The Insightful Trader

I’ve had some inquiries about private coaching. This is a service that I am going to start offering on a very limited basis.

This will entail setting up your charts correctly with the indicators that I use, the mental aspects of trading, position sizing, picking and executing trades, and spending the day looking over my shoulder and vice-versa as we do actual trades. This can be accomplished quite easily with Go-to-Meeting, which I will provide, which will enable you to watch over my shoulder and I yours during the trading day. If you’re new to trading or experienced, whether a day trader or swing trader, this service should get you on track to help make consistent profits.

The cost for this service is not cheap but not prohibitively expensive as I tried to make it affordable to newer traders as well as experienced. Cost for a full trading day is $500.00 or for 1/2 day – $300. However,  you may be able to recover the majority of this during the trading day, depending upon market conditions and your risk tolerance.

If you’re interested, please contact me at trader1@theinsightfultrader.com

Those of us in the investment world, even if you’re relatively new, have always been taught that you should have a thorough knowledge of any investment you make. Though this may be true of any investments that you plan to hold for any amount of time, for short term traders I ‘d like to put forth the proposition that this may be hazardous to your short term fiscal health.

As a trading coach and a long time trader I’ve seen it many times, heck I’ve even done it myself, where your familiarity with a given stock or group of stocks leads to poor trade management. Whereas if you just happen upon a trade or a stock that perhaps someone else mentioned, then you’re much more likely to follow your signals and maintain your stops without any preconceived notion or expectations of the outcome. If the trade works, fine, if it doesn’t then that’s ok too. You followed your rules.

This first came to my attention several years ago when I started noticing certain traders who regularly traded the same given group of stocks would tend to be more lax and give a given stock more leeway or have higher expectations of the results than the trade setup suggested. Say for example Trader A likes to trade the oil stocks and he just knows oil is going up, thereby his stock should be up that day too irregardless that it’s beenup 5 days in a row, is right at a major resistance point etc. you get the picture. If you had never traded that stock in your life or could care less about the price of oil, then your expectations of a given outcome are going to be completely different and probably more objective than trader As.

I recently made the same mistake when the financials had all made a 200% move thinking there was no way they could continue. What started out as what I felt was a fairly conservative contra play using an inverse ETF and options, relatively quickly went from being a  short swing trade into a long term holding. Conviction in the market can be a killer if you’re not careful.

We all hear it and say the words, but as we all know the psychological part of trading is often more important than the actual skill set in many cases. Just remember to set up your trade parameters for whatever time frame and be adamant about following,  BEFORE you make  the trade and especially so if it’s one of your favorites.

Traders of all types, whether they be intraday day traders, swing traders or even long term traders all have their favorite indicators. This is true even if they’re fundamentally inclined, much as I often am. I have friends who have charts with so many indicators in different time frames on them that you can barely see the candles. Indicator lines going everywhere in all directions.

Today’s computers with incredible computing power, not even imagined just 15 years ago and the readily available high speed internet,  let most anyone have a wealth of charts and indicators on their screens. As one of the old school, I can easily remember when all we had was a ticker and quotron machine that took up half your desk and no one was even dreaming about what’s available today. As a budding trader somewhat technically inclined, it was a big day when the new chart booklets came every month so you could draw new lines in them. And forget anything shorter time spanned than a daily chart

In those days if the stock price was above the 200MA you were bullish and if below you were bearish on the stock in general. If you were so technically inclined, and willing to work a lot of hours doing it, then you brought out your straight edge and pencil and quickly learned to draw lines on your new charts. Little 6 inch rulers worked best because the longer ones were tough to use because of the page binding in the books.

As more an more things became available, traders of all sorts quickly migrated to new technology and more and more exotic tools. The one thing that all traders like almost as much as a winning trade, are new toys, especially if perceived to give them an edge. In 2007 there was worry that there would be a serious shortage of mathematicians because all the good ones were either getting hired or starting hedge funds, each competing with more exotic and esoteric trading strategies. As is pretty obvious these days, where were they and their supecomputers in calling the top and getting everyone short, or at least out of their longs.  Whereas anyone with a straight edge, electronic or otherwise, would have lightened up, if not at 1500 then most definitely by 1400 using a simple trendline.

I’ve tried a wealth of various indicators over the years, and as each of us, have my favorites, which by the way I have reduced to just a few over the years. However, my single most favored and unquestionably most reliable is a simple trendline. Invariably if I trade against them, it comes back to bite me more often than not. The great thing about trendlines is that they work equally well in all time frames, whether it be a 1minute chart or a 20 year monthly.

Trendlines are not necessarily going to get you in at the absolute bottom or out at the very top, though an intial break of one can often come very close, in many instances, but they will surely get you in or out in time to capture the majority of the move. I’m not going to give you a course in the basics of how to draw here, you can get that anywhere, but I do encourage you, no matter what time frame you invest or trade for, to add to your arsenal. It might be the simplest and most effective tool you’ve ever used.