For further examples of our trading calls and how to follow them, please visit our Traders Guide.

[16:06] <bluemonkey_68> typical of the other educational chats....
[16:06] <bluemonkey_68> please hold all your questions until we ask for them
[16:06] <mickd> back thanks
[16:06] <bluemonkey_68> ok...we will start...
[16:07] <bluemonkey_67> This chat is designed to help you understand why we make the trading calls that we make, and how we help you become a better trader by using these trading calls. We are going to do this by incorporating the happenings of last week into further understanding of our goals later in the chat.
[16:07] <bluemonkey_67> First things first, let's talk about the goal of our disciplines and strategies.
[16:07] <bluemonkey_67> The goal of the disciplines and strategies that we have developed and that we pass on to our clients is to help our clients minimize the risk of trading stocks while maximizing the gains without experiencing the same mistakes we did when we were learning how to trade.
[16:07] <bluemonkey_67> Yeah, yeah, that's what they all say…but this is a no nonsense approach.
[16:08] <bluemonkey_67> We hear over and over again things like: I'm afraid to enter cause it may go down?, why are we buying?, Why didn't we sell?
[16:08] <bluemonkey_67> All of these questions are relevant at appropriate times so long as you understand our Market outlook and the reasoning behind the trades.
[16:08] <bluemonkey_67> We only trade stocks that are testing support or resistance levels. This satisfies extremely important questions: where do we enter and where do we place the stops….by identifying support and resistance levels, we are able to clearly find appropriate entry levels, and thus appropriate stops, and by doing this, we minimize our risk.
[16:08] <bluemonkey_67> Minimizing risk is ½ of the battle. If we didn't use defined support and resistance levels to enter a trade, we would be entering trades in the middle of the ranges and our stop losses would not be clearly defined.
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[16:09] <bluemonkey_67> WE NEVER TRADE IN THE MIDDLE OF TRADING RANGES BECAUSE THIS WOULD CLOUD ANY ATTEMPT AT A DICIPLINED PLAN.
[16:09] <bluemonkey_67> We maintain the disciplined approach to stop losses to keep us from worrying about the Market.
[16:09] <bluemonkey_67> The next thing that we need to do though, is to accept small losses in our trades. It is part of the business, and it should be treated as an integral part of your day to day activities. There is nothing wrong with taking a small loss if your stops are triggered because: 1. you are preventing further losses 2. You can always re-enter the trades.
[16:10] <bluemonkey_67> This is easier said than done, but it should be recognized and the practice should be followed religiously. Please don't trade until you can accept small losses. Look at it this way: If you don't stop out with a small loss, that small loss could turn into a big one.
[16:10] <bluemonkey_67> Now we have the entry level, and we are accepting the use of stops, next we need to find our targets.
[16:10] <bluemonkey_67> Our targets are simply the next support and resistance level as defined by our analysis (next support = target for shorts, next resistance = target for longs)
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[16:10] <bluemonkey_67> This is simple and clear, but sometimes our targets aren't hit. Thus, taking profits more quickly needs to be addressed.
[16:11] <bluemonkey_67> We can incorporate profit stops and/or as if stops into our trades (as if stops do not apply to swing trades). By using these tools we are able to maximize our gains on these trades. The guide link explains profits stops and as if stops clearly.
[16:11] <bluemonkey_67> We do not choose to scalp a stock in the middle of a range unless we think the Market may reverse against us.
[16:11] <bluemonkey_67> This leads us to the underlying tone of this chat.
[16:11] <bluemonkey_67> First lets review what we have learned and why we use the strategies: Are there any questions at this point?
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[16:12] <fei> clear
[16:12] <triman> understand
[16:12] <plh> got it
[16:12] <Sailor1> Got it
[16:13] <bluemonkey_67> This is important: We are not right all of the time!!!!!!! Don't expect us to be!!!!!!!!
[16:13] <bluemonkey_67> What you can expect is for us to make trading calls in accordance with the direction in which we foresee the Market heading. You can also expect these calls to reflect support and resistance levels, and you can expect them to have tight stops.
[16:13] <bluemonkey_67> You should expect every trade to have set parameters and a defined plan. You can learn how to use the calls to make a plan in the guide or by asking in chat at another time.
[16:14] <bluemonkey_67> If we are wrong, which we will be from time to time, expect the losses to be small. If we are right, which we hope to be all the time, expect the gains to far outweigh the small losses.
[16:14] <bluemonkey_67> We have opinions about Market direction based on News, upcoming events, technical analysis, and sentiment and we use these opinions to help us determine ideas.
[16:14] <bluemonkey_67> By accepting that any losses we will incur will be relatively small, and by accepting that the gains will outweigh the losses overall, we have come to terms with our fears and we are able to incorporate the plans that we have set forth prior to trading
[16:14] <bluemonkey_67> Without doing this you will continue to have fears like: I am afraid the stock may fall, so I don't want to buy.
[16:15] <bluemonkey_67> This attitude will hurt your returns over time.
[16:15] <bluemonkey_67> Don't be afraid of the Market. You have a plan, and you know what to do in all circumstances.
[16:15] <bluemonkey_67> Last week we missed some gains that were available to us, and we then incurred some stops, and this was repeated this week as well.
[16:15] <bluemonkey_67> These things will happen, and we must accept them as part of the business.
[16:15] <bluemonkey_67> Reflect on the point that we don't trade in the middle of a range. Also realize that we don't sell in the middle of a range either. Unless we feel the Market is turning of course. We have not felt that the Market should fall however, and we were wrong, and therefore we were stopped for small losses.
[16:16] <bluemonkey_67> You can and should use your judgement on all trades, of course, you are the decision maker, but realize that you should always be disciplined.
[16:16] <bluemonkey_67> We will never be able to be perfect. We will miss ideal turning points, we will see some gains turn into small losses as a result, and we may feel disappointed that we missed taking the profit.
[16:16] <bluemonkey_67> But we always know that we made the decisions that we made based on analysis, and they were educated. These educated decisions are what helps us make superior returns, and these are what protect our assets.
[16:16] <bluemonkey_67> Let's open this up to discussion….what are your questions?
[16:17] <CarolAnn2> If a strong stock is going down towards an entry, and market is goint down, do we enter or wait for a reversal?
[16:18] <triman> why don't we move up stops as the stock rises? example - last week vrts moved up to 44.
[16:18] <bluemonkey_67> if a the mkt is crashing, yes...
[16:18] <bluemonkey_67> but...
[16:18] <fei> Is the gap of levels in swing calls too big?
[16:18] <bluemonkey_67> if the mkt is just making a conservative slide...no...we buy
[16:19] <bluemonkey_67> triman, we will include profit stops in swings when we see a resistance point passed
[16:19] <bluemonkey_67> in the case you mentioned, that point was 45
[16:19] <bluemonkey_67> so we missed it
[16:20] <bluemonkey_67> swing trades have much larger spreads between the buy and targets, but they are based on defined support levels
[16:20] <bluemonkey_67> too big is relative because the points don't matter, the sup/res is what is important
[16:20] <CarolAnn2> it seems that the spreads between levels in day trades has widened considerable, but you have been advocating smaller scalps
[16:21] <bluemonkey_67> day trades: I use the numbers that I get from my analysis in day trades...but the mkt has been telling us over the course of the last couple of weeks to take smaller gains when we have them
[16:22] <bluemonkey_67> so the reason I am taking smaller gains is because of that
[16:22] <jas1> What method do you use to determine the support/resistance levels?
[16:22] <CarolAnn2> ok
[16:22] <bluemonkey_67> when the mkt gets out of these choppy ranges I will go back to being more patient
[16:22] <mickd> BM, would you pls tell us wha is your method for finding sup/res for daytrades.
[16:22] <bluemonkey_67> sup/res...we use charts and fibonacci calculations
[16:22] <bluemonkey_67> 1 minute intraday charts
[16:23] <bluemonkey_67> I draw my own trend lines
[16:23] <bluemonkey_67> I do not rely of bollinger bands or anything else
[16:23] <mickd> I thought rotts used 5 day charts per something he once said
[16:23] <bluemonkey_67> he does...
[16:23] <bluemonkey_67> I found that to create too many trades
[16:24] <bluemonkey_67> and I firmly believe in my method
[16:24] <mickd> so you don't necessarily find the same numbers
[16:24] <mickd> ?
[16:24] <bluemonkey_67> I would use a combination of the intraday and the fib
[16:24] <bluemonkey_67> he is learning the way I want things done....
[16:24] <mickd> okay thanks
[16:25] <mickd> oh, but once you decided we needed smallerspreads. How did you change your analysis
[16:25] <mickd> then?
[16:25] <bluemonkey_67> I didn't
[16:25] <bluemonkey_67> I just took gains faster
[16:25] <bluemonkey_67> am taking
[16:26] <bluemonkey_67> entry levels and sup/res numbers are the same as they would be in any situation
[16:26] <jas1> Do you feel you can make money in any sort of market?
[16:26] <cronos> BM, the spreads have in fact narrowed in the market for many stocks lately
[16:26] <mickd> The thong is, thing is, that the fib calc yields a wide spread. what do you do to find point within?
[16:26] <bluemonkey_67> yes...but the slower themkt the hgarder it is to trade
[16:27] <fei> BM, May I ask how many years experience do you have in stock trading?
[16:27] <bluemonkey_67> I don't look for points within miked, but if the futures tell nme we are hitting rews and I'm in a stock that is in the middle of its range I'll consider scalping
[16:27] <bluemonkey_67> assuming long
[16:28] <bluemonkey_67> 12 yrs fei
[16:28] <bluemonkey_67> roughly
[16:28] <triman> what length of chart do you use to determine a trend? 3 month/6 month etc
[16:28] <bluemonkey_67> for day trades I use intraday charts only
[16:28] <bluemonkey_67> for swing trades I use 3 month
[16:29] <bluemonkey_67> and for specials, any combination
[16:29] <mickd> I know what ur saying re scalping. But sometimes you guys have calls that have sup and res levels which are different from the fib calc
[16:29] <bluemonkey_67> they come from charts or fib numbers so if not from fib assume from chart
[16:29] <bluemonkey_67> note: we will have a fib discussion next week
[16:30] <mickd> okay
[16:30] <mickd> tvm, again.
[16:30] <bluemonkey_67> ?
[16:30] <mickd> thx very much
[16:30] <jas1> How many points do you need to make in a day before you consider it a good day?
[16:30] <bluemonkey_67> oh, lol
[16:31] <bluemonkey_67> good days can be defined in many different ways
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[16:31] <bluemonkey_67> today could have been considered a good day I suppose
[16:31] <bluemonkey_67> we were +3.7 or so
[16:31] <bluemonkey_67> but
[16:31] <bluemonkey_67> they were spread out gains
[16:31] <mickd> :-)......will you sometime have a chat about level ll?
[16:31] <bluemonkey_67> yes miked
[16:32] <bluemonkey_67> re good day...
[16:32] <bluemonkey_67> 2 trades that = 1 point = good
[16:32] <robertoo> would it be possible to have fibonacci s/r number shown automatically for each share in stockroom program
[16:32] <triman> how much equity is recommended to do this trading full time?
[16:32] <bluemonkey_67> but 10 trades = 3 pts is good too
[16:33] <bluemonkey_67> triman, it depends on you, individually, but I think you need at least $100K to do anything day trading, less for swing trading
[16:33] <mickd> one other q - the time sup/res rotts suppies on request - where do they come from?
[16:33] <bluemonkey_67> robertoo, not at this time
[16:33] <bluemonkey_67> he gets them from charts only
[16:34] <CarolAnn2> intraday?
[16:34] <bluemonkey_67> yes
[16:34] <bluemonkey_67> when you ask in the very first part of the day or in pre mkt
[16:34] <mickd> the format and commentary seem as though they're from svc ?
[16:34] <bluemonkey_67> he uses 5 day I believe
[16:34] <bluemonkey_67> what is svc?
[16:35] <triman> you made a good call on issx at 22 today. did the chart indicate that?
[16:35] <mickd> sorry svc=service
[16:35] <bluemonkey_67> yes triman
[16:36] <bluemonkey_67> chart showed sup at 22...and we have been watching issx closely lately
[16:36] <triman> why did you chose one month timeframe?
[16:36] <bluemonkey_67> I don't understand miked
[16:37] <bluemonkey_67> roughly, that gives us plenty of time and lowers expectations...it only took 2 weeks to go from 32-22 tho
[16:37] <bluemonkey_67> and 2 weeks from 22-32 the time before
[16:38] <bluemonkey_67> entering trades with high expectations is not good in my opinion
[16:38] <triman> don't you worry about a big gap down on stocks that have negative news?
[16:38] <mickd> the consistent format and the comments like "stok tailing off in afternoon trading" make them seem as though they've been pasted in from some other source as opposed to being composed upon request by rotts
[16:38] <bluemonkey_67> gap downs are a part of holding stocks overnight
[16:38] <bluemonkey_67> or gaps up
[16:38] <bluemonkey_67> there is a consistent risk of that
[16:38] <bluemonkey_67> the only way to avoid it
[16:39] <bluemonkey_67> is to end every day in cash
[16:39] <bluemonkey_67> afraid is not the right word
[16:39] <bluemonkey_67> aware is though
[16:39] <bluemonkey_67> and that's why we only buy at sup levels
[16:40] <bluemonkey_67> as far as news...we also try to find stocks that we think won't have bad news, but this we can never be sure of
[16:40] <bluemonkey_67> re newsletter and morning report...all the commentary and the opinions are proprietary but I copy some news and charts from other places to develop the report
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[16:42] <bluemonkey_67> well, I hope I answered all of your questions...
[16:42] <bluemonkey_67> and I hope that I set the stage for future expectations
[16:42] <mickd> i have to step away for a few minutes
[16:43] <bluemonkey_67> I want you all to know what you are doing before you do it
[16:43] <bluemonkey_67> that's the goal
[16:43] <triman> you refer to futures a lot, how do they work?
[16:43] <bluemonkey_67> and that will make you a better trader
[16:43] <bluemonkey_67> futures are for another discussion
[16:43] <bluemonkey_67> they are complicated in nature
[16:43] <bluemonkey_67> but everyone needs to use them
[16:43] <bluemonkey_67> I hope to have integrated into the software soon
[16:44] <bluemonkey_67> I'll do a chat on them at that time
[16:44] <triman> thanks
[16:44] <bluemonkey_67> OK, if nothing else, have a great day....
[16:44] <aa> u2
[16:44] <Sailor1> Thanks BM , Bye All
[16:44] <fei> thx,bm
[16:44] <plh> thx bm
[16:44] <wonder> thank you blue, looking forward to fib discussion and futures too!