What Is The Best Environment To Hone Your Skills?
Question: What has declined by 63% from
March 2000 to January 2003? And, what has declined 18% in the first 10 days of
February?
Internet stocks? Gold shares? The major indices? The number of analysts
who admit we are in a bear market?
Well, any of the above answers would be correct, however, the answer I was
looking for was:
The percentage drop in the number of trades done at
Charles Schwab via their on-line trading platform.
Worse than that is the 23% decline in the value of a seat on the NYSE since
October alone.
Pretty scary. While at the same time it clearly puts an explanation to the
current trading, or lack thereof. Naturally, the spinsters (and they may be
right, there really is no way to know) indicate that this malaise will lift once
Iraq is out of the way. I hope they are right, but other than the cloud of war
uncertainty being lifted, not much will have changed from an economic
standpoint.
Friday’s trading activity was once again a picture of occasional trade(s), and
more often than not, false starts. I cannot tell you how many times I was
locked and loaded, only to call the trade off as yet another price spike from
out of nowhere dashed my hoped of $$ in the old trading account. When all was
said and done, I had done only four trades all day for a marginal profit. I hear
that Webster’s will soon be adding a depiction of traders engaged at
their screens under the word patience.
One thing is for sure, if you are new to trading, or even if you are not, the
fact of the matter is this is the BEST environment to hone your skills. If you
can keep yourself out of trouble in these markets, I think it is safe to say you
play this game with the best of them.
I wish that I could offer some sage advice, but frankly there is no magic
panacea presently. The only solution is to wait. There will undoubtedly be
some great trading in the wake of the Iraq conflict, but I expect it to be
brief. Nonetheless, these pockets, as I have mentioned several times, can be
incredibly profitable. However, if you are inclined to hold positions slightly
longer than a few minutes or hours, there are still opportunities. I have
recently begun illustrating longer-term setups in my nightly trading service
simply as a way to show subscribers opportunities that exist outside of
HVT land. Frankly, it is not important how
the money is made, just the fact that it can be. I have responded to many
readers e-mails lately stating that the standard patterns used for
HVT are applicable on longer time frames.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| **975** | *1039-44* |
| 868-69 | 1030 |
| 862 | *1019-25* |
| 850-53 | 1006 |
| 845 | 998 |
| **840** | 991 |
| *834-36** | *970-74* |
| 827 | *962* |
| 820-22 | 952 |
| **817** | |
| 809 |
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As always, feel free to send me your comments and
questions.
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