Mar 222016

You need to be familiar with WHICH news affects the market you are trading, and HOW and WHEN that market is affected.

Watch this video, where I explain it in detail.

Whether you trade futures, stock, forex, your trades will be affected by news. You need to be careful when news comes out that your market will react strongly to – your trading platform can become overwhelmed with data and you won’t be able to keep up. For example, here is a chart showing the behavior of the ES emini when the FOMC announcement occurs.
FOMC day price and volume

News Affects Trading, No Doubt About It

If you are day trading, you should check early what news will be coming out and how likely it is to have an effect on the markets. A site you can go to for both of these is

If you see a red star, you will know that that news is likely to make the markets move.

Red star news

A gold star is much less likely to move the markets, and a dot or no dot or star is news the markets will likely ignore.

News not affecting the markets

Watch your chart(s) carefully during these news events for many days and weeks, and you will begin to see the pattern of reaction to news. There is nothing like personal experience to teach you what is likely to happen. Take some simulated trades during the big news reactions, just to see what happens on your platform. Then, when and if you take actual trades during big news events, don’t be surprised if real fills are not really the same as simulated fills!

I myself just stay away from daytrading during news. It is too risky for me.

Mar 082016

Controlling our emotions is always a challenge when trading! If you know how to take a “free trade”, you can sit back and relax, get that cup of coffee, really have fun trading. This is one of those trading tips you can really use.

Watch the video below to see it in action.

You can take a “free trade” no matter what instrument you are trading, and no matter the time frame – day trading, swing trading, long term trading – it can be done anywhere, anytime.

Simple trading rules for taking a “Free Trade”

  1. Place your trade with at least 2 contracts if you are trading futures, or a number of shares or lots that can easily be halved.
  2. Place a stop for the entire trade at a reasonable distance from the entry.
  3. Place two targets exit orders, each for 1/2 of the entire trade size. Place one fairly close to the entry price, and the other where you’d really like to take your profit.
  4. Relax with a Free Trade - Trading TipsOnce the first target order is filled, move the stop to the same distance from the entry as that first target was. Now, even if the price moves against you, you pay only commission. You now have a “free trade”
  5. Sit back, relax, you are now not going to lose money. Get that next cup of coffee, get that donut, read the paper. Whew!
  6. If the price continues in your direction, you can move the stop to breakeven, so that this will be a winning trade, no matter what. Even more peace of mind!
Jul 102015

A dead cat bounce is traditionally described (for example Investopedia) as “a small, brief recovery in the price of a declining market”. We day traders like to look at it a bit differently – because when we anticipate these¬†bounces, we can take profits smartly and quickly.

Dead Cat Bounce, YM 15 Sec ChartFor us, a dead cat bounce is the pull back we see after a very strong reaction to a news item, or any quick, strong movement, either up or down. The typical behavior to a significant news announcement is very strong movement, very quickly. But, once that strong movement peters out, sometimes after only a minute or two, we get that bounce, where the market retraces towards it’s price point just before the news came out.

Here are two charts showing the same event: the FOMC announcement on March 19th, 2014. The first chart, as you can see in the upper left corner, is the YM (Dow index futures contract), showing 15 second bars.

The price action you see here is quite typical of FOMC day action. The market sits around, hardly moving, “holding its breath”, so to speak, waiting to see what the fed is going to do. Then, when the announcement comes out, the market reacts with big moves. Continue reading »

Jul 032015

Bull Markets Climb Stairs, Bear Markets Fall Out of Bed, what the heck does that mean? It just means that, in general, if the market is climbing, it climbs more slowly, with stops and starts, and if the market is falling, it tends to fall fast and far and hard. Not always, of course, but this “rule” is one that is good to keep in mind, because it is often true.

Why You Should Know How Markets Move

Knowing how markets move, their tendency to trend fast or slow, with fits and starts or straight down, will help you in knowing when and how to enter a trade, and whether to “stay the course” or jump out with a profit quickly.

By “Market” I mean any index or instrument you might be trading. So, it applies to the S&P, to Google, to oil futures, to FOREX pairs. Let me show you an example:

How Markets Move Continue reading »

Sep 192014

Just to support what I showed you in the video in the previous post (Finding Turn Around Points), I want you to see – it happened again today, and I took a 2 point trade off this signal.

The two green arrows show the signal. The ES dropped to the support line (top green arrow) and the TICK dropped below -700 (bottom green arrow). I took a long at 1715.75, for 2 points. If you traded 10 contracts, and took that trade, you’d profit $1000, minus commissions.