Do yourself a favor and give yourself enough buffer between the time you wake up and the time you take your first trade. The last thing you want to be doing is feeling rushed into your first trade as this will set the wrong tone for the rest of your trading session.
Now you’ve heard my morning routine. What does yours look like? I’d love to see and hear your comments below.
It is a very helpful article thetradingedge.org for premarket ritual
A good source for trading strategy
Not just because it has nothing to sell. But more importantly, because its goal is to assist you in developing your own swing trading system. You, after all, are the person ultimately responsible for your own success (or failure) as a trader. So you might as well be in on the ground floor and guide the development of your system every step of the way.
To that end, this site is organized around the 5 key components of any successful swing trading system. Here you will learn about:
- Swing Trading Plans – general plans of action answering everything from why you want to be a trader to your general attitude towards risk
- Swing Trading Strategies – specific sets of instructions specifying exactly how you will conduct your trades
- Swing Trading Resources – the material and non-material means by which you will execute your trades
- Backtesting and Paper Trading – records of how your system would have performed historically and currently, using a fake trading account
- Live Swing Trading – the central component of a trading system towards which the other four components all eventually lead
The following part is from Linda Rascke and her colleague , “Street Smart” a must read book.
- It is important to initially trade a new concept or strategy on paper. Only by seeing a pattern over and over again will you truly feel comfortable with it. You must believe in its ability to repeat itself. Don’t be surprised if you find yourself actually becoming excited as you see the patterns begin to set up.
- If a pattern does not make sense to you, don’t trade it. If you don’t have a 100 percent belief in it, you will not be able to overcome losing streaks.
- All you need is one pattern to make a living! Learn first to specialize in doing one thing well. We know two traders who do nothing but trade the “anti” pattern from a five-minute S&P chart. Another friend trades only “Three Little Indians” on tick charts. Traders can earn their living by trading any one of the patterns that we present in this book.
- Your biggest enemy in trading is going to be a directional bias, an opinion about market direction … whether yours, a broker’s or a friend’s. Shut it out! Learn to concentrate on the “right-hand side” of the chart-in other words, on the pattern at hand.
- One of the things you will get out of this book is an increased ability to listen to the market.” Even if a chapter does not seem to suit your personal trading style, it should at least heighten your awareness of market action and price behavior at critical points.
- None of these strategies is designed to be a mechanical system. Be grateful that they are not! If they were, a large fund would come into the marketplace and exploit the edge. It is estimated that over 90 percent of the large pools in the commodity markets are run on a mechanical basis, systematically attempting to exploit trends. It is very difficult for these funds to move large amounts of money on a short-term time frame. They do not have the luxury of using resting stop-loss orders without risking adverse slippage. They cannot be as nimble as the small speculator can-and herein lies your edge.
- This brings us to the most important point. Initial stop loss orders are essential! Each strategy in this book will have you entering a protective stop upon being filled. Stops are necessary for your protection against worst-case scenarios. (Remember, we are trading on probabilities only.) All it takes is getting sloppy once, or experiencing the “frozen rabbit syndrome” in a bad trade, to undo the efforts of the previous 20 trades. Placing initial protective stops must become a habit that is never broken. As you will see, in most, if not all of the examples, your stops will risk only a small amount of money.
But first–the rules! Because of the short-term nature of this technique, swing traders must adhere to some very basic rules, including:
- If the trade moves in your favor, carry it overnight–the odds favor follow-through. Expect to exit the next day around the objective point. An overnight gap presents an excellent opportunity to take profits. Concentrating on only one entry or one exit per day relieves the pressure.
- If your entry is correct, the market should move favorably almost immediately. It may come back to test and/or exceed your entry point a little, but that’s OK.
- Do not carry a losing position overnight. Exit and play for better position the next day.
- A strong close indicates a strong opening the following day.
- If the market doesn’t perform as expected, exit on the first reaction.
- If the market offers you a windfall of big profits, take them to the bank on the close.
- If you are long and the market closes flat, indicating a lower opening the following day, scratch or exit the trade. Play for better position the next day.
- It is always OK to scratch a trade!
- Use tight stops when swing trading (wider stops when trading trend).
- The goal always is to minimize risk and create “Freebies.”
- When in doubt–get out! You have lost your road map and your game plan!
- Place your orders at the market.
- When the trade isn’t working, exit on the first reaction.
Quantifiable Edges has been publishing quantitative research, systems, and trading ideas since 2008. We utilize technical analysis concepts and quantify them in a way that allows traders to determine the edge that was provided in the past. Breadth, volume, sentiment, volatility, Fed-induced liquidity, seasonality, and price action are all used to assess market conditions. Gold and Silver level subscribers are led through Rob Hanna’s interpretation of the data in a simple and complete manner via the nightly and weekly subscriber letters. Gold subscribers also have complete access to our subscriber area, which includes the Quantifinder, custom charts, trading systems (with code), special research, and more.
For additional insights into the Quantifiable Edges approach we’d strongly recommend:
1) Checking out the About Rob page, with links to interviews, webinars & more.
2) Taking a free 1-week trial.
The Quantifinder is Quantifiable Edges original functionality. There is nothing else like it anywhere on the web. The Quantifinder was designed to automatically search through our database of published research and extract anything that is applicable to the current day’s market action. This includes studies based on price, breadth, volume, leadership, and sector rotation. It looks at both daily and weekly data across a wide range of indices. All applicable studies are then published on the Quantifinder page, where you can easily see their bullish/bearish tendencies and a description of the research. From there it just takes a simple click and the publication containing the research is automatically pulled up for you.
Some of the elements of peak performance that I’ve observed among successful traders include:
* Pre-trading rituals to prepare for various market scenarios;
* Meditation, biofeedback, self-hypnosis and similar activities to increase our focus;
* Mental rehearsal of plans for the day;
* Physical exercise to be energized for the day;
* Taking breaks to renew concentration and stay in the right mindset;
* Constructive self-talk through the trading day;
* Looking at markets through multiple lenses to see fresh sources of opportunity and threat.
The bottom line is that trading psychology has to be something we do, not just something we think about.
Trading style and beliefs
As reported in Market Wizards and the press, Jones futures trading style and beliefs are summarized as follows:
- Contrarian attempt to buy and sell turning points. Keeps trying the single trade idea until he changes his mind, fundamentally. Otherwise, he keeps cutting his position size down. Then he trades the smallest amount when his trading is at its worst.
- Considers himself as a premier market opportunist. When he develops an idea, he pursues it from a very-low-risk standpoint until he has been proven wrong repeatedly, or until he changes his viewpoint.
- Swing trader, the best money is made at the market turns. Has missed a lot of meat in the middle, but catches a lot of tops and bottoms.
- Spends his day making himself happy and relaxed. Gets out of a losing position that is making him uncomfortable. Nothing’s better than a fresh start. Key is to play great defense, not great offense.
- Never average losers. Decreases his trading size when he is doing poorly, increase when he is trading well.
- He has mental stops. If it hits that number, he is out no matter what. He uses not only price stops, but time stops.
- Monitors the whole portfolio equity (risk) in real time.
- He believes prices move first and fundamentals come second.
- He doesn’t care about mistakes made three seconds ago, but what he is going to do from the next moment on.
- Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.
Jones’s global macro trading style is based primarily on technical analysis, as opposed to value investing, with an emphasis momentum factors driving markets. In a 2000 interview, he suggested however he regretted not being more involved with venture investing in technology firms during the 1990s.
Assuming you have either started day trading or are looking to get into the game, I am going to shock you in this article. What I will cover here would have saved me 20 months of headache if I just had someone give it to me straight. Recent studies have shown that the majority of trading activity occurs in the first and last hour of trading. Let me make this even easier for you, only focus on the first hour and watch how simple it all becomes.
Why First Hour Trading
Simply put, trading during the first hour provides the liquidity you need to get in an and out of the market. On average the market only trends all day less than 20% of the time. Most new day traders think that the market is just this endless machine that moves up and down all day. In reality the market is pretty boring. The one time of day which consistently delivers on sharp moves with volume is the morning. Assuming you are doing this for a living you will need some serious cash. Day trading isn’t something you should undertake with your lunch money. If you were trading with a $100,000 per trade how much volume do you think your stock needs? If you are really reading this article the first response from you should have been what’s the price of the stock. Assuming you were already thinking that, you need tens of thousands of shares trading hands every 5 minutes. Reason being, you need enough volume to enter the trade, but also enough that you can potentially turn around in a matter of minutes and close out the same trade you just put on.
– See more at: http://tradingsim.com/blog/first-hour-trading/#sthash.fFuO9WAM.dpuf