Do You Think August Is A Lousy Month For Daytraders? Here’s How To Make It Great

This morning, before the open, there were a several items that I was very aware
of. The first was the Fed meeting. The pre-market was appearing very strong
ahead of an anticipated rate hike of 3.5%.

The other was favorable news on ELN and TWX. ELN appeared
on my alerts and confirmed my bullish opinion, I quickly went long as there was
ample support in the NYSE openbook and a number of large prints being traded on
the offer. This confirmed that there were large buyers in the stock and I wanted
to go along for the ride.

TWX came up on my alert in the same manner. I was able to profit to the
long side in this stock as well. TWX rallied up from its opening of 17.93
to a high of 18.70. This number is just below the March 17th high of 18.80. If
we get a strong market and TWX returns up to 18.80 I will be looking to
go long through this point of resistance.

As we are entering the middle of August I am anticipating a drop off in volume
as well as volatility, therefore it is extremely important to be extra attentive
and disciplined. The most important discipline to follow over the course of the
next few weeks is PATIENCE. Patience is the discipline that most traders have
difficulty adhering to during low volume trading periods.

Without patience traders get pulled into an endless cycle of overtrading, sub
par entry points and losing trades. During low volume trading periods there is
not enough follow through to compensate for a bad entry. Most traders get drawn
into trades that do not fit their trading style because they are just plain
bored and looking for something to trade.

With patience it is easier to have the courage and fortitude to execute the
proper trade. Opportunity to make money in August will occur less frequently. If
a trader has had the patience to stay away from less then ideal setups, he/she
will be able to have the strength and focus to execute on the higher probability
trades. As a trader you have to have the inner strength to pounce on the
opportunity when it presents itself. Although a certain strategy may not always
work you have to give yourself the opportunity to be in the correct trade and
profit from it.