12/28/11 Trade results: 2 trades, $50 profit. Trading light and on low volume

This is the last trading week in 2011. The volume is very light this time of year, therefore don't expect much from the markets, be patient, and enjoy your vacation! I glance at the screens maybe 30min-1hr each trading day this week. I take very few trades because of the realization that there may not be volume to support the moves. I had 2 trades today, one was a $50 loss and the other a $100 profit, netting $50 profit on the day.

I began writing out my analysis sheet by hand this week, editing a few things, and incorporating the trade journal into the same page. I log each trade and note a mistake if a mistake was made. This is in the hopes that I can recognize and eliminate these mistakes if I see them regularly.

Here is the chart from today and below are the mistakes that I made and why they were noteworthy mistakes.

Trade 1: Took the 123 long signal, placing a stop limit to buy above the swing high.
Mistake: The trend was down and my rules say that the failure trade is a higher probability trade than the 123. Basically, placing a limit order to sell above that swing high.

Trade 2: Took the PB short signal, expecting the lows of the day to test and break much quicker than they did.
Mistake: I took a weak signal, micro-analyzed the charts. I should have waited to short higher on a better signal or waited for the breaker signal through MAJOR support.

Major mistakes that retail / new traders make that cause them to fail and how not to make them.

When I started trading, I did almost every possible mistake there is. I failed numerous times, went through times of large drawdown, and considered whether its even possible to earn a living trading. I quickly realized what my mistakes were, but it took me a very long time to actually correct them for good. The macro level mistakes are things like:

- Not having a trading plan
- Being under capitalized
- Trading in "non-trading" environments (not knowing when to just sit on your hands)

Those are things that you read about all the time. Today, I want to discuss micro level mistakes that retail and new traders make. These are thigns that even with a trading plan, plenty of capital, and knowing what to do; new traders "mess is up" anyways.

1) Retail traders chase the market
2) Ratail traders jump in too early
3) Retail traders get out too late

I came up with solutions for each of these mistakes. One thing that I started doing, which helped me a lot, is reading a list of rules every morning. The same list, each and every morning. Eventually, it gets memorized and your brain subconciously does not perform the mistakes.

1) Retail traders chase the market
-BE DISCIPLINED-
Plan the trade. Know what you're going to do when and define your entry signals. If the breakout occured and you missed it, wait for the pullback.

2) Ratail traders jump in too early
-BE PATIENT-
Simple, be patient and wait for the SIGNAL. Never anticipate a signal.

3) Retail traders get out too late
-DON'T BE GREEDY-
Nobody ever lost money taking profits. Another thing, never let a winning trade turn into a losing trade, always move your stop to positive.

12/22/11 Trade results: 2 trades, $110 profit. Trading bull and bear channels

Today had VERY light volume. It seems like a lot of the trades ended work for the holidays. The market was moving very slow on low volume since last night, after hours. I had a couple signals triggered however. They were both channel trades, the first a bear channel trade, the second a bull channel trade.

The second trade had a 123 signal within the bull channel. I missed target by 1 point and got stopped out for +$10 on that trade. The first trade met target at +$100. I ended the day with only those 2 positions for a profit of $110.

12/21/11 After hours trade: $100 Profit. Trading Price Structure, bear channel

The most important technical indicator I use is price structure. I defined exactly how to trade certain price structures. When I spot the structures, I try patiently wait for the highest probability trade. For example, in a bear channel, the highest probability trade is shorting the highs of the channel. Next, its buying the lows of the channel. I recognized the bear channel and shorted around the highs of the channel with a stop above the resistance. I made the big mistake yesterday of not trailing my stop and having a target too high, therefore I made sure that my target on this trade was at the lower support line of the bear channel.

This trade yielded $100.

12/21/11 Trade results: 3 trades, $250 profit. Trading trends, cutting losses short, letting profits run

Over the past few months I've altered and improved my trading style. I started out trying to take "x" amount of dollars per trade, over and over again. This leads to overtrading and eventually netting losses. What I then realized is that time is your friend when it comes to futures trading, so let the profits run, protecting them with a stop. I had 3 trades for a profit of $250 today.

I had one major mmistake today, letting a very profitable trade turn into a breakeven. Importantly, it wasn't a loss, but a break even after being so much in the money is a MAJOR MISTAKE.

The reason I let the trade play out is because I thought the momentum from yesterday was going to continue over into today and that 2300 on the Nasdaq would be tested (this was my target on the trade).

The One Simple Idea That Enabled Me to Become a Full-Time Trader

I always like reading informative writing from traders around the world. I am able to expand my ideas and pick up valuable information from others in the field. I want to share a very interesting piece from Jim Neihart who graduated in 1980 from the University of Arizona with a degree in Finance. 

The One Simple Idea That Enabled Me to Become a Full-Time Trader

Trade To Trade Well, Not To Make Money! I have repeated this statement hundreds of times to my students. It seems like a contradiction but it really is not. Traders who routinely make enormous amounts of money trading don’t mentally count the dollars while they’re trading. They don’t keep a mental calculator continuously running in their head to constantly keep track of how much money they’ve put into their account. “Let’s see, I bought 1000 shares of Halliburton and it’s up one point, times one dollar a share, equals 1000 dollars!”

Nothing and I mean nothing, will blow your concentration and cloud your judgment faster than keeping that calculator running in your head, calculating the dollars you’ve made or lost each minute that goes by during the trading day.

Another booby trap is to announce to the world, your husband, wife or even your dog that you’re going to make a specific amount of money trading today. You’re setting yourself up for failure. Setting as specific dollar amount you must bring home each day, especially if you’re a beginning trader, assures that it probably won’t happen. This need to make a specific amount of money colors your view of the market and pressures you to open positions that are marginal trades because you have promised yourself or worse yet, someone else - that you’re going to bring home the cash! Your pledge echoes in your mind, so you force trades. Odds are, you lose money. Now you’re embarrassed with yourself and you start questioning your self-esteem, which automatically leads to more losses.

The cure for this illness: From this point forward, your goal is not to make money. Your goal is to trade to trade well! Money is a by-product of trading well. A very interesting thing starts to happen when you focus on trading well. Your profits will start to add up a lot faster than they did when making money was your primary goal. This is simply because traders who focus on trading well cut their losses and let their winners run. They protect their capital and leave unnecessary risks to others. They recognize a choppy market and sit on their hands and don’t trade. They make promises to no one, including themselves, about the money they want to take home.

Traders who trade well let the market come to them. They are extremely patient and disciplined. They wait for the perfect setup and entry point. If that perfect point doesn’t come along, oh well, they wait for the next one knowing that another chance is just around the corner. Once in the trade, they mechanically and methodically manage their position, taking profits at specific points, and moving their stop loss to protect their principal.

Traders who trade well don’t trade simply for the excitement of the trade because they have become addicted to the thrill. They don’t trade out of boredom or when they are sick or tired. They don’t trade especially if they have stress in their life that disallows their full focus on the market. Successful traders always abide by their trading rules and never stray from them. Traders who trade well are perfectionists and are very wealthy as a result of their unwavering discipline. You too should have this goal

12/19/11 Morning Trade Results: 3 Trades, $60 Profit. This is why I use STOPS.

Wanted to make a post really quick on showing you how to use price structure for profit targets. Looking at this chart, you see the bearish channel. What this tells us is to take profit around the resistance if you're long. Therefore, I had my target around that level, 5 points. I ALWAYS move my stop above entry after the market goes in my favor. The reason for this is to avoid getting destroyed by a move like this:

Imagine is you had a 1 to 1 risk to reward, for example 10 points profit to 10 points loss and you never adjust your stop, or worst, you don't use a hard stop, only a mental one! This is a situation you need to avoid and if you experience it, you want to experience it on the right side movement of the market.

So far I had a few trades, $20 from premarket, a $60 stop, and a $100 profit. I am at +$60 on the day so far.

Mondays are usually a "get back into the swing of things" kind of day. It's usually a slower trading day for me in the sense that I try to be very cautious with trades and my only goal is to try to turn a profit so that it puts me in a positive mind set for the rest of the week. I may end around +$60 for the day and work on a couple of things for the rest of the session.

12/15/11 Trade results: 4 trades, $65 loss. Its the sample of trades that matters

I had 4 trades today and ended with a $65 loss. 3 of the 4 trades were managed very well, according to the system, stop was moved to +$5 after movement in favor. One of the trades took a full stop due to an emotional decision (as I said I'm still working on correction this issue).

The whole thing with trading is that its the net result that matters. How you end at the end of the week, the month, the quarter. I used to put a heavy amount of focus on each individual trade and each individual day, but I learned that its the "sample" of trades and the end of a period that  really matters. For example, I like to see how I performed over 20 trades or 1 month, thats what will build consistency.

The moral of the story is that I expect down days, its a part of the business. MOST IMPORTANT THING IS NOT TO TURN A BAD DAY INTO A CATASTROPHE! Take your losses and learn from them, make sure your decisions are correct. Also, try to make sure your down days are small, especially smaller than your positive days.

12/14/11Trade Results: 13 trades, $130 profit with a 15% win rate!

Today was very interesting. I had the 1st trade of the morning long at the lows of yesterday. It was a classic system setup, also, following the system, I got stopped out for a profit of $5. I ended up having 13 trades today and only 2 of them were profitable! BUT, applying the number one rule, cut losses short let profits run, I ended the day with a slight profit. I had plenty of mistakes today regarding fighting trend, I had way more long trades than short trades and according to my system that's a problem. I will review today later on and try to fix the issue of forcing counter trend trades. I seem to "notice" more seller failure trades in a short environment than there actually are. Lets see what I can come up with tonight to fix this for the future! I finished with $130 at the end of the day.

12/14/11 Live Nasdaq Trade: $25 risk, $800 max profit

Here is a live trade that was just taken. At previous day's lows, you want to look for buying opportunities, if previous day's low is broken, then you want to look for short opportunities.

I took a long signal around previous day's lows. The max risk on this trade is $25, which will eventually have the stop moved to 1 tick above entry, for a risk free position, worst case scenario making $5. The max profit target on this trade is $800, but the position will be managed accordingly depending on market conditions.

12/13/11 Trade Results: 15 Trades, $625 Profit. The trend following system way

Today was a great example of how important it is to follow your system for the long run. I started the day off with multiple stops of $50-$60, which was VERY discouraging. I tried to reiterate to myself that a trend following system accepts those losing positions, and knows that the profit will come from the trade that really takes off. Here's the trade that took off for me in the afternoon session and took me from being negative today to a profit of $625:

12/9/11 Trade results: 6 trades, $530 profit. All 3 trade signals triggered today

As mentioned before, Friday I tend to end the work day early and go over the trades from the week and the decisions made. I try to find solutions for mistakes and reinforce the positive decisions that were made.

I have 3 trade setups that I take. They include:
1) High of day / Low of day trade
2) Buyer / Seller failure trade
3) 123 Trend trade

Today's chart shows examples of all three of those setups. I try to make it a habit and stop trading by noon, especially on Fridays, so I'm done for the week.

If you have any questions, please let me know. Enjoy the weekend!

12/7/11 Trade results: 2 trades, $270 profit trading mini DOW and Nasdaq seller failure

Had another one and done day after meeting target on my DOW position very early in the morning. Because of meeting full target on the DOW trade, I just closed out the NQ trade for a profit of $20. Both the NQ and YM trade were seller failure trades.

I am done for the day and its only 8:42am EST, these are the days I like when trading!

Here's the entry and exit on the DOW trade:

12/6/11 Trade results: 1 trade, $300 profit. A one and done day trading wedges

If I have fundamentals agreeing with technicals, I like to position trade for bigger moves. These types of days I have less trades and large profit targets per position. I trade the price structure that's being presented by the market. For example, today, fundamentals were bearish (EU), technicals were in a falling wedge (bearish).

Prior to entering positions on these types of days, I know where I will enter and where I will take profits. For example, on the chart below, I entered short at the resistance of the wedge. I took profit around the indecision zone, which is the open of the day.

I ended up having 1 trade today for a profit of $300.

HT Trading Office / Monitor Setup

I received emails from people asking what my trading office setup looks like.
I have a custom built PC with a 6 monitor display. Here are photos of the office and then the monitors up close.

I only have 3 instruments on my charts.
Monitor numbers:
123
456

1: Long term charts on Nasdaq, Euro, and Dollar
2: Medium term charts on Nasdaq and trade management chart on Nasdaq
3: The most important monitor of all- It has my RULES and notes
   (Be patient, dont be greedy, follow the system)
   (Losers average losers)
   (3%) noting that 3% of traders succeed, and to strive to be in that group
4: Medium term charts on Dollar and Euro
5: Faster term charts on Nasdaq
6: Euro and Nasdaq DOMs and Time and Sales for Dollar, Nasdaq, and Euro

Please let me know if you have any questions.

12/2/11 Trade recap: $175 profit. Including HT Trading entry setups.

In this video I go over my trades for the day and show you the type of setups I took. I have 3 main entry setups that I look for on a daily basis, they're all discussed in the video below! Have a great weekend!

What is buyer and seller failure, how to know when it happens, and how to use it to make profit

The concept of buyer and seller failure is fairly basic:
- Buyers are unable to make new highs / lack conviction behind up move attempts
- Sellers are unable to make new lows / lack conviction behind down move attempts

In the trading community, there is the belief that institutional traders will "run stops". Basically, you take a long, place your stop below the swing low, you get stopped out (lose money), and the market rallies in your original direction. This concept of buyer and seller failure will allow you to recognize when this is occurring and profit from such instances.

I want to stress that it's very important to leave stops in place, NEVER ADJUST A STOP AGAINST YOURSELF, this leads to bad habits! Protect yourself on trades, always assume the worst move against you rather then a quick stop run.

How to get started in trading: Where to begin, what to do, how to do it.

Learn the terminology

Stock Market Terminology

Advanced Computerized Execution System (ACES)- This is the service offered by NASDAQ to broker-dealers to automatically perform internal transactions and process the records appropriately.

After Hours Trading- Trading on normal currencies after normal trading hours.

Arbitrage- This is transacting to profit between two or more market by taking advantage of the difference in prices in the similar markets.

Ask- This is the price which a trader can buy a currency offered for sale.

Attain ECN (ATTN) - This is a broker-dealer that specializes on direct access electronic trading.

Auction Market- This is the market where buyers and sellers compete to buy and sell currencies respectively.

Back testing- This means analyzing the history of the investment opportunity provided and comparing with the present trends to see how successful (if successful) the investment would be.

Bear Market- This is the period when the declines in prices of individual securities or assets have fallen for a long time.

Best Ask- This is the lowest price of a security or asset which a seller can accept at a particular time.

Best Bid- This is the highest price of a security or asset which a buyer can give at a particular time.

Beta- This term is used to note how volatile or how risky an investment on a security might be when compared to the overall market.

Bid- This is the price one is offering on stocks or commodities.

Big Board- This is the major indigenous stock exchange company in the US, responsible for overseeing the activities in the stock exchange operations.

Block Trade- This is the transaction of a very large amount of shares (typically 10,000 or more) worth at least $200,000.

Blue Chip- These are stocks that are seen as less volatile. Their investments are considered to be more profitable.

Broker-Dealer- This is an individual or a company that trades on securities. The individual or company can also perform the actions of a broker or a dealer.

BRUT ECN- An Electronic Communications Network owned by Brut.

Bull market- This is a market where prices of securities have risen for a long time without returning to the normal prices.

Circuit Breakers- This refers to the procedures/measures that are employed to halt trading on all US stock markets for a particular period of time.

Close Position- This means buying back a stock to prevent a reversal of price trend which may have been observed in the stock market.

Consolidated Quote System (CQS) - This is the service delivered by NASDAQ informing its subscribers on quotations of stocks traded on the regional stock exchanges in the US.

Common Stock- This is the security owned by investors to seal their participation in owning a company.

Crossed Market- This is the case when the bid price of an asset or stock is greater than the ask price.

CUSIP- Committee on Uniform Security Identification Procedures.

Day Order- An order, if not transacted on the day it was placed would get expired.

Day Trading- This refers to the transactions that are made and within the same trading day before close of trade for the day.

Depth of Market- This is the amount of assets or commodities that can be transacted without a large difference in price change at the end of trading.

Derivative- This is an asset/commodity that gets its value from another asset/commodity.

Diversification- This is the method of spreading investments within a portfolio to reduce the risk of losing within a portfolio.

Dividend- This refers to the profits issued by companies to their share holders.

Dollar Cost Averaging- This means buying stocks bit by bit over a long period of time.

Downtick- This is normally experienced when a current transaction price falls below the initial transaction price.

Dow Theory- This theory states that the market appreciates if one of its averages goes above a previous important high.

ECN- It is designed to facilitate trading of stocks and currencies.

Fill or Kill (FOK) - This is an order made on a large amount of stocks. It is either that the transaction to be made ill be made completely or it will not be made at all.

Firm Quote- This is a non negotiable price of a security made by a market maker on not more than 100 shares.

Floor- This is the medium whereby bids and offers are made by traders.

Floor Trader- This is a registered competitive trader who understands the rules of a stock/commodities exchange for his own account.

Front Running- This happens when a broker trades based on the information obtained from the analyst department before the clients (of the broker) receives the information.

Fundamental Analysis- This means understanding the overall state of a business company. Factors that may be looked into are earnings and productions made by the company.

Gap- This simply refers to the break between prices.

Good-'Til-Cancelled Order (GTC) - This is an order to invest in a security which does not close until the conditions/requirements for executing the order are met.

Hedging- This is the method of buying or selling the same amount of securities, almost at the same time, in two different markets.

Imbalance of Orders- This is used to describe the event when buy orders exceed sell orders.

Initial Public Offering (IPO) - This is the first sales of stock by a private company that want to become publicly owned, so that they can expand.

Inside Market- This is the market maker spread. It shows the highest bid quoted and the lowest price offered.

Instinet ECN (INCA) - This is the first medium brokerages had to display bid and ask prices for most stocks in North America.

Joint Account- This is any an account that is operated by more than one person.

Level I- This is beginner trader who does not trade with real money.

Level II- This is an advanced beginner. He trades with real money but at a minimum risk.

Level III- This is a competent trader. He can trade on a more professional level.

Limit Order- A price set by an individual to buy or sell a stock. Above or below this price, the trader is neither willing to buy nor sell securities or stocks.

Liquidity- This is the ability of a trader to convert his assets to cash in a fast way.

Margin- This is a collateral willing to be issued by a trader to a broker when he wants to borrow funds.

Margin Account- This is the account a trader must own in order to qualify for borrowing funds.

Margin Call- This is the call made by a broker to his clients when he observes that the securities bought from the borrowed funds have decreased in value. This call is normally made to tell the trader to add more money to his account.

Market Maker- This is a broker-dealer firm that facilitates the trade of a particular security by dealing on a large amount of them.

Market Order- This is also called unrestricted order. It is the order that guarantees the execution of a trade.

Market Timing- This is the process of predicting future price movements of stocks or securities.

Momentum Investing- This means buying stocks that have been profitable around 3-12 months ago and selling off stocks that have not been profitable around the same time period (3-12 months ago).

Nasdaq- This is the largest electronic screen based securities trading market in the US.

New York Stock Exchange (NYSE-) This is the largest equities-based exchange in the world.

Odd Lot- This refers to stock that is less than 100.

Odd Lot Theory- This states that if odd lot investors are selling, it is likely that buying such stocks at that time will be a profitable venture.

OptiMark- This is a company that owns patents and intellectual properties and also hs its own securities exchanges.

Overbought- This means that the price of an asset has risen to a very high value within a short period of time.

Oversold- This means that the price of an asset has fallen to a very high value within a short period of time

Paper Trading- This is the practice made by potential investors when they start learning how to trade stocks.

Pink Sheets- This is another way of referring to over the counter trading.

Preferred Stock- These are stocks owned by those higher than the ordinary share holders of a company.

Program Trading- This is the method used to take advantage of arbitrage possibilities. It occurs automatically when created.

Qualitative Analysis- This means understanding the qualities of a company.

Quantitative Analysis- This means measuring the strength of financial instruments and institutions.

Random Walk Theory- This states that the prices of stocks in the market cannot be predicted.

Regulation T- This is the regulation done by a Federal Reserve Board to control customer cash accounts and the issuance of credit to customers by brokers to purchase securities.

Round Lot- This is 100 shares of stock.

SEC Fee- This is an additional fee implemented by the Securities Exchange Act of 1934 for stock traders. They are paid to into the brokers’ account from where the sum is collected and remitted to the US treasury.

SEC Order Handling Rules- This consists of the limit order display rule and the quote rule.

Sell-side- This refers to a firm that sells securities and offers investment services.

Settlement Date- This is an agreed date between the buyer and the seller when transactions must be made complete by effecting payments for securities bought.

Sharpe Ratio- This is the value of the excess return per unit of risk in any trade or investment.

Short Sale- This means selling borrowed stocks from a broker to take advantage of the falling prices of the stocks in the market.

Short Squeeze- This is an upward price of stocks caused y lack of supply and over demand of stocks in the market.

Specialist- This is a person who tries to narrow the gap that may be experienced when the market maker is not available.

Spiders (SPDR)- SPDR means Standard and Poor’s Depositary and receipt. They are traded under the symbol SPY just like other American stock exchanges.

Spread- This is the difference in value between the bid and the ask price of a commodity/stock.

Stock Symbol- This refers to letters used to represent stocks for trading purposes.. The numbers of the letters vary among different stock exchanges. These letters are used for security purposes.

SuperDot- This is an electronic system used on the New York Stock Exchange to place orders of listed stocks.

Systematic Risk- This is the risk possessed on an individual which cannot be reduced by diversification.

Technical Analysis- This means understanding the price movement of securities in the market.

Trading Halt- This refers to the period when trading is stopped. Its normal duration is around 30 minutes.

Trin- This is a tool used to indicate the presence of volume in the market.

Triple Witching Hour- This is the final trading hours on the third Fridays of March, June, Septmber and December.

Uptick- This is the case when the current transaction price is above the initial transaction price.

Volatility- This is the measure of the daily changes in the price of securities.

Volume- This is the number of shares that are available o be traded in the market at a particular period and time.

Wash Sale Rule- It states that an investor should not claim a capital loss for tax purposes as long as the capital was repurchased within 30 days.

Zero-Sum Game- This is the case when someone only gains when another investor losses.

Learn the basics of the stock market and how it works

http://www.investopedia.com/university/stocks/#axzz1fEEAyEKK

Click through the table of contents

Learn the basics of futures trading

http://www.investopedia.com/university/futures/#axzz1fEEAyEKK

Click through the table of contents

Decide on a strategy that you will apply to trading, there are plenty out there but it comes down to 2 main schools: Trend trading vs. Counter-trend trading

Most beginner traders try to catch tops and bottoms in the market, not even trying to trade the (intra-day) trends. I, like many other traders first starting attempted to do the same thing. Most traders feel that by trying to catch the top or bottom is really where the real money is. I on the other hand disagree completely. Catching just a little piece of a trend (and sometimes larger than a little piece) adds up, not to mention easier (higher percentages) to do than trying to catch a top or bottom in the market.

Let me first start out by saying that 90% of all your trades should be those trading with the TREND. The other 10% could potentially constitute COUNTER TREND (CT) trades. I would highly suggest concentrating more on the Trend trades as opposed to trying to pick tops and bottoms (CT trades). By not only teaching, but by speaking with students, especially beginners, I find that most traders just try to pick tops and bottoms as opposed to trying to enter the market with the Trend. I will go as far as to say you probably will not make any money by trying to pick tops and bottoms when you first start off trading. Counter-Trend (CT) trading takes a lot more experience. Believe me when I say that you will not only find trading less stressful, but much more rewarding and profitable if you simply stick to trading with the trends. Look to make the small consistent profits with the trends, and of course you will occasionally catch the bigger move.

(No research to support the following claim, this is another traders opinion, not mine, Tim )Of the 10% of trades that are COUNTER TREND (CT) trades, 90% of those trades should be BUYS. Why Buys? Simply put, because I have found that BOTTOMS are much easier to pick than tops. If you think about it, the psychology of most traders are more biased to buying the market as opposed to selling the market as a whole. Traders in general (obviously not all the time) seem to be more optimistic rather than pessimistic on the overall market.  Believe it or not I have spoken to many futures traders that have told me that they feel more comfortable buying the market as opposed to selling it. I know that sounds ridiculous (especially in futures trading), and I agree, but a lot of traders, feel this way. That is one of the reasons why bottoms are easier to pick than tops – traders are more prone to buy than they are to sell, in general. Think about it, how many stock traders do you know that actually sell a stock short?  Not many, most stock traders buy stocks in anticipation of higher prices. When the market gets extremely oversold and drops to levels where the big money comes in to Buy the market (oftentimes at a 5%, 10% & 15% overall market corrections), you will oftentimes see the market move higher (spike up) and continue the overall uptrend.

When the market is in a downtrend, the market not only drops three times quicker than it rises (making it much more volatile), but bottoms are put in place much quicker. This is evident in many charts you may look at. On the other hand, when the market is trending up, the market generally moves much slower and much more gradual in nature. Therefore, trying to find market tops are much more difficult to do, at least that has been my own personal experience. So, when attempting to BUY on a Retest of a Low (important), the market is generally in a Downtrend, and when attempting to SELL on a Retest of a High (important), the market is generally in an Uptrend. By knowing these two simple rules will help make Counter-Trend trading much more predictable in nature, rather than trying to BUY when the market is in a free-fall, or trying to SELL when the market is going to the moon. At most, these rules will prevent a trader from jumping in front of a freight train. Therefore, I suggest waiting for a RETEST OF A HIGH before looking to go Short. Conversely, always wait for a RETEST OF A LOW before looking to go Long. Remember, Counter-Trend Trades Should Only Constitute As Roughly 10% Of Your overall Trades. As mentioned before, CT trades are definitely more difficult than trading with the  trends.

A General Rule Of Thumb: When a market is Trending Up, the market tends to be a lot less volatile than when a market is Trending Down. Therefore, generally speaking a Down Trending market is much more volatile than when a market is trending up. A market falls roughly three times quicker than it rises.

• 90% Of All Your Trades Should Be With The Trend

• The Other 10% Of Your Trades Should Be Counter-Trend (CT) Trades

I suggest NOT trading Counter-Trend (CT) trades until you have more experience trading the markets and become quick with your decision making skills.

Follow financial news / keep up with current events moving the markets

Daily financial news and market updates:

www.cnbc.com

www.marketwatch.com

www.bloomberg.com

Economic events calendar:

www.forexfactory.com/calendar.php

Develop or learn a trading system and establish rules for your system

Once you get to this point, let me know and I will show you my trading system and the rules that I have established for it. It would also be beneficial to google the subject to get other perspectives.

Once you are ready, paper trade [trade a simulated/demo account (fake money)] until you consistently make money

http://ampfutures.com/ninjatrader_cqg.php

I recommend the Ninjatrader platform with the CQG data feed, link above.

Once you are at this point, let me know and I will help you set it up. This is completely free and you receive real-time price data! You can try trading risk free and trade the simulated account until you are confident trading live money.

Once you are consistently profitable, open a live trading account

Covert your simulated account into a live account with the broker.

I recommend starting the smallest leverage possible

1 micro Euro/USD futures contract.

Once you are consistently profitable in your live account and have earned a “buffer” of profits

Increase your leverage / move to a higher leveraged instrument. I suggest the Nasdaq emini.