Does making $100-200 a day within a two hour time window sound appealing to you? Of course it does, who wouldnâ€™t?
The real question isâ€¦ are you willing to put in the time, effort and money to learn to do this? We might lose a few people with that question.
The final question isâ€¦ do you have $30,000 of risk capital to make this money and are you willing to lose that? Ok, that eliminates most of you, so you can hit the BACK button here. Sorry, but better you know now, than later. Bye.
If so, you probably did the math and figured even at $100 profit a day times 20 trading days is $2000 a month which equates to $24,000 a year in profits which is an 80% return on investment. Thatâ€™s an amazing return. Good thinking. The only problem is if you are just starting out, cut that figure by 80% if you are lucky. Thatâ€™s the time, money and effort part. But that doesnâ€™t mean you wonâ€™t get there, it just means you have to work your way there, slowly. You can hit the BACK button nowâ€¦
If you are still reading, then there is hope, but itâ€™s a long journey. Let us not fool anyone here. Trading is a skill that has to be taught but only to those who truly desire to learn. We call this hunger. The most costly way to gain hunger is to blow out your account and lose a ton of money in the process. We call this the learning curve. You get so deprived of effective trading methods that the process of elimination and contrast draws you to what eventually works and doesnâ€™t work. From here, the trader seeks out to fill in the void in his understanding of the markets and methods (if he lasts that long), unfortunately, he has no more access to capital. That is the tragedy of trading.
For all intents and purposes, we want to trim the learning curve as much as possible. Yes, it is POSSIBLE. Just like the markets, we like to let others test the support and resistance levels and then step in on confirmed breakouts. This way we avoid the risk ourselves. When learning how to trade profitably, you can also avoid the pitfalls by learning from the experience of others.
First, let me start off by saying, making money trading the market is not hard (if you know what you are doing). The hard part is keeping it. These are two separate statements. In order to even relate, you must have already â€˜earnedâ€™ your way in the form of experience and effort with learning the methods. Letâ€™s also get something straight. There are no shortcuts in this game. This isnâ€™t a cheeseball infomercial and there are no twelve part video/dvd series to buy.
How these statements pertain to you as a trader depends on which side of line you are standing. Are you on the inside or the outside? The inside simply means you have already built a solid foundation in regards to knowing and executing the methods effectively. The outside is â€¦ everything else.
Hereâ€™s a quick test to see where you stand:
Answer yes or no:
1) Can you identify a pup and mini pup pattern?
2) Can you identify a prime setup and perfect storm?
3) Can you identify the four parts of trend?
4) Can you explain a channel widening and tightening?
5) Can you spot a consolidation?
6) Can you identify a â€˜tradeableâ€™ market environment as opposed to a flat and choppy â€˜untradeableâ€™ market environment?
7) Can you walk away from the computer screens at any given moment?
8) Can you take a stop loss and reenter the same trade minutes later and explain why?
9) Can you determine when your premises are fading and keep stops?
10) Can you enter a trade long and reverse it short based on premise changes?
11) Do you believe a stock can be uptrending and downtrending at the same time?
12) Can you accept losses on a trading day?
13) Do you have to make money every trading day?
If you answered YES to all the above and NO to the last question, then you are already at the stage where you should be making $100-200 a day, so good trading!
If you didnâ€™t get all the answers right, then keep reading.
The first part is being able to make the money. In order to do that, you need to learn an effective trading method or system. This can take years to develop or you can learn a system someone else spent years to develop (namely me). I make my methods public so anyone who truly desires to learn it can. Naturally, being able to learn it and apply it can be separate things all together. The connecting of the two can be resolved by spending time in our interactive trading chatroom. We offer a free 10 day trial. Full membership allows the trader access to over 3,000 pages of materials and interactive privileges.
Changing your oil is not hard, if you know what you are doing. You can either figure it out yourself through trial and error or pay to have a mechanic teach you. With that thinking, the goal of UndergroundTrader.com is to put our experience to your use so that you can fend for yourself in the markets. Learning trading should be a dynamic real time experience just like the markets. This is what we do every day. Here is a sample log of a day in the trading pit http://www.undergroundtrader.com/samplelog.html and a sample trade alert http://www.undergroundtrader.com/graphics/jay/
Apply for a free trial and you will have access to the trial trader training slide slow which has all the answers to the above questions and much more. This will serve as a good starting point to building up your foundation. In addition, you will also be able to view the analysis and alerts in real time so that you can gauge the results for yourself to see if it is actually worth pursuing the effort. Hey if the results are sucking, then why even bother? Seeing is believing and first hand experience is the only true way to form an opinion.
Before this sounds too much like a pitch, let me show you a trade we played on a stock called HOKU on 7/9/2007. If this goes over your head, donâ€™t sweat it. The goal is to be able to eventually understand it.
At 12:19pm est, we alerted our members to consider buying shares of HOKU up to $11.85 based on the multi lane perfect storm setup which comprised of a 8/13 minute dual pup and mini pups along with a daily and 60 minute pup breakout. The 3 minute chart formed a nice consolidation breakout. The beauty of the perfect storm setup was the layered support levels at 12.70. Members were alerted to trim the heavier size shares up to 12.10 coil resistance at 12:24 pm est. At 12:57pm, members were alerts to trim out more shares in the 12.40 x 12.50 levels (stinky 2.50s call option strikes). We finally LOCKED the rest of the profits out in the 12.60 to 12.70s range at 1:20 pm est as it was forming a gap fill of prior daily highs, where we anticipated heavier selling. The trade played out beautifully and our members made money.
Is every trade this good? Hell no. Does my method work all the time? NO. Does it have to work all the time? NO. It only needs to work when we use it under the RIGHT circumstances— thatâ€™s all that matters. The key is to know when the method is most effective and use it ONLY in those situations. This is what the real time trading pit is for. Learn and move on to sustain yourself.
Making the money is not hard, once you learn how to do it. Keeping it is the tough part. This is addressed in the pacing article. Remember, this is a long road, but if you choose to take it, the end game can be lucrative and fun. Good trading.
Hereâ€™s the free trial application:
Jea Yu is a co-founder of Undergroundtrader, an interactive active trader chatroom and training site that has served over 8,000 traders, fund managers and investors worldwide since 1998. His brainchild was voted Forbes Best of the Web for four consecutive years under the active trader category. Mr. Yu has published two best sellers through McGraw Hill “Undergroundtrader Guide to Electronic Trading” ,2001 and “Secrets of the Undergroundtrader”,2003 as well as two popular trading videos titled “Level 2 Warfare” and “Beating the Bear” published through Traders Library. He has been a featured speaker all over the country at various expos and seminars who enjoys a standing-room-only reception in the largest convention halls. Jayâ€™s energetic presentation style, along with his obvious mastery of the materials being covered makes him an audience favorite. He has been quoted in USA Today, WallStreet Journal, and the Financial Times. Mr. Yu is an active contributing writer for TradingMarkets