Words of Wisdom

[NoProblem]

Quote from dman666:

Interesting, good luck and hope you make lots of cash following him. I don't trade the S&P though, so can't say I'm to interested in all the vids.

I don't trade them either, but the stuff he teaches applies to stocks, commodities, futures - you name it.

Same with time frames - the stuff he teaches works for day traders and investors.....just takes a little time for it all to sink in - for me at least.

 

[Cheese]

Usually this sort of trading rules list is cliched or of little addtional value. I liked this list because it highlights observable probabilites.

The caveat is that you need to have easy trading fluency and confidence to be operating them. This characteristic is often absent from amateur trading in general.

The key point is missing also. You must still have an accurate methodology to navigate a market, Open to Close. You optimise the points you take out of a daily market when you capture each downmove and upmove as they follow each other. This is what an accurate methodology enables you to do. For example YM's gyrations on Friday April 18 had 21 'legs' of 15 or more points (bar close to bar close). Some of these 'legs' gave sizeable numbers of points.

 

[orange_trad]

Every trading application should start up with a splash screen:

I would never die for my beliefs because I might be wrong.
-- Bertrand Russell

 

[Wayne Gibbous]

Unfortunately the usual "conventional wisdom" Roolz of Trading - especially from the likes of Farley - are a big part of why very few traders make it.

Make your own rules.

 

[Lynn_cn]

Thanks for your advice . I think its very useful for me . : )

 

[bob83]

stuff to think on, but this list, for most people, could probably be subtitled "20 ways to lose your money".

no one is just a few talking points away from making money...

 

[MrDODGE]

21. Short a market that goes up daily on bad news

 

[stock_trad3r]

Quote from NoProblem:

1. Forget the news, remember the chart. You're not smart enough to know how news will affect price. The chart already knows the news is coming.

2. Buy the first pullback from a new high. Sell the first pullback from a new low. There's always a crowd that missed the first boat.

3. Buy at support, sell at resistance. Everyone sees the same thing and they're all just waiting to jump in the pool.

4. Short rallies not sell offs. When markets drop, shorts finally turn a profit and get ready to cover.

5. Don't buy up into a major moving average or sell down into one. See #3.

6. Don't chase momentum if you can't find the exit. Assume the market will reverse the minute you get in. If it's a long way to the door, you're in big trouble.

7. Exhaustion gaps get filled. Breakaway and continuation gaps don't. The old traders' wisdom is a lie. Trade in the direction of gap support whenever you can.

8. Trends test the point of last support/resistance. Enter here even if it hurts.

9. Trade with the TICK not against it. Don't be a hero. Go with the money flow.

10. If you have to look, it isn't there. Forget your college degree and trust your instincts.

11. Sell the second high, buy the second low. After sharp pullbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try.

12. The trend is your friend in the last hour. As volume cranks up at 3:00pm don't expect anyone to change the channel.

13. Avoid the open. They see YOU coming sucker

14. 1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom.

15. Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.

16. Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.

17. Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.

18. Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.

19. Bottoms take longer to form than tops. Greed acts more quickly than fear and causes stocks to drop from their own weight.

20. Beat the crowd in and out the door. You have to take their money before they take yours, period.


....From the Author of The Master Swing Trader - Alan S. Farley

And...

21. Make money