If there is one guarantee in the world of trading is that there will always be change. The changes I speak of are changes to how prices are quoted, changes to the executions available, changes to the cost of those executions, changes to the way information is disseminated to the public. The list goes on and on.
The point I am trying to make here is that when you decide to implement a method or system, make sure it was devised in the current environment you are trading in.
There are many systems and styles of trading that worked flawlessly five years ago, but because of technological changes they would be impractical to use in today's markets. One example of this is scalping the NASDAQ stock market using Level 2 quotes to make your decisions.
Stocks traded in fractions until 2001 and the bid/offer quote had much more meaning than it does today. Virtually half of the executions done on the NASDAQ today are done by computer programs or algorithms. This is known as "black box" trading.
The good news is that not matter how many changes occur from the market powers that be, the basics of trading can never change, price still must move from point A to point B.
These seven steps are the very same strategies we use every day
on our NYC trading floor!
It is our job as traders to make sure we never stray far from the most basic premise of trading any market:
The analysis of price action is nothing more than the study of supply and demand.
This seven step mini course will explore the planning and action steps you will need to consistently pull money from the markets.
Step #1: writing a trading plan. Why are you entering the business and what do you hope to accomplish? What skills do I have? What skills do I need to learn? How much time and capital am I going to commit to the business? What are my long term goals? Which markets will I trade and why? What style of trading do I feel suited for?
Step #2: Do you have a trading style? Do you know how to identify if conditions match your trading style?
Step #3: Clearly identify who is winning the battle, the buyers or sellers.
Step # 4 Learn a secret method used by floor traders to identify short term market highs and lows to help pinpoint your entries.
Step #5: Understand what risk is and what it is not. Most traders have it wrong and it's the reason they take much bigger losses than they should. Understand the role of the stop loss.
Step #6: Learn the importance of the opening range and how it can be a source of consistent easy money.
Step # 7 Identifying which stocks to trade. It's not as cut a dried as you think. Hint: It's not the stocks you hear Cramer screaming about every night.
Learn how to do homework and prepare yourself for tomorrows trading, the night before.
Once again, we welcome you to this exciting seven step course. We know it will be a valuable addition to your development as a trader.