Day Trading Tips and Tricks

July 26, 2016

Erich Senft

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The Stock Market is Ripe for Day Trading

stock market conditionsSome people think the most successful people are, on the whole, a happy lot.  It always seems that Lady Luck smiles in their direction. As they move from one success to another, others sit on the sidelines and complain it’s not fair.  I suppose they never realize they could be just as lucky if they would only stop complaining and begin making the most of the opportunities that exist around them.  Complaining, envy and jealousy are never attractive qualities when compared to an optimistic outlook.  Not only does it turn people off, but the negativity is also like a black hole that sucks more of what they don’t want into their lives.  

I finally stopped taking phone calls from trading friends that just want to complain about the continued “madness” in the stock market, and how it is sucking every last nickel and dime from poor unsuspecting traders. 

“Depend on the rabbit’s foot if you will,  but remember it didn’t work for the rabbit.”  – R. E. Shay

Really?  I doubt it.  I may be going out on a limb here, but I’m going to give credit to the average trader. I am talking about the less than 5% of the 99% that has money to trade. People who are trading in the face of the litany of lies and deception spewing out of Wall Street. 

stock market tradingJust stop and think for a moment.  Who has the motivation to keep the stock markets moving higher?  Who is massively long on equities, treasuries, and short precious metals, the average trader?  No way! 

The self-centered reporters from the financial media who believe they are “in the know” pros have no idea of how they are routinely led to slaughter. The recent stock market activity isn’t a battle between “bulls and bears” it is a struggle of continuing a charade for the masses that the media believes are gullible and stupid.  I find this apprehensible and deceptive.

The greater fool theory may be alive and well, but it is because the “masses of asses” sitting on trading desks still believe in the “rote” reaction in response to the continued spewing of financial news pundits.

Trading at the intraday level continues to offer an abundance of opportunities. Typically, the trading starts with the broader indexes moving in a seemingly defined direction.  However, without any supporting evidence or concrete news, the algorithmic trading machines move into the stock market and start an upward avalanche that triggers additional buyers and so on.  Should you sit back and take notice when the indexes push to new highs?  You bet!  In fact, you can even sell into the movement, and against the grain because of the inevitable reversal for a few points.  Again, I’m not making any bearish statement or bias, but merely trading what the stock market gives at that moment. 

So should you trade when the stock market is banging up against a defined range level?  As a position trader, the answer is No – not even with someone else’s money – But, as a day trader, the answer is an absolute Yes. After all, it’s only a number!

Bear Stock Market Move

The current stock market state remains prime for day trading.  There are numerous opportunities for a growing list of traders who approach the stock market from a bullish perspective as well as traders who approach the stock market from a bearish viewpoint.  Being able to reduce and separate the “noise” from opportunity takes knowing and executing a well-defined strategy.  This situation allows you to see opportunities amongst the “chaos” and by trusting the mechanics of your strategy, be able to take advantage of them. 

 

Emotions can and do run wild and often with higher velocity when feelings become facts.  Tuning out the noise is an art form that few master. Technology has made the information highway travel at “warp” speed.  Much of the information is “noise” but when emotions run wild so does the “noise”.  Focusing on “noise” instead of reacting to a definitive decision is a losing proposition.  Knowing why should not be the first response.

The trading opportunities are abundant within equities, futures, ETFs, options, treasuries, and precious metals.  Opportunity continues to knock on our doors.  While it doesn’t come without risk, risk can be defined and more manageable.  Volatility and broad moves are exactly what a day trader desires and being able to respond without questioning is a luxury many are unaware of. 

Using the Diversified Trading System (DTS) with various stock markets can produce reliable results.  The combination of either of the systems with Trade Manager provides a solid, more stress-free way to build profitable trades. 

See our diversified trading Systems in action Every Wednesday in our Trade Room. Register Here.

July 26, 2016

Erich Senft

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