Day One

Yesterday, I wrote a post about a Trader Community and how great it was and badly I wanted it at that time. It also sounded like I might be this old pro that did not need it any longer. Nothing could be further from the truth. I still love trading and I still love talking about it. Thus I write.

Also I still have contact with other traders through the support I offer on the products I sell. Many are new to this trading busines and some need a lot of help. It is as much reward to me as it is to them. I am still getting my dose of satisfaction talking about trading with someone one on one.

In my previous post I talked about how we shared how our day went. Well today was rather uneventful trading day but it certainly represents things that might happen while one is trading. Today I visited my accountant and talked about K1s and changes in tax laws regarding trading. There was some thought given to becoming a corporation since the tax laws favors what a corporation can deduct. But more on that later since there are always upsides and downsides to any decision. One thing you might check out.

As an individual you can no longer deduct trading expenses and fees. However, if your broker includes those fees into the cost of the trade you get the benefit of reducing your profits with the fees. TDAmeritrade is currently doing that. I called to find out why the fees where not being displayed on my 1099 and they explained that they were already worked into the cost. My accountant tells me his broker does not do that, but rather details those fees separately. So if you make a lot of trades it might be to your benefit to find a broker that includes those fees in the trade cost.

I was up early trying to get ready to leave and find a trade before market open. It was not to be as, volume just was not potent enough to keep a trade running more than for a little gain before it came back. That left me with two thoughts.

The first thought was that I need to include a volume gate on my TWIT (TestedWisdomIndexTrader) just as I have on my TWPT (TestedWisdomPowerTrader). The second thought was that stuff that I really do not like to do keeps getting in the way of me doing what I love to do. Unfortunately, that is just the way it is. What really sucks is that today is Friday and I cannot get back on the computer tomorrow morning.

About off market hours trading; I have posted some examples of pre and post market trades under the “Tested Tips” section on my website. It really amazes me just how profitable they can be IF you can get enough volume to drive them. When IF happens they are incredible smooth and easy to determine when it is time to bail on the trade.

To day was a good day aside from the lack of trading. I got out of the house and took my Lady out and did things SHE like to do. It was great, I even got the opportunity to buy her a gorgeous necklace. It is so totally great to be able to that without blinking an eye. Making money is fun but spending money is even more fun.

Thanks for letting me share, it as though your are right here.

TestedWisdomTrading

Trader Community

I recall so many years ago when I had few to speak with about my trading. My spouse certainly did not have a clue of what I was talking about and my friends and fellow workers were totally confused or else they thought they knew it all and yet knew nothing at all. I found it incredibly frustrating.

Eventually, I established some on-line contacts to do nothing but talk about trading. We met on-line every Saturday morning and shared trades by displaying our screens and talking about what we did and how we either crashed or cashed in. We were all learning, so there was much to be shared.

Now, the lack of contact is much the same except for different reasons. Now I am a consummate trader just going through the paces as though on auto pilot. I miss those days of leaning and sharing. But times have changed and people have moved on and I am left with those that became friends. We still communicate now and again, but not nearly as often as I would like. We have all stated the same disappointment in not being able to meet more often.

Now my friends are entrepreneurs, some professional traders and some have just dropped by the wayside and are no longer interested in trading. Those of us who are still trading look forward to those cherished moments of sharing. But we are busy now and that is sad for that was a beautiful thing that we experienced.

If you find yourself with same need, form a group and do as we did. You can always use the social networks, though those tend to be cluttered with people we do not need. They invariably find their way in. You can form closed groups and perhaps that is the way to go. After doing a litte search on Facebook I found mostly promotional sites and nothing to allow a bunch people who love trading to exchange ideas.

I would establish a forum for such a need, but I do not have time to moderate it. People being people, I am pretty sure moderation will be necessary. In any case, you may find trading lonely and it certainly can be but it is still profitable. The reward is worth the isolation I can assure you. But it isn’t about the isolation is it? It is just wanting to talk to someone who “gets it” and share something you love.

See you on the other side–

Your Success Is In Question

I am troubled by your response. It is not from the lack of activity but rather from the lack of your interest. My last post to you dealt with trading psychology and I saw that fewer than average bothered to view it. That really concerns me because psychology is an important key to success.

The purpose if this post is not to send you back to read that post, but rather to caution you about avoiding things that will determine your success or failure. You may or may not have noticed that my posts are not sell pieces but rather an effort to help you understand the path to success. I have already accomplished that goal and I have a constant income to provide for my needs.

My future is not dependent on your purchase of my products. I continue to write new studies that address the constantly changing market environment and I do so more so for my own needs than developing a product to be sold. The selling of the product comes only after it helps me achieve my own personal goals. Others have helped me get to where I am today and now it is my turn to help those seeking it.

Maybe you think you have gotten a handle on this trading business. But if you have already done that, why are you still seeking an answer of how to do it? Did you really think it would be so simple that it would not require some effort on your part? I won’t lie to you. It is not easy, it is hard. If it were so easy then why are so many still struggling to become a successful trader? Why are 80% of those who are in the market unsuccessful? Why is the market place filled with those offering “simple ways to beat the market”? It is because there is always someone looking for an easy way to do a complex task. It does not exist.

I wish I could tell you that by buying the Power Trader you would have immediate success. I cannot tell you that as I would be a fraud. Can it help you? Probably, but not certainly. I can provide you with all the tools at hand, but if you do not use them and use them correctly they will not help you.

I encourage you to be curious and question all things. Even question what I tell you. For in doing so, you will learn what is true and what is false. It is through that questioning you will acquire wisdom of this crazy business of trading. Some of what we know today will not be so tomorrow; some of what we know today will be true forever. It is to the seeker to determine the difference. If my comments cannot stand your review then they are not fit to be published. I am confident I will never lead you astray. Take what you wish, leave behind that in which you do not see value, but never discount it before questioning.

See you on the other side

A Trader’s Psychology

Your “self”, or whatever you want to call it, is so incredibly important in all facets of life and particularly so in trading. Your frame of mind, attitude, focus, and confidence will, not can, but will make a difference in your trading results.

If you do not struggle with theses feelings, then you either have mastered your ability to deal with those feelings or you are a machine. There is no alternative. We are human thus we have human feelings, different in each of us, but yet so similar in a lot of respects, particularly so in trading.

You will see a lot of discussion of things like fear of loss and confidence in your trading abilities and they are, in fact , incredibly important. But today I want to address a topic that lies beneath the obvious churning that goes on in the brain and stomach. Yeah, I know, that is a lot of emotion. OK , so maybe you do not get that worked up.

I confess, I love to trade, perhaps too much. I am not bothered with any of the aforementioned emotions to a point that I cannot deal with them. Thus, my love of trading is one that I need to deal with. You see, if I am not incredibly careful, I find myself over trading. I recall Orson Wells back in the 70’s doing a wine commercial for Paul Masson wines where he states,
” We will sell no wine before its time.” That was a comment that I have taken to heart by paraphrasing it into “I will take no trade before its time”. Perhaps the wine was not that great. but the slogan was priceless.

Sometimes little things make big differences. In my case, that slogan has made a huge difference. Waiting for a signal with everything right about it was the sure answer to successful trades. Knowing when not to trade may be even more important than knowing when to enter a trade. Equally so, knowing when to get out is huge. So I have developed a little routine that I follow and it never fails me when trading the e-minis.

First picking the right time to trade. When I say time I mean time, like the time of day. There are ways to trade market open but it is not just entering when market opens. That can be an equally rewarding as well as a painful experience. Large rewards are most often combined with large risks so one must keep that in mind when entering the highly volatile market open. You cannot get greedy at that time and must be ready to exit at the first signs of a reversal in your fortune. The problem exists; when is that? And that is why I rarely trade market open unless it is a continuation of pre-market trading and rather smooth in comparison to normal market openings. This morning was one of those times and I did extremely well trading three of the indexes.

The time of day between market open and approaching lunch break for wall street generally offers good opportunities to enter trades going both directions. If the market is not highly charged when it opens it will find a time where profit taking happens before the lunch break. When they return you will likely see a similar setup for an hour or so until you see end of day position settlement. Time is critical because plans and intentions are connected with time. Remember price is a reflection of people. People with emotions just like our own. When the herd goes one way so does price, but only until it is no longer a herd mentality and there is where we hope you find yourself. Knowing what to expect might happen is huge because sometimes it actually does. If we are watchful enough we will find we get it right more often than not. And that my friends is the markings of trader.

What about getting out? Through experience I have learned when to take profits and let it go regardless of where it goes. I keep a close eye on the power indicator to tell me when when the fizzle is fading off the champagne and that is where I exit. Sometimes too early, you ask? Never, if I am at profit. Learning to accept an acceptable reward was hard for me, because, well, I was greedy. Guess what, greed is an emotion too and something we need to get a handle on as well. My TW trade manger shows me what the calculated risk is but I am not obligated to accept it. I generally do, but more important I sometimes use that same amount as an exit point. Sometimes I get right back in, but now I have money in the bank and fear no loss. One might say that a 1:1 loss to win ratio is too tight. If I were not diligent in my entry actions that would be so, but with a high winning ratio it is just fine. And who is doing the calculations and what is an acceptable loss? If I follow what I see before me, I will have a high winning ratio. From there on it is about trade management and that is where a lot of folks get burned. Using the tools offered by Tested Wisdom and controlling my emotions, I am pretty much guaranteed a positive return. I may not hit a home run everyday, but if I can just avoid striking out most of the time, I should end up on the bases. Games are won with base hits.

Sorry about the baseball analogy, it just fit so well.

See you on the other side–

TWSRT Part 2

This is the continuation of the “TWSRT with price action”. This video is a discussion of how trade entries are associated with the TWSRT. Here we cover how to use the TWSRT to enter trades and improve your results. We also discuss how to use the TWSRT to determine trade exits.

Using the TWSRT for entering and exiting trades.

TWSRT and Price Acton

This a second video on the TWSRT, however it is a updated explanation of how the TWSRT details price action. It gives you a great deal of information of what price is doing and what one might expect it to do in the near future. The TWSRT is a great addition to any methodology you choose to use to enter or exit your trades. Check it out here and look for a futures follow up video to come including incorporating the TWIndexTrader.

How you can read price action the easy way

Planning Your Trades Before They Occur

The title may sound strange to you, but it is actually something you might want to consider. I know you have heard the expression of “having your ducks in a row”, well that is pretty much what this is about. Only to applies to being prepared by knowing what you need to do before you actually enter the trade. Check the video for more.