Day Traders – Stock Trading Strategies

Welcome back Day Traders! Lets start off with the basics here.

First of all, I’m getting all excited!  I’m all warm and fuzzy inside as you can imagine with the $VIX being down here getting close once again to those seven year lows.  This is a monthly chart of the $VIX.  You recall the last time we got down that low back in 2007, well of course that was a precursor to major sell offs in the markets.  Right now let the good times keep flowing because first of all we’ve got the trading on the positive side like we did yesterday where everything was just blue, blue, blue.  Just rip roared away between Ryan and I firing off a bunch of trades there.  Then today you can see we discontinued to bleed that down and then of course we know ultimately we look for major sell offs and corrections out of that.  Let it keep on going because this just sets us up for really great trading as we continue to go forward.  Great time to be a  Day trader with Stock trading.

As we look at the Euro here, it is below the point where we want to long.  It’s above the point that we want to go short.  It’s kind of in no traders land, again, we have the ECB announcement out tomorrow morning so we’re going to be holding off on that.

As far as Gold is concerned, it just could not go ahead and break through this distribution bar that we set from yesterday.  This was a really nice follow through day, exactly what I warned about and showed yesterday in yesterday’s session before it happened.  The exact same thing I warned about this morning happened again, it was really great for people to see that back to back this morning.  Great stuff there. Still holding to this major distribution bar as well.  So nothing to do with Gold at this time but we’re going to be watching for a break out of yesterday’s distribution bar for some opportunities.

Stock Index Futures Talk

Taking a look at the Stock Index Futures here, of course we had the big up bar pre-holiday run.  We always look for that usually around the 4th of July.  Typically look for those bullish runs, we had that yesterday, it was all systems go.  Today now is a pause.  We have a lot of economic data both domestically and on the European side of the equation and we’re going to look to see if that’s going to allow the good times to continue to roll and make a blow off type move tomorrow or if we’re going to start drilling back down through these speed lines and we’re actually going to be looking for shorts.  So we have to wait to see how the news responds tomorrow, it’s anybody’s guess, it’s pure voodoo for some people who are trying to place some bets before those announcements go out tomorrow morning.

What we’re going to do, and that’s why it’s great to be a day trader, we’re going to see what this market tells us.  What we knew yesterday walking in the door we were firing on all cylinders, what we call Blue 15, you just can’t get better than that.  It was left and right rapid fire long side trading.  Today as we look, this the S&P, let’s go back and take a look at that because this is the S&P as of a few minutes ago.  That’s a two minute of the S&P, these ranges here are as little as two tick ranges on the S&P.  Pretty much where we started this morning is where we’re ending up going into the last half hour of this session.  This is a really great object lesson for day traders, when to push in situations like yesterday when you’re Blue 15 and everything is firing on all cylinders to the upside, when to back off is when you don’t even have a heartbeat in the market.  The problem is that people go ahead and come into a day like today if they made money yesterday, which a lot of our day traders did, they want to come right in and repeat that.  So you have to slow them down and show them the proper stock trading strategies. If they didn’t make money yesterday or worse yet they lost money for some reason, then of course they are coming in trying to make up for lost time and lost revenue opportunites from yesterday.  A lot of people get hurt on day number two like today for various reasons.  Whether they did really well and then they don’t know when to quit or the people that didn’t do well and try to have a repeat of yesterday’s activity.  So, did a really good job of trying to slow people down this morning, you can see why as we look at this S&P today.  Going into tomorrow morning we have a lot of news coming out domestically and on the European side and we’ll see if that will lead to a nice first hour rush there.

You guys have a great night.  We’ll look forward to seeing you in the Live Trading Room tomorrow morning or in tomorrow night’s videos here.  Take care everyone, have a great evening and a wonderful Fourth of July!

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