Things I have learned about trading the past thirty years:
You cannot trade without Kwikpop (www.kwikpop.com) or a very similar service. The charts are the eyes of the market. To trade without the charts is like getting in a car blindfolded and trying to drive across the country.
If you have an opinion on the direction of the market – DO NOT TRADE!!! Take your money and give it to someone who can use it. The market is always going to fool most of the people most of the time. If you think like the average small trader then you are done. Most traders lose their money to the big boys who take a profit out of the market everyday. Your charts are the eyes of the market. Just open your eyes and do as the market tells you to do. If you want to gamble play the horses. Very few people come out of the horse race track a winner, the same is true for the would be “market traders”. If you want to be one of the few then you MUST learn discipline.
Don’t be a sucker for the trading programs. These people feed on people like you who are looking for the magic grail of trading. There is no such thing. The most a trading program can offer is indicators that assist you in making a decision if you are going to buy or sell. Most want your money up front and if you win or lose it does not matter because they have your money.
I am not affiliated with www.kwikpop.com in any way but I do use their charts. They have free training program and you can watch their charts live and take the training free and never spend a dime. It seems to me if a company is willing to let you use their charts for free and train you for free you would be a fool not to try that before you gave your money to all the others who claim to have the magic grail of trading. Watch this free video at http://www.kwikpop.com/index-1.html
GREED is the biggest downfall of the small trader. We dream of making a big trade with a lot of contracts and being able to go to our love ones and tell them you just made life changing money. The chances are small that you will be in the trade you dream of. The only way to trade is to start out small as small as you can. One contract on the S & P Mini is all you need to learn to trade. Once you have twenty winning trades over your losing trades then you can go to two contracts.
There are three successful trades that I take everyday and they are winners more often than they lose.
Kwikpop’s 2-UP & 2-DOWN trades. You can find them free on the Kwikpop site on their training videos.
Kwikpop’s W and lazy W trade, along with Kwikpop’s M and lazy M trade. You can find them free on the Kwikpop site on their training videos. They are all the same trade just different directions.
On a standard five minuet chart at the opening of the market look for two green bars or two red bars in a row. Add 1.25 to the highest green bar or subtract 1.25 from the lowest red bar and put in a buy or sell order at that price in the same direction the market is going. This trade is very risky and losses a lot. When it works it seems t get you in for a big move.
Stop losses are the name of the game along with profit preset points. The people at Kwikpop will tell you your stop loss has to be two points or more. I agree but I say it has to be three points. Today’s market is fast and if you put a small stop loss in your orders you will be stopped out more often. I use a three point profit or loss for every trade. On the trades listed above you will have a lot more winners than losers, and you will lock up your profit. If you have one winning trade for three point’s everyday it will be all you need to be wealthy. As you develop your trading skills and your bank account you can simply trade more contracts.
Never move your preset stop loss. This one factor will break you because the more money you loss on a trade the harder it is to exit the trade and take your loss. Instead you will stay in the trade until your account is wiped out. If you lose on a trade take the loss, get a cup of coffee and calm down. Once you are calm look for the next setup and take the trade. My winning trades are more than eighty percent of my trades. Every once in a while they market will back up and run over you. Just let it happen and move onto the next trade.
Money management is the most important part of trading. You must not risk more than three percent of your account on any trade. With the S & P Mini each point is fifty dollars, therefore one contract with a three point loss is one-hundred and fifty dollars. Accordingly you need to have a bank roll of five thousand. You can start with less but your risk of losing your money goes up.
Work with your trading broker to get you commissions down. I pay $3.25 round trip with the exchange fees included in the $3.25. You will not get that price in the beginning but as you trade more contracts keep after your broker to get you commissions down.
Trading after hours is tough. The big boys earn their money through the night moving the market in any direction they want to take your money. If you are going to trade at night wait until 3:00 AM when the Europe boys are starting to trade.
On a gap opening; look for a reverse of the over night session after 9:45 AM ET. Just try to get three points on your trade, it worked for me one time twenty three times in a row. I wish I would have let it ride on all the trades.
The 2- UP / 2 DOWN trade will not get you in going down at the top or going up at the bottom. Once you understand the setup you can take a reverse trade at the high or low if the 3350V chart bar is below TSKP E BANDS, TSKP BOLLONGER BAND AND TSKPMEANSWINGLINE. The bar must print below or above all three indicators. The TSKPMEANSWINGLINE will not appear until the market has exhausted its move and is ready to go in the other direction.
My experience is that a one point jump off point for a profit does not work. Here is why, If you trade five contracts as some suggest and you set you profit at one point on three contracts then if you are successful on the trade you get one point X three contracts = $150.00. You have 2 runners that may make you some more money. Let's say you get your 3 points on those two contracts. You would earn an additional two points on two contracts for a total of $200.00 and a total of $350.00 for the trade. That is if the trade worked! If the trade does not work you lose on all five contracts at 2 point loss the loss would be $500.00. In my opinion you need to take the trade and go for a three point loss or gain. If you have a profit and it looks like the trade is not moving in your direction then you can jump out. I have found that my trades work more often than they miss. Therefore when I take a trade and set my stops it is better for me to walk away and let the market give me a decision. My problem in the past would be I would move my stops and either lose a great deal more or lose my 3 point profit. There should be a way to get an electrical shock if you are in a trade and move your stop.
You say, "When I was on the right side of a trade, the candles take me out!" I know the feeling especially when the trade was correct and the market takes off in your direction. It makes you sick, however, that is not the way to look at it. All we need is a system that works. Once we have a system that works, which we have, then we need money management. If you trade and you make three points everyday then you will have all the success you ever dreamed of. We want a $50,000 profit on a trade but they don't come very often. Here is a way to get one. If you are in a trade for a three point profit instead of getting out you can add to your contracts but you must move your stop to break even. I took the move yesterday at the open. On the five minuets chart two green bars. I set a buy at 1.25 higher than the high second bar. The market shot up and I added to my contracts. It shot up to ten points profit. I kept my stop at break even and just stayed with the trade. I was long at 786.25. I got out with a fifteen point profit and shut down for the day. In other words that dream trade can come but it has to start with a normal trade that you decide to stay in and set your stop to break even. It is a free trade and you might get lucky. The difference is you start with a smaller amount of money at risk and add to your position instead of betting big and losing big.
It is real hard to trade one contract because if you have ten successful trades you think, what in the hell am I doing? That is the wrong way to look at it. We can stick with the trades and take trades when they are smaller. We can obey our trading rules. We need to master them before we can be successful. It’s not the money it is the successful trades. All we need is a system that works, if we never develop the system and train ourselves then we will not be successful. The one contract trades is training and developing our system. It is the only way we can be successful in the long run. Another thing is you do not need more than $5,000 in order to be successful and all the money lost learning the system was well worth the loss if you learn the system and you are successful. After you have twenty more successful trades than losses then go to 2 contracts. It will only take a few months and you will be earning over a thousand dollars a day and you just keep moving up SLOWLY the amount of contracts. I trade twenty contracts Yesterday I raised the trade to forty contracts after a three point gain. I made more yesterday that most people earn in a year.
Relax and train your mind to take it slowly. I am old and I have learned that when I built slowly I kept what I built. When I went to fast it all fell apart. I have a great book for you to read. It has been my guide to life for the past forty years and it is on line free. It is by James Allen, The book is at:
http://www.conures.net/allen/allen01.html
READ EVERYDAY BEFORE YOU TRADE
Never trade over night unless it is at 3 AM. They move the market in any direction they want and the volume is very low.
Never be in a trade against the trend. If you take a trade against the trend then the 3350V chart must have the price bars below the TSKP E BAND and for a stronger win percentage below the TSKPMEANSWINGLINE
Always have a 15000V, 7500V, 3350V and 5 minuet charts.
Set your trading stops and NEVER move those after you enter the trade to the loss side. It is alright to adjust the trade stops in the profit side. People are all the same and until they learn this they can never be successful trading. You have to have a loss parameter on a trade and once you are losing the tendency is to move your stop to not take the loss and if you do it you will wipe out your account. Just take the loss and look for a better trade.
In learning trading you rather lose $5,000.00 or $50,000.00? Personally a one point trade does not get me excited. However in proving the trading system works it is all you need. Forget that you are looking to earn a living trading. Learn the system first and prove that you have at least twenty successful trades, then increase to two contracts and prove you can do an additional twenty wins before you move to three contracts.
Relax while you trade, the only thing that matters is how much you earned at the end of the day.
Look for the high or low of the day after 9:45 AM ET and before 11:00 AM ET.
Look for a market reversal around 3:00 PM ET.
