Tuesday, September 8, 2015

Virtual Trading: Why I'll Be in Cash This Month

Virtual Trading: Why I'll Be in Cash This Month


It was nice spending the long Labor Day weekend with my family. We had a gathering of four generations with different ethnic backgrounds for a fish fry with Greek salad and some French bread.  That's about as much of a melting pot as you can get in America!

It wasn't just the good times and family that kept me, stress free.  The biggest reason is because I am mostly in cash right now. While we in US were enjoying our festivities, markets were open in Asia on Monday. They start the ball rolling on Sunday night for the rest of the world markets and set the tone for how the rest of the world markets react.

With the market is in correction right now, this isn't a good time to be taking any stock trades or bullish option positions. This is the time to be on the sidelines but also a time when staying sharp on your trading skills is a must. A lot of traders that I talk to have just given up on the market because they have lost substantial portions of their portfolio.  However, right now is when a trader should stay even more disciplined and focus on their Virtual Trading!

Most, if not all, brokers offer the ability to virtual trade so use this option to keep your skills sharp. Virtual Trading allows you to stay in the good habits of trading without putting any money at risk. It also allows you to test out new systems and theories, so use it to your advantage.



Maintaining Good habits


Maintaining good habits like building a watch list, or creating trade plans - is critical in the market environment we are seeing now.  Even if you're not planning to place a trade, the market could turn bullish and we could see a follow through day when we least expect it.
 

Having studied the last several severe (20% or more) market corrections, the same general theme appears. The market is predictable because human behavior is predictable.  Always remember that the market is really just human behavior on display.  Looking at the history, most of the gains in the market are made right about the time when the market has reached the low point of correction.  The ensuing "bounce up" of a true rally provides sustained growth for a few weeks before things start to move sideways.

In my Monday blog posts in August, I identified several stocks on my secondary watch list every week. For access to my primary watch list you can subscribe here

My secondary list is made up of stocks that are ideal candidates for Virtual trading. Not surprisingly, some of these stocks keep appearing every week due to my strict pre-requisites for consideration. 

These stocks show early signs of institutional support which means they could be the leading stocks when the market health improves. My stock list for virtual trades this week is:

$NKE
$V
$SBUX
$FL
$STZ
$GOOGL
$AMZN
$FB
$DHI
$UA



Just a reminder - I'll be hosting a live presentation on my methods on September 26th that you're welcome to attend!  I'll be covering my process for selecting stocks and Ron Appel will walk us through some specific options techniques that can be used on the stocks my system produces.

If you would like to attend in person, we'll be hosting it at the East Lake Woodlands Country club from 9:30 AM to 12:00 PM.  We have limited seating available so sign up here to reserve your spot!

If you would prefer to review the event On-Demand after the fact, we have an option for that too.

Happy Trading!






DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.