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Is there such a thing as the perfect entry?

We have all been there. Our indicators are on point, order ticket filled out, one last gasp and boom! Trade sent and confirmed. Oh and all of a sudden the trade goes against you. But why? What do we do next? Well, let’s take a look at a few things and analyze what happened and what to do next. Let’s first go over one important point! There is no such thing as the perfect entry. It just doesn’t exist. You do your best to pinpoint an entry and you take the plunge. It can immediately go in your favor. Which in that case congrats! However, more often than not, a trade might go slightly against you for a bit before it turns and aligns itself with what your strategy had in mind. The timing of a trade is a fool’s game. The execution and discipline that follows are one of …

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Trading on Emotion. How to create the ultimate mindset

We have all been there before. Starting out in our trading career with zero experience yet the mindset to strike it rich day trading. We hit a few winners and it’s like Oh wow, here we go! And Bam! That first loss. It hits you like a ton of bricks. What’s the first thing we tend to do? We try to quickly recoup those losses and completely forget about our strategy and most importantly discipline. Then it turns into one loss after another and drains us mentally to the point we walk away and question whether trading is really for us. My advice comes in two forms. The bad news and the good news. No matter how much advice you get, human emotion is very strong and we learn by making mistakes. I’ve made plenty and after blowing two accounts, I had to take a step back and figure out …

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The most important 15 minutes of your life

I’ve heard so many times that a trader should avoid the first 15 to 30 minutes of the trading day. It’s too volatile and unpredictable. Or is it really? Let’s take a closer look at what occurs in this window of time. The pre-market can give you big hints as to where the market can and will go on any given day. Now there is always uncertainty. However when you take into account some useful tools then you can put the odds more in your favor. The pre-market can be either down, up or flat. This can be caused by a plethora of reasons. News, Earnings, world events etc. This is your starting point. Now that you know where the market stands, you have to prepare your game plan. Once the market opens you will most likely see a close in the gap. This means if a stock opens lower …

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Market Makers. Who are they and why you should know

The age old question many traders and investors ask me is, why do I get into a position during the first hour of trading and usually get crushed? The answer is simple. Market manipulation. But by who? The answer is simple. Good old market makers. First, let’s go over who they are. Market makers are basically the middleman for buyers and sellers. They are employed by the big firms such as Goldman and Morgan Stanley. They are also known as specialists as you will see them referred to on CNBC and Bloomberg. They ensure proper and efficient order flow and create an environment where buyers and sellers have a liquid trading experience. Now they usually don’t earn a commission. They are mostly salaried and ensure that their firms make money as they hold large amounts of stock which they buy and sell each and every day. They make money by …

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The Trend is Your Friend. Or is it?

You’ve read it all before. Follow the trend. It’s your friend. The question is, how accurate is that statement really? In terms of day trading, it’s a double-edged sword. In equities as well as futures, the trend is hard to fight when you have a massive sell off or massive spike in the market. It’s a no-brainer. However on a typical day with average to above average volatility you can expect some swings and reversals. Especially early in the trading session. The beauty is that you don’t need a secret formula or that one magic indicator to figure that out. Think in terms of an airplane. As crazy as that sounds it won’t fly forever. It will come down. The question is when. When I trade futures or options I’m looking for sudden extremes whether they be on the buy side or sell side. In terms of price action, I …

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