Swing Traders Seminar

Swing Traders Seminar

5 Reasons to Step Away From a Trade

Volatile markets can send your positions into the negative. Indeed, bad trades frequently happen to good traders. Regardless if you are a scalper or momentum trader, the most important part to any strategy is knowing when to intelligently and rationally walk away from a trade.

1. No Support or Resistance in Sight

Technical analysis is the backbone of day trading. Day traders use technical analysis to find support and resistance levels to determine where the price will go next. Most day trading strategies are built on support and resistance, with some heed paid to news events over the course of the day. When holding a position deep in the red, or if you are contemplating taking a position, look at the chart for support and resistance lines. In an area with no support, it is likely that the stock could go in any direction.

2. Momentum is Against You

With a quick breakout out of an uptrend, you suddenly find that the market is moving against you. Upward gaps symbolize that the position has legs and will keep running. Momentum strategies usually send day traders and swing traders alike to place heavy bets in their momentum calls. Once a trend is established, traders from all around the world jump on and push the market further – meaning your trade runs further from your profitability. When the market gaps away from you, get out of the trade.

3. Low Reward

Trading success is dependent on producing returns and minimizing risk. When support and resistance levels are both within sight, it is generally not a good idea to make the trade. The marginal benefit from a support bump is not worth the risk of a trend breakdown. Create your own risk and money management criteria to determine when the time is right to make a trade.

4. Topping Out

Tops are difficult to call until they are over. Understanding candle sticks and candlestick chart patterns can make calling a top a much easier task. In a market top with significant support, the price could drop dramatically or go into a sideways trend. A sideways trend is a dangerous market because the ups and downs eventually breakdown to send the price in one direction, giving you a 50/50 probability of profitability.

5. Late in the Day

Late day breakouts can be profitable, but holding a position overnight can ruin your trading capital by market open. Swing traders might be able to weather the market open, but highly leveraged day traders should avoid late-in-the-day positions. Most trading strategies avoid late-in-the-day trades to cut interest costs and limit exposure to volatile market opens. In day trading, it is always best to start your trading day anew, limiting your risk to any overnight or pre-opening bell surprises.

The most successful traders know how to read strong trades, but equally as important, they also know exactly when to cut their losses or lock in their gains. Developing your trading acumen means trading your exit strategies and analysis.

About the Author

About the Author:
Leroy Rushing is an active, professional day trader; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide.

Anyone know any professional stock or options traders that have no college training on their craft?

I am looking for a professional or semi-pro (part time) options or swing trader that is not college educated on the subject. I am looking for someone that is self taught through books, seminars (training courses) and /or trial and error. My questions are:
1. What % of your capital do you make on average per month or year?
2. How much capital do you have?
3. Are you primarily an options spreader, swing trader, or both?
4. How consistent are the returns month to month.
5. How long did it take to learn to be a consistent winner?
6. Did you have a mentor?
7. In your opinion is it possible to do it by yourself or do you need a mentor?
I am not college educated, and I am interested in this field without college education. Thanks anyone for help. Any books or mentoring programs recommended on application (not theory) would help.

I am a full time stock trader and I am not aware of ANY good traders that learned their craft in college. You ask the right questions but to answer them would require a book. You are welcome to join our stock picking group at:

http://finance.groups.yahoo.com/group/TradingZoom/

We encourage these types of questions in AH.

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