Stalking A Swing Trade

Stalking A Swing Trade

If you want to swing trade, you need to have patience. Like a lion quietly waiting in the bush. You need to stalk your trades.

Then when the time is finally right… YOU POUNCE!

STALKING CYBERARK SOFTWARE ($CYBR)

After riding it up from Jan – June, I kept it on a special “interesting ideas” watch list. This is the spot where I keep all my ideas that i don’t want to lose track of.

I’ll check this list every weekend and see what’s setting up. There’s about 100 ideas on this list.

On Nov 16 I saw $CYBR setting up. I shared my thoughts on this idea in TRADER’S MINDCHAT.

Here’s what I wrote:

Seeing a symmetrical triangle down on the daily and below. I’m aware of the potential resistance at the 200dma and 40wk line. If we bust above there, we’ve got a clear run to highs at 148. Do we get there? Who knows. That’s why we look at the target as a POTENTIAL and we call it “Potential R”. It’s the next major level of resistance. . Always manage your reward:risk throughout the trade.

TICKER EARNINGS (MM-DD-YYYY) SECTOR SENTIMENT SETUP
$CYBR 02-16-2020 Software Bullish Symmetrical Triangle

TIMEFRAME ENTRY STOP LOSS TARGET POTENTIAL ‘R’
Daily and below $115.70 $111.70 $148.00 8.08

 

This gave us a potential 8R trade! I love that s***!

Check out the TRADE-EMOTIONATOR to calculate the right amount to buy every time.

$CYBR broke out Nov 18. Here’s how I’m playing it.

  1. I am playing it on the 2HR. While I’m AWARE of many timeframes (I keep track of monthly, weekly, daily, 2hr, 30min, 15min), when trading, it’s important to trade on just one.
  2. I hit 1R (1x the amount I risked) when CYBR touched 119.76. That prompted me to raise my stop. Support developed just above my entry point and I moved my stop up to 116.10
  3. I’m using the 5ema as a trailing stop for 1/4 of my position. Same deal for the 10ema. If we close below that, I’ll sell another 1/4.
  4. My ultimate profit target for this is 148. IT’S RARE to get there smoothly. With that profit target, this trade started out as an 8:1 reward:risk. IF at any point the price action makes the ratio less than 3:1 w/o creating a fresh area of support, I’ll take 25% off.

swing trade What are your thoughts? Drop’em below or join TRADER’S MINDCHAT and engage with us 24/7!

Avoid The “Gun Show”

Avoid The “Gun Show”

Have you ever gone to a gym or been to a beach and saw those guys with the gigantic arms and scrawny little chicken legs?

This reminds me of a lot of traders… Way too many traders treat their trading like this. They focus on charts and not much else.

Are you guilty of this? I was at one point. 

From my own experience and from the traders I’ve spoken with over the years, this never ends well.

Most blow up their accounts.

Only a few persevere long enough to learn that it takes a helluva lot more than charts to be a successful trader!

What Leads ALL Traders To Success…

mindwheel

Whether they realize it or not, ALL consistently successful traders follow the Trading Mindwheel.

You might be thinking “WTF is a Mindwheel?”

It’s the 7 core things all traders need in order to zoom down the path of success.

When any one of these are missing, it’s like trying to drive on a flat tire.

If you’ve ever felt stuck at any point in your trading, I can guarantee it’s related to a hole in one or more of these areas.

Mastering the Mindwheel IS your ticket to trading success!

Where To Start?

trading chartsAre you a newbie?

If you’re relatively new to trading, start with 1. Environment and work your way around the wheel.

Have you been trading awhile?

If you’ve been in this game a while, do a self assessment. On a scale of 1 (I suck) to 10 (I’ve completely mastered this), how do you rate yourself in each of the 7 Mindwheel categories?

The more honest you are with yourself, the faster you’ll be able to patch those holes and get speeding toward your goals.

The 7 Core Parts Of The Mindwheel

1. Environment

Does your trading environment fit you? When was the last time you checked? Do you have clarity? Could key elements have greater clarity?

2. Trade Style

Have you explored a variety of trading systems and styles?  Have you found the timeframe that works best for you?  That feels right?  There are thousands of tactics, the key is lining it up with your personality.

3. Risk-itudes

Where do your trades fall on the Fear vs Greed spectrum?  Are you closer to the betting the farm type or clinging to pocket change?  Winning traders find balance, leverage, and asymmetric reward:risk. They manage it throughout the trade.

4. Pattern Mastery

The market IS human emotion on parade.  We can see collective hope, fear, & greed materialize before us.  Learn how to read it.

5. The Art Of Trading

Betting the right amount at the right time, and ensuring it happens rests not only on you, but on your team (including your broker).  The Trade-Emotionator can help your figure that out!

6. Write Right

Trading w/ clarity involves writing out your plans, reviewing them, and tracking them.  It helps us learn and evolve.  The Trade Tracker gives you core questions to ask yourself on every trade.

7. Vision-Vestment

You made some great trades, made some money, but riches and wealth aren’t the same thing. What are you doing with it? How is it continuing to grow, to serve you, to serve others?

This is the step that keeps tread on the tires. Keeps you motivated. Helps you enter the top 1% of traders in the world.

Neglect this step and eventually your tire becomes bald. It’ll get a flat. You’ll lose your passion and end up walking the rest of the way.

You Don’t Have To Go It Alone

Trading is akin to learning how to ride a bike. You can learn on your own or have others help you.

Whether you have help or not, you’re still going to take some bumps along the way.

The difference is that you’re FAR more likely to learn how to ride if you get help and you’ll be doing it a helluva lot faster too!

No one talks trading like this.

In all of the trading books I’ve read (my personal favs are here), courses I’ve taken, or seminars I’ve attended over the past 20 years, no one talks about the Mindwheel.

That’s why I’m constructing this blog, developing a course, writing a book (look for it mid-2020), and coach traders one on one.

Want me to be YOUR trading coach?

I’m very picky about which traders I work with. I only work with serious action takers who are open minded.

If that sounds like you, check out the rest of the details on the coaching page.

Book the FREE 20min Sesh and we’ll assess where your trading is at right now. Where you’d like it to be. And the steps needed to get you there.

Why Perspective Is So Important In Trading

Why Perspective Is So Important In Trading

Have you ever focused so intensely on finding a pattern that you started seeing it everywhere?

Yeah, me too! And it was nearly my undoing…

I blew about a third of my trading account before I learned any better.

This happened to me pretty early on when I first discovered William O’Neil and the CANSLIM method. His book “How To Make Money In Stocks” is phenomenal and I consider it a must read.

Just be careful you don’t make the same mistake I did.

One of the first patterns I learned about were cup with handles. I learned about the shape, depth, time they typically take to form, and the best times to find them.

cup with handle

I studied this chart pattern like I was preparing for my keystone project in grad school.

I thought I was well prepared, practicing this one pattern over and over again. The way Bruce Lee practiced one punch would allow me master of this one pattern.

Unfortunately, this wasn’t what Bruce had in mind. I had misapplied his lesson and learned the hard way…

bruce lee

A Hard Realization

Rather than having the massive gains my trading heroes William O’Neil, Gil Morales, Chris Kacher, and others had, I had a dwindling bank account, the crushing weight of self doubt, the feeling of wasted time, and loads of confusion on my mind.

What was I doing wrong? I had studied for countless hours. Applied intense focus. What the hell was I missing??

I was missing PERSPECTIVE!

trading perspective

I had become so insanely focused on finding cup with handles that I was missing the bigger picture.

It was the equivalent of a doctor examining a patient’s broken hand while missing the stroke he was having!

In trading you need a broader perspective. If you want to win you must always keep the bigger picture in mind.

Stop Hunting For Patterns

You shouldn’t be hunting for patterns. Especially not with a magnifying glass like I was doing.

Take a broader perspective. Start with an awareness of the types of patterns that are out there. The main bullish ones are:

  • Cups
  • Cup w/ handles
  • Double Bottoms
  • Flat Bases
  • Pennants
  • Flags
  • Triangles

If you’ve been in the game a while I’m sure you can rattle off plenty more. These are the most common and you can do quite well with these alone.

The main bearish ones include:

  • Head and shoulders
  • Double Top
  • Triple Top
  • Rising Wedge
  • Bear Flag
  • Bear Pennant

Again, there are many others but these are the most common and you’ll do fine with them.

What you want is awareness of these patterns. Stop hunting for them. Simply observe and wait for them to present themselves.

Take a look at the sample above. I used to behave like “Them” all the time. If you are so intensely focused on finding cup with handles, you’ll find it!

Be careful where you place your focus. In this case, the old me would have found what I was looking for in the super bearish right shoulder of a head and shoulders top!

So how do we gain a better perspective?

Shifting Our Focus From The Leaves To The Forest

trading perspective

You want to stay in step with the market. Be in tune with it. Feel it.

Sound airy fairy? I thought so too at first! But it’s actually a deeper understanding of the market that we’re all after.

Do you want that crystal ball that some traders seemingly have? Well, this is how you get it!

You want to be in the moment. What many athletes call “the zone”. Mark Douglas calls it that too. I highly recommend checking out his book “Trading in the Zone”.

When you step back and see the bigger picture, you can see multiple things happening at once. The long, intermediate, and shorter term time frames become clear.

You can see if the market is moving up, down, or sideways. These kinds of things are pretty easy to spot! A child could do it.

Why then is it so hard for so many to win at this game? Why did I fall flat on my face for years??

Where Is Your Focus?

A big part of winning at trading comes down to focus. The problem is most of us tend to focus on the wrong things in the wrong ways at the wrong time.

I did it for years. Focusing narrowly when I should have been using a wide angle lens.

Focusing on chart patterns when I should have had an awareness of them and allowed them to simply manifest themselves.

I fixed this problem, but it took me nearly a DECADE to do it.

What are you focusing on? How much longer will it take for you to gain the awareness of what you should be focusing on? Months? Years?

The only thing that we’re constantly running out of is time! Isn’t it time you started taking action?

Market Prep Like A Champ!

Market Prep Like A Champ!

How well you prepare for the trading week sets the tone.

Are you walking into the market prepared? Excited? Relaxed? Or are you scrambling and mostly trading by the seat of your pants?

The unfortunate truth for the majority is the latter…

I traded by the seat of my pants for years! You know what ended up happening?

It was kinda like some schmo from the audience stepping into the boxing ring with Deontay Wilder. Not a great idea!

So what does market prep like a champ look like?

market prep

3 Key Questions To Ask Yourself

First, understand that preparing for the trading week doesn’t have to take a lot of time!

It does, however, take is consistency.

What you want is a trading process that will help you meet your goals, that you can execute well, and that you enjoy doing. If any of those three are missing you’re screwed.

Ask yourself:

  1. Does my trading process help me meet my goals?
  2. Am I able to execute it well?
  3. Is it fun?

Hopefully you answered yes to all three. If you didn’t and would like some help getting back on track, go to my coaching page and book a free 20min sesh with me.

My 2 Step Trading Process

STEP 1: Gauge the ‘Market’s Mood’

  • Review the major indexes on the Monthly, Weekly, and Daily time frames
  • Assess the number of New Highs vs New Lows being made
  • Observe what kinds of stocks are setting up. The total number of setups there are. And the types of setups there are (bullish or bearish, early or late stage).

STEP 2: Find Trade Ideas for the week

  • Assess every setup I found in ‘Step 1’
  • Determine the Reward:Risk of all trades
  • Dive deeper into the setups that offer at least 3:1
  • Place working orders with my broker

This whole process takes only a couple of hours each weekend. It actually takes longer to create the content around it than it does to perform the exercise itself.

My process actually hasn’t changed much from before I quit my day job.

The key for you with all of this is making it your own. Modeling success works. Attempting to clone it does not.

I made this short video outlining my market prep for the week of 11-11-2019. Enjoy!