Online Stock Trading is run by Mike. Always interested in the market, I caught the trading bug in high school when our Social Studies teacher showed a 5-minute video of currency traders at work. They had to closely monitor their positions, even setting alarms to wake them in the middle of the night to check their trades. I must be a masochist to think this was cool.
I started trading stocks online around 1997, after obtaining a degree in Finance, and working a short stint in the mortgage industry. This was just in time for the crazy Internet stock bubble, where I learned every stock goes up. Just by the dips. After trying a few techniques of trading, I’ve settled on a system that works best for me.
(The Trading Turret)
Basically, I trade using a few different patterns. They seem to work well in most market environments. I’ve named the patterns myself for easy recording when I journal my trades. The patterns are nothing more than taking advantage of supply, demand and peoples perceptions. They can be used in any time frame, from 1-minute charts, to a monthly chart, which make them very powerful. I always refer to the 2-minute, 5-minute, 15-minute, 60-minute, and daily chart for each trade. This gives me the big picture of the equity I’m trading.
Trading Psychology and Money Management play a huge role in successful trading. Trading in the Zone, Investment Psychology Explained, and Trade Your Way to Financial Freedom, are some of the best books I’ve read on those subjects. Combine the philosophies in those trading resources, and the experience of looking at 1000’s of charts every day, and you have my style of trading. I’m a big fan of using the techniques of Van K. Tharp (He wrote Trade Your Way to Financial Freedom) for money management. Keeping losses small is one key to winning in the stock market. Using a value of R (Risk) for each trade keeps your losses consistent. I really struggled with position sizing until I found this method a few years ago.
I’m also a big believer in positive thinking and intuition. I’m working on incorporating these aspects into my trading. If you get down to it, we’re basically trading against other people’s perceptions of the markets. If you’re in tune with your intuition, what you perceive in the market will usually be correct more than often. Some traders call it, Being in the Zone.
This weblog, Online Stock Trading was started to #1, help me analyze the entries and exits of trades taken. Two of the biggest challenges for a trader are entering a security and the exit. Analyzing my trades will help reinforce what I need to do the next time I’m faced with a similar pattern. That’s all that technical analysis is: Patterns in the market that historically repeat themselves and allow some predictability of future movement. The #2 reason I chose to do a weblog was to have a reference of trades for each pattern.
When I trade one of the patterns in the Trading Patterns category, I’ll refer back to it. After a while, each pattern should have example trades on how the pattern has been played.
The watchlist I use consists of roughly 150 stocks each day. These stocks include high Relative Strength numbers as found in Investor’s Business Daily, which include some of the more active traders. You won’t find me trading in the Pink sheets, or Penny stocks. I’ll scan the morning gap stocks to look for trading candidates too. During the day, I’ll watch the scrolling New Daily High list to find active stocks. This function is available in Realtick, and other software packages. Generally, I prefer equities in the 20 to 120 dollar price ranges for trading purposes.
I won’t always be correct with my trades. My focus is to cut losses short when I’m wrong, let the winners ride as long as possible, and make some money.
Feel free to send me any questions or comments below.