The part-time trader advantage

You've heard me say it before. One of the biggest trading leaks is micromanaging positions by jumping from trade to trade and never letting your trade work for you.

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Well part-time traders, I've got great news for you. You have a huge advantage over full-time traders in this area just by the nature of your environment. You don't  have time to sit and stare at every tick on the computer screen. Take advantage of this instead of wishing you could trade full-time. You can "set it and forget it" and let your trades make you money while you do other things.

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Swing Trading Smart Tips: Set It and Forget It

Tick. Tick. Tick. That stock is driving you bat shit crazy!

Your co-workers gawk as you sweat and continually look up at your screen. You can't hide the fact that you are stressed-the-you-know-what-out.

Why are you stressed?

It's because that stock you entered moved 20 cents below your entry and is now forming a bearish engulfing pattern.

Sounds bad huh? I forgot to mention that you are swing trading this stock for a $10 gain, your stock has moved 20 freakin' cents and that bearish wedge . . . it's on that 2 minute chart you keep peaking at when you should be trading off the daily.

Yeah, that daily.  The one that is a 330 minute chart.

Look, I've been there. It's tough to enter a swing trade and not monitor it. It's human nature and we all do it. However, we must fight ourselves from doing this, because it inevitably leads to micro-managing positions, which is the death knell for swing traders.

That is why I constantly preach the mantra of "set it and forget it".

One of my mentorees just witnessed the power of set it and forget it first hand. I got this email from him today:

He "almost tapped out" is trader code for "gave up on the trade before hitting his stop or target." In the past, he would have. But now SB has seen the light.

Set it and forget it

A lot of hard work went into your entry, stop and target levels. Hours of experience in pattern recognition, sector analysis, trader psychology, risk analysis and support and resistance levels went into that trade you just put on. Now it is time to enjoy the fruits of your labor by "setting it and forgetting it".

If you have managed your risk right, what's the worst that can happen? You'll take a small loss and move on to the next trade.

See, trading can be as easy or hard as our minds make it out to be. Make it easy. Set it and forget it.

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Trading "Leak": Impatience and the GS Trade

One of my mantras is to "set it and forget it" after making a trade. Once a trade is made, I set my stop and target, then forget about the trade until one of the price objectives is hit. At least I usually do . . .

My recent GS trade is a good example of a trading "leak" that many traders have, the error of impatience. GS was not a losing trade, but I could have done better. I originally entered at the bottom of the current trading range as an "oversold" setup as the stock neared support and was oversold. My initial target was hit, I took a partial profit, then moved my stop up just under the current support range. If I had stuck to it, the second half of my trade would see a profit right now.

Instead, I got tired of waiting for something to happen and exited on Friday before my stop was hit. Thus, I missed out on today's 2 percent gain.

We all must remember that we set out stops and targets for a reason, and little good comes from "micro-managing" trades.

Video: Sticking with the Trade (FSLR)

In todays' video, I detail my current position in FSLR to show how important it is to stick with the trade until your stop or target is hit.

Ain't No Glass Chin Here

I'm taking it on the chin today. Not only from the market, but readers as well. It's comforting to know that I can bring so much joy to so many of you. It seems some of you derive a lot of pleasure from my pain. I guess that comes with the territory, especially with the profits and win rate I've enjoyed this year. Yeah, that is a jab at the petty bastards that bombarded my inbox. May you rot in 10 feet of bull dung!

I haven't covered any of my shorts just yet. As I constantly preach, it's important to let your stops work for you. As of yet, no major S/R points have busted, so I remain in bear mode. However, we are getting close. For instance, my stop for AAPL is a tad above $181, and the stock closed at $180.22. My QID stop is around $37.60, PGJ at $34.50 and MER above $60.

While I'm not concerned about any losses I may suffer from the above trades, I am ticked off about not entering MA at $181 (it's currently at $195.60). I outlined it in Monday's video, and pointed out that it is a better bounce play than bearish looking setups like AAPL and GOOG. Note that MA was up 6.30 percent today , while GOOG moved only 2.77 and AAPL 3.09 percent.

My mistake with MA was waiting for too perfect of an entry. I've talked about this before. I am not usually all that precise with entry points, as long as risk/reward is good. What was I thinking!!!

Patience, Trading and Profitability

I stumbled across this article on patience and trading via Trader Mike's links. Although it may seem like basic stuff, it speaks about an issue that has been one of the toughest for me to master. The basic message is you must be patient with your entry points and give your positions time to work for you.

I know it sounds like a basic principle. However, it's been a tough one for me to master. I can't count the number of times I've spent all evening researching my watchlist and identifying the perfect entry points, only to jump the gun the next morning and enter before my entry point is hit. Inevitably, the stock will end up reaching the entry point I originally identified, take time to get to my buypoint, and take even more time inching higher.

There's likely a very good reason that I identified a certain entry point, most likely a pullback to breakout level or a trendline tag of support. By succumbing to my emotions, I've ignored logical analysis, lowered my rewark to risk ratio, and actually created a longer and more frustrating hold time. If I would have just waited for the buypoint, I'd actually already have a nice profit by the time the stock moves back up to my original buy point. If the stock went the other way, I would end up with a smaller loss.

A good trader must also exercise patience once in a position. I've wrote about this before, about how important it is to let your positions work for you. Just as with entry points, there is a logical reason for setting your stop just below support levels. By "micro-managing" your trades, we usually end up losing out on big gains.

One way I combat the urge to micro-manage is by taking partial profits as they come. It keeps me in the game if there is a big move, locks in a small profit and feeds my basic emotional needs.

I know it's tough to be patient, but by gettting a handle on my entry points and allowing my positions to work for me, I've become much more profitable.

View the rest of this blog.

Freshly Squeezed

Days like today tend to turn smack talking bears into nervous nellies with itchy trigger fingers. This gives rise to a nice little stock market pop that makes everybody wonder if we really have seen th worst of it and bottomed. Maybe we have, though I seriously doubt it. More likely, what we have today is a good old fashioned short squeeze.

Take a look at the Nasdaq chart below. If today's price bar had been wide ranging, closed near the high, pushed through 2400 and been on high volume, I would be rethinking my game plan. As we can see, that's not what happened. Instead, we got a weak little pop on below average volume, which is certainly not cause to change our market stance.


If you are holding shorts and feeling a little pressure, look away and do something totally non-market related. Let your stops work for you. You placed them where you did for a reason. Covering now could just lead to trading yourself out of a good position.

If you are wrong, and we are in the midst of reversing, big deal. After all, you prudently managed your risk-reward and position sizes before the trade; so a few losing trades ain't gonna kill ya. You did do that, right?