5 lessons to improve your trading
Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
selling books,
>Dave Landry’s 10 Best Swing Trader Patterns And Strategies and
>Dave Landry On Swing Trading.
If you would like a free trial to Dave’s Nightly Swing Trading Alerts Report
at=st”>click here or call 888-484-8220 ext. 1
Lessons Learned Last Week
There were a plethora of lessons to be learned (or re-learned) this past week.
1. Protective stops on every trade: It doesn’t take a rocket scientist to
know that longs got hit hard last week. Always use stops.
2. Wait for entries. Remember Rio from last week? Fortunately, it did not trigger.
As you can see, this simple technique can often keep you out of trouble. Note:
for more on entries, watch the audio/visuals from 03/05/05 and 10/05/05.Â
 3. Make sure you play both sides of the market. The two biggest winners mentioned
recently here have been shorts. If you are not familiar with shorting, email me
for a primer article. Â
4.Smoke ’em If You Got ’em (take partial profits when offered). Notice
that the BBH dropped over 10 points since mentioned (a). When blessed with
such a nice, quick profit, make sure you lock in a piece and trail your stops
lows (see my swing trade primer and A/Vs for more on this).Â
5. Be flexible. Many stocks that just recently set up as potential longs are
now setting up as potential shorts. For instance, notice that aforementioned RIO
(
RIO |
Quote |
Chart |
News |
PowerRating) is now set up as a potential First Thrust Short:Â
I did learn a lot of other useful things last
week like what NOT to say when asked “does this dress make me look
fat?” but I suppose that’s for another conversation.Â
On Friday, the Nasdaq rallied in early trading but then chopped
sideways for the remainder of the day.Â
Ditto for the Ps.Â
So what do we do? All I can say is thank goodness the market finally
did something! The sideways chop over the past several months has been
brutal. Don’t get me wrong. I’m not happy that the market went down. I’m
just happy that it’s moving and once again creating opportunities for this card
carrying “trend following moron.” Therefore, since it appears to
be breaking down, look for transitional patterns (early trend) in those areas
that are breaking down from high levels such as the energies and metals &
mining. Avoid the long side.
As far as setups (see also RIO above), Petroleo Brasilerio
(
PBR |
Quote |
Chart |
News |
PowerRating), in the
energies, looks poised to resume its slide out of a First Thrust (as usual, email me if you need rules). Â
  Best of luck with your trading on
Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.