be your plan. Your plan to become a successful trader includes: become educated about the field of trading, practice trading, and master it. You should be able to simplify your plan so that you have a daily plan as you set out to accomplish your goal.

Work!
Once your plan is in place you must work it otherwise it is useless. To become a successful trader you must master your craft. This implies educating yourself; a lot of practice, more practice and then some more practice. Use the luxury of free virtual trading, and paper trade as if you are trading in a real account. Review your work and find out why some trades go bad as some will always do. Then improve and learn from your errors/mistakes.

Be Patient!
Once you turn on your computer to practice and later to trade in a real account you must avoid all distractions no matter how simple it may be. Stay focus as you seek candidates for trading. Wait for your favorite chart patterns and trade them only. Be focused as a laser beam especially when you are in a trade. You do not have to trade if the conditions for trading are not in your favor. Wait for another day!

Execute!
Like driving, many people get into an accident because of their indecision. Once you have determined you are going to make a trade, make the trade, period. When the trade is over then you can do the analysis that's necessary. Enter and exit the trade as per your predetermined plan. Absolutely no modifications during trading. Modifications are done when you review and analyze your work.

Be Disciplined!
Be disciplined can't be over emphasized. It includes focus, but it goes even further. Your emotions must be managed and have no part in a trade. Be very much aware of fear, greed and what you think. What you feel about a stock has nothing to do with your trade. You must only react to what your charts and indicators etc. are showing. Do not act on what you think but on what is.

Be Consistent!
Before you move on from one stage to the next you must first master that previous stage. Think about doing a long division Math problem. In order to do it, it is important that you can multiply and do subtraction. Once you master multiplying and subtracting then you can move on to dividing. The same can be said for trading. Master a strategy before your move to another. Then, after you mastered a strategy just keep on doing it until it becomes an automatic process to you. Do not change until it fails as it may because of the field you are in. It is good practice to quit trading once you have met your daily goals.

In summary many people like to make money and are intrigue by the stock market. They have heard many good stories about the stock market but have forgotten the many horror stories. What I have discerned is that many want-to-be traders fail because of lack of proper preparation to trade.

All the best and good luck in your trading!

Part III - How Small Traders Overcome Inherent Disadvantages in Day Trading

Gary Ender from Candlecharts.com shows you how to use candlesticks with pivot points for better trading results.

Continued from Part II...

Introduction
I received the following from Yogesh, a very good virtual trader on howthemarketworks.com. He was unable to post it as a response to my blog so he forwarded it to me. It is an excellent commentary so I am posting it in its entirety and I am responding 'in blue' to it paragraph by paragraph with resolutions to handle the disadvantages to small time traders. Here are his comments and my response: 

Tips
1. Select stocks between $5-$15, with high volume and volatility for quick results. Larger the number of stocks more will be gain/loss. Playing short gives double the profit in this contest (with no relevance to real trading).

In real trading you need to know if the stock is shortable, marginable, and if the stock is available for shorting. Direct access trading software do provide this information.

2. Don’t leave any stock position open overnight. At the end of every day as a day trader only cash shoud be in your account. If the stock gaps up/down overnight you will have big losses. Up is good, but what is the guarantee!

I agree totally! This is not applicable to swing/long term traders.

3. Use 2 different browsers (preferably Fire Fox and Int. Exp.) for short and long to save time (for this contest).

I even try this to trade in two portfolios. In doing so you save a few clicks.

4. Up/down trend lines in MACD, rsi2 and crossover of moving averages is good guides to decide buy/sell (Study this at investopedia and onlinetradingconcepts.com.

This site has 5 chart formations they claim that all traders should know. The information is very good: chartadvisor.com

5. All the websites I mentioned here are free.

I agree.

6. Study Doji, Bullish and Bearish Engulfing, Hammer, Inverted hammer, Hanging man, Morning star and Evening star for reversal in price trend in the charts. (onlinetradingconcepts)

These are candle stick chart formations and you may research YouTube for help on these formation also.

7. Especially for Elena, you experience drop of price as soon as you buy, and price rise as soon as you short, because you are buying at the top of the uptrend line and selling at the bottom of down trend line.

In understanding indicators, chart patterns, and candlestick patters you will be able to avoid such mistakes. Also, if what you are doing you are getting the negative result on a consistent basis, then trade against your original intent. For example: If you were planning on buying long, then sell short instead and vice versa.

H A P P Y T R A D I N G

All the best!

Part II - How Small Traders Overcome Inherent Disadvantages in Day Trading

This is a very important video as it explains how to best use our free videos for inspiration and how to safeguard you against too big losses testing out new ideas. For example the use of Simulator will protect your trading capital.

Continue from Part I...

Introduction
I received the following from Yogesh, a very good virtual trader on howthemarketworks.com. He was unable to post it as a response to my blog so he forwarded it to me. It is an excellent commentary so I am posting it in its entirety and I am responding 'in blue' to it paragraph by paragraph with resolutions to handle the disadvantages to small time traders. Here are his comments and my response: 

There are many other things that are different here. So don’t think that if you do well here you could make money in real trading. Mack’s blog has good things to say, and what to do. But he has not told you how to do that and where to find the information. I will try and give you whatever I know and practice.

The above is true, however, I entered some related websites in the comment section of the contests and I will be entering relative links to the blog. As a facilitator, I wanted the traders to do some searching for themselves. Also, I do not share my trading set up and the proprietary indicators that I use. I believe each trader has to choose or develop his/her own set up.

Charts and Portfolio
It is very important to follows the charts and know the indicators. You can find them at freestockcharts.com. Find different indicators that suit you and study them at investopedia.com and onlinetradingconcepts.com. I use volume, MACD 12/26, rsi2, Exponential Moving Averages 6 and 30 (i.e. 6 days and 30 days), Bollinger Bands and Stochastic Fast. You may make your portfolio with freestockcharts.com.

I did share about freestockcharts.com before. I even mentioned their premium paid service called TC2000.com. It is similar to the free version but there are many more options. To subscribe to TC2000 is about $100 per month. I am a subscriber. You can even go to the Worden Brothers website, worden.com and watch free Webinars to learn how to use the software and to understand the different features such as indicators and what they mean etc. 

Selection of stocks
1. Go to barchart.com and under Signals, you will find Top Signal Stocks and Bottom Signal Stocks. Make 2 separate portfolios for use of Long and Short. Choose stocks with daily volume of 500,000 and more only. Below that, in this contest, it will go to delayed orders. Higher the volume more volatile it will be. Lower volume stock price change slowly and keep you waiting for long time for a price change. Next to Signals is Hot Stock topic. It gives the top 10 positive/negative moving stocks at that time. Playing these stocks is very useful in this contest.

I use the scanner in TC2000 or if you use the free version there is a scanner you can use there too. My scanner is real time, auto updating, and the best stocks according to my criteria always come to the top of the results. I simplify my set up as much as possible.

2. Yahoo Finance, under Market Movers, gives most active, %gainers and %losers, that are very good guide for selection of stocks. (Remember the volume).

Gainers and losers are old and after the fact information. But you may use the info for trading second wave movement or the pullback and the comeback. My scanner provide me with all the stocks I need to trade. I only trade one stock at a time and every time I trade have from at least 6 or more candidates to choose from.

3. Its a good idea to keep track of earnings status of financial results. Its reaction gives sure up and down

This may have some benefits to long term traders. I do not trust the stock market. I do not listen to any news, period! I tune out all noise, and I focus as a laser/robot. All the information I need are shown on my chart set ups. I strive to be very, very simple.

4. CNBC will give you an idea as to how the market is going to open that day at opening. So you can select long/short play.

This may have some benefit to swing traders or even some day traders. I am a scalper. See response to #3 above.

Continue on Part III...

Part I - How Small Traders Overcome Inherent Disadvantages in Day Trading

Expert trader Linda Raschke discusses her pre-market preparations, technical and fundamental analysis, and important steps traders should take to prepare for each trading day.

Introduction
I received the following from Yogesh, a very good virtual trader on howthemarketworks.com. He was unable to post it as a response to my blog so he forwarded it to me. It is an excellent commentary so I am posting it in its entirety and I am responding in 'blue' to it paragraph by paragraph with resolutions to handle the disadvantages to small time traders. Here are his comments and my response: 

 

With Reference to Howthemarketworks.com Contests

I can't add to your blog. If you think it is fitting can you please include this in your blog that it may be beneficial to the participants of the contests on howthemarketworks.com? I love to share what I know with people, if it can be of any use to them. I would be more than happy if they benefit from my experience.

I would recommend that you all to read Mr. Mack’s blog at mainstreetusa1.blogspot.com . It is very informative. I will like to mention here that this competition is not like what actual trading is. This is a good way of learning different trading methods. There are certain glaring differences between actual trading and virtual trading, which I know about and would like to mention them here.

I agree.

The Contests are Very Different Because:
1. Order execution here is at market price, whereas in actual trading it is on ask/bid price, which may be more or less than 1 cent. So here you can cash-in on 1 cent, you can buy a stock at $8.81 and sell right away at $8.82. But you will have to make at least 3 cents to gain 1 cent, in actual trading.

Some readers may have difficulties understanding this point. In summary, when you trade live, commission ($5) is paid first. Then, the price of the stock you buy is at least 1 cent greater than the price you will get if you sell at the same time. So if you sell as soon as you buy you will loose the cost of round trip commission ($10) and 1 cent by the amount of shares traded (3,000 shares x .01 cents = $30). My goal also include to be able to predict that a stock that I am about to trade will increase or decrease in price by 3 cents or more. To date my predictions are nearly good.

2. There are no worries about buying/selling large a number of stocks here, whereas in actual trading, as soon as you put large stocks on sell/buy, the market will react and the price will change with your order. Your order may not be filled at your desired price. It may not be filled fully , for a long time because there may not be enough buyers or sellers at that time.

To resolve this issue, trade no more than 5% to 10% of the shares currently trading. Also, select only stocks that their current volume exceed 500,000 to 1,000,000 shares. If you still have difficulties, then trade stocks with even higher volume, may be 10 million or more.

3. Stop loss orders put up by small traders, like us, are immediately taken up by market makers and then it comes back to previous market price. Say the market price is 5.81 and you put a stop market order at 5.71, your order is immediately filled at 5.71 and then the price returns to 5.81. Then you feel cheated and fooled. I have experienced this more than 75% of times, before I stopped using stop orders in real trading. In this contest it is fairly dealt and gives you the feeling that it works.

In real trading as a day trader do not enter a stop loss into the trading software you are using. Instead, keep your stop loss in your mind, or draw a line on your chart where your stop loss would be. My stop loss is very simple, if I predict a stock to go up and after I make the trade it turns down, -1 cent, -2 cent; then I would exit the trade; and vice versa for shorting. If I am in this trade, as soon as there is any indication of a red bar appearing in conjunction with my other indicators; I would exit the trade.

4. You can put your short sale orders to use full available money here. But if you do so in actual trading, on a slightest loss you are reminded by the broker to put additional money, lest you’re a/c could be restricted.

This is an easy fix. Just do not use your entire balance to short trade in real trading. Some US brokers require $25,000 in order to day trade others even ask for $30,000, however there are offshore brokers such as SureTrader.com and AllianceTrader.com that only require a $2,000 deposit to open a margin account to be able to day trade.

Continue on Part - II...

Ordinary Trader Turned $700k to $41 Million In 3 Years

Mr. Burns inspired me as virtual trader but Karen has blown me way with what she did in actual trading. Karen went from her day-job as a CFO to an option trader and made 50% profit on $100,000 in  2007. Later she turned $700,000 into $41 million by 2011. This is her story, as told by Karen herself with Tom Sosnoff on Tastytrade.

She took about five years to educated her self about trading. She attended several trading seminars and workshops at that time. During those years she paper traded, practiced her strategies and learned from her mistakes. Her confidence level rose to the level where she thought she could make a living trading. She then took her funds from her broker and invested and managed her own money. In the first year she made 50% profit. Later her previous broker called her to manage his money.

In her own words in summary - "It took hard work and being discipline and the controlling of your emotions."

This video of 24:55 minutes is a must watch!

I can hear the doubters. Well she used options. It can't be done trading stocks. And I can also hear the excuses... This documentary is very good because it shows that there are tremendous possibilities in the markets. What anyone who watches this video, who are interested in charting their own future need to do is to choose the vehicle they are comfortable with and do what is necessary to accomplish their goal.

As you may know by now, I have a plan to be financially successful in the market by trading stocks. Without even knowing about Karen, I see many similarities in her story and my experiences. I am currently near to the end of the practicing stage of my plan. As a result, I will be updating this blog to document my progress as a I take this journey from a day job to a successful trader - from virtual to reality!

You can do it!

I can do it!

Part II - Tips on Making Money Trading Like a Pro

This video shows a simple entry and exit method for swing traders. This strategy can be used in day trading. 5 minute candle will be used instead of daily candles.

Continuing from Part I...

Introduction
The greatest thing about virtual trading is that you cannot loose any money. It is a good place to develop and practice your trading skills and master your craft. To do so tips are very useful. Compare the "10 Golden Trading Rules" in the video in Part I with the tips shared in this blog and make your choice based on your style or method of trading.

Tips 6 - 10

Tip 6. Select or develop an entry and exit strategy which must include stop loss. The chart formations in the previous link can be used in any type of trading. Take your profits, you may reenter a trade if need be. You can't go broke taking profits. But, greedy pigs get fat first and are then slaughtered. There are many trading systems, but you have to choose one you are comfortable with according to your risk tolerance. To succeed in a system you must follow it 100%, and be consistent. Document and learn from your mistakes. You do not have to win a virtual competition to be a successful trader, but use it to help you get better at trading.

Tip 7. You need time to trade. The best time are from 9:35 am to 10:35+ am; and from 2:45 pm to 3:45+ pm. The “+” sign means you are in a trade that is working for you. A few stocks at 9:00 am and after 3:45 pm may explode or gap up or gap down. Sometimes, during the middle period of the day a few stocks may also drop like a rock or go up like a rocket. If you can catch any of these at the right time you will make huge profits in a very, very short time.

Tip 8. Every expert trader needs a reliable scanner or some other method to prepare a list of stocks to trade. A good scanner will inform you about stocks that fit your trading criteria. To get a quick list of stocks to trade, visit the profile of the leading traders in this month official competition at howthemarketworks.com. Create a watch list with these stock symbols and monitor them daily.

Tip 9. Another day trader suggestion is to be focused like a laser beam. Trade only one stock at a time. Buy long or sell short the maximum amount of shares as per your capital balance (in reality trade the maximum according to your brokerage commission/volume agreement). Once you understands the movement of a particular stock you may be able to buy long and sell short this stock at the appropriate time. You will be able to make profitable trades better than 70% of the time if you are aggressive and almost 90% if you are conservative.

Tip 10. Some traders say you need to know the the market sentiment, but I say you need to know the psychology of the trade and what the indicators represent. Obviously, as a new trader if you select a stock to buy long and the market is going up at that time you will have a good chance of making a profitable trade; and vice versa if you sell short. However, as a you get good at this, you will be able to buy long even on a day when the market is down. For example, in my $5,000 virtual portfolio, New 1 Percenters-Jan I only did a few short trades on the 31st of the month and I won that contest with huge gains. In that month I made at least one trade every day.

Finally, if you are a new trader and you move from being a long term or swing trader to a day trader and you implement the above tips you will have a good chance to increase your profits. Also, even if you are an experienced trader, you can use the above to help fine tune your trading and be more efficient in your trading, and be good enough to compete with Mr. Burns in the virtual competition. If you have any difficulties with any of the trading terms used; feel free to research the terms at www.investopedia.com or in Google type for example - “define: scalper” without the quotation marks.

All the best in your trading!

Caution
According to the Federal Trade Commission, 'How-To' Products Promise Extravagant Profits, Few Risks, While North American Securities Administrators Association Says 70% of Day Traders Lose Money. Please visit the FTC at the link above. The information provided on this site is for educational purposes only and does not give trading, investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. Because of the nature of financial leverage and the rapid returns that are possible, day trading can be either extremely profitable or extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Anyone who chooses to use the information here in real trading does so at their own risk and will be responsible for their gains as well as their losses.

Part I - Tips on Making Money Trading Like a Pro

10 Golden Rules of Trading explained by former floor trader, retired hedge manager and President of INO.com, Adam Hewison.

Introduction

The greatest thing about virtual trading is that you cannot loose any money. It is a good place to develop and practice your trading skills and master your craft. To do so tips are very useful. Compare the 10 Golden Trading Rules in the video above with the tips shared in this blog and make your choice based on your style or method of trading.

Recently, there are a few people who have influenced me and made a lasting impact. They include: Nick Vujicic – Life without Limbs; Brian Tracy – Personal Development; and Mr. Burns – one of the most skillful virtual day trader on howthemarketworks.com.  In this article, I will share some trading secrets to help new traders. The information will also help the experienced trader to step up his/her trading to another level.

Long Term Investors vs. Day Traders/Scalpers
Long term investors can’t compete with Mr. Burns. Mr. Burns is an exceptionally highly skilled day trader, paper trading on howthemarketworks.com. He can trade the same stock an investor has in his portfolio and Mr. Burns will take out profits and exit while the investor is waiting for the stock to accumulate more profit. With his increased capital (initial capital + profit) Mr. Burns will make even more money shorting the same stock on the down side while the investor is still waiting for the stock to rebound .

A swing trader does not have a chance either. He will get the same treatment if or when he holds his position for a day or more.

Day Traders/Scalpers
A day trader has a chance to compete with Mr. Burns. A day trader holds his positions for less than a day and if skilled, may be able to compete. However, I believe that Mr. Burns has the uncanny ability to detect when a stock is going to gap up or gap down and he enters his trades before the events occur. Therefore, making huge profits in a short period of time.

Then, there is another group of traders that howthemarketworks.com does not account for. These traders are called 'scalpers'. I believe that Mr. Barns is an extremely advance scalper/day trader. On the site, he has two portfolios of which he is in first place in each portfolio. He also trades a few days in each portfolio and then rides off into the sunset, may be playing golf or making real money.

I can be categorized as a scalper. But, I refer to myself as a 'Momentum Minute Trader' tm. I trade from 1 – 25+ minutes per trade. I work full-time, so my time to trade is very limited. However, Mr. Burns by his performance has inspired me to step up my trading and I made huge profits in one day virtually trading one stock. I hope that every trader who reads this article will refer to themselves from now on as a 'money making trader' instead of a long term investor, a value investor, a swing trader or a day trader etc. Meaning, that they will become whatever trader that is necessary that will help them make money.

For new traders to increase their profits; and for experienced traders to step up their trading they need to implement the following tips. These may give them an opportunity to compete with Mr. Burns; but most importantly, make them better traders.

Trading Tips 1 - 5
Tip 1. Every trader must have a trading plan and task/strategies to implement in order to accomplish their goals.

Tip 2. A day trader/scalper has the best opportunity to make serious money in this market environment. However, stock market trading can be highly risky. A trader must be proficient in shorting. In shorting, you could make just as much or more as in buying long.

Tip 3. Trade the lower-priced stocks with large 90-day average volume, 500,000 or more. Buy long or sell short the maximum amount of shares as per your available balance. This will give you the biggest bang for your buck and avoids slippage when you enter and exit a trade. However, in comparing two stocks look at the increment on each chart. Let’s say one chart shows $5.21, 5.22, 5.23 etc.; and the other chart shows $7.71, 7.81, 7.91 etc.; then you are better off trading the $7.71 stock. To simulate real trading stay within the commission/volume range of your brokerage account.

Tip 4. Trade the most volatile stocks with the largest price ranges. This gives you an opportunity to make a lot of money quickly, your potential to loose also increases. Disregard news, stock tips, fundamentals etc. Just focus on the stock charts. Charts reveal all you need to know about a stock in order to make money. Could you imagine traders chatting about AAPl, $457 and GOOG, $754? I traded virtually KERX, $8.49 a few days ago and made huge one day profits when my portfolio balance was about $50,000. I traded virtually RIMM, $13.78 for part of the day and made very large profits also – need I say more?

Tip 5. Become a pro by practicing and know the movement of Exchange-Traded Funds, ETF’s. Some ETF’s goes up when the market goes up and goes down while the market is going down; example: XIV. Other Contra-ETF’s goes up during the time the market is going down and goes down when the market goes up; example UVXY.

Continued on Part II...

Caution
According to the Federal Trade Commission, 'How-To' Products Promise Extravagant Profits, Few Risks, While North American Securities Administrators Association Says 70% of Day Traders Lose Money. Please visit the FTC at the link above. The information provided on this site is for educational purposes only and does not give trading, investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. Because of the nature of financial leverage and the rapid returns that are possible, day trading can be either extremely profitable or extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Anyone who chooses to use the information here in real trading does so at their own risk and will be responsible for their gains as well as their losses.

Money Answers All Things… Meeting Most of Your Needs

The above video presentation outlines very well the high risk that is involved in trading the markets. However, if you can establish your risk tolerance and manage it you could be on your way to a coveted position, becoming financially independent.

Introduction

Most people can do with some extra money.  If you were to have just one financial goal in life it should be to make new money. If that is the case, then you will realized that that goal will answer most of your other financial goals. Some people do overtime, some take on another job, some may use their skills in an entrepreneurial fashion. However, all the previous options to make more money require a considerable amount of time to satisfy a new boss or new clients. 

Another avenue one may use is to acquire the skill of trading in the stock market. The opportunities that are available in these markets are overlooked because they are misunderstood and miss used. Even though there is the possibility for huge losses, this normally would occur when there is a lack of proper planning, execution and greed. Nevertheless, a very small percentage of our society who  are disciplined, mastered the planning and execution of strategies in the financial markets are the ones who are not in poverty in a society of abundant wealth.

The Intent

My intent in this blog is to provide information on how to use virtual trading sites as a training ground before getting into real investing or trading in a real account. With the easy access to computers and the Internet anyone who wants to do so can develop the skill in due time and become a successful trader.  Notwithstanding, that everything is not for everybody; individuals may chose their trading style based on their risk tolerance and accomplish their financial goals using the stock market as a vehicle to do so.

There are many established norms and assumptions associated with the stock market and trading it makes you wonder if these were set up deliberately or became self-fulfilling prophesies. Nevertheless, in this journey of practicing in a game and implementing strategies learned in reality isn't something new. It is used in other industries and could be applied in the stock market. There are other markets that provide the opportunity of trading but this blog will be focusing on trading stocks.

This blog will be addressing the major concerns that are associated with trading. We will see how to minimize them. I will share alternative view points to what most people accept as established fact. I will also, in a synergistic form put together various principles from unrelated disciplines to help traders succeed consistently trading in the stock market.

Caution
According to the Federal Trade Commission, 'How-To' Products Promise Extravagant Profits, Few Risks, While North American Securities Administrators Association Says 70% of Day Traders Lose Money. Please visit the FTC at the link above. The information provided on this site is for educational purposes only and does not give trading, investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. Because of the nature of financial leverage and the rapid returns that are possible, day trading can be either extremely profitable or extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Anyone who chooses to use the information here in real trading does so at their own risk and will be responsible for their gains as well as their losses.

Create a Financial Plan - Bring Your Dreams to Reality

Creating A Personal Finance Plan

Every year people make New Year's Resolutions and at the beginning of this year is no exception. Some popular resolutions includes: losing weight, making more money and getting out of debt. However, the problem is that most people do not follow up on whatever resolution they make or they lack the "know how" to carry out their wishes.

On this blog we will be focusing on making new money. We will provide you with information you can use to explore the opportunities available in the stock market to help you accomplish your financial goals. We believe that new money will help you meet most of your needs.

Visit LaBordeFinancial.com regularly to review the latest personal finance news. You will learn how these new developments may have an impact on your money and what you need to do to safeguard your finances.

Setting Your Goals

In order to achieve your dreams there are some basic things most financial advisers agree on. For you to succeed it is absolutely necessary that you convert your wishes to goals and write them down. To hit a target you must have some thing to aim at - your goals are your targets! First, you must create a written financial plan which is developed from your goals. Then, research the strategies needed to help you reach those goals. Lastly, you must implement the strategies that best apply to you.

Use the tips you learn in the video above to help you write down your goals and create your unique personal finance plan. Here is a review of the easy steps you need to take to create your own plan:

1. Write down your dreams and/or your New Year's resolutions.
2. Watch the video above and write down the important tips mentioned for creating a plan.
3. Convert or re-write those dreams into goals using the tips from the video.
4. Research the strategies you need to implement that are necessary for you to accomplish your goals.
5. Take action NOW and do them!

Note

• Everyday, do something that moves you closer to your goals!
• Make peace with God and yourself and prepare for eternity!
• Do your best and prepare for physical emergencies!
• You may follow this basic planning guide and prepare for your financial success!