For sure my favorite chapter so far! While I gained a lot from the “how to trade” and “how to find setups and entries” that were the focus of many of the earlier chapters. I really liked this “hodge podge” of trading related topics.
There is a TON of content in this chapter and all of it useful. See below for the play by play. There are so many topics that I’m not really going to hit them one by one in this recap. Just skim below and you’ll see all the main bullets.
I really think this chapter is useful for any and all traders. I don’t care if you are a newb or some salty old whore of a veteran. Nate goes over everything from a daily routine (which I’ll admit, daily routines of successful people border on a fetish for me), to defining your style and great commentary on the Ego.
Nate wraps up with describing and detailing the basic four times of the day.
- Pre Market
- Trading day
- Mid Day Lull
- After Hours
And goes into detailed discussion on how to trade or even more important NOT trade these time periods.
One of the great parts about this chapter is everything in it is timeless and evergreen. This chapter would be useful for a trader today or ten years from now.
VERY GOOD STUFF, really liked this chapter!
7AM – getting up early?? 🙂
-Looking for early big movers, up and down
8:00 – Look sharp – trade sharp
-Start working on borrows, pre borrow, check inventory etc
-Match up scan/plan to what is happening pre market
-check back into gappers
-again match up market plan
-Condense scan down to a trade plan 3-5 main watches
-Main screen is these 3-5 tickers on main monitor
Eat lunch, step away from monitors
If you traded well and in cash, take a walk – THIS IS HUGE!! Saves crappy trades during lull
4:00 Hit the gym, non negotiable, either early in the morning or after hours
Do a scan/watch then be done for the day.
CLOSE THE LID
Things to be a aware of
Trade tickers not companies
check news FDA etc
avoid on the short side especially, don’t fight/battle
-Market is always right
-Hope is not a strategy
-“Its easier to be patient when wrong than right.”
-So much less work when you trade the plan
-Clean slate every day if possible
– Have a plan but be prepared to adapt to what is happening real time
-Flexibility and an open mind
Define your style
-What is your goal?
-Swinging or day trading?
-Write down your plan.
-If you understand what is going on, you can make money
Building your account
Do not compare to others
Don’t make changes trying to push
Multiple accounts is good, especially for swings vs. daytrades
-Trading account is in cash every day.
-Back burner swing account, add alerts for stops, but don’t stare at it trade the plan
-Don’t turn day trades into swings
Calculating Risk discussion
-Surprising how quickly profits add up.
-Size discussion, take profits scale back and let it ride
Only trade liquid stocks
Good scaling discussion
Cash is a position too – don’t overtrade
-Basically a casino
-Can ruin a good day
-If you do trade after hours, use small size
-Be especially quick taking profits
-More consistent than after hours, less gambling/crapshoot
-Avoid- don’t anticipate
-Wait for the news to come out, then trade your plan
-Same with FDA news, trade it after not before
Mid Day Lull
-Trade your plan, but not out of boredom
-If stuff isn’t working don’t wait out the lull, ditch it and move on.
-Sideways action will burn you almost every time
Importance of stopping out
-If your stop slips you HAVE TO HAVE THE OH SHIT HANDLE
-Loss is $300-500 – have your number
Focus on what you are good at
Always have a plan – set risk
-miss good trades
Sector Sympathy Plays
– What they are.
-Kind of like former runners, need to be in it to know what they are
-Sector rotation, cycles repeat
-LESS IS MORE