Essential Daytrading Foundations

Technical Analysis lesson: Fibonacci numbers

noreply@blogger.com (Unknown) — Sat, 24 Jul 2010 21:11:00 -0700

noreply@blogger.com (Unknown) — Sat, 24 Jul 2010 21:09:00 -0700

Phillip Futures Malaysia Sdn Bhd is a licensed futures broker operating in Malaysia.

Services offererd:

Futures online trading utilising Patsystems Jtrader.

Bursamalaysia Derivatives- KLCI Index futures, CPO futures

Singapore Exchange: simsci, timsci, nikkei 225 index futures

Hong Kong Futures Exchange: Hang Seng, China H share Index futures,

US exchanges: CBOT, CME, ICE, Nymex: Soybeans, Corn, Wheat, Crude Oil, Gold futures, emini S&P500, Nasdaq100 and mini Dow futures.

European exchanges: Liffe, FTSE 100 futures: Eurex: DJ Eurostox 50, Dax index futures

For self directed individuals wishing to take up the challenges of futures trading, Phillip fuutres provides online internet access for direct access to these markets. If you are interested, email: emacro88@gmail.com doreenlee@phillip.com.my

Limit your losses to 2% on any one trade

noreply@blogger.com (Unknown) — Tue, 21 Aug 2007 07:01:00 -0700

The art of trading is about winning, but equally important is to limiting risk when wrong on a trade. The table shows the drawdown of a trading account, and the return one would need to achieve if the account suffers those types of drawdowns. The striking reality is that if one is careless (or carefree) and looking to make big money TODAY and overleverage, the task to get back to break even would be daunting, to say the least. So, limit the risk to 2% of your account on any one trade.

noreply@blogger.com (Unknown) — Wed, 2 May 2007 08:36:00 -0700

20070502 I came across NQoos page on the various setups efuturevision.com uses in trading the futures markets. These are basically trend following setups and volatility breakout setups. The setups are logical and intuitively sound, and I think any trader might want to look at them to add to their arsenal of trade setups or to compliment their existing methods.

Interview with Ken Chow by Traderinterviews.com

noreply@blogger.com (Unknown) — Tue, 10 Apr 2007 08:38:00 -0700

Tim Borquin of www.traderinterviews.com interview Ken chow, a futures trader. I happened upon this audio interview. I thought this was an excellent insight into how a professional trader approaches the market, using meditation, simple chart patterns and Fibonacci ratios. In my opinion this will be very helpful to new traders. Although some charts to look at would have been good, Ken's explaination is clear enough and not a 'hard sell' of some product. Global Forex Trading (GFT) was the kind sponsor of this interview.

noreply@blogger.com (Unknown) — Sat, 11 Nov 2006 04:44:00 -0800

As traders, we need to be aware of the big picture, ie which stage of the trend we are in. With trend being defined as on higher timeframes, setups on shorter term intraday timeframe can be triggered, giving the 'with the trend' trades, reducing the risks of the trade. This description by Mark McRae on the 4 stages of a trend can be helpful for aspiring day traders to know. I have also seen other people such as Don Shellenberg expousing a similar staging of trend. (he is always being touted by thenextview.com as one of their experts to give seminars)

The right state of mind for trading

noreply@blogger.com (Unknown) — Thu, 23 Mar 2006 23:04:00 -0800

A lot has to be said for the psychological aspect of trading successfully. Mark Douglas in his book Trading in the Zone, puts forwards 5 truths about the market. Rewiring the mind to believe wholly these 5 truths is the way to go to obtain the best psychological frame of mind to trade successfully.

Anything can happen
Every moment is unique
You don't need to know anything about what is going to happen next in order to be in a winning trade.
An Edge is nothing more than a higher probability of one thing happening over another
There is a random distribution between wins and losses and any given set of variables that define an edge

4 Stages a Trader goes through

noreply@blogger.com (Unknown) — Sun, 5 Mar 2006 00:20:00 -0800

4 Pillars of Trading Psychology

noreply@blogger.com (Unknown) — Sun, 5 Mar 2006 00:16:00 -0800

According to H Senters, there are 4 pillars to Trading Psychology

noreply@blogger.com (Unknown) — Sat, 4 Mar 2006 23:34:00 -0800

Some tips for novice traders from J Carter, author of Mastering the Trade.

Tips for novice traders

Trading is simple but is not easy
Trading should be boring, like factory work
Be aware of your own emotions
The market always reinforces bad habits
Don't focus on the money, focus on executing trades.

The Trading Edge, 15% of the equation

noreply@blogger.com (Unknown) — Fri, 22 Jul 2005 21:53:00 -0700

I will presume most of you are familiar with technical analysis, as a way to analyze and try to forecast future price movement. The way I see it, technical analysis provides a conceptual framework with which to organize the chaos of the auction process which is the market. TA will aid in analyzing the supply and demand forces that will ultimately determine the traded price.(present and future)

Following is what I think are essential building blocks to mastering this art of technical analysis and its application for the budding daytrader.

(This is a work in progress, so I hope you will bear with me)

1 Trend. The adage among traders is 'Trade with the Trend'. 'Buy low Sell high'.
Trend is defined as a series of higher highs and higher lows (uptrend), or correspondingly a series of lower lows and lower highs.(downtrend)

2 Markets will trend (make directional movements) only 40% of the time. The other 60% is spent consolidating with the battle between the supply and demand of the buyers (bulls) and sellers (bears)

3 Dow theory provides a good framework from which to analyze the markets. Consolidation is where the 'big boys' do the trading, accumulating the position they want to take. When the other side of these accumulator's positions near exhaustion, the market makes a breakout and start trending. In effect, there will be 3 types of trade the trader can execute in the quest for profit.

The accumulation phase
The breakout from that accumulation phase
jump on the trend sometime after the breakout and try to catch a piece in the middle.

In reality, the daytrader (small fry) will only realistically participate in the latter 2 of the 3 types of trade. The trader thus seeds this trading edge to capture these trades with a higher degree of probability.

Herein technical analysis will provide the tools to organize the trader's effort to gain this trading edge.

Fear and Greed, the Trader's Nemesis

noreply@blogger.com (Unknown) — Sat, 16 Jul 2005 02:00:00 -0700

Fear and Greed

The most important aspect of successful trading is to overcome the psychology involved. Trading is 85% mental and 15 method. Fear and Greed are always emotions to overcome, which if not controlled, will interfere with success.

Fear

Types of fear traders experience:
Fear of losing
Fear of taking a trade
Fear of not taking enough trades and missing out
Fear of being wrong in trading decision
Fear of having to make a decision
Fear cannot control the market
cannot control themselves.

Fear reduces ability to focus on objectivity.
sweaty palm and rapid heartbeat doesn't help the process of trading. These fears will sabotage the trading decision and execution process, resuting in undesirable outcomes such as missing a trade altogether, entering the trade late etc.
How to overcome this fear? Need to develop confidence and through practice. The important tools are to know oneself and develop an effective trading plan.

Greed

This is the other evil emtion of trading What happens to a trader is that the exits after entering trade, are based on greed-there is an urge of wanting to max out profit for every trade. Have to have mindset of being consistently profitable ie take the profits when they are there. Nobody however good can sell the top or buy the bottom of every move. Profitability will come from consistency in following trade plan keep emotions under control. Trading is a business, not Las Vegas or a roulette wheel.

The first step, no shortcuts, learn to lose money first

noreply@blogger.com (Unknown) — Sun, 19 Jun 2005 23:19:00 -0700

Many would be mrket wizards set out with too high expectations. They want to become the wizard overnight They want success NOW, want to make a great living trading. The reality is that trading is a multi-step process and success comes from painstaking hard work through all the steps. In reverse the steps are:

Making a great living
Making a good living
Making a living
Making a profit
Breaking even
Make smaller losses
Make losses (tuition money)
Making big loses (possibly wiping out whole accounts)
Testing the trading plan
Creating the trading plan
Knowing oneself

Build solid foundations before you begin daytrading

noreply@blogger.com (Unknown) — Sat, 18 Jun 2005 23:58:00 -0700

Just as a good foundation is essential to skyscrapers like the Empire State building, the Sears Towers or the Petronas Twin Towers, a solid foundation will stand anyone aspiring to become daytraders or traders. A trader's education is obtained via various means, books, seminars where you can learn from the wizards, the web (free resources) or engage a trading mentor,. The ultimate teacher though will be the market itself, where the initial losses (which are inevitable) are the fees paid for the ultimate learning experience of real time trading.

I found that a few books can lay this foundation.

Street Smarts by Linda B Raschke and Larry Connors
Day Trader's Course by Lewis Borsellino
The Symmetry Wave Trading Method by Michael Gur