Day Trading Psychology; Cut Losses Let Winners Run, Average True Range, trading management futures contracts, using MACD Indicator, SchoolOfTrade.com

It has nothing to do with my tools….its all in my emotions, and in today’s video we discuss the importance of working WITH the market, rather than against it, which will solve that problem for you very quickly, you DON’T want to miss this video!

We also talk about trade management, using our Average True Range indicator and the MACD for our trade management charts.

 
– Cut your winners early and letting your losses run?

o Starts with emotions
o Im convinced I made the correct decision so I let the loss run
o But them in scared of losing the profit, so I cut my winners
o First step to solving this problem

 Taking responsibility for your trading actions
 I take a losing trade

• I blame the market
• Im going to bury myself in negative emotions and ill focus on more analysis
• What other indicator?
• What did I miss?
• You are completely on the OPPOSITE side of the market

 I take a loss

• I look and understand WHY the loss occurred
• I find out that I made the mistake

o Didn’t follow my rules
o Trading during news
o It may be 15% of losers that I am expected to take

 The next time I have a losing trade

• I will quick to exit because I know now that I made the mistake
• You take responsibility

o Technical aspects:

 Know your rules
 Know what YOUR pattern looks like

– Lifetime Membership:

o comes with charts & market data
o all future additions
o lifetime access to our live trade room
o no monthly!

– Average True Range

o 2-min, 3-min chart
o Load template: James 2-min Range
o Im watching where the ATR is going?

 Is it rising? Good!
 Is it falling? Bad!
 I don’t care what the reading of the ATR is, I only care about the direction.

– Why don’t we trade the Dollar?

o Symbol = DX (Globex)

o Very low volume, so we don’t trade it

o We use a correlation with other markets, which is why we watch it

o https://www.sidewaysmarkets.com//2010/03/01/dollar-index-futures-correlations-to/

o https://www.sidewaysmarkets.com//2010/07/21/dollar-index-futures-contrac/

– Using limit orders, standing orders

o Sign up for a free webinar with Ninjatrader

o Free webinars every day and they go over all these details.

o

– Using the Price Alert indicator

o In the download section under ‘indicators’
o Right click on the chart
o Add the Price Alert Indicator
o Define the price level you want to be alerted for, and that’s it!

– Which indicators are we using?

o Pace of Tape (only for members)

o Auto levels: (only for members) https://www.sidewaysmarkets.com//2010/07/22/auto-levels-technical-indicator-locates/

o As a member you will OWN these, never any fees, and all future add-ons!

– Trade Management for our different types of trading

o Scalpers = 4/8/runner, 6-tick stop
o Day Traders, Position Traders, Swing Traders will use slightly different stops and target
o Use the market to give us support and resistance for our stops and targets

 What do we look as targets and stops?

• Trend lines (blue)
• Trigger lines (yellow)
• Swing highs/Lows (red)
• OHLC (Dark Blue)

o NO matter how wide or narrow your trade management, we always need to have a LOW Risk/Reward ratio (1.5/1)

 10 tick target , 15 tick stop (worst case)

– Trade the News Service?

o https://www.tradethenews.com/?affiliate=SOT
o News comes over my loud speaker
o Im not reading, I’m listening
o Its 100% real time
o I use this service for…

 Updates on what’s going on in the markets
 Heads up when something unexpected happens?
 Remember the big issue with Greece?
 Don’t use squak (too distracting)

– How do we know when to enter the trade?

o Learn the 3 steps to success

 Pattern: knowing the pattern well will make sure you’re always in position
 Rules: knowing your rules you will have confidence in your entry
 Confirmation: learn to read the tape, and learn how to use momentum

– Buying the HOD/ Selling the LOD (acts like a magnet)

o Don’t trade into the high of day

o We trade away from the highs, with the intention of taking profit at the highs

 This way you don’t compete with the sellers trying to short the highs.

– Why Range Charts?

o https://www.sidewaysmarkets.com//2010/07/23/day-trading-swing-trading-charts-minute/

– Using the MACD

o Intermediate Course
o Beginner’s Course as well as an intro (indicator)
o MACD is a lagging technical indicator
o One of the most lagging
o I use this for my EXITS, and never used for my entries
o Im looking for the MACD to be above the zero line for a long, and below the zero line for a short.
o If im long the euro, and I see the MACD go below the ZERO line, I think now is good time to take profit

 Combine that with the momentum positioning down
 And RED speed of the tape, and this is the time to look for a price reversal

o Proprietary indicator and our members own it!