I have been saying this for some time on this blog, but people seem to be shocked that we are losing jobs at a faster rate than these moron economists thought.  We are not creating jobs as we have below trend economic growth confirming my suspicions that what we saw over the summer was a US government fueled rally thanks to cash for clunkers.

Anyone that thought this economy was out of the woods should have their heads examined and check their CFA degree at the door.  The pressure of the quarter being over and some bad economic news, and that October has been a scary month for the markets historically are adding gas to what may be a bonfire of a correction in this market.

It will be fun to watch and hopefully this keeps the volatility up for us intraday traders for a while.  Looks like another bubble going pop to me.

I hate the idea of multi tasking.  I do not think people are wired to do more than one or two jobs at a time, for example the driver that is trying to text on his cell phone at 85 mph is bound to get into an accident at some point.

When it comes to trading, it is very important to have a laser like focus on what you are doing and that includes understanding how many stocks you feel comfortable trading at any one time.  Most of my time I trade one stock at a time, but sometimes I find myself in two or three positions at once so I have learned to manage my share size when this occurs and to keep an extra level of focus.

Now that I am doing daily teaching webinars, there is a new level of distraction which took me a while to become skilled at trading and teaching but again, I have learned what the problems are and have overcome them.  Do you work from home?  If so, that probably adds many layers of distractions to your day, so close the door to your home office and concentrate.

I think a good rule of thumb is if you have a position on, you are doing nothing else except evaluating your factors through out the trade.  When there is no position on, you can let your guard down and take care of other things in your life.

Technology is wonderful, but it certainly adds to our stress levels as text's, emails and IM's fire at us all day long.  Remember that texting with your buddy will not add money to your account, so stay focused during the day, there is a lot of time pre- or post-market to handle the more social matters in your life.

If you analyze the mistakes that you make, you might start to realize that they come from a lack of focus, do not be that person bounding down the road with one eye on his blackberry and one eye on the road and disaster looming. 

Today signals the end of the third quarter and like the previous quarter the broad markets have had a big run up and there seems to be no reason for the train to stop just yet.  I am an intraday trader so I am not that concerned with the bigger picture but as a Wall Street veteran for 20 years it may be more about intellectual curiosity.

I would really like to see the end of the quarter signify an end to the light volume that has plagued this market for some time.  I also think a pullback would be very healthy for the long term growth of the major averages.  We have basically created a long pole straight up and that can easily come crashing down, unlike a solid pyramid with a good foundation.

The fee based managers and brokers have had an excellent run in their assets and their paychecks will be larger than the previous quarter, so I see no reason for any sort of window dressing to occur today.  My gut is that we will see another low volume day, not much direction, just riding the wave of the past six months.

I hope you have given this a lot of thought as I have for myself in the last 24 hours and I have come up with some interesting answers.  I believe that what sets me apart from the average trader is

1. I consistently make money;
2. I keep the right attitude; and
3. I do a lot of analysis about my trading.

The one reason most people get into becoming a trader is to earn money and to be able to do this on a consistent basis, day after day and month after month is paramount from a psychological and monetary stand point.  Over the last 12 months, I have calculated that I am positive money an average of 17.2 days a month and I have not had a losing month over that time frame.

Having this type of consistency will help you maintain the right attitude, but everyone goes through stretches where something gets them down and you cannot let this affect you during the trading day.  I keep a very even attitude whether I am up or down on the day, never getting too high or too low.  When I am done trading for the day is when I can give myself praise or berate myself for stupid mistakes.  Students on the webinar will attest to my even attitude throughout the day.

I am constantly analyzing my trading, reading my journals and figuring out how I can get better.  What I spend time analyzing has changed throughout my career.  When I first started trading, I was concerned with almost every trade, length of time in the trade, percentage of winners and losers and how much I made on each winning trade compared to how much I lost on the losing trades.

Now I am more concerned with how I can maximize each trade making sure I have the right amount of shares and working on holding stock until I am sure the trade is about to reverse the trend.  I also have learned about my weaknesses and can avoid them now that I know and understand them.

This is what I feel makes me a very good trader and separates me from the pack of traders out there.  I did not rush to the conclusion on this, I gave it lots of thought and dug down deep.  I look forward to hearing what things make you successful as a trader.

When I interview for candidates to trade for me I ask the question "what separates you as a great trader" and for the most part I get very standard answers such as "I am discipline" or "I have a great strategy".  These are understandable answers but sometimes I feel that this is just what these people think I would like to hear.

I want you to think about what makes you different, what makes you great, what gives you your edge as a trader.  Why would someone want to hire you to trade their money?  Even if you trade your own money, this is a good question to answer as it will give you added confidence in what you are doing everyday.

I would like to hear back from all of you that read this, tell me what makes you a great trader.  Give it some thought and who knows maybe I will ask you to join my team. 

So what makes me a great trader?  Tune in tomorrow for the answer. 

Today we have quadruple witching, which happens on the third Friday of the month that closes out a quarter.  What this typically means is that we see an enormous rush of volume in the first 30 minutes and then the rest of the day gets choppy.  Anyone who knows my trading knows that I don't like Friday afternoons and this one is even worse.

My goal today is get in early, make a few good trades and keep my P&L in good shape and get out.  What is your plan for a day like this?  If you are new to trading I would think about watching and learning how the markets trade on a day like today.  If you are experienced then you will know what to expect and can alter your trading to work within today's market.

Good luck today and if you need help with your trading, be sure to contact me for the best program to fit your needs.

One item I find that is troublesome for my students is knowing when to exit out of a position on both profitable or loss positions.  I strongly believe in the adage that if you use good entry points, the exits will take care of themselves, but I find that many of my students and traders that I know, will often get stopped out just before the big run in a stock.

On our daily webinars we talk often about the difference between a shakeout and a real move.  A shakeout is a move designed to get traders to exit their positions with the appearance that a large move is coming and in the wrong direction, so traders think that they will be super smart here and exit before it hits their stop and save a few dollars and some added pain. 

I do not think that I need to tell you how this ends, but if you are new to trading or the best trader in the world and have never seen this happen, 9 out of 10 times the stock moves back in the desired direction and now you get the added benefit of feeling like an ass on top of losing money.  The next time this happens, the stock moves through your stop, but with your new added knowledge from the previous trade, you decide to let this go feeling that it will come right back like the last time.

Only this time, it was a real move and not a shakeout move.  There are few ways to combat this dilemma:

1. Learn to tell the difference between a shakeout pattern and a real breakout:  Tape reading is extremely helpful in this endeavor as you need to be able to tell if the stock you are trading has broken out of a certain range.  If it has, then it is probably a real move.
2. Use volume to strengthen your conviction:  If the volume is heavy and the stock is moving against you, then again be careful.  If the volume is lower than usual, take your time getting out, maybe exit a portion of your position.
3. Adhere to your stops and you will not second guess yourself:  Once you violate a rule that you have put in place, you open up the possibility for terrible things to happen.  If you set a stop, stick to it and it will save you a lot of pain in the long run.
4. Use as much data for support or resistance that you can:  My methodology is designed to give you more than one indicator, use as much information as the chart will give you.  If the stock breaks the 200 day moving against you, be very careful.

All traders have sold the bottom and bought the top, it is part of this business, but if you make a habit of it, you won't be around long.  Set up your strategies and your plans and be prepared to exit properly.

To learn more, contact me personally for a free 15 minute consultation.

AAPL was heavily in the news yesterday with their product conference going on and with Steve Jobs being there was an exciting event for AAPL enthusiasts as he seems to be recovering well from liver transplant surgery.  CNBC was showing this story every 15 minutes and the stock gyrated wildly peaking just after the story at $174.35, above R4.

The stock then started to come in and eventually penetrated R3 at $173.24, placing it on a sell signal and moving through the 200 day moving average.  My maximum position in the stock was 1,400 shares, so I stepped in with 300 shares to get started as the market was moving higher I was a bit cautious.  Soon after that the stock confirmed to me that the downtrend was good and I added shares up to my maximum number.

AAPL then very rapidly went through S3 and then S4 at $172.30 for a breakout sell signal and the rout was on bottoming out at $169.70 in the span of only an hour and a half.  I was able to scale out on the way down, covering the last 200 shares at $170.04 and taking a good day and turning it into a great day.

I show you this example as a way you can incorporate technical analysis with short term fundamental events.  I don't know if the picutres of Steve Jobs looking very thin sent the stock down, but I do know that the pivots told me it was a sell, the moving averages confirmed it and that CNBC kept showing pictures of him from 2005 and from yesterday side by side and as Jobs has become the face of AAPL over the years, this may have been the catalyst for the sharp move down.

Wall Street can be a nasty place and traders will make money anyway they can and I don't feel bad that I profited from what may have been a sell-off due to his appearance, it is just the way the technicals presented themselves. 

Here at DayTradeWell.com, we wish the best recovery for Steve Jobs and hope to see him presenting fantastic products for years to come

Even though we have not had the official end to the summer labor day weekend yet, I am ready to get back to working hard and I want you to commit to the same.  When volumes are low traders tend to get bored and that could lead to some problems in their trading and discipline.

I would rate myself a B this summer as I traded well, journaled almost everyday, but I did not keep up with my blogging and I am going to commit to doing a better job on that front.  So for todays lesson, I would tell you to find one thing that you did not keep up with during the summer and stay with it, get back into being consistent in the fall.

Once you are doing that everyday, then move onto the next thing until you are back to your full routine.  Let me know your progress.

I guess he never really left, but with today's nomination of Ben Bernanke to head the Federal Reserve confirms that Washington just loves the status quo and has blinders on about the past.  So now we have Geithner heading the U.S. Treasury, the same man who let Lehman go out of business and Bernanke running the Fed who insisted in August of 2007 that there was no housing crisis and that the world was just great. 

The stock market will like this news as it hates uncertainty and with this huge run, President Obama was going to do nothing controversial to ruin that, so now we can create a new bubble that can implode and really make this country weak.  Why don't we just bring Alan Greenspan back and maybe we can figure out a way to get the Fed Funds lower than zero?  Bernanke's Fed has used the same policies that got us into this mess in the first place and if he is late even by a little on reigning in the easy money that has been created, we could see inflation that would rival the 1970's.

Bernanke was late to notice the housing bubble which has cost millions of Americans their jobs and has put this country so deep into debt that we will never get out from under it.  The worst case scenario is that we have a period of stagflation, or inflation without growth, this could be the financial death warrant for this country.

I have been bearish on the economy for some time so I may be talking my own book, but we have to be so careful here at this juncture and any misstep could take us out.  We cannot keep printing money, rates can go no lower and still the economy is sufferiing.  I am not as scholarly as Ben, but I know enough to know that when someone is oblivious to the biggest crisis the economy has ever seen, you don't reward him with an extension.  This is like being shot, and then the same person that shot you, saved your life, so you give them a great big thanks.

Nothing I say will change the nomination and maybe there is nobody better out there for the job and that is a thought that scares the heck out of me.

Congratulations Ben on your re-nomination, now don't screw it up.