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.
[16:08] *** jas1 has joined #stocktradersdaily
[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)
[16:10] *** CarolAnn2 has joined #stocktradersdaily
[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?
[16:11] *** aa has joined #stocktradersdaily
[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
[16:31] *** twosocks has joined #stocktradersdaily
[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
[16:41] *** aa has joined #stocktradersdaily
[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!
|