On today’s video I’m going to go through 3 stock trades; STT, PBA & WST – I think you’ll be able to learn a lot from this video so be sure to let me know what you think of it. Have a profitable day and hope it helps you.
On today’s video I outline four potential stock trade set-ups that I believe you should immediately put on your short watchlist, they are; SU, STT, SAFM and IART. Have a fantastic weekend and I hope this helps your trading.
On today’s video I decided to use my webcam to try to spice things up a bit…don’t get alarmed 🙂 Don’t forget about the webinar we’re putting on tonight where we are able to elaborate more on what I talk about in today’s video – hope to see you LIVE tonight!
Many talk about the psychology of trading and how important it is to develop a mindset that is conducive to being consistently successful at this endeavor. However, there seems to very little written about how to actually live through the daily riggers of trading. How to live through the daily, weekly or monthly drawdowns that plague us … well daily, weekly, monthly.
Living through drawdowns is the key to successful trading, bar none. If you can’t live through a drawdown you will not be a successful trader. It’s that simple. Hopefully this article will help you to do just that.
Since this is such an important subject I will be addressing a different aspect of living through these times in the next few newsletters so I can expound upon each point.
What is a drawdown?
Notice the title of this article is not live through “a” drawdown but live through drawdowns – plural. And I’m not talking about the MAX drawdown, I’m talking about the drawdowns you will be in most of your trading career.
A drawdown is the dip between new equity highs in your equity curve, it’s as simple as that. So, by definition, you can see a trader will spend most of his/her time in drawdowns. Some traders think drawdowns are a rare event, or at most, a once a year or quarter event – but the fact of the matter is that traders will spend more than 75% of their time in a drawdown.
Here’s an equity curve of a very successful algorithm. The Green boxes are new equity highs. This is when your account is making more than it’s ever made trading this system. These are your feel good times. Now look at the Red line when it’s not in one of the green boxes, for this is “the rest of the story.” The red line is you living in a drawdown. I’m thinking 75% of your time in a drawdown may be a little too conservative and that it may be more.
So if you’re going to spend more than ¾ of your time in this quagmire called a drawdown, you need to learn how to live through it/them.
I have a list of 5 things that won’t make them easier but will help to navigate drawdowns a little more elegantly.
This is not meant to be funny. Your ability to handle drawdowns, hands down, is dependent completely upon how mentally prepared you are for them. This means it’s crucial you know your system’s past Max Drawdown as well as you know your own birthday. However, just like that birthday, you should expect to visit a drawdown of equivalent size once a year then, an even bigger one sometime in the future.
If you’re trading, and consider yourself a trader, you need to be very aware of what will happen to your account during that drawdown. If you do, you will be mentally prepared and have the intestinal fortitude to stick with the program through these challenging times.
If you’re not prepared psychologically for the drawdown, you will make emotionally driven decisions at the worst possible time in the worst possible place. These emotional decisions lead to that trait all bad traders share – selling at the lows or its doppelganger, buying at the highs. How many of you have done that?
One of the most important benefits of trading with an algorithm is to eliminate those counterproductive emotional decisions. Please don’t offset that leverage by acting emotionally when in DD.
Next week we will talk about #2 Measure your Drawdown – watch this space!
Why should I use an OPG order and what the heck is it anyways?
Has this ever happened to you?
You place your market order to sell XYZ at the opening price. However, your trade doesn’t execute until 9:32 a.m. ET, and by then, the price is lower than it was at the market open. What happened?
If you mark your order as a DAY order, many brokers will hold these orders until the markets open before routing them to the exchange. Even in this age of split-second transfers, it can still take a few minutes for an exchange to receive and queue your order. Therefore, your order gets filled a few minutes after the open.
The opening price for a stock is calculated by taking all the pre-market orders and setting a price that satisfies the greatest number of buyers and sellers. That price then becomes the opening price. This is the reason why we often see gaps between yesterday’s closing price and today’s opening price.
So how do we tell our broker that we want to participate in the opening price by submitting our order prior to the open?
We use a different TIF (time in force) designation for our order.
Instead of using a DAY order we use an OPG order (when trading with Interactive Brokers). If you use a different broker, be sure to check with them as to how they indicate market on open orders. Some brokers use MOO instead of OPG.
Here’s an example of an order to sell 100 shares of MSFT at the open with Interactive Brokers. Notice that instead of using DAY, we use OPG.
An OPG order will be accepted if it is received by the exchange before 9:15AM (ET). The order can be cancelled after 9:15AM, but it cannot be edited. After 9:28AM, OPG orders cannot be edited or cancelled. If you are placing your trades the evening before, you should have no problems here.
Now keep in mind that if you use a LIMIT order with an OPG, if the order isn’t filled on the open, it will be cancelled. So for those portfolios that use LIMIT orders to exit positions, do not use the OPG designation. Use DAY instead.
There are no guarantees in life or trading. But by using the OPG designation for your market exits, you will find that your fills will more accurately reflect a stock’s opening price. And your number of bad fills will greatly decrease.
On today’s video I outline three potential trades that are setting up right now, they are; FCX, GLD and Apple (APPL) – be sure to watch the video for all the details. Hope the video helps and you’re able to make money with these plays.
On today’s video I discuss 3 stocks that are setting up for nice potential trades, they are; UGI Corp (UGI), Entergy Corp (ETR) and Gartner Inc (IT). Be sure to watch the video for all the trade details and be sure to watch Doc’s 4th Video – it won’t be up for too much longer. Have a great evening and hope the videos help!
On today’s video I discuss two stocks to watch, NXP Semiconductors (NXPI) and DISH Network (DISH). Be sure to watch the entire video for the trade details for each stock. Have a profitable day and I hope today’s video helps you in your own trading.
Good Morning from Todd Mitchell for Monday, August 4th, and we are looking at the stock, DISH Network (DISH). From the daily chart you can see the stock’s been up for quite a while and we’ve been pulling back. Let’s just look back even further on the stock. Weâ€™ve had a really strong uptrend, broke up through the all-time highs a few weeks ago, just like the overall market. Iâ€™ll show you on the video where we’ve had a really nice pullback, almost straight down starting from a high with lower highs and lower lows. As you can see, we’ve broken down through the blue action zone. We’ve successfully broken down through the 50 exponential, pretty much in a straight shot. Now, it looks like the market’s holding at the gray action zone. The only thing is, we’ve got earnings on this stock on Wednesday, the 6th, before the market opens. This is not after the market closes, but BMO which stands for “Before Market Open.” We’ve got earnings on DISH Network (DISH) coming up.
For today and tomorrow, if we’re able to get a pop, meaning a rally up through Friday’s high — Friday’s high is 82.32 — the buy would actually come at 82.42. If you want to play the options so you could limit your downside risk on something like this and really try to get an explosive move in terms of percentage-wise, you could definitely buy if . . . this is a trade set-up. Remember, there’s a big difference between a trade set-up and an actual trigger. The trigger to actually enter this market is a penetration up through 62.32 to 62.42. Once you see this stock trade to 62.42, that’s when you’d want to look to buy the call option. I personally would go out to September, I would buy to September, deep in the money calls, and I’m talking two to three strikes below the 63, so maybe a 60. Buy a 60 or a 59 September call option, but you would only look to do that if we get the penetration and we hit the 62.42 today on DISH Network.[Tweet “Remember, there’s a big difference between a trade set-up and an actual trigger. “]
A September Buy for NXPI
One other stock that I want you to let you know I am in is NXP Semiconductor (NXPI). What I did Friday was I bought the September 60 call. The September 60.00, so itâ€™s an in the money call. This is because the market barely took out the low on Thursday, and then we traded up through Thursday’s high. Essentially I’m looking at this as the market’s back into the gray action zone. We did, in fact, get that inside pattern. We took it out on Wednesday of last week. Then, we came down, it never would have stopped us out because our stop was sitting at 60.95. The market traded down to 61.10, and then popped up a little bit on Friday, so I decided to do the call option, the September 60 call option looking for a bigger move to the upside. Again, I’m going to use this actual stock as a trigger point. If the market trades down through the 60.95 to the downside, then I would just call myself out of this trade. I’d take a loss.
I hope that helps. Have a profitable day and I’ll be back with you tomorrow. Bye.
On today’s video I discuss the two stock trades of Harley-Davidson (HOG) and Chevron (CVX) – they both are profit plays with a high reward to risk, which makes these trades even more attractive. Be sure to watch the video for all the details. Have a profitable day and a fantastic weekend!
Good morning for Friday, June 6th for today’s free video. It’s also D-Day. Seventy years ago today, my grandfather was actually on Normandy Beachâ€”a big day for the Mitchell family–70 years since D-Day.
Waiting for the HOG to Take Off
Weâ€™ll take a look at what we talked about yesterday, Harley Davidson. We’ve been talking about this for a few days and I really believe this market is ready to move higher. We got long a little below 71 yesterday and the day before we really tested these highs. I’m looking for the market to break up and Iâ€™ll show you where in the video along with where the stop is. I am patiently waiting for this market to take off. Of course, the overall markets have taken off to the moon, yet this stock hasn’t. So we’ll see what happens here. We’re not risking a whole lot on this trade, just a classic, range. Two days ago we had that bullish, engulfing pattern. Yesterday, technically it’s an inside pattern. So we’ll see if we can break up through those highs.
Good Reward to Risk with Chevron
The one trade that I gave you yesterday that actually worked out extremely well so far is the Chevron Corporation (CVX). We went long at 122.88 with a stop right below here. And our first objective is roughly 124 Â½ and a half and now we’re moving our stock up to below yesterday’s low of 122.46 to 122.26. So look at what we’re risking here; 62 cents here to make, about two full points. This trade is roughly, three to one, reward to risk. So again, we move our stock from here, up to below yesterday’s low. If today is able to take out yesterday’s low, I won’t want this trade anymore, right? I’m expecting a continued move to the upside. All right, I don’t expect this trade to take a whole lot of time. Yesterday, we got the explosion to the upside we were anticipating, and again our first objective is roughly 124Â½ . We’re slightly below. Our stop is below yesterday’s low.
The Overall Market
The DOW is in new territory again, we closed above the all-time new highs, for the first time in DOW. The E-mini S&P again, had another record close. Look at the range of yesterday compared to the prior eight or nine days, the range of yesterday is about twice as large as what we’ve seen in the last ten trading days or so.
We had a jobs report this morning at 8:30, the market is up roughly four full E-mini points, which is about 35 to 50 DOW points to the upside. So we’re making new highs again. The Russell, as you all know, that’s the one lagging index. I’ve been telling you for the last week or so that the Russell’s probably going to try to catch up, and we’ve seen a rally in here, so we’re going to continue up. Actually, the Russell’s up a lot more than the E-mini’s pre-market. We’ll see what happens there. With the Qs, again, new highs, we busted up through a little consolidation. We’re up through. So everything’s looking really strong here. Bonds are rallying.
Next is my premium video where I outline about four or five new trades that I think are extremely powerful, so if you’re not a premium member, I urge you to at least try it out for a month. As an example here, we have been long the spy call options so we’ve caught a big move. We got a double right here; pretty much doubled our option price. We doubled our money on that trade. Everything’s looking good, but I got four new powerful trades in the premium video. Be sure to watch them. Have a great weekend and I’ll be back with you on Monday. Bye for now.
In today’s video I show you where I’m taking profits in the the stock Allergan, Inc. (AGN). This trade was good for about 5 full points of profits in 24 hours – be sure to watch the video for all the details. Have a profitable day and I hope the video helps you in your own trading.
I hope to see all of you tonight in the Q and A session. Again, all you need to do is go toÂ http://www.tradingconceptsinc.com/swing-trading-stocks/
Are You Taking a Profit in Stocks? Â
Good morning for this Tuesday, Tax Day, April 15th… there are two trades I want to go through with you today. First is the one that I went through with you yesterday, AGN, Allergan, Inc.Â This is a great, great trade. I told you this market was probably going to go much higher. Market did just that. Got long yesterday morning first thing, 121.63, a great trade set up. I’m usually looking for these kinds of trades all day long, right?
The Market—a very nice up trend, correct? The Market’s pulling back. We’ve got to exercise patience. The Market dropped into that gray action zone and created an inside pattern. It created a bearish engulfing followed by a bullish engulfing; a lot of indecision here and an overall up trend in a beautiful support zone. The market has rallied almost five full points from where I entered this market. This makes taking a profit in stocks possible. But before the market opened up today, it became a free trade. Then as soon as we started getting this rally and took out yesterday’s high, we hit our first profit target at 126.50,Â and we’re at 126.49 right now. Let’s see if we can get 126.50. We’re looking for that half, okay? But, we’re going to move that stop up to below today’s low. Today’s low is 124.02. We’re going to move that up to 123.82.Â So so that was a good trade.[Tweet “Exercising patience is crucial to solid trading decisions…”]
For those of you that signed up for my swing trading class last Saturday, I want to thank all of you that attended and for those of you that still want to get in, the recording is finished. All the PDF’s are ready to go out if you’re interested and then tonight we are going to do about an hour or two Q&A session and I’m going to give a bunch of trades out tonight during that. So all you need to do is go to TradingConceptsInc.com, right? Type in swing, swing and then dash swing dash trading, right? Then dash stocks if you want to attend that. Go there. Sign up for the class. You’ll get the DVD sent to you next week and you’ll also have that recording ASAP when you sign up. I’d love to see you there.
Now let’s take a quick look at the E-mini S&P’s. They also had a great trade set up this morning. It came down. We were in the gray action zone yesterday and missed taking out Friday’s high by about 50 cents. Yesterday in essence was an inside pattern. Nice compression and so the break out today, the trade of the day in the E-mini futures was at 128 and three quarters and look at what we’ve run already, 137. Almost a ten point move in the E-mini S&P 500. Now these are the trades I’m always looking for. These are the trade set ups,Â just like the ones on AGN. These are nice trades. We get those all the time. Hope to see you tonight. Have a profitable day and I’ll be back with you tomorrow.