Friday, October 29, 2010

Q&A with ART OF TRADING Members

A couple of days ago i asked you guys to email me any questions or concerns you might be having with your trading: So here you go some Q&A and MY best attempt at answering them. I really hope this helps guys!




Question 1:


Thank you Stewie, i'm beginning to understand a little more on how to find good trades.
Looking forward to your next video, my portfolio is gaining with small increases but it is gaining, as we see a more stable mkt. & my confidence grows i'm looking forward to larger share investments, your service, chat room & members are great!
Stewie, I haven't been able to figure out how to set stock alerts on stockcharts.com , do you have to be a member? if not would you mind instructing me how to move through stockcharts?

GOD BLESS
Dan


My Answer:

Hi dan,


Thank you for the very kinds words! These kinds of comments seriously make me wanna work tens times harder and bring you and everyone else only the best material! On stockcharts.com you CANNOT set alerts. But look thru your online brokerage account and i bet you will find a feature that allows you to input price alerts. If you are not sure, please call your brokerage firm and have them walk you thru how to set alerts. Please learn to do it as setting alerts is a key way to stay abreast of what is happening to your setups!

God bless you and your family, Dan! Let me know if you need anything else.




Question 2:

Stewie,

Can you share your scanning techniques / methods?

Do you use a software platform to scan for certain criteria? What are those criteria?

Just curious about how you are finding these stocks

Regards,

Eric



My Answer:

Hi Eric,

I am sure this video will help explain how i scan and spot new ideas!


http://theimpatienttrader.blogspot.com/2010/01/video-on-how-i-scan-for-new-setups.html



Question 3:

Hi Stewie,

I am just very frustrated with myself. I had wrote you about this before. The market is beginning to make sense again to my brain but I am unable to place trades or the trades I place become winners and I get out too quickly.
On and off the during the recent years the markets makes sense to me on and off. I figure when my eye on trades start working - I should be making a lot of money.
Something is broke in my head. I thought i started turning a corner about a month ago but I am all messed up again.
As I wrote before - I traded like a mad man many years ago taking risks I should not. I had a kid in college, some debts, a job I could lose at any time and I was trading 50-100k positions on a 30k account.
Come forward - other than a small mortgage, I have no debt, no kid in college. My account all are higher than they were before this mess. I have for the next year or so a solid full time job. No real money pressures. My job is really flexible were I can watch the markets a lot.
Last summer my daughter had an accident that she nearly died. It took a lot out of me but for many months I now free recovered and my friends and other half saw I seem like myself again.
So I am left here at this point in my trading career - I have the money to trade with. I have money I can afford to lose. I have no money pressures compared to any other time of my life.
Why am I having more problems pulling the trigger on trades and then if I do - staying in them - then I have ever had in my trading life??? Also I am feel I see and feel the market better than I have ever had before.
I want to scream.
Yesterday the crude market moved without me. I waited on the trade and even had orders in on and off for about 90 minutes and I missed the best setup I have seem in weeks. It was a setup when seen to double or triple size on but I was just going to use my normal.
I do not know what is broken in my head. I wish I had someone with me where I would just bark orders to and never touch a keyboard.
I know trading is not easy but after watching/trading the markets for 35 years - I feel what I know in my head - i should be making real good money - instead I am only a break trader.
I do not know how to get to the next level and take command of my emotions?

Jeff.





My Answer:



HI jeff,

I took my time answering this email because i really wanted to think about this:

Read these sentences which YOU wrote again out loud to yourself: "I traded like a mad man many years ago taking risks I should not."......."My account all are higher than they were before this mess."

I highlighted and underlined the words i thought that could be PLAYING psychological games with you right now at this stage in your trading career. Whether you realize it or not, the words you used are very strong statements and to me as a neutral reader of this email, i can tell there was some trauma as a result of your aggressive prior trading history. I honestly think, subconsciously you were 'scarred' from this. I am no psychologist by any means but to me, i cannot help but think that your prior trading habits might have affected your levels of aggression TODAY. Chances are very high that back in the days when you traded 50-100K on a 30K account, you took some pretty traumatizing beatings from time to time. As your account grew several years and all the sweat and hard work that comes along with a growing and capitalizing an big account, your subconscious self DOES NOT want to lose that money that took so much work to build.

You know many people who build 200-300K accounts only to "gamble" it away by pressing hard on margined bets?

Another avenue to take is to seriously consider having a trading partner. Maybe your wife or another fellow trader sitting by you. Walk them thru your trading plan for the day/week and have them place the trades for you : Give out clean, concise orders with strict and disciplined risk/reward parameters calculated before hand. I am willing to bet, this help eliminate some of the 'emotions' you so much want to remove.

What do you think? Am I on to something?



Question 4:


Hey Stewie,

Just a quick question and concern with my trading. It seems as though everytime I buy a stock and then the stock moves my way, I add to the postion at the wrong time. I obviously move my stop up so I retain some profit. But sometimes I don't put the stop in and then the stock reverses and I lose my gains. So my question is, when is it worthwhile to add to a winning position and when should u scale in. What's your methodology?

Thanks
Keith


My Answer:

Hi Keith,

Read this sentence you wrote again:
"sometimes I don't put the stop in and then the stock reverses and I lose my gains."

Ok, As a trader, seeing a profitable trade turn into a loss does more damage than a trade that turns sour right from the start. Why?? Because once a trader sees green, he is instinctively 'attached' to the trade: You like it, it worked, it made money and all is "good". Hence why sometimes, traders slack off and assume it's ok to not use a stop loss. WRONG! IN this market trades can flip from gains to losses very quickly. Look, you will never go wrong respecting stop losses. Stop losses keep you in the game longer and eliminate emotions once you 'lose' control of the trade. USE STOP LOSSES, ALWAYS. No ifs, ands or buts.

I sincerely think that when placing a trade, it's best to start off small(starter position) and add to it IF it starts to work and the action looks right and you have a high sense of confidence a trade will be a winner. Have you ever put on a trade and thought to yourself: "Kieth, this one feels good"? I am sure it has happened, in all honesty, these kinds of QUALITY trades come maybe ONCE or TWICE a week, they are rare! So your primary focus should be to know in advance that adding to a trade will be a RARE event. Think about it in terms of poker: When you are in a middle of a poker game, what are the odds of you scoring a ROYAL FLUSH? Not very high right? But when you get that royal flush, what do you want to do?? Press your bets obviously!
In general keep trading bets small initially until you are confident you have a 'ROYAL FLUSH' makes most sense. That's my advice, i am sure others will give you different advice!

Hope this helps bud.







And lastly i would like to conclude this email by welcoming Sandy(still on free trial) into the ART OF TRADING team and sharing this very nice email!!




"Hey Stewie,
I have not made one trade this week and I am going to wait until next week after mid term elections.
All I have to say is, I like what I have seen so far(with the service). Even though I placed no trades, I have followed your insights and like the advise that comes along with them.
Keep up the great work! I look forward to continuing after my FREE trial expires.
Sandy"

Thursday, October 28, 2010

Art Of Trading Member Books A 14% Winner!!


"Thanks for the lead on IMAX. Had it as a long-term swing trade and just sold near that top at 20.75 for a 14% gain.


Regards,
Eric".

Tuesday, October 26, 2010

New Long Setups To Watch











Some decent looking stocks setting up here. Worth watching going forward.

Monday, October 18, 2010

Sample Emails ART OF TRADING Members Got This Morning

Sent to members at 11:20AM Today:

"CAUTION WARRANTED

Hey guys,

I am really starting to think it's time for a deeper pullback to start soon. We are seeing some signs that a little pause or period of resting is needed here. Keep in mind, AAPL had a huge run lately and they report their numbers today. If i had to guess: I would say that AAPL will kick ass on their earnings. The stock will initially pop higher and then move lower tomorrow and we are likely to see a "SELL ON THE NEWS" type scenario. The bull run is NOT over in my humble opinion BUT it needs to take a breather and i am thinking very soon, we could see a start of a correction. So please BETTER TO BE SAFE THAN SORRY! Nothing worse than holding stocks that you bought at elevated levels expecting a breakout only to see the indexes start to pullback. Very anxious moments and it's best to avoid them."




Here's another email i sent members at 3:10PM



"All Cash Ahead Of AAPL Numbers


Hi guys,

AAPL reports numbers after the close today. This will be a market mover! Obviously AAPL is gonna blow these numbers out of the water and will report very good results but it's the reaction to these numbers that is most important. ALL cash ahead of tomorrow and we will see how things look tomorrow morning."




If you also want to see some more sample emails please email me traderstewie@yahoo.com

I will forward you some of the emails!!


At the ART OF TRADING: Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

Much more than simple trading alerts! Learn why, what and how!

Join us for a 14 day free trial and test it out for yourself!


Friday, October 15, 2010

What Have Been The Winning Patterns Lately??










Alright guys,

It's time for a report card check on some recent stocks i gave you and time to check out which ones have been not only the big winners BUT also THE MOST CONSISTENT winning patterns! Been scanning tonight, not for NEW stock setups! I have been scanning thru my previous stock picks: Stock picks i have given you guys here! Some of you will surely recognize some of these names.

"BOTTOMING FORMATIONS" have won the prize hands down during stock selection process for best performing and generating the most number of winners! Best part about a bottoming formations: RISK is relatively low on entry but reward is HIGH!

What is a BOTTOMING FORMATION? good question! A BOTTOMING FORMATION is typically the price action ones sees in a stock after a sustained decline: The stock will go a "repair" phase after taking a serious beating. This "repair phase" takes weeks, months or some times years to wash out ALL the sellers from a stock. After a sustained decline, the stock will subsequently move sideways of slightly downwards essentially creating A BASE; Essentially washing out all big sellers: in some cases leaving only late to the party SHORT SELLERS who will eventually have to cover these short positions if/when the stock starts to create HIGHER LOWS and ramp higher, creating an even more aggressive SPIKE in prices.

HIGHER LOWS on increasing volume is a KEY part of spotting bottoming patterns. When spotting a bottoming pattern, make sure to spot HIGH volume activity in the stock as a HIGHER LOW is being created. This will be your cue that something is brewing and "SOMEONE" KNOWS SOMETHING and is buying big blocks of the stock to capture further upside.

STOCKS PRICE ACTION and VOLUME are the only two components to proper chart work and stock selection.

Hope this helps!

Attached charts are of recent stock picks i shared with folks on twitter but mostly ART OF TRADING members. Check out and see for yourselves how these picks fared. Some of these even triggered TODAY!

Art Of Trading Scores A Nice Gain In CSTR!!


"Hey Stewie!

I wanted to see what you thought of CSTR. I got long on the breakout at $45.00 and am now sitting on about $1.50 profit right now. Do you think this one has more room to run and is a hold over the weekend? Thanks! I really enjoy subscribing to your service and following your calls!"

Scott B.

ART OF TRADING Member Clears $1,026 On One Trade!!


"Stewie!!

Closing out the week on a high note. Thanks for the quality setups bro. $CHBT in particular was a biggie! Picked it up near the trigger price you provided and kept trailing my stops. Sold all my shares just now and the $1,025 gain should keep the wife happy over the weekend! THANK YOU! THANK YOU!"

Tom S.

Monday, October 11, 2010

My Watchlist For This Week












10 long setups to watch this week. Good luck!

Make Sure To Join Us For A 14 Day Free Trial!!

Much more than stock setups!

Sunday, October 10, 2010

Lower Priced Stock Setups








I do not usually trade stocks below $5 but i know many of you do so here you go!

Enjoy and good luck!

Thursday, October 7, 2010

New Stock Setups and Random Musings










In my +13 years of trading, i have never seen a market that is so treacherous. Be aware of bigger/stronger forces betting against you. Algos and computerized trading models have altered this game until further notice(i.e. flash crash event). I repeat: Be aware of bigger/stronger forces betting against you.


The fastest to recognize and adapt win. Avoid the very 'popular' stocks and especially the 'popular' patterns: Head and Shoulder patterns covered on CNBC, death/golden cross, hindenburg omens, etc. All this is noise that sells newspapers and loses you valuable capital.


'Fuckery', a term geniously invented by stock trading master THE FLY, wants to get you in, stop you out, and rip without you. Use responsible position sizing and allow your stocks to wiggle. A trader is usually much better off with a wider stop loss than a stop loss that is too tight. Tight stops unless EXTREMELY experienced with short term trading time frames is


If new to trading, stick to trading stocks on the long side. Shorting is a skill that is acquired after many years and many painful lessons. Shorting is a whole different tactic that requires a trader to anticipate.

Earnings season kicked off today, know in advance what you own and when these companies report their numbers. $$ Avoid careless blow ups.

Wednesday, October 6, 2010

Cash Is King

Hi guys,

I think holding lots of cash makes the most sense. There are too many unknowns right now. Lots of damaged stocks out there today and historically this type of strong selling in names like: CRM, NFLX, AKAM, VMW, FFIV, RHT, RVBD to name a few is the start of a TREND CHANGE. These stocks were the leading names once the market took off running in Late August. Now these stocks are breaking down. Any logical trader would view this as a warning sign that something is NOT right out there and many veteran traders know that the market tops out in a process that takes time. Tops and bottoms do not happen in ONE day. They happen in a process which often takes days or even weeks. There will be numerous attempts by both bulls and bears to make their stance until eventually the stronger side wins. So expect lots of head fakes up and down over the next few days before an eventual break one way or the other. With big techs flashing warning signs today: I feel that the bears are starting to smell blood here but AS ALWAYS HAVE AN OPEN MIND AND BE OPEN TO ALL POSSIBILITIES!

CASH IS KING as far as i am concerned for short term traders.

New Long Setups To Watch




Here are a few of the names i'll be watching today that appear to be setting up for a move higher.

Enjoy and good luck.

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