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Trading without a good day trading system is like jumping out of an aeroplane without a parachute. No matter what you’ve heard, you’ll never make it out alive. The only question is whether you’ll suffer a quick death (best) or suffer a long drawn out obliteration of your trading account (not so good because it tends to encourage future gambling tendencies).

Why do you need a good day trading system? Because only a good system will help you to navigate the following critical obstacles:

1) Trading the wrong commodity/currency. ETFs, forex, options and futures all have very different ways of behaving. Unless you are willing to spend years getting to know each one intimately you are best to get some training from an expert. Continue reading ‘Day Trading System – Get This Wrong and You’ll Be Jumping Off Buildings Without a Parachute’ »

It is easy to know when to start following an advisor or trading system – start trading as soon as you have determined it is the right investment for you. But, do you know when you’ll stop following that new system?

Whether you are following your own trading system, or following an advisory, newsletter or some other service, if you don’t have an exit plan for discontinuing it, you should.

Why? Studies have shown that when people are under stress, many times they make poor decisions. Certainly if you were losing money with your systems you would be stressed. Consequently, you might make a knee jerk reaction to the losses, or you may stick your head in the sand and avoid a decision all together. Both scenarios can be dangerous. So, the time when you are losing is a bad time to determine when to exit.

Continue reading ‘When to Stop Trading a System’ »

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What is a trading system?

A trading system is a form of trading based on tested rules of entry and exit. A stellar system includes the price (number one indicator), market stable datum, and other trading indicators. It is a “trading tool” for serious traders that are disciplined and willing to trade like a pro. There are valid systems and crazy systems. When a trading system ignores the price, it is likely to perform poorly. A viable trading system must contain the price and at least one stable data. An example of market “stable data” is the “Elliott wave” theory or the Fibonacci retracement or projections. Trading systems produce both bullish and bearish signals, but the price the number one indicator must prove the signals. There are direct signals and indirect signals. Direct signals are usually easy signals because in this case the validation of the signal introduces the signal. After an indirect signal, traders must wait for confirmation. A straight forward MACD system will be: buy when the price displays a double- bottom pattern and MACD crosses above its signal line. Continue reading ‘Free Trading System TS 2050’ »

An alternative trading system (“ATS”) that does not publish quotes to the marketplace gets the unfortunate moniker “dark pool”. That label leads some in the investing public to believe that nefarious activities are taking place, when in fact dark liquidity has existed in many forms since the beginning of trading on organized stock exchanges. Indeed, ATSs that do not publish quotes are only one form of “dark” trading that occurs today.

The Securities and Exchange Commission (SEC) is focused on equity market structure, among its many responsibilities. With various rule proposals,as well as a concept release seeking comments on a wide range of market structure topics, the SEC has sought and received input from many market participants from the smallest of retail investors to the largest pension plans and the tiniest of hedge funds to the grandest of money managers, as well as all manner of broker-dealers and other financial intermediaries. The SEC is now synthesizing these comments and considering what new regulation, if any, is appropriate. Continue reading ‘Dark Pools: A Misunderstood Label’ »

Trading for a living is probably the number one reason that makes many people enter the day trading arena. Trading also offers many benefits that can never be matched by traditional nine to five jobs. But, it is also a trap that many want to be traders fall into if they come totally unprepared. Many traders make mistakes and learn from them, and then there are other traders who make the same mistakes and never learn from them. Below, we take a look at the five most common mistakes made by the novice day trader.

(1) Not Having a proper Trading Plan in place : Most people start trading without any kind of plan in place. That is a very serious mistake to make. Every business is built on and thrives on proper planning. A trader should know in advance how much risk capital they are willing to trade with. Traders must stop looking for the Holy Grail and try to get good at one or two setups and execute them religiously. Traders must plan to cut losers off quickly and hang on to winners as long as possible. By not planning their trading, traders set themselves up for failure. Continue reading ‘The Five Most Common Trading Mistakes Made by Almost All New Day Traders’ »