This Week’s Battle Plan
In a few
weeks, TradingMarkets will celebrate its third anniversary.
As many of you know, the original name of this site was TradeHard.com.
Our initial idea was simply to create a place where hardcore, serious
traders could learn directly from successful professional traders.
What started out as a very small site with some basic ideas has now
grown to thousands of pages of trading lessons, trading courses,
trading commentary, numerous indicators, over
a thousand trading Q+As, numerous interviews, a Galleria,
live trading events, and more. Incredibly, TradingMarkets is now the
world’s largest site for traders. I wish I could say I was smart
enough to have seen all this was coming. But I can’t. My goal in
launching this site, along with co-founders that include Kevin
Haggerty, Mark Boucher, Dave Landry, Raul Pallares (who runs our
day-to-day operations and is a pretty good intermediate-term trader in
his own right), Conrad Kalil (our Director of Technology) and others,
was a single-minded focus to provide the best and highest-quality
education for you to use in your trading for the rest of your life.
And from the many, many e-mails and phone calls we get from you daily,
we are rapidly moving toward reaching that goal.
In a few weeks, we are going to be launching our newly designed site.
We are also launching TradersWire Interactive
3.0, which will be an upgrade of our current TradersWire.
Included will be intraday audio alerts and analysis, plus news
analysis. The news analysis will not be what you see on CNBC. It will
go much further. It will take news, and in a very rapid style, analyze
what markets, sectors and other stocks will be immediately impacted by
this news. This is an area that is ripe for traders to take advantage
of, and launching it keeps with our mission of giving you daily,
proprietary information and education that you cannot find anywhere
else in the world.
This Week
Each week in this space we look at the market and try to determine
what it is saying. This week we will not. Why? First, this is an odd
trading week. Half-day Monday, Tuesday is closed, and for the next
week after that, half of Wall Street will be on vacation. Markets will
be less liquid, which means moves will likely be exaggerated when they
occur. (Next week we’ll look at how to take advantage of these
exaggerated moves.)
Instead of trading this
week, I’d like to encourage you to review your trading year and then
spend some time learning how to further improve your trading before
the New Year starts. What did you do best this year? What did you do
wrong? Did you make most of your money in the first nine months of the
year by being short? If yes, then how will you profit in 2002 if
prices rise sharply? Did you trade successfully 19 out of the 20 days
of each month and still lose money because that one bad trade a month
wiped out all your profits? (This is a common problem even amongst the
best of professionals.) Did you fall into the “guru-itis”
trap and blindly follow the advice of individuals with unproven
methodologies who believe they are the Miss Cleos of trading? (For
those of you who read Street
Smarts, you know how guilty I was of this in 1987.) Or did you
ever follow the advice of journalists even though you know you are
absolutely more qualified than them to analyze the markets? What about
overtrading…was that a problem?
At TradingMarkets 2001, Joe Corona
(senior trader for Tony Saliba’s organization), who is a 20+ year
successful trader and one of the best and smartest options traders I
know, told an audience of over 400 traders that it was his number-one
weakness. If a man at this level of the game is still working toward
mastering this part of trading, there’s likely room for all of us to
grow. And probably the most serious problem to have; did you go into
any trades “hoping” you would be right? And when the trade
moved against you, did you “hope” it would turn? Hope may
spring eternal but it also springs large trading losses. Learn to stop
“hoping” when you trade and your returns will increase
further. This is guaranteed. My list could go on and on. But I believe
you see my point. Now after HONESTLY answering the above, let’s move on to how to improve your trading even further in 2002.
Connors’ Recommended Trading Lessons
Beyond focusing on the markets this last week of the year, spend some
quality time learning in order to improve your trading for the
upcoming year. With over 300 trading lessons at your fingertips, plus
eight in-depth courses, there is information that you can use and
apply to your trading immediately. And this knowledge will make you an
even better trader in 2002 and for years to come.
Here is a list of my favorite lessons,
plus one course that has been written over the past three years. They
cover a lot of territory and they are amongst the best of the best.
Courses: On top of my list is Mark
Boucher’s 10 Week Short-Term Trading Course. This course was
written two years ago and remains a classic. Mark covers in full the
many aspects of trading and builds a framework that you can use for
the rest of your trading life. I’ll give you an idea of the excellence
found in this course: A good friend of mine is a successful (very
successful) professional trader. Three of his children have, over the
last six years, entered Wall Street. When Mark’s course was first
published, this gentleman told me that upon his completing the course,
he printed it out three times and made it required reading for his
kids. His exact words were, “I wish someone had shared this
information with me when I was starting out. In fact, I wish someone
had shared this information with me anytime in my career!”
Key Lessons:
Many many good ones, and I chose the ones that will likely have the
most impact on your trading the fastest.
Money Management: Dave Landry’s Four-Part
Series, “Money Management – An In-Depth Look Pt
1, Pt
2 Pt
3, Pt
4 ” In my opinion, money management is more important than
trading strategies. Dave interviewed a number of successful money
managers and traders who shared their best money management
techniques. The other lesson is Mark Boucher’s “My
Best Trailing Stop Techniques.” Both will go a long way to
helping you master this area.
Intermediate-Term Trading: Two from Loren
Fleckenstein. “Using
Volume: The Key to Price and Liquidity” and “Calculating
and Using RS Lines For Intermediate Term Traders.” Neither
lesson is for beginners. They’re for those who understand the
intermediate-term trading game and want to review some of the core
concepts (with a few new twists) and key strategies.
Daytrading: Kevin Haggerty has many good
lessons (as do others). If you are looking to expand your daily stock
hit and focus lists, Kevin’s “Trade
Selection: Using Four New TradingMarkets.com Screens” will
quickly get you there.
Swing Trading: “Ten
Tenets of Swing Trading” from Dave Landry. Good solid advice
from the man who literally wrote the book on the topic.
Short Selling: Another from Dave. “Shorting
Stocks: The Art Of Playing Both Sides of the Market,” quickly
became one of the site’s most popular and talked-about lessons. This
past year has taught you that opportunities come on both sides of the
market. This lesson is for those who never shorted a stock. Read it,
and in 15 minutes you will know how.
Options: Tony
Saliba’s two-part series on spread trading “An
In-Depth Look at Vertical Option Spreads, Pt
1, Pt
2” This lesson remains the most popular options lesson on TM.
Single Stock Futures: They’re coming in
April. In “Single
Stock Futures; The Essentials,” you’ll get a head start on
the product that will likely be the next killer app on Wall Street.
Many of us can’t wait for this product to launch. After reading this
lesson you’ll know why.
Interest Rates: Tony Crescenzi wrote a
hell of a lesson (in two parts) entitled “Trading
Greenspan Pt 1 Pt
2.” This lesson teaches you how to read the Fed and how to
trade ahead of important economic reports and Fed Policy meetings and
testimony.
Psychology: The
Discipline Behind Translating Market Analysis into Results (Pt
1 Pt
2 Pt
3) from Mark Douglas. Mark is one of the true leaders in the
field of performance enhancement for traders, and his lesson helps
bridge the gap between living in the world of possibilities and living
in the world of high-performance trading reality.
Nightly Planning: Always
Plan For Trading Success…The Night Before, Dave Landry. This
lesson really struck a chord with the members. The trading battle many
times is won the night before in your preparation for the upcoming
day. Here is a blueprint to follow.
Interviews: Read my interview with hedge
fund legend Michael
Steinhardt. Don’t read it for the strategies. Read into his words
when he talks about what is needed to succeed at trading at the
highest level. This man’s philosophy is not only applicable to
trading, it’s applicable to all professions in life. And it’s the same
philosophy that all men and women who achieved greatness embrace.
Enjoy the above lessons. Read them, learn from them, and most
importantly, apply them to your trading.
We wish you and your family the best this holiday season!
Larry Connors and
Brice Wightman
Larry Connors
is CEO and co-founder of TradingMarkets. He is also the author of four
books on trading, including Street
Smarts,
co-written with Linda Raschke, Connors
on Advanced Trading Strategies, and his latest release, Trading
Connors VIX Reversals.
Brice
Wightman is a Market Analyst at TradingMarkets.com.