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Hi Trading Family,
I still expect that 300 point bounce to help give me direction in the market--another leg down, or another leg up?? That places the DJI around 10225 to 10275 from my start point. This can take a day to a few weeks. Until then, expect choppy seas! Lighter market volume, as we've had of late creates volatility that is dangerous, yet a blessing. Any move by an institution or news event, as examples, can swing the market either direction. Don't get lost at sea!!
I sound like a broken record, as this week is still a repeat of weeks past
in my warnings. This market environment is still not conducive to build
positions. By the time I post a build today, it will be obsolete in 36 hours it
seems.
Many of you want me to build swing trades which, under normal conditions I
would have no problem constructing. However, until I have a very clear market
direction for the week, I still remain high cash, trading smaller positions, and
on shorter time frames. It's a day traders dream. The swing trader --not such a
dream.
I am providing a few tickers I will be watching this week.....it doesn't
mean Tuesday. If the trade hasn't triggered or rejected during the trading
session Tuesday, I review Tuesday night, adjust my potential entries, and go
again Wednesday. I repeat this process each evening until the trade has clearly
been rejected. (My criteria/review process is in this .pdf) Quite frankly,
once you learn how to confirm/reject set-ups, it will begin to provide a nice
income. The beauty of this process: it can be used for any time frame.
In the Black Room, we have brand new options traders. The market forced my
hand the last week of January to pull out my 1k strategy that we now call
"proteins." These are day trades using 1k or less to create consistent income.
We don't worry about holding overnight; we trade what the market gives us each
day. The market can be down 100 points; we are still making money.
If I have
1k in a starter account, I can trade 2 or 3 proteins ....approx $300 to $500
each. It's difficult to do this trading stocks, yet with the leverage of
options, it's quite workable. Some in the Black room are doing quite well;
others are a combination of virtual/live but are learning life skills to build
income for the rest of their life. Yet another group won't even give them a
chance. They want swings dadburnit; they want the market to mold around them. Oh
brother! (Smile)
I opened an account for my daughter, a student, now learning options. I
post her progress on the days she trades as an example for the team to learn how
to take a starter account and build. It also creates a weekly paycheck, while
building the account for growth. She can only trade around school; even she's
learned to trade during the morning hours when the market is full of the
volatility she needs to succeed.
As the accounts and confidence of the trader grows, more may be placed on
the trades. It's easy to make money with 50k; however, it takes true skill to build
a 6-figure income starting with 1k or 2k. That skill is what traders are
learning in the Black room....and it's not easy. It's not pie in the sky. It
takes practice, education, and it's frustrating. If it was that easy, we'd all
be zillionaires.
I prefer no real dollars are used for the first several months. Most don't
wait that long; (smile) I rarely have students that will wait that long without
dipping their toes into live trades. Incidentally, statistics indicate that
95% of traders will lose their initial investment within 24 months. Let's
don't allow you to be one of those statistics.
I said all of the above to say this: it's a difficult trading environment
right now. Cash is a trade too. Preserve capital, stay focused on bigger
picture, and don't be afraid to sit on the sidelines if you aren't completely
sure of a trade.
Evaluate your goals again. Is your intent for growth or income? If it's
growth, you have a little time to "wait" perhaps a few more days/weeks to ensure
it's safe to go back in. However, during that wait, please practice
virtually. Try strategies you haven't perfected. Use a simulator to practice
shorts or scalps. Make use of these conditions to continue your education. It
will help you down the road as the market is not predictable.
For those that need income, again, I cannot stress enough to keep tight
stops (not so tight that you are continually stopped out-need to learn the balance), hold cash, learn
how to repair and adjust positions.
The key to being a successful trader is "market timing" --you can have the
right build, but the wrong timing. It still produces a loss to the
pocketbook.
Thank you for sharing your life with me,
Leigh
Facebook: copperstl Leigh Jones (my BULL$ trading
page)
www.bullsonwallstreet.com
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