A Course in Technical Analysis

Here is a comprehensive course of Technical Analysis including Candlesticks, Elliot Waves, Market Profile and Capital Flow. Enjoy.

Why Price & Volume?

End of Year Homework

As the end of the year rolls around, volume tends to diminish as traders go on holiday. Now is a great time to look back across the year and reflect on things you have accomplished, set goals for 2010, and improve your trading as a whole.

Below are some things you can do as the New Year rolls around to improve your trading…

• Review your current year goals and evaluate your over/under.

• Create new goals: Push your limits, get you out of your comfort zone.

• Flip through your notebooks and highlight key points.

• Review the years p/l and commission reports.

• Make updates and changes to your current trading plan and system.

• Analyze your performance.

  (see calculations page in Creating a Trading Plan presentation)

• Revamp your notebooks, excel spreadsheets, and word documents.

Any and all of these tasks can be done anytime thought the year, but it is most important to complete them around this time as often times traders forget that reflection is a crucial part of a traders developing success.

Happy Holidays & Happy Trading!

Creating a Business Plan

Treating trading as a business with the objectives, goals, and guidelines clearly laid out will not only help keep things organized, but allow for less emotional involvement during tough market conditions. Defined entry and exits need in place for when to take losses and profits. Protecting profits while limiting losses is the name of the game, remember the bottom line, we’re in this to make money.

Being diligent and thorough with your trading, and keeping detailed records will be a tremendous help and allow you to go back and really pick apart things the things that are working from the things that are not.

Finally decisive action is an important quality to have when developing as a trader. A good trader has trained his eye to spot potential forming trends. Often times when a clear trend is established it is already too late to enter in the trade. The business is trading and treating it as such will be the first step to becoming successful.

Revenge Trading, Find a Release

For newer traders, revenge trading can become a big problem and lead to over trading. When a trade goes against you, some traders see the need to make their money back from that particular stock and force trades, which can lead to more losses. The most important thing about trading is knowing when to stop. Having a rule, or line in the sand as to what dollar amount or loss you will stop trading BEFORE you place your first trade is vital to keeping your account alive. Remember, the market will always be there.

So find a hobby or fun activity that takes your mind off trading, preferably outdoors, for during those rough times or when the markets are closed. Whether it's hiking, biking, running, playing sports, working out or golf, studies have shown that being outside in green spaces like gardens and parks can act as a recharger to the mind, and as traders, we always need to be on top of our game.

First 15-Min. Rule

One of our rules we use is to NEVER trade the first 15-minutes of the market. This is because many times noise and false moves take place in this time.

For open positions, if a stock gaps down below the established stop, wait for the first 15-min bar to fully form, and then place a stop underneath the low of that bar. More often than not the stock will gap below your hard stop then rally in the first 15 minutes.

The only exception for this rule is when taking profits. Profits can be taken at ANY time during market hours and override any rule.

Welcome Traders!

To newer traders I can offer 3 things...

• Get a journal and record everything.
• Develop money management skills for both trading and the rest of your life.
• Never stop learning, read anything and everything.

Great books:

• Jesse Livermore’s Reminiscences of a Stock Operator
• Jack D. Schwager’s Market Wizards and New Market Wizards
• Japanese Candlestick Charting Techniques by Steve Nison
• Trading For a Living by Alexander Elder

You have no control over the markets, you can only control yourself. The market will do what it wants to do regardless of your feelings. After all your time spent learning to make money, the markets will not hesitate to take it away from you at any split second. Good luck out there, and remember...

"Plan your Trade and Trade you Plan!"