Thanks, Jeff.
As always, we appreciate all your help. Something I just noticed last weekend while analyzing my stock plays (some stocks move better than others.) I hate to even admit this, but I never really looked at how much some of these stocks moved in a year. Needless to say, some stocks that I had large amounts of capital in were small movers. I decided to put more of my money in stocks like POT and MLM and GS, for example, and not in CE or DRYS. Just something I thought I'd mention in case some of you traders out there are looking too short term and not looking at the big picture.

Randall and Michelle

Yeees, what a way to rally.


I love market days like this where you hang on by your fingernails, and then, pop, the market does its thing.

Go do your thing Jeff, the Addicts got er under control today!!!

What a great day, did not even need the barf bag!

WOW,
what a day, even with the AVB black eye still a very nice day....very nice.
S&P all time highs, Nasdaq at 52 wk high, the Dow all time highs.
B.....E....A.........utiful
Ladd

Ok, 1 last attempt - hopefully someone will have some response. With Mastertalk upon all those subscribers again, does anyone have the ability to digitally record an archived Mastertalk. I really would like to hear the first part of Jeff's last Mastertalk about in and out of the money options.

Love how the day ended today.

Gary

Jeff-

Not that you haven't already heard this, but I really dig the new look of the videos. They're easier to read.

Today I was in love with POT, X and OIH. We'll see what tomorrow brings but today it's love.

Well, I'm off... busy day, busy week.

liz
pasadena, ca

Anyone know why PCP is up in after hours? I didn't see any news.

Gary,
You have to subscribe to Master's Talk and then click on the archives. If you don't have it in your package of Investools, it is going to cost ya around $1500 a year to get the subscription.

Hope that answers your question.

Yeah, my account went to kind of hurting to -- well, great.


Randall and Michelle

Got it...they're being added to the S&P 500 as of tomorrow's close.

Jeff what is your take on POT, CROK and DECK?

Anonymous,

You tell me yours, and I will tell you mine...:)

Jeff,
Since you're watching...maybe you can answer the question we were debating in yesterday's post about BG. Do you see an inverse H&S about to pop up or a downtrending channelling stock heading down?

Thanks!

Jeff,

Any case study on the horizon for this week ? I am learning a lot from those case studies.

Thanks for all your price less help.

Kas Sleep Less in Seattle

Kas,

Learning a lot? Or making a lot?

OK I have been sitting back and watching for some time now without making any posts. I have been paper trading for some time now and I have met my goals (10% per month) month to date I am at 23% so far. I have doubled my papertrade account in 3 months. I want to get to a point where this is my job! I hate going to work knowing that I can make more money if I stayed at home. I want to make the leap but I am hesitant to do so. I quess what I am wondering is who has made the leap and how did they go about it. How much should I have in my account before doing so? How much should I be able to average a month percentage wise? I am not married yet and I dont have kids so now is the time for me to do this before I get others depending on me for income. Any advice would be appreciated along with personal stories. How many are traders as single source of income?
Best of Luck to All!
Thanks!!
Springy

Springy,

I am new to posting on the blog as well, but I have been following for 8 months and have the found the site incredibly informative!! Therefore, let me say THANK YOU - JEFF!! This is a great learning tool and I incorporated into my daily routine with great success.

Sounds like you are doing really well in the paper trading. However, before you go making in leaps and quitting your job you need to begin trading hard earned cash - there is nothing like taking a loss with real money - this will truely put your rules into perpective - DO YOU HAVE THE STOMACH TO TRADE? Are you in control of your emotions?

Thanks again to Jeff for making this blog happen and your trading insite. Also many thanks to all who have been using the blog, love the comments!

Trade On
Christine Lumia

Karen,

I see a little inconsistency in calling this a channel, yet no head and shoulders pattern. I'm a little indifferent on this one.

Springy,
Here is my experience. If I were papertrading, I'd probably considering quiting my job already. But paper trading and REAL trading is a world apart. I started a 10K account, saw it go to 12K, 9K and not back to 10K. I'm still fine tuning my exit points. It is extremely important that you time your exit. If you get emotional and don't let a winner run, they your loses can take out your gain.

Here is something you can try: For every $10k you make in papermoney, allow yourself to trade one (1) contract of real money... just to get your feet wet. This is because, things sure get emotional when you see all RED and Minus on the computer screen. Once emotions sets in and you start closing your positions, you're done. Hope that helps.

Phil

Springy (love that name),

I found that there is a big emotional difference between paper trading and using "real" money. I started with the minimum to open a think or swim account ... $3,500.

The “problem" I run into is adhering to the 2% rule. Eric Utley’s rule of position sizing: You shall not risk more than 2% of you account equity on any single trade. This means you can only risk $70 per trade with a $3,500 balance.

I don't mind trading one contract at a time. The difficulty is finding a trade that has a support level close enough to the entry point that you only risk $70 each. I've violated the rule and I've been burned ... a lot.

My wife says that I can learn with a $3500 account just as well with a $20K account. I think it would be easier to find trades with a $20K account. I'll let you know when I get the $20K.

Stick to the 2% rule. You will loose some but your winners will make up for the losses. I would highly recommend reading the book "Trading for a Living" by Alexander Elder. Try to find it at the library since it costs $75 and the best chapters are the first few and the last two.

I have similar goals to some day leave my 9-5 job and do something I really want to do and not because I have to. I figure it will take me a couple of years. Brett recently has made the leap.


Good Luck,

Steve

Traders,
Does volumne on a day like today count as break out volume? Seems like every other stock on the watch list have ~150% volumne.

Buck..

Springy,
Great question. Only you will be able to answer that AFTER you start trading real dollars. I know you have heard this so much you're sick of it, but it is not the same. I wouldn't even worry about trying to figure out when you can quit your job until you've traded for about a year and been successful in all market conditions, Bull, Bear, sideways, choppy.
My husband and I were all optimistic when we finished our training and started trading and had this same question, how much can we make a month. We were trading heavily, then the market plunged last May and we didn't know what caused it or what to do. I think you should start out small and learn, then think about percentages and such. I am not saying this to discourage you, just to get you thinking differently. Don't quit your day job yet.

Happy trading,

Randall and Michelle

Jeff,
Thank you for Pot, X & GS and your mentoring.God bless you
Connie R

Ditto





Randall and Michelle

Springy, I am the 1,000,000th person to say this but I just have to say, please don't make any major decisions until you trade real money. I am convinced emotion is the single biggest factor in trading success. I didn't believe that at first but I am convinced of it now.

If it is indeed a big factor, then it is something you have to practice. You have to practice controlling your emotions, and I don't think you can do that with paper money.

After paper trading to learn the basic mechanics, I moved into real trading but with VERY small positions. I started out risking no more than $100 per trade. I am now up to risking $150 per trade. You have to very gradually increase the risk or you run the risk of getting all of your gains wiped out as soon as you make the big jump up.

It is hard to trade small because, guess what, you can't trade everything. At this point, any underlying that's priced over $110 is generally going to be out of my reach with an option, even with just one contract. I might have the cash to buy it, but I don't care how much the option costs, I care about the risk.

But, I also sometimes just trade the stock if I can't make the option work. You can buy less shares of a stock and risk less and still practice.

Now that I've said all of that, let me say this -- i think you are right that now is the time to jump in since you are not married and don't have kids. So, I'd say, depending on what kind of job you have, maybe you should go for it. Do you have the type of job that you could just go back to if you had to earn some more cash?

I only say this because I would guess that jumping in with both feet would get you there faster and if you can afford to take that plunge, it might be worth it.

For me, with a wife and two small kids I don't have that option right now. My goal for this year is to learn to trade, not to make money, though money is being made currently thanks to this very nice and hugely bullish market.

Springy,

This is not a hard question to answer. At least not from my viewpoint.

First, dont' quit your day job. Then, figure out what you need to earn yearly to replace that day job, and figure on a 10% annual return. That, for me is easy to do. Then, when you have enough money in your account to pay yourself at least 6 months worth of salary "banked" without dipping into your original account balance, you can quit your day job.

I've been trading for two years now, and am just figuring it out. I was told (and did not believe) it takes about two years to learn the market.

Not sure if I belive that, but I can tell you that I originally started with an account of several hundred thousand dollars, and the more you have, the easier it is. It is also easy to get too confident, make some stupid, emotionally driven mistakes, and poof..it's gone. Faster than you can imagine.

So, don't rush trading as a full time endeavor is my adivice, and don't be fooled by paper trades. Prove to yourself that you are without emotion and making money with real money on the table. I am lucky enough to get a second chance, most people don't get that.

Hope this helps.

I found a computer at the airport to use... couldn't find the blogspot for a while. Now I have to go.

Springy it's been said by many but we'll add our nickle's worth here. I got into stock trading through investools and did incredibly well my first year (my IRS was up 80%.) I thought "hey this is easy... I'll do options." So here we are, doing options, still down about 25% from 27/02. But we were originally down almost 50% so we're battling back. It's way, way, way different trading your real, hard-earned cash.

Lots of good books out there will tell you you've got to be able to produce your anual income every 3 months consistantly and have a minimum of $200k in your trading account to even think about full time trading. We're 1/10th of the way there. And climbing fast. It's fun and this blog makes the learning a lot faster.

Thanks Jeff. You're the best

What does anyone think about entering PSA or KIM bearishly for another run down? Too early? I'm tempted. They both look like they're holding resistance to me.