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Know When to Hold em' for Better Trades
Good Morning,
Kenny Rodgers had a popular hit with this title that spoke of the gambler's need to manage risk and stay in control. As a trader you too must control your risk and manage your trades but trading is not gambling, it is more like farming or adding a new product to business's product line. Setting stops must be seen as the limits and tactical tolerances of risk that would go into any new venture.
Market Mind Games and Better Trades
The adage goes "If Doctors and Attorneys are so smart, why are they still practicing their professions?" Well, it is a fact that to be good you must always keep honing your skills. The persistent practitioner becomes the consistent performer.
"Divergence" for BetterTrades
I love to teach technical trading but I have an aversion to letting technical indicators get out of hand. A recent check revealed over 120 indicators that were available to use on my charts. This is also not including many economic indicators that can be and are used by folks to overlay charts and predict activity.
BetterTrades and "FUNNYDAMENTALS"
The end of last month, a broker from New York calls me. He has called several times over the last year to tell me I need to open an account with him because he has such a great buying opportunity. He was armed with a strong list of fundamentals that just had to convince me to give him money to buy this stock. Well I enjoy talking to him because he proves my points about staying neutral and playing the stock not the fundamentals or the news.
Big MAC Divergence in BetterTrades
Indicators are a powerful tools and they generally have a very specific function. They measure specific aspects of behavior and that behavior is compared to the chart movement. Some indicators are very narrow in focus i.e. only relavent in trends or only in compression patterns while other indicators work well in nearly any market patterns. Some of the more common and respected indicators measure over bought / oversold conditions or trend strength or divergence. I will focus this article on the divergence indicators and how to recognize divergence.
Earn To Profit from Earnings Season with Better Trades
We are currently in earnings season - a time when companies announce their earnings results from the past quarter. These much awaited announcements can cause quite a bit of volatility in the markets, especially when the results are something other than expected. But, as a trader you can learn to capitalize from this volatility and profit from some unique trading opportunities.
Better Trades Industry Spotlight Part 2
In part I of this article you read how the Internet E-Commerce industry is one of the better performing industries this year. Within that industry we selected three stocks that have good fundamentals and strong trading patterns. Those stocks are eBay (EBAY), the University of Phoenix Online (UOPX) and Getty Images (GYI). Finding the right stocks to trade is half the battle. The other half of the battle is using the right trading system to find the best entries and exits to profit substantially from the price moves of those stocks.
Don't Be An Average Trader, Use Better Trades
We are in the midst of earning's season and the market could not be any more crazy. Today, most of the stocks that were reporting posted better than anticipated earnings and the Dow managed to break a 5-day losing streak. This week the housing sector posted good permit applications and sales numbers, two indicators that bode well for a continued strong housing market. Many of the basic economic indicators are weak and the latest rumor on the street is that the Fed MAY cut interest rates another 25 basis points to a 60 year low of 1%. Then, add into the mix an Iraqi dictator whose defiant stance has the whole world wondering when the first bomb will be dropped, by whom and what will be in it? It is all enough to drive the average trader nuts.
Four by Four Trading for BetterTrades
Some months are diamonds and some are coal but most of the time I settle for gold. Last month was diamonds all the way; four trades on with four winners. In my book that is "Four by Four Trading".
The Difference for Better Trades
When I was an accountant, I was frequently amazed by the choices of my clients. They spent more time choosing a household appliance than they did learning how to handle their investments. When it came to buying an appliance, they spent hours trying to save $50. Would they trust the appliance store salesperson to tell them if they were getting a good deal? Nope, they would do the comparing on their own because the salesperson has a conflict of interest - commissions! However, when faced with investment decisions, they leave the major decisions up to the investment salesperson (broker, insurance agent, banker, etc).
Better Trades: A Powerful-Profitable-Cash-Cow
Dear Traders and Friends:
Lately I have had many students ask me about the QQQQ's - so much that it merits a rewrite. The QQQQ is an incredible choice for making money in today's market. Taking the time to learn this EXCHANGE TRADED FUND (ETF) could put fun, fast cash into your pockets. Don't let the fact that it is called an ETF scare you away. It is very simple to play. I missed making hundreds of thousands of dollars on this Powerful-Profitable-Cash-Cow because I feared it was complicated. Just remember what FEAR really means FALSE EXPECTATIONS APPEARING REAL!
Selecting A Great Full-Service Better TRades Broker
I have taught thousands of students all over the USA how to trade with safety nets and insurance. I am just as excited about profiting from falling stocks as I was during the BULL MARKET. In addition to profiting in any market, and playing it safe it is also important to work with a broker that will benefit you. Your broker is an important key to your trading success.
Playing Resistance levels with Better Trades
I have been on traveling a lot recently, and it is amazing to me what people are saying about the stock market. Most reply, wow this is not a good time to be in the market while I am thinking "what an INCREDIBLE time to be in the market"!
Improving Your BetterTrades Success Using Trading Cards
In reviewing my last five years of stock market success, I must admit that the most important thing that needs to be learned - is how to pull the plug when a trade goes wrong. As a matter of fact, I am going to quote myself here... "If you can not get good at pulling the plug when a trade goes wrong...then you should not be trading!"
Portfolio Sabotage and Better Tardes
I am writing this as I am sitting here at the airport in NYC, after an incredible private tour of GROUND ZERO, from someone who experienced it first hand. It is just unbelievable to see what these people have been through and how much it is still effecting them today. It sure makes me grateful for my many blessings and how every day is such an incredible gift to never take for granted.
Getting Back What Works for Better Trades
In my last newsletter I began my discussion relating to the secret difference between profitable traders and non-profitable traders. I stated that people who consistently win the stock market battle are those individuals who remain focused on "the basics." I promised to continue the discussion in this newsletter. I ended the last article with a "cliff hanger" ending, where I promised to talk about charting patterns, entrances and exits, and more.
BetterTrades to Stay on Top
It goes without saying that we've been trading a pretty tough market. I believe as well that is really a matter of perspective. Many of those trading today have been trading fewer than 5 years and have no prior experience with this kind of market. Additionally, their relative lack of experience has them running for the "Tums" at almost every negative comment out of New York or Washington! Well, justified or not, it is precisely this kind of market which drives home an important tenet of trading. You have to stay 'on top' of the market at all times if you expect to be a successful trader. I have developed a pretty simple method for doing that.
Letting Stops Work For Better Trades
One of the most important aspects of successful trading is not the strategy itself.That will either work or it won't (all things being equal). We have a 50 / 50 chance either way. While perhaps not mathematically accurate, that pretty well captures the spirit of my point; we exercise precious little control (as in NONE) over how our stocks move. We ALL have losses from time to time. It's a fact of trading life! That being a given, one of the most critical aspects of successful trading is to control any LOSSES we might be facing. Obviously, it is in our best interest to minimize those losses as much as we can.
Gaps Importance for Better Trades
There is general knowledge of gaps but most people do not know enough about the many types of gaps and their respective importance. The understanding of gaps begins with the gap theory. But while the gap theory deserves a thorough discussion, I want to focus on the types and relative importance of the many different gaps and leave a detailed treatise on the Gap Theory to another time. Nonetheless, a quick lesson on the theory is warranted to set the stage. First off the definition of a gap is when the closing price and the following opening price is different. There are true gaps and body gaps just to name a few but a quick run through of the gap theory will serve to set the stage.
Stability Vs. Profitability and BetterTrades
Previously
Earlier, we began a to investigate the need for stability in our trading business. We agreed that an important purpose for stability was having a more or less consistent ability to pay our bills, enabling our trading business to survive. Additionally, we outlined a strategy which had the ability to maintain our initial value (our emergency money) and the potential for making profits as well. The strategy; a 'balanced' straddle; amounted to finding a stock whose price 'oscillated' above and below a particular value. If that value was also a strike price for that stock, then we could straddle it, buying puts and calls at that strike with several months before expiration. As the price moved up and down, the value of our calls and puts moved up and down inversely, keeping the total value of the position roughly the same. In this way, our 'emergency fund' was more or less kept intact. In this discussion, we see how to draw a profit from such a position.
Treating BetterTrades as Business
Have you ever wondered how in the world large businesses or corporations such as GM or IBM just manage the small day to day tasks of operating and managing such huge concerns? It is just mind boggling to think about the millions of little details which have to be handled just to keep the doors of such complex corporations open! I'm not a CEO or CFO type and I certainly have no training or expertise in those areas, but I have spent a lot of time talking to folks whose job it is to run large and medium sized companies in an effort to understand how to better run my own, comparatively tiny business. What I found was truly amazing, if not totally refreshing!
Climbing To The Better Trades Top
I have the unique opportunity to teach Traders with a wide range of knowledge. Some individuals are just beginning, while others have been around the market for 20+ years. There are some "laws of life" that seem unchangeable. For example, I know that some people will earn more than me in this market and, unfortunately, others will never have success in their trading efforts. It's sad to think that some people will not see their aspirations for financial success materialize. It is comforting to know what makes the difference between the winners and the non-winners (I choose not to use the "L" word).
Every Day Success for Better Trades
There has never been anything I've done which hasn't taught me something. Often these 'lessons' are simply reminders of mostly insignificant 'truisms' of life. Occasionally they can call back into focus really useful principles we might have 'packed away' for a season. One of these was vividly placed before me in a trade last week.
Better Trades By The Calendar
Previously:
In previous articles, we developed the premise that we need to build stability into our trading business. We discussed using a specific strategy; straddles; for that purpose. The main idea was to find a stock oscillating equally as long and far above AND below a specific strike price. Once found, we'd allow the stock to get to that strike price, then buy a put and a call with that specific strike price and about 4 or 5 months of time prior to expiration.
Better Trades Example and Analysis
This week we began with a trade to the upside on QLogic Corporation (QLGC). The stock came from the Dedicated Trader's Key Level Stocks - Channeling Stocks. The research department tagged this as being a stock at or near the bottom of it's channel (not far from support)!. One look at the chart below certainly confirms that!
BetterTrades Trading System
I think it was Will Rogers who said "I am more concerned with the return of my principle than the return on my principle". How true that rings when it come to trading in the stock market! Yet I find myself receiving emails and being told sad story after sad story about traders who have lost a fortune trading! The emails and comments I love to receive, however, are the ones from students in my classes that are making a fortune because they took the time to learn the SYSTEM I teach in my LIFESTYLE TRADING WITH LEAPS 2 day class.
7 Elements for BetterTrades
Lately I have had a lot of new traders in my online webshops. I will never forget what it was like to be brand new! The excitement of hope for a better life, the power to control your future at your fingertips, and the awe of finding out you can trade with a strategy is so awesome when you see first see the light. However, it took me years of study, mistakes and the school of hard knocks to get to where I am today - a world known successful trader
Selecting the Right Stock for Better Trades
In the last newsletter we covered part two of a three part series on how to select the right stock option. We covered, in detail, items 1 - 4 below. We will now complete item 5 and expand this newsletter into a SIX PART SERIES instead of THREE.
How to Confirm Trades to Make Better Trades
I have noticed an AMAZING number of students placing trades that have gone wrong and if they could have done what I call "A ROUND ROBIN" it likely could have prevented the cost. I would like to share what I do in my "ROUND ROBIN" before entering a new trade or deciding to exit an existing trade:
BetterTrades Opportunity using Strangles
Earnings announcements create a problem for traders as we often see an overreaction to the announcement. This overreaction takes the form of an unusual amount of buying or selling pressure. Because most earnings are announced after the market has closed this buying or selling pressure builds up overnight and causes the stock to gap up or gap down. The stronger the buying or selling pressure the more the stock will gap.
Better Trades Turning Point
Recently in a Denver LEAPS class, I was teaching some tips on drawing support and resistance and how to read some basic candlesticks patterns to fine tune an entry into a trade. I was explaining how I get great entries by using the prior days' low (for a down trade) and the prior days' high (for an up trade) to confirm the stock direction.
The Right Options and The Better Trades
In the last three newsletters in this series (first, second, third) we explored five of the eight essential elements you need to consider when purchasing options. In this newsletter we will take a look at the sixth element . . . Open Interest.
Where Does One Actually Begin To Better Trade?
At first it may appear this newsletter is for new traders, but it is perfect for seasoned traders that are struggling. After trading and teaching students how to trade for over 8 years, I have learned that we can cycle in and out of trading patterns. What seems to happen is we get excited about learning so many new things in the market (such as numerous technical indicators), that we can begin to over-analyze our trades. It is so easy to do. So easy that we forget how simple and important just plain old basics are. BUY LOW - SELL HIGH! Then we start slipping and miss reasonable entries or stay too long in a trade. Whether you are new, or you just need to get back to the basics, this newsletter is intended to help you get back on track.
Better Trades that will Pay Your Holidays
If you visit a mall or retail store these days you will be bombarded by hoards of frantic shoppers. People are expected to pay as much, or more, on gifts this year than they did last year. This creates wonderful opportunites for traders! Find and trade those retail stocks that will see the biggest benefit from holiday shoppers and you can pay for your holiday gifts from these trades.
Wny Practice Trading Is So Crituical
When you are new at this game called the stock market, you will find it necessary to start off with the basics. Milk not meat! If you only knew what we know, after years of trading and teaching students, you would do whatever we tell you and never break a rule. It is so hard to watch students jump before they are ready, but I see it time after time. I call this the READY - FIRE - AIM syndrome. Believe me, I so understand where you are at - I started the exact same way.
Timing is Everything for Better Trades
Timing is everything! Especially when it comes to trading in the stock market. It amazes me the thought process a lot of students go through when it comes to trading.
The Right Stock Options to Select
In the last five newsletters in this series we looked at a series of issues to select the right stock option. This newsletter will cover the final step, Graceful exits, along with a recap of the items previously discussed so you will have an easy reference tool at your disposal.
What Works for Bettertrades
Before you can play a stock split you must have a stock split candidates list. This is where you have to do a little research. Start with the stocks that you currently are watching and ask the following questions:
Increase Your BetterTrades Success!
We've talked about the fact that in any business, there are three basic financial needs; cash flow, stability and growth. For growth in my net worth, I utilize long term trades involving mainly high quality blue chip stocks. The correlation between long term trading and the quality of the underlying company being traded should be obvious, so we'll leave that alone. Rather, let's discuss how to increase your likelihood for profit as the stock price goes back up. First, let's find a quality candidate stock on weakness.
"Chicken Bull Put Spread" on BetterTrades
I am famous for getting up to $2.75 in a Bull Put Spread the day before expiration date! That is almost unheard of! But yes it can and does happen if you use my secrets! Let me share with you my secrets and technique that I call CHICKEN BULL PUT SPREADS.
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