My Daily Crust

Trading the Markets for a Daily Crust Y'know, time was when I thought that trading and making money were two totally opposite phenomenon. See I'd traded for nearly ten years and in reality, never came close to making money long term. Sure, I'd had a few notable successes, but as for earning a living from trading, no way. So it was with a mixture of relief and jubilation that I fell upon the method of day trading that now forms the basis of my comfortable existence. This, I'm sorry to say wasn't the result of my own ingeniousness, nor brilliance but luck. A chance meeting with a fellow trader at a house-warming party; only he worked for a trading corporation and was paid a decent salary plus bonuses, he didn't actually trade to live as I wanted to. Anyway, at a follow-up lunch he gladly shared his knowledge of the markets and how he traded them, I guess as the trading method had been taught to him by the firm he didn't consider them to be secret or even that clever – his attitude was “hey, doesn't everyone do this?” Nope, they most certainly don't. So, I got myself organised, got the software, the data feed, opened an account and started to practice trading his way. It worked. I kept trading for a whole week – it kept working. I was stunned to find that something so simple actually produced consistent results day after day. So what is it ?? Well, you trade the Mini Dow, S&P, or Russell on a one minute chart. You look for a signal from an indicator suggesting that the price is over-bought or over-sold (not stochastics), you then simply trail an order at the high or low of the market until, eventually you get filled. You then look to take a really small move then get out. The whole idea is to have something that works “most” of the time so that you can get real confident in the system, then, to make serious money, you simply increase the size of each trade. Easy. I make profits 3 or 4 days a week and break-even on the others. I trade for about 90 minutes per day tops, and I have maybe two losing days a month. Happy – you'd better believe it !! Before I found this fantastic trading method I got to learn about web sites, so I've put the details of all this on a site; it's Http://www.FiveTicTrading.Com/FiveTicSalesNew.html You can get a free report giving more details and, if you get really interested there's a course available. So, for now ciao, Matt Sharp Copyright Matt Sharp 2007. You may re-produce this or use it in your web site, news letter or whatever providing the above link stays in place.

You can Afford Your Home with CitiMortgage & Citibank Loan Modification

CitiMortgage, a branch of Citibank responsible for mortgages, has a very appealing, affordable, proactive home lending plan supported by the Treasury Department. CitiMortgage is able to receive government incentive payments when it allows its customers to modify their existing mortgage agreements. This means that if you are having trouble paying your mortgage, there is a way to renegotiate it. This article will tell you how and why you should. Everyone is welcome to apply, even if you have already tried to get a loan modification and been turned down. The government requires that this plan be available to every homeowner if CitiMortgage and Citibank are to be part of this program. If you need this help, now is the time to ask for it. If any one of the following conditions applies to you, you may qualify for a loan modification: 1. Do you live in the home for which you are requesting the loan modification? 2. Did you negotiate your loan before 2009? 3. Is your remaining mortgage debt less than $729.750? 4. Is your current mortgage payment more than 31% of your gross income (this includes all dues, insurance and taxes)? If your answer to any of these questions is yes, you are eligible to apply for an affordable home plan. Note everyone who applies will be approved however. If you can show good reason why you qualify under these requirements, you may be able to have your loan's interest reduced to as low as 2% for as long as 40 years. The reason the government has put this plan into place is to help you get a mortgage you can afford, and this is deemed to be 31% of your income before taxes. Citibank is motivated to help you as they receive money from the Treasury Department for every approved application. Another additional incentive is a payment of $5,000 to homeowners that do not default or fall behind on their newly negotiated mortgage for five years. Before you call Citibank and before you fill out an application, make sure you have everything that is required so there are no glitches in the process. Take the time needed to study the application since the application is vital to your success. Once you know you have everything you need to precede, call Citibank and begin the loan modification process.

Using Stop Loss Orders to Determine When to Enter a

More from this Author at http://www.mytradesignals.com Many people enter into trades with little more than a desire for profit. In Forex we normally use between 50 – 400 to 1 leverage. Because of the large amount of leverage we are able to use, simply hoping for a profit is not enough. Traders need a solid plan before the pull they trigger. When planning any battle, successful generals begin at the retreat and work their way backwards. Traders should do the same. The first and most important decision is when to admit defeat and retreat. Survival to fight another day is more important that going down with the ship. This article proposes that traders take a different approach to figuring out when and where to place their next trade. The approach is simple. Just like the generals, start by figuring out when to get out. This may sound strange, but if you apply this idea to whatever other methods you are using to determine your entry signals, your bottom line should improve. The overall idea is simple, rather than first looking for a good entry point, look for a point where you would want to be stopped out. At this point you are probably saying “who ever wants to get stopped out?” The answer is, not the majority. But let’s look at several statistics for a moment to get some perspective. Depending on who you believe, anywhere between 75-95% of all retail Forex traders blow out their account within one year. So it seems that the 5-25% of traders who are winning are doing something different then the majority who are losing. One of those main differences is not being bothered by getting stopped out. Many new traders complain that they hate trading with stops because they have been stopped out of a trade that almost immediately turned around and would have been a huge winner had they not run the stop. They take that to mean that they should not trade with stops. Trading without some kind of risk management is like playing Russian roulette by yourself, it may not be the next pull of the trigger that kills you, but pull it enough times and sooner or later it’s a sure thing. Trading without risk management is much the same. You may get away with it for a while, but the lesson you are learning will sooner or later prove deadly. There are many forms of risk management, from the extremely complex, like cross hedging with options, to the very simple, such as using stops. The use of stop loss orders is one of the simplest and often most effective way to manage the risks of any given trade. The reason many traders have had a bad experience with using stops is not the fault of the stop itself, but rather the placement of the stop. Most traders get into a trade and then decide where to run a stop, if at all. They often have a fixed dollar amount that they are willing to risk per trade and they then place the stop loss order accordingly. All of this on the surface sounds like a good plan, but in practice it often leads to the scenario mentioned before, where the trade gets stopped out and then the market turns on a dime and goes the way the trader had originally anticipated, leaving them to mistakenly blame the stop. The individual points that led to the stop being placed are not bad in and of themselves, but put together this way, they often lead to the frustration mentioned above. So let us look at these issues from another angle. Rather than getting into a trade and then deciding where to get out, let’s determine the exit point and let that dictate where we get in. To do this you will need a chart. Choose the chart’s time-frame based on how long you intend to hold the trade. If you only hold your trades for a few hours then a 15 or 60 minute chart should be fine. If you are more of a swing trader, then daily or even weekly charts would be best. Currencies tend to trend more than most other markets. However, they do not trend all the time. In fact the opposite is true. Most markets only trend about 30% of the time. The remaining 70% of the time they are trading within a range or chopping. Therefore, learning how to trade the chop is paramount if you want to be a trader for years to come. What follows is a simple yet effective way to trade the chop. Trading the Chop First, start by looking at long term support and resistance zones. Markets tend to have certain zones that they “bounce” off of time and time again before penetrating them. These zones are what you want to look for. Start with weekly or even monthly charts, no matter what time-frame you trade in. This will tell you in an instant whether the market is trending or choppy. Once you determine the underlying market condition, look for significant areas of support and resistance. Finally, move to a daily chart and then to a 60 minute chart. After going through these different time-frames you should be able to find a number of these zones. The best are those that coincide through all the time-frames. That will only happen if the market is at or near relative new highs or lows. When it does happen, though, it is time to sit up and pay attention. However, you do not need to wait for perfect conditions to use this method. You only need a support or resistance zone in whatever time-frame you are comfortable trading. Once you have identified these areas on a chart, you need to look closely and determine where that level would be broken and place your stops accordingly. A move through this level would signify that the market is breaking out from the previously established range. Once you find what the highest high is in the case of a resistance level, or lowest low in the case of a support level, you need to go a certain distance beyond that so you are not stopped out by a move of only one or two pips beyond these levels. There are many ways to determine how much extra distance to give each market. One way that I have used is to simply look for the next closest Fibonacci number. This method is not scientific, but one that has served me well over the years. The Fibonacci sequence is one that was discovered by a mathematician all the way back in 13th century. The sequence is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144… For the purposes of using them for stops I normally only use 8, 13, 21, 34, 55, and 89. So if the last two digits of the highest high in a resistance zone had been 25, then you would use either 34 or 55 depending on which particular market it is in. The more volatile, or greater the average true range (ATR), the wider you should go. Once you identify the zone you can then come up with your exact stop point. Look at the daily chart of the USD/JPY and you can see that we have had significant resistance between roughly 121.50 and 122.25. Each time the market has reached this zone it has failed to follow through. There have been three attempts to break out from this zone, each one being lower than the last, forming a descending trend line. This is what you want to look for. Once you identify the zone you can then come up with your exact stop point. Simply find the recent highest high, in this case 121.66, and then find the next closest Fibonacci number (89) and you have your stop (121.89). Determining your entry point Now that you know where you are going to run your stop you can use that to determine your entry point. This is the point where you want determine how much actual money you are willing to risk on the trade. Most money managers will tell you to never invest more than 1% of your account on one trade. That rule really only works for traders using 50k or more. Most traders start with less and therefore are forced to break that rule. Starting with a $5,000 account and only risking 1% would mean that you can only risk $50 per trade, which in some cases is less than the bid/ask spread once you enter the trade, so it is obviously not realistic. But try to keep the amount you risk on any one trade as low as you can. Trading is a long-term endeavor. Do not fall into the trap of thinking that your next trade is “the big one” and you are sure it will work, and therefore put half or even all of your account into it. That is not money management, it is gambling. But let’s say you are comfortable risking $400 on a trade, or 40 pips on a 100k contract. Looking at a Daily chart of the USD/JPY, you can see that the most recent high was 121.66. Using the Fibonacci stop idea you would run your stop at 121.89 because 89 is the next closest Fibonacci number above 66. Now you have your stop well above a significant point of resistance. To calculate your entry point, simply subtract the 40 pips you are willing to risk from your stop point to arrive at 121.59 (121.89 – 40 = 121.59). The next day the market traded up to 121.63 so a limit order at 121.59 should have been filled. Once the order is filled, you can trail your stop with the market or move it to coincide with other support and resistance zones within the range. Your target would be somewhere near the bottom of the range. In this example your target would be a move to 119.50 or below. So let’s review this method. First determine if the current market is trending or chopping. Then look to identify areas of support and or resistance. Next find the highest high in a recent resistance level or the lowest low in a support level. Determine the next closest Fibonacci number and you have your stop point. Then take the amount you are willing to risk per trade and either subtract it from your stop if it is a short trade or add it to your stop if it is a long trade. You now have both your stop and entry points, and you are only risking whatever amount you determined you were comfortable with. Your stop is placed at a level that signifies a change in the recent trend, and therefore is mush less random than most other stops. This method is not to be used exclusively, but it is one that can compliment whatever other indicators or patterns you are using to determine you next trade. This method should help you avoid getting stopped out at insignificant points that have you selling near highs and buying near lows within the established trading range. More from this Author at

How To Build A Profit-Making Website

One of the things I love to do first thing every morning is to check the Internet, to find out how much money I made over the night. Like a fisherman checking on his trap, I am thrilled to see money accumulating in my account while I sleep. The beauty of earning an income from the Internet is that my websites continue make money for me from all parts of the world. I can actually know where the money come from, and how much, and test the pages to continue improving them. Wouldn't you want that too? Before you get the wrong idea, let me clear the air about how I make money from the web. HappyJoblessGuy is NOT about earning money from some online pyramid schemes. It is not about Multi-Level Marketing (even though I have no issue about people earning through MLM). It is not about online forex trading. I am going to show you an honest way of generating income from the web but it's going to involve a degree of hard work from you. For sure, nothing comes easy, and that includes building a machine that makes money online. Do not have your website hosted by PBase, Tripod, Blogger, even though it can be done an hour. If you intend to earn serious, long-time income, that is not the way to do it. You want something that is 100% your own. Once you have your own website (not an account with Blogger, PBase, etc.), you will realise the amount of freedom in your hands. If you were to ask me, what are the tools you need to build a great website, I can count them with the fingers of one hand. You can hire a web programmer to build a whole website for you, bypassing the need to be acquainted with any tool. But to own a really great website, I would urge you to do it yourself. You can't be the captain of your own ship if you can't tell stern from starboard. I have received emails from people asking to give them personal coaching. I am sorry, but I do not have time to do that, even if you're willing to pay me money. In the next five pages of this chapter, I will go through each essential tool one by one. At the end of this chapter I will recap what we have learned. You will realise, if you haven't yet, that earning a living without holding a job requires you to learn skills that you may not have learned before. On the other hand, you may have built many websites, and are wondering what's new that I want to share. Once again, I urge you to be patient as the topics are developed. Now, without further ado, let’s look at the 5 Essential Tools: The first tool you need to build a great website is a HTML Editor. A HTML Editor is a software application to write web pages. There are several brands in the market, including Microsoft Frontpage, Adobe Dreamweaver and so on. Personally I would encourage you not to use Microsoft Frontpage, as it tends to add proprietary codes to your pages, making it difficult to be edited with a different HTML Editor. The one I use is called Homesite, also from Adobe. I learned to write webpages with Homesite. With a HTML Editor, you write the content of your pages by keying in the HTML Codes, and then checking it with the Preview function. If you do not have a HTML Editor presently installed in your computer, I strongly suggest you get one immediately and start fiddling with it. Get used to all the functions. Learn what to click to make the text bold, italics, underlined, etc., how to hyperlink, how to insert picture, and so on. A good HTML Editor does a lot of work for you, so that you can concentrate on putting together a great website. It doesn't matter which one you use, as long as you get familiar with it. The second Essential Tool you need is knowledge of HTML Codes. As mentioned in the previous page, you need to learn coding. To be exact, HTML Codes. HTML Codes are instructions you tell the Internet how you want to format your webpages. The basic HTML codes you need to know are: • Title • Body • Head • Html • Headers (H1, H2, H3, etc.) • Bold • Italic • Underline • Hyperlink • Table In addition to the above, it would do you good to learn how to format size and colour of your font, background, border. More advanced features such as CSS would be helpful too, but are still all together very easy, that even a dummy could learn it (so if you have to, find a book for dummies and learn all about it). The third Essential Tool is a Domain Name. The domain name, also called the hostname or sitename, is the basic name of your website. For example, www.happyjoblessguy.com. As you probably have known, the domain name has an ending such as .com, .net, .org, etc. To use it to earn an income, I would suggest you go for .com. It is the most popular, hence, the most difficult to get. Nonetheless, you should try to get domain names with .com. You probably will not get the first domain name of your choice, and will need to try a few times before landing on one that is still available. This is a very important exercise, so take all the time you need. Registering and keeping a domain name will cost you approximately US$10 per year or even lower. That is peanuts if you can earn the amount back. For now, look for the domain name but don't register it yet. Instead go to Essential Tool #4 to read about Web hosting. The fourth Essential Tool is Web hosting. To get web hosting means you rent space on a server that will host your website. You do not need to purchase a server - you don't even need to know how a server works. All you need to know is that you need to host your website on it. The Webhost provides you the space and the interface for you to manage your website. Think of web hosting as a safe deposit box, and the domain name as the safe deposit box number. When you register for web hosting, you are buying space in a safe deposit box. The amount you pay should determine the amount of space you need. For that reason, the web hosting fee is directly related to the amount of space you purchase. The safe deposit box number remains the same, regardless the amount of space you use. In a similar sense, the fee for domain name is fixed regardless the amount of content you have on the web. When you start your website, the amount of space you need will most likely be pretty low, less than 1GB, so do not pay for a lot of space that you are not going to use. You can always buy more space as your needs grow. If you pay for 5GB per year, and throughout the course of that year, you never use more than 1GB, then the balance 4GB is money wasted. The fifth and final Essential Tool you need to build a great website is an FTP Software. An FTP Software is an application that enables you to transfer data from your computer to your website on the Internet, and vice versa. There are many other ways to do it, including using an online interface provided by your webhost, but usually, using an FTP Software is the swiftest way. The FTP Software allows you to upload new pages to your website as well as update existing pages. The FTP Software that I use is called WS FTP, which stands for WinSock File Transfer Protocol. To download it, google "Free FTP Download" to see what comes up. In the next chapter, we will look at Building a Profit-Making Website. As of now, I want you to be familiar with the five Essential Tools in this chapter. Please go ahead and register your web hosting and obtain your domain name, but once again, let me urge you to give the domain name a good thinking through before decided which. If you choose a wrong one at the beginning stage, fine, it only costs another US$10 or so to register another. But you need to make sure it is a domain name you want to own for years and years to come. Who knows, one day you may even sell that domain and the whole web business for $1 million? So, choose carefully. For more topics on how to earn a living without holding a job, go to http://www.happyjoblessguy.com/

The Two Worst Things That Could Happen With A Business Loan

It is important to have an understanding of what can go wrong with a business loan. The focus of this article is on two situations that will have the most severe financial consequences. A loan disapproval at an early point in the application process is not included here because it is not likely to have the immediate financial consequences of the examples provided below. Business owners should be prepared in advance for these problematic circumstances so that they can develop contingency plans. RECALL OF A COMMERCIAL LOAN Recall provisions allow the lender to call the loan (forcing the borrower to repay early) prior to the expiration of the loan. This issue is not of concern to commercial borrowers whose business loan does not contain provisions permitting the lender to recall the loan. However many traditional commercial lenders routinely place recall clauses in their loan agreements. The conditions which can trigger a recall will vary but will commonly include periodic review of financials and credit history by the lender. Under these circumstances if agreed levels of income and credit standards are not met, then the bank will typically notify the commercial borrower that they must pay off the loan within a 30-90 day period. When confronted with a recall notification, commercial borrowers will have little recourse other than to seek refinancing from another lender. In seeking alternative sources of commercial financing, prudent borrowers will eliminate potential lenders who will impose similar recall provisions in new financing. To avoid the recall situation in the first place, commercial borrowers would be wise to consider only commercial loans which will not have recall terms. For commercial borrowers who currently have recall provisions in their commercial financing agreement but have not yet received a recall of their loan, it will be equally wise to consider refinancing their business loan before such a recall occurs so that refinancing is accomplished according to the commercial borrower’s timetable and not that of the current commercial lender. COMMERCIAL PROPERTY APPRAISAL COSTS AND RESULTS The commercial appraisal process is lengthy, expensive and relatively uncontrollable in terms of results. In many cases one of the unknowns is how much the appraisal will cost. Unfortunately commercial mortgage appraisal costs can be unpredictable and will approach what many borrowers view to be excessive for specialized commercial properties such as assisted living facilities. Appraisals for a stated income loan will usually be more costly because the lender is primarily depending on credit scores and a sound appraisal to support the loan. These appraisal situations will cost more for commercial properties in rural areas because qualified appraisers may not be available locally. The timetable for completing an appraisal is another potential source of problems, and until the appraiser is selected and commits to a schedule, the completion date is not likely to be known with any degree of accuracy (and this can result in a longer processing period for the loan). Even though cost and schedule are critical issues, an even bigger issue is the appraisal value that is provided by the appraisal. For example, I have seen instances in which a commercial borrower thought their property was worth $500,000 but the commercial appraiser selected by the lender produced an appraisal with a value of $285,000. While this is not a routine outcome, it is certainly not unusual to receive an appraisal that produces a value that is less than the commercial borrower expects. A similar (but avoidable) problem occurs when a commercial appraisal is not accepted by the lender because the appraiser did not provide an appraisal meeting basic guidelines. For example, a key element of a commercial appraisal is the valuation based on analysis of income. If an appraiser chooses to submit an appraisal based only on comparable sales data even though the lender stipulated in the engagement letter that an income appraisal is required, then the lender will not accept the appraisal (and is likely to refuse even a modified report from the appraiser when they violate such a basic appraisal requirement). It is important to have an understanding of how the appraiser will be asked to determine value as well as to realize that there might be significant assets which will not even be included in the value. Items such as equipment and furniture are frequently excluded, especially in commercial real estate loans. For businesses such as funeral homes and assisted living facilities, it is very common for the overall business value to be much higher than the real estate value. But an appraisal based on the real estate value will nevertheless exclude the excess business value from the commercial real estate value. What contingency plans are advisable for the appraisal process? First, be prepared for the appraisal to be more expensive than initially expected and ensure that funds are available to cover this possibility. Second, be prepared for the appraisal to take longer than expected. If buying a business property, the buyer should discuss this possibility in advance with the seller. If refinancing, the owner should not make plans for spending funds until the appraisal has been finalized and the lender indicates their readiness to close the loan. Third, consider in advance what action to take if the appraisal produces a lower value than expected. Fourth, decide if an additional appraisal is warranted (this possibility needs to be considered especially for the situation in which the appraisal is not accepted by the lender). The purpose of this article was to focus on business loan problems with immediate financial consequences. There are a multitude of other serious commercial loan problems which borrowers should have a similar awareness of in order to avoid unnecessary complications. Commercial borrowers should visit http://aexcommercialfinancing.com/ and http://steve.bush.googlepages.com/home for an overview of strategies for avoiding commercial financing problems. Copyright 2005-2006 AEX Commercial Financing Group, LLC. All Rights Reserved.

Finding Reliable Forex Signals

You guys know how hard it's to find a reliable forex signals and most of the forex signals services are very expensive ranging from $199 to $500 per month. And worse of all, there's no guarantee of this.
To find a good service, you must make sure that you get their free trial before you really subscribe to the service. 1 to 2 weeks is good enought to prove that whether they are reliable or not.
You want to find a forex signals service just because you don't have time or you don't have a good skills in trading forex. I understand your felling and that's why I've created a blog for people who want to get the free forex signals.
But I have day job as well. I don't post forex signals every day but if you can catch some, you got your money into the bank! :)
By that, I wish you to have a good trading in forex world!
Take care and God bless

Find Your Futures Trading Blood Type

Perhaps the greatest luxury I have in this business is the ability to observe the experiences of many traders with different personalities, life schedules and risk capital, each trading in a variety of markets। What most astute brokers realize is that, over time, as some individuals prematurely exit winners while others desperately cling to losers, it becomes quite possible to match different "blood types" of those traders with their correct "trading diets." Clearly, we're not talking the medical blood type here, but in the figurative sense it makes the right point. With practice, it's not too hard to determine blood types (type of trading best suited to the individual) based on the personality of the trader, and then prescribe a diet based on that individual trader's capital, experience, risk profile and schedule. Discovering Your Blood Type and Trading Diet Just like a diet, where there is no right plan for everyone, in trading there is no single plan for all traders. Before deciding whether to "cut out the carbs," "add more fiber," or simply avoid certain markets, do some self-assessment, starting with personality. For example, are you hesitant or impulsive? Patient or short-tempered? Identify strengths and weaknesses, and then let someone close to you help pinpoint those personality pros and cons. Have a tough skin; it's for your own good. To further understand your personality, keep a trading journal to help zone in on specific traits and how they affect your trading. Remember, understanding your personality is one thing; understanding it when you're trading is another. While patience with children is good, patience with a losing trade is not. A journal enables traders to review winning and losing trades and identify factors that aided in success or contributed to failure. After reviewing inner traits, don't forget to review the outer ones—your schedule and risk capital. Think long and hard about how much you have available in terms of time and risk capital when it comes to trading, and don't delude yourself. In addition, look at how you are using your time and risk capital. Go over the market(s) you are trading, the style of trading and time frames you are using. Is this market, this style and this time frame suitable to your risk capital and personal schedule? Are they suitable to your personality? Doing some self-assessment is absolutely essential to determining what type of trading diet you should be on, as the examples later will make clear. But first let's define the trading blood types and their respective diets. Blood Types and Trading Diets No A-positive or universal donor types are necessary here. Instead, for our purposes, let's classify types by using NT, PT, DT and ST. NT. Is trading suitable for you at all? That is the question. Trading require a desire to take risks and, of course, the ability to afford to take them. These simple suitability questions must be firmly answered in the affirmative before anyone can consider taking the plunge. Those who have little desire for risk, have little risk capital to spare (and completely disposable income at that) and little time to devote to this very challenging exploit are classified as blood type NT (No Trading). The right diet is no trading at all. No carbs, no cals, no fiber, no fat. Nada. PT. Those who are either gun-shy or trigger happy would be classified as blood type PT (Position Trading). With what kind of regime, you ask? Clearly this type requires a rule-based diet. To develop those rules first and foremost means doing some homework after market hours. Once these rules are in place, test any possible trade idea against those guidelines because each trade must pass this test before Mr. or Ms. PT enters the trade. This is the time to plan a trade from start to finish, visualizing a few different scenarios with a possible action plan. It may also be the time to employ the assistance of a full-service broker. His or her job should be to help implement the rules that will keep the trigger-happy trader from going nuts or help the trader with a fear of pulling the trigger to take the right kinds of actions. DT. Some traders simply cannot take any positions home with them. It hurts the quality of their "after-trading-hours life" and makes them uncomfortable. Most of them also are impatient by nature and tend to over trade. They feel a need to be in the market at all times because they are scared of missing a good trade and scared of losing too much. This blood type is classified as DT (Day Trading). Patience, discipline and strategy are the main diet ingredients for this group, but certainly not exclusive to it. Setting daily loss limits is a must, and a daily trading journal will help them quite a bit. The correct training cycle for successful day trading involves education, planning, routine, survival and getting to the point where a trader finds the set ups with which he is both most comfortable and can produce high success rates. A note here: More often than not, the biggest obstacle DTs face is the patience for such a set up; they feel they are not working if they are not trading, because they are day traders. This is one mentally crippling thought they must get over to survive. Being a day trader does not mean that the individual must be in the market with frequency — only that he must be flat at the end of the session so as not to take his position(s) home with him. ST. Then there are traders who try to go with the flow of the market and take small to medium bites out of market ranges or, perhaps, trade ranging markets between different support and resistance levels. Many will do it well for a period of time until they are almost married to it and get stuck with a loser. Let's classify this group as blood type ST (Swing Trading). The biggest problem most swing traders have is the ability to take losses. Too many traders — even those who generally are good, consistent traders — fail by carrying one big loser one too many times. Is this stubbornness, the inability to admit making a wrong move(s), simply a case of hoping instead of trading? Those who have walked in these shoes know who they are and should be ready for the ST diet — placing stops and understanding that even the best of traders have more losers than winners. The math is very simple. Because many markets will trade sideways, there are times when both longs and shorts will come out losers. Some trades simply don't work. The bottom line is that the total of a person's winning trades should outnumber losing trades. How Two Traders Changed Their Diets The following two examples, which combine traits of various clients with whom I've worked over the years, point out some of the considerations of which traders must be mindful as they try to figure out what trading diet is most appropriate. The names have been changed to protect both the "innocent" and the "guilty." Example #1. Karen was one of my first clients. A smart and outgoing woman, she worked in the human resources department for a large company. During her first two years, she had some winning trades but, overall, her account was down. Karen juggled a busy schedule everyday. She had numerous meetings and often traveled, yet she insisted on day trading stock index futures. I tried to direct her into a different approach, but she resisted. My advice did not sink in until she hit a period during which all of her trades were going against her, and she was facing a margin call. When I spoke with Karen, her normally self-assured demeanor had changed. She was scared. She was no longer looking forward to the next trading day. After losing most of her money, Karen struggled to make a trading decision. The once confident, outgoing and independent trader was now grasping for outside advice from a variety of newsletters and other resources. She was desperate. On the morning after a long holiday weekend, Karen called me and with a steady, confident voice, placed orders to get herself out of all of her positions. Over the weekend, she had read a book or two and had some conversations with her husband. It's hard to determine which of these produced the "epiphany," but she now wanted to try a different approach — one of a longer-term nature (PT). After careful reflection, Karen recognized that she was at times impulsive, stubborn and simply not realistic (not good for a DT). Even though she clearly could not devote the time necessary to be a day trader with her current work schedule and mentality, she realized that her routine and dedication must change completely no matter what the trading time frame. She was now dedicating 30 minutes during the day and/or evening to go over the markets. She adjusted her trading size to fit a longer-term approach but, most importantly, she had a plan, and that plan fit her schedule. She no longer had to make decisions in the heat of the moment. She started looking for longer-term trends that did not require hour-to-hour decision making. Doing some self-assessment is absolutely essential to determining what type of trading diet you should be on, as the examples later will make clear. But first let's define the trading blood types and their respective diets. Karen finally understood how to successfully incorporate trading into her life while having another demanding career. Her account has grown over the last two years through the changes she implemented in her routine, behavior and trading style. Example #2. John started trading about four years ago. He seemed an agreeable enough person, but very business-like with no time for chit-chat. He wanted to trade online from the start because he had plenty of stock trading experience. John lived on the West Coast and was a real estate agent who did pretty well in the dot com bull market trading stocks until the market met its maker. Confident, willing to learn and fairly disciplined, he was trading with $25,000 of pure risk capital, adequate for a first-time futures trader. Days went by and every morning as I was going over my clients' daily statements, I noticed that John was trading coffee. Not only was he trading coffee, but he was sometimes day trading coffee. I let him know that I would be pleased to talk with him about various markets if he wanted. He would call once in a while checking on fills and asking about different reports. A few weeks down the road, John called and mentioned he would be in the L.A. area and would like to meet for lunch. During lunch, he mentioned his frustration over recent losses when trading futures. At this point, his account was down to about $14,000 over a six-month period. I asked him why he was attempting to day trade coffee, and he said his brother-in-law was a coffee importer/exporter, and he thought that it would help him. The coffee market was open from 6:15 a.m. to 9:30 a.m. PST, which perfectly suited his work schedule, but as I found out later, not his personality. I asked him to start writing a trading journal, which allowed him to look back objectively and find patterns in behavior that both helped him and hindered him. John's journal revealed that he was frustrated with the slow fills of the open-outcry coffee market, and so he was quick to get out of winning trades and too slow getting out of his losers. He was trigger happy and at times traded larger positions than he should have. I suggested that we change his "trading diet" around a bit and introduced him to the U.S. Treasury bond and the E-Mini stock index futures; both trade electronically and provide instant fills. These markets were perfect both for his schedule and personality. I felt that these were good markets for both day trading and swing trading and recommended a few concepts in money management and trade management. The first was the maximum daily loss that he should set and place in a visible way as a reminder. The second was the setting of a daily profit target. Though it was somewhat hard to implement, if he could walk away when he was down to his maximum daily loss or when he reached his daily profit target, he would last much longer as a trader. It also would give him a better chance of succeeding down the road — in other words, smaller steps down that longer road. John is still down in his account, but he is making progress. Here are a few tips that have helped him: Instead of buying and selling five contracts at a time and "starting and finishing" the trade this way, he now gets into his trades in multiples of three. In the past, John simply would buy five contracts when he thought he needed to go long and sell five when he felt he needed to take profits or cut his losses. When John gets into a trade these days (let's say in a long position), he will buy six contracts and place a stop loss on all six. Initially, he looks for a small profit on the first two contracts. (It helps him mentally to know "I took a profit on this trade.") He then raises his stop loss and changes it to a four lot. He looks for a second profit target for two more contracts based on his support and resistance levels. If that profit level is reached, he can get "greedy" with the last two contracts. In essence, he now knows how to manage his trades in a way that increases his profitability. And, further, and perhaps as importantly (based on his personality), he does not feel like he is missing out on big moves if they happen, and he still locks in small profits when they present themselves by using the first and second targets. Be Realistic Succeeding in futures trading takes hard work and time, and new traders need to be realistic and introspective right from the start. This is no time to devote anything but risk capital. Beginners should start small, allowing periodic checks to learn from mistakes, and from successes. Just like anything else in life, from diet and exercise to business and career choice, one size does not fit all. Before anyone can succeed in trading, he or she must spend time doing homework, as well as ascertain personal strengths and weaknesses, schedule, risk capital and trading experience/ knowledge. Only with those in place, can traders choose the trading diet that will work for their blood type.
About The Author
Ilan Levy-Mayer is currently a senior commodity broker and the Vice President of Cannon Trading Company. Cannon is among many introducing brokerage firms and is considered a leader in providing futures trading, forex trading, and option trading services since 1988. Ilan helped pioneer online trading for today's industry that allows traders from all across the world to partake in. Ilan started out as a professional basketball player in Israel where he played for 5 years until he suffered from a major knee injury. Ilan could no longer play Basketball at his full potential after undergoing knee surgery so he decided to go back to college. He received his MBA in Finance and Marketing from the Hebrew University of Jerusalem. After about a year of working in real estate he started a new job as an Institutional Account Executive in a start-up internet company that led him to the United States. As the V.P. of Cannon Trading Co., Ilan wrote several articles about trading and the trading psychology as well as being quoted a number of times in different publications in magazines such as: SFO (Stocks Futures & Options), Futures and "Bloomberg" just to name a few.