Emini Trading Blog

Archive for the ‘Dow’ Category

Initial Claims Report, released at approximately 08:30 (all times, EDT) rose unexpectedly, further straining the current bull-market. Or has it? As of 12:25, price has exceeded yesterday’s high by six points! If you believe that “price never lies”, the bulls then are still clearly in charge. That being the case, deciding where to get long is the job at-hand.

Regarding trade entry-tactics, what would you say, is the biggest variable in the answer to the question of where? There are numerous tools available to aid the market technician in positively identifying support. Further, there are numerous tools capable of broadcasting an indication of the strength of the momentum that pushed the price higher.

After working with hundreds of traders, from beginner to 20+ years experience, my opinion is that the biggest variable is YOU, the trade operator. Each trader reacts differently to the readily available data referenced above. Yes our differences can be vast. Remarkably however, most I have worked with, seem to have one of two, primary “trader personality” types.

First, there is the swashbuckling, warrior-style mentality. Exorbitant risk, large drawdowns, and a tremendous sum of hope prominently characterize this type. Secondly, there is the anxious, fearful type. Self-doubt, trade-execution inconsistency and regret rule for this group of traders.

Yet, the majority of BOTH “trader personality” types desire an income. $500 per day is a typical starting point. To showcase how BOTH types trade, how BOTH types face pitfalls peculiar to their “trader personality” and how EARNING $500 PER DAY IS POSSIBLE FOR ANYONE willing to grow, I will now introduce to you two (fictitious) traders!

Trader 1: Bob Bright. Trader Personality Type: Aggressive. High risk, high reward.

Trader 2: J.R. Down. Trader Personality Type: Fearful. Out too soon, if in at all.

Both have $10,000 to start. Watch and read further updates. Both “trader personalities” will be showcased routinely. Then I will address how to move past the limitations associated with keeping rather than expanding your trading mentality. See you soon! – Jared

Do you even recall the last time the words exemplary and General Motors were this close to one another? Too much time and too many missed opportunities have passed since one could write that with a straight face. Yes, in view of the “Titanic”-esque pace with which GM truly changes, exemplary is a stretch. However, the far-reaching cuts and wholesale abandonment of long-held nameplates is a feat worthy of recognition. Worthy also of imitation. Yes, even for day-traders and investors alike, GM of all sources, can serve as a valuable warning example!

One application we can glean is the need for clarity. The rest of the world could see that there were numerous needless models in GM’s line-up. The cost of flooding the market with redundant offerings outweighed the margins earned. Additionally, this flood-strategy fails to guarantee market-share. What are the similarities to trading? 1) Our entry criteria is met so we enter. Prior to our profit targets being reached we see an additional trigger telling us to enter. Is this an opportunity to earn more? As a rule, no. The time it took for the second trigger to develop has embedded risk. More often than not, a delay in reaching your profit target is a signal to lessen your position. If you decide you must keep it. 2) Generally, this secondary entry will be at a less favorable price point. This means your profit targets require greater follow through from the market. Of course there are exceptions, these are general reminders that will likely have application at times regardless of the time-frame or instrument you trade personally. Yes, the payoff for adding to a position you already have can potentially be rewarding at times. However, risk when realized is unrelenting. Just ask GM.

TODAY WE SAW: Bullish start with higher highs throughout. Expanded volatility came as bank related news was released.

BUY-SIDE ENTRIES: One entry near 859 was a very quick earning trade. POTENTIAL OUTCOME: + six-tics.

SELL-SIDE ENTRIES: One entry near 858 was a very quick earning trade. POTENTIAL OUTCOME: + six-tics.

TOTAL POTENTIAL OUTCOME FOR FRIDAY 24-APRIL-2009: + 12 TICS.