Archive for category: Day Trading Education

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The New York Lunch Phenomenon Delivers!

Emini S&P 500 New York Lunch Phenomenon

I'll be the first to admit that the morning session today was a bit, *ahem*, boring. We're in the midst of summer trading where trading volume is often low and ranges are tight.  It also doesn't help that price is sticking near All-Time Highs which usually makes the market far more hesitant and indecisive.  Those factors made for a very slow start today as price moved in a 4 point range and there really wasn't a quality trade to be found for my trading strategy.

However, there's two lessons that come out of this kind of scenario.  First, there's no need to force a trade.  Some ranges are going to have excellent trades with a strong positive expectancy but many simply don't offer anything with good momentum or potential to latch onto.

If there's no trades available that fit your plan then the trader's best action is to simply sit on their hands and wait patiently for the next good setup to arrive.  It sounds easier in theory than it is in practice, which is why so many traders who search for consistent profitability end up failing through over-trading time after time. Read more

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The Importance of Research and Testing for Trader Development

The impression that people get about traders and those who make full-time day trading a career can sometimes be a funny thing.  I'm often asked about what I do for a living and when I tell people that I trade the financial markets for a few hours each day from home (or sometimes from my laptop on my travels), I get a lot of people asking what I do with my extra free time.

Of course, I tell them about how I like to get away from the computer screens by going out for a long walk in the sunshine followed by a mid-day workout or how I will spend a few hours on some of my favorite hobbies and they can appreciate those activities just fine, but when I tell them that I also spend a lot of time doing research, teaching others, and testing new trading ideas to further improve my craft I often get asked - "why?"

They wonder why it would be that if a person can trade and be consistently profitable that they would continue to spend time OUTSIDE their active trading hours to learn more.  What's the point if you are already making money?  Why not just stop there and settle into a simple routine? Read more

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Don’t Trade More Often if You Want to Make More Profit

The Patient Hunter

Anyone who has traded for any significant length of time has been through it themselves at some point.  They hit a good run of trading days and became so over-confident in their own trading abilities that they suddenly deviated from what's was working for them so far, broke their own rules in search of more "I can't possibly lose" trading opportunities, and quickly see what profits they had gained fly from their accounts.  Or they took a string of losses and became frustrated with a market that is "working against them" and threw caution to the wind with undisciplined trade after undisciplined trade to get their measure of revenge or in the hopes of scraping back to their previous account balance.  Of course, both of these over-trading scenarios rarely leave a profitable result and only act to dig a deep hole in a trader's account that they now need to dig themselves out of.

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Don’t Be Afraid to Take Profits

Personal Growth as a Day Trader

Recently I've been thinking a lot about the emotions of fear and greed and how they impact our behavior and our profitability as traders. We've all probably heard the saying that "Wall Street is driven by two things: fear and greed" and while emotions do play their part in the big picture they can certainly impact individual traders as well.

This has been on my mind lately because I've been working with a couple of traders that are trying to push their profitability to new heights and a part of that is selectively increasing their profit targets on some trades. However, they've yet to find a good balance of greed that gives them the best long-term result.

That's right, I did say balance, so I'm not saying greed is bad. Then again, it's not really that good either. You could say that the dose makes the poison.

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Learning to Day Trade and the Pressure of Performance

Learning to day trade and then achieving a consistently high level of profitability in this business can be a curious thing.  When observing full time day traders the trading process often seems very simple, even nearly effortless, with minimal emotion getting in the way of decision-making.  However, for the novice trader learning to day trade is rarely an easy and straight-forward endeavour and is often a rather emotional undertaking at times.

The interesting thing is that the novice's perspective of what the professional trader is doing isn't incorrect.  Trading well should be a simple exercise, though not necessarily easy.

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© Copyright - Samurai Trading Academy - RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. CFTC HYPOTHETICAL PERFORMANCE DISCLAIMER: HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.