Brendan Egan is a full-time swing trader. Here we talk with Brendan about the three main stocks he trades and the three main patterns he watches for opportunities.
Brendan Egan interview
Thursday, April 1, 2010
Wednesday, March 24, 2010
Floyd Upperman and Commitment of Traders: An Interview
I recently interviewed Floyd Upperman about how he trades and uses the Commitment of Traders as a strategy to find good market opportunities.
Tim Bourquin: Now, there's always been a really avid, passionate group of individual traders that trade the cocoas and sugars and things like that. But it's never caught on like the Emini has or other things that at-home traders are typically trading. Why do think that is?
Floyd Upperman: You know, it's interesting. There are you know niches in there. There are people that just love certain markets. Like I really love soybeans and I know a lot about soybeans and studied them for a long time. But why is that? You know, they're not as liquid for one thing as like the NASDAQ or the S&P 500 where you have a lot of liquidity and it's real easy to get in and out. There is just not as much trading that takes place. But you know this is kind of the chicken or the egg, which comes first. Why isn't there a lot of trading there? You know maybe it's because people don't know a lot about coffee as far as - like say coffee for example, you know how does that market work. And people are a lot of times afraid of commodities because of the risks involved. But when they do get into commodities, a lot of times they get into grains because those are the more popular ones like the corn and the wheat. But you know like I mentioned the cocoa and the sugar and coffee, why don't more people trade those? You know I don't know. All I can say is they are thinly traded, more thinly than some of the other ones. So that might be one reason why people shy away from them because they're not as liquid. But you know I can't say for sure why we don't have more day traders in cocoa or coffee. They make nice moves. But for day trading though, I would say they're probably not the best markets again because of the liquidity. You know, you can't get in and out as easily as you could like in the S&P 500. Where if you're day trading that one, you know, you can get in and out with hardly any slippage at all. Whereas in the cocoa and the coffee and the sugar, because of the fact that they're not real liquid they're going have slippage getting in and out and that can make it real difficult to day trade.
Listen to the interview or read the transcripts in full here.
Tim Bourquin: Now, there's always been a really avid, passionate group of individual traders that trade the cocoas and sugars and things like that. But it's never caught on like the Emini has or other things that at-home traders are typically trading. Why do think that is?
Floyd Upperman: You know, it's interesting. There are you know niches in there. There are people that just love certain markets. Like I really love soybeans and I know a lot about soybeans and studied them for a long time. But why is that? You know, they're not as liquid for one thing as like the NASDAQ or the S&P 500 where you have a lot of liquidity and it's real easy to get in and out. There is just not as much trading that takes place. But you know this is kind of the chicken or the egg, which comes first. Why isn't there a lot of trading there? You know maybe it's because people don't know a lot about coffee as far as - like say coffee for example, you know how does that market work. And people are a lot of times afraid of commodities because of the risks involved. But when they do get into commodities, a lot of times they get into grains because those are the more popular ones like the corn and the wheat. But you know like I mentioned the cocoa and the sugar and coffee, why don't more people trade those? You know I don't know. All I can say is they are thinly traded, more thinly than some of the other ones. So that might be one reason why people shy away from them because they're not as liquid. But you know I can't say for sure why we don't have more day traders in cocoa or coffee. They make nice moves. But for day trading though, I would say they're probably not the best markets again because of the liquidity. You know, you can't get in and out as easily as you could like in the S&P 500. Where if you're day trading that one, you know, you can get in and out with hardly any slippage at all. Whereas in the cocoa and the coffee and the sugar, because of the fact that they're not real liquid they're going have slippage getting in and out and that can make it real difficult to day trade.
Listen to the interview or read the transcripts in full here.
Monday, March 22, 2010
Interview with Norman Hallett
I recently did an interview with Norman Hallett of The Disciplined Trader.
Norman has a website at The Disciplined Trader where he educates traders on the psychology of success trading methods.
Norman has a website at The Disciplined Trader where he educates traders on the psychology of success trading methods.
Thursday, January 7, 2010
What time does the Super Bowl start?
I found a site that makes it easy to see what time the game starts:
Super bowl start time
I'll be watching the big game with family and friends on February 7! Hope it warms up in Miami.
Super bowl start time
I'll be watching the big game with family and friends on February 7! Hope it warms up in Miami.
Thursday, August 27, 2009
20 Trading Rules Every Trader Should Follow
The cop in me loves rules. One of the first things I remember
seeing when I walked into my assigned police station the day after
I graduated from the academy was a flier on a bulletin board near
the door. It was titled, "10 Mistakes that Have Killed Experienced
Police Officers." I still have a copy taped to the inside of my
locker and read those rules while putting on my uniform twice a month
as a Reserve
Rules give us order and something solid we can grab on to when
confusion reigns.
I've seen a lot of lists of trading rules, but the ones below come
about as close as I've ever seen to being a complete set.
Follow these and you'll avoid 99% of the problems that blow-up
traders' accounts. Print this email out and post it next to your
computer.
Refer back to them anytime you hesitate or don't know what to make
of the markets. I guarantee one of these rules will apply to any
trading situation in which you find yourself.
And forward this email to your trader buddies - they will thank
you for it down the road.
I found these originally on Olivier Tischendorf's blog and he
mentions that most of them came from Dennis Gartman.
1. Never, under any circumstance add to a losing position....ever!
Nothing more need be said; to do otherwise will eventually and
absolutely lead to ruin!
2. Trade like a mercenary guerrilla. We must fight on the winning
side and be willing to change sides readily when one side has
gained the upper hand.
3. Capital comes in two varieties: Mental and that which is in your
pocket or account. Of the two types of capital, the mental is the
more important and expensive of the two. Holding to losing
positions costs measurable sums of actual capital, but it costs
immeasurable sums of mental capital.
4. The objective is not to buy low and sell high, but to buy high
and to sell higher. We can never know what price is "low." Nor can
we know what price is "high." Always remember that sugar once fell
from $1.25/lb to 2 cents/lb and seemed "cheap" many times along the
way.
5. In bull markets we can only be long or neutral, and in bear
markets we can only be short or neutral. That may seem
self-evident; it is not, and it is a lesson learned too late by far
too many.
6. "Markets can remain illogical longer than you or I can remain
solvent," according to our good friend, Dr. A. Gary Shilling.
Illogic often reigns and markets are enormously inefficient despite
what the academics believe.
7. Sell markets that show the greatest weakness, and buy those that
show the greatest strength. Metaphorically, when bearish, throw
your rocks into the wettest paper sack, for they break most
readily. In bull markets, we need to ride upon the strongest
winds... they shall carry us higher than shall lesser ones.
8. Try to trade the first day of a gap, for gaps usually indicate
violent new action. We have come to respect "gaps" in our nearly
thirty years of watching markets; when they happen (especially in
stocks) they are usually very important.
9. Trading runs in cycles: some good; most bad. Trade large and
aggressively when trading well; trade small and modestly when
trading poorly. In "good times," even errors are profitable; in
"bad times" even the most well researched trades go awry. This is
the nature of trading; accept it.
10. To trade successfully, think like a fundamentalist; trade like
a technician. It is imperative that we understand the fundamentals
driving a trade, but also that we understand the market’s
technicals. When we do, then, and only then, can we or should we,
trade.
11. Respect "outside reversals" after extended bull or bear runs.
Reversal days on the charts signal the final exhaustion of the
bullish or bearish forces that drove the market previously. Respect
them, and respect even more "weekly" and "monthly," reversals.
12. Keep your technical systems simple. Complicated systems breed
confusion; simplicity breeds elegance.
13. Respect and embrace the very normal 50-62% retracements that
take prices back to major trends. If a trade is missed, wait
patiently for the market to retrace. Far more often than not,
retracements happen... just as we are about to give up hope that
they shall not.
14. An understanding of mass psychology is often more important
than an understanding of economics. Markets are driven by human
beings making human errors and also making super-human insights.
15. Establish initial positions on strength in bull markets and on
weakness in bear markets. The first "addition" should also be added
on strength as the market shows the trend to be working.
Henceforth, subsequent additions are to be added on retracements.
16. Bear markets are more violent than are bull markets and so also
are their retracements.
17. Be patient with winning trades; be enormously impatient with
losing trades. Remember it is quite possible to make large sums
trading/investing if we are "right" only 30% of the time, as long
as our losses are small and our profits are large.
18. The market is the sum total of the wisdom ... and the
ignorance...of all of those who deal in it; and we dare not argue
with the market’s wisdom. If we learn nothing more than this we’ve
learned much indeed.
19. Do more of that which is working and less of that which is not:
If a market is strong, buy more; if a market is weak, sell more.
New highs are to be bought; new lows sold. Not the other way around!
20. The hard trade is the right trade: If it is easy to sell,
don’t; and if it is easy to buy, don’t. Do the trade that is hard
to do and that which the crowd finds objectionable. Peter
Steidlmayer taught us this twenty five years ago and it holds truer
now than then.
All the best,
Tim
---
Tim Bourquin
http://www.TraderInterviews.com
1-949-348-2590 ext. 15
P.S. I just made one of our most popular interviews a freebie.
It's with an S&P trader named Don Miller. It's an older one done
before we started doing weekly shows, but a goodie. Check it out:
http://www.traderinterviews.com/out/DonMiller
---
seeing when I walked into my assigned police station the day after
I graduated from the academy was a flier on a bulletin board near
the door. It was titled, "10 Mistakes that Have Killed Experienced
Police Officers." I still have a copy taped to the inside of my
locker and read those rules while putting on my uniform twice a month
as a Reserve
Rules give us order and something solid we can grab on to when
confusion reigns.
I've seen a lot of lists of trading rules, but the ones below come
about as close as I've ever seen to being a complete set.
Follow these and you'll avoid 99% of the problems that blow-up
traders' accounts. Print this email out and post it next to your
computer.
Refer back to them anytime you hesitate or don't know what to make
of the markets. I guarantee one of these rules will apply to any
trading situation in which you find yourself.
And forward this email to your trader buddies - they will thank
you for it down the road.
I found these originally on Olivier Tischendorf's blog and he
mentions that most of them came from Dennis Gartman.
1. Never, under any circumstance add to a losing position....ever!
Nothing more need be said; to do otherwise will eventually and
absolutely lead to ruin!
2. Trade like a mercenary guerrilla. We must fight on the winning
side and be willing to change sides readily when one side has
gained the upper hand.
3. Capital comes in two varieties: Mental and that which is in your
pocket or account. Of the two types of capital, the mental is the
more important and expensive of the two. Holding to losing
positions costs measurable sums of actual capital, but it costs
immeasurable sums of mental capital.
4. The objective is not to buy low and sell high, but to buy high
and to sell higher. We can never know what price is "low." Nor can
we know what price is "high." Always remember that sugar once fell
from $1.25/lb to 2 cents/lb and seemed "cheap" many times along the
way.
5. In bull markets we can only be long or neutral, and in bear
markets we can only be short or neutral. That may seem
self-evident; it is not, and it is a lesson learned too late by far
too many.
6. "Markets can remain illogical longer than you or I can remain
solvent," according to our good friend, Dr. A. Gary Shilling.
Illogic often reigns and markets are enormously inefficient despite
what the academics believe.
7. Sell markets that show the greatest weakness, and buy those that
show the greatest strength. Metaphorically, when bearish, throw
your rocks into the wettest paper sack, for they break most
readily. In bull markets, we need to ride upon the strongest
winds... they shall carry us higher than shall lesser ones.
8. Try to trade the first day of a gap, for gaps usually indicate
violent new action. We have come to respect "gaps" in our nearly
thirty years of watching markets; when they happen (especially in
stocks) they are usually very important.
9. Trading runs in cycles: some good; most bad. Trade large and
aggressively when trading well; trade small and modestly when
trading poorly. In "good times," even errors are profitable; in
"bad times" even the most well researched trades go awry. This is
the nature of trading; accept it.
10. To trade successfully, think like a fundamentalist; trade like
a technician. It is imperative that we understand the fundamentals
driving a trade, but also that we understand the market’s
technicals. When we do, then, and only then, can we or should we,
trade.
11. Respect "outside reversals" after extended bull or bear runs.
Reversal days on the charts signal the final exhaustion of the
bullish or bearish forces that drove the market previously. Respect
them, and respect even more "weekly" and "monthly," reversals.
12. Keep your technical systems simple. Complicated systems breed
confusion; simplicity breeds elegance.
13. Respect and embrace the very normal 50-62% retracements that
take prices back to major trends. If a trade is missed, wait
patiently for the market to retrace. Far more often than not,
retracements happen... just as we are about to give up hope that
they shall not.
14. An understanding of mass psychology is often more important
than an understanding of economics. Markets are driven by human
beings making human errors and also making super-human insights.
15. Establish initial positions on strength in bull markets and on
weakness in bear markets. The first "addition" should also be added
on strength as the market shows the trend to be working.
Henceforth, subsequent additions are to be added on retracements.
16. Bear markets are more violent than are bull markets and so also
are their retracements.
17. Be patient with winning trades; be enormously impatient with
losing trades. Remember it is quite possible to make large sums
trading/investing if we are "right" only 30% of the time, as long
as our losses are small and our profits are large.
18. The market is the sum total of the wisdom ... and the
ignorance...of all of those who deal in it; and we dare not argue
with the market’s wisdom. If we learn nothing more than this we’ve
learned much indeed.
19. Do more of that which is working and less of that which is not:
If a market is strong, buy more; if a market is weak, sell more.
New highs are to be bought; new lows sold. Not the other way around!
20. The hard trade is the right trade: If it is easy to sell,
don’t; and if it is easy to buy, don’t. Do the trade that is hard
to do and that which the crowd finds objectionable. Peter
Steidlmayer taught us this twenty five years ago and it holds truer
now than then.
All the best,
Tim
---
Tim Bourquin
http://www.TraderInterviews.com
1-949-348-2590 ext. 15
P.S. I just made one of our most popular interviews a freebie.
It's with an S&P trader named Don Miller. It's an older one done
before we started doing weekly shows, but a goodie. Check it out:
http://www.traderinterviews.com/out/DonMiller
---
Tuesday, August 25, 2009
Top 3 Things Traders Do To Sabotage Their Trading
Some of you may know that my wife is a Marriage and Family Therapist (and no, I don't win many arguments at home - thanks for asking).
She knows me well, though, I have to admit that.
My wife: "Tim, you have certain "issues" that you really need to work on."
Me: "Yes, Dear, I'm aware."
My wife: "And I bet they affect your trading, so you might want to get a handle on them."
In cases like these where she knows I need my "emotional medicine" but I refuse to take it because I loathe the psycho babble, she "re-phrases" it to apply to something she knows is important to me.
Well, now I'm going to do the same thing for you...
I just finished reading an e-Book by a guy named Jeffrey Kennedy. One of the things he discusses is "emotional pitfalls." Now before you gag on your donut because you've heard that a million times, stay with me.
He also takes some of the best lessons he's learned over the years
and puts it into actionable steps anyone can use to improve their trading.
If you're guilty of doing these 3 things (and we all have been at one time or another), you've left money on the table (or in the market, in this case).
By the way, download your own copy at the link below for the low price of $0 (you do create a profile for their free "club" but it takes just a few seconds):
14 Actionable Lessons in Trading
Let's just call these "Certain issues we all have that sabotage our results." However you phrase them, they hold us back from making more money so let's get right to it.
1. "Swinging For the Fences Every Time" Syndrome
from 14 Actionable Lessons in Trading:
To be a consistently successful trader, the most important trait to learn is emotional discipline. I discovered this the hard way trading full-time a few years ago. I remember one day in particular. My analysis told me the NASDAQ was going to start a sizable third wave rally between 10:00-10:30 the next day... and it did. When I reviewed my trade log later, I saw that several of my positions were profitable, yet I exited each of them at a loss. My analysis was perfect. It was like having tomorrow's newspaper today. Unfortunately, I wanted to hit a home run, so I ignored singles and doubles.
I now call this emotional pitfall the "Lottery Syndrome." People buy lottery tickets to win a jackpot, not five or ten dollars. It is easy to pass up a small profit in hopes of scoring a larger one. Problem is, home runs are rare. My goal now is to hit a single or double, so I don't let my profits slip away.
2. The "Shawshank Redemption" Syndrome
(What, you haven't seen that movie yet? Stop trading immediately and go to NetFlix and rent it - now.)
Hope is a very dangerous thing in trading. Shawshank Redemption = hope is good. Trading = hope is very very bad.
from 14 Actionable Lessons in Trading:
Have you ever held on to a losing position because you "felt" that the market was going to come back in your favor? This is the "Inability to Admit Failure." No one likes being wrong and for traders, being wrong usually costs money. What I find interesting is that many of us would rather lose money than admit failure. I know now that being wrong is much less expensive than being hopeful.
3. The "I'm the Only Trader in the World Who Isn't Killing it Today" Syndrome
(This syndrome is most commonly caught by traders watching StockTwits too much while people "tweet" about how much $ they just made on this stock or that option)
from 14 Actionable Lessons in Trading:
Another emotional pitfall that was especially tough to overcome is what I call the "Fear of Missing the Party." This one is responsible for more losing trades than any other. Besides overtrading, this pitfall also causes you to get in too early. How many of us have gone short after a five-wave rally just to watch
wave five extend? The solution is to use a time filter, which is a fancy way of saying wait a few bars before you start to dance. If a trade is worth taking, waiting for prices to confirm your analysis will not affect your profit that much. Anyway, I would much rather miss an opportunity then suffer a loss, because there will always be another opportunity.
This emotional pitfall has yet another symptom that tons of people fall victim to chasing one seemingly hot market after another. For instance, metals have been moving the past few years so everyone wants to buy Gold and Silver. Of course, when everyone is talking about it is usually the worst time to get into a market. To avoid buying tops and selling bottoms, I have found that it's best to look for a potential trade where (and when) no one else is paying attention.
Amen, brother. So there you have it. I'm still guilty of these things from time to time - every trader is.
Go get your free copy now and take your medicine!
All the best,
Tim
---
Tim Bourquin
TraderInterviews.com
1-949-348-2590 ext. 15
P.S. I didn't even get to talk about all the great Elliott Wave
stuff in his e-Book too. Go get it now:
http://www.traderinterviews.com/out/pitfalls
---
She knows me well, though, I have to admit that.
My wife: "Tim, you have certain "issues" that you really need to work on."
Me: "Yes, Dear, I'm aware."
My wife: "And I bet they affect your trading, so you might want to get a handle on them."
In cases like these where she knows I need my "emotional medicine" but I refuse to take it because I loathe the psycho babble, she "re-phrases" it to apply to something she knows is important to me.
Well, now I'm going to do the same thing for you...
I just finished reading an e-Book by a guy named Jeffrey Kennedy. One of the things he discusses is "emotional pitfalls." Now before you gag on your donut because you've heard that a million times, stay with me.
He also takes some of the best lessons he's learned over the years
and puts it into actionable steps anyone can use to improve their trading.
If you're guilty of doing these 3 things (and we all have been at one time or another), you've left money on the table (or in the market, in this case).
By the way, download your own copy at the link below for the low price of $0 (you do create a profile for their free "club" but it takes just a few seconds):
14 Actionable Lessons in Trading
Let's just call these "Certain issues we all have that sabotage our results." However you phrase them, they hold us back from making more money so let's get right to it.
1. "Swinging For the Fences Every Time" Syndrome
from 14 Actionable Lessons in Trading:
To be a consistently successful trader, the most important trait to learn is emotional discipline. I discovered this the hard way trading full-time a few years ago. I remember one day in particular. My analysis told me the NASDAQ was going to start a sizable third wave rally between 10:00-10:30 the next day... and it did. When I reviewed my trade log later, I saw that several of my positions were profitable, yet I exited each of them at a loss. My analysis was perfect. It was like having tomorrow's newspaper today. Unfortunately, I wanted to hit a home run, so I ignored singles and doubles.
I now call this emotional pitfall the "Lottery Syndrome." People buy lottery tickets to win a jackpot, not five or ten dollars. It is easy to pass up a small profit in hopes of scoring a larger one. Problem is, home runs are rare. My goal now is to hit a single or double, so I don't let my profits slip away.
2. The "Shawshank Redemption" Syndrome
(What, you haven't seen that movie yet? Stop trading immediately and go to NetFlix and rent it - now.)
Hope is a very dangerous thing in trading. Shawshank Redemption = hope is good. Trading = hope is very very bad.
from 14 Actionable Lessons in Trading:
Have you ever held on to a losing position because you "felt" that the market was going to come back in your favor? This is the "Inability to Admit Failure." No one likes being wrong and for traders, being wrong usually costs money. What I find interesting is that many of us would rather lose money than admit failure. I know now that being wrong is much less expensive than being hopeful.
3. The "I'm the Only Trader in the World Who Isn't Killing it Today" Syndrome
(This syndrome is most commonly caught by traders watching StockTwits too much while people "tweet" about how much $ they just made on this stock or that option)
from 14 Actionable Lessons in Trading:
Another emotional pitfall that was especially tough to overcome is what I call the "Fear of Missing the Party." This one is responsible for more losing trades than any other. Besides overtrading, this pitfall also causes you to get in too early. How many of us have gone short after a five-wave rally just to watch
wave five extend? The solution is to use a time filter, which is a fancy way of saying wait a few bars before you start to dance. If a trade is worth taking, waiting for prices to confirm your analysis will not affect your profit that much. Anyway, I would much rather miss an opportunity then suffer a loss, because there will always be another opportunity.
This emotional pitfall has yet another symptom that tons of people fall victim to chasing one seemingly hot market after another. For instance, metals have been moving the past few years so everyone wants to buy Gold and Silver. Of course, when everyone is talking about it is usually the worst time to get into a market. To avoid buying tops and selling bottoms, I have found that it's best to look for a potential trade where (and when) no one else is paying attention.
Amen, brother. So there you have it. I'm still guilty of these things from time to time - every trader is.
Go get your free copy now and take your medicine!
All the best,
Tim
---
Tim Bourquin
TraderInterviews.com
1-949-348-2590 ext. 15
P.S. I didn't even get to talk about all the great Elliott Wave
stuff in his e-Book too. Go get it now:
http://www.traderinterviews.com/out/pitfalls
---
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