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  I hear many traders early in their development wrestling with issues of emotional, reactive trading.  Here are three practical steps that can help traders avoid going on "tilt": 1)  Plan Your Losses - Big expectations lead to big frustrations.  Every trade should be accompanied by a very specific idea of what would tell you you're wrong and how much you're willing to lose on the trade.  It's when losses surprise us and become too large that they're likely to create disruptions in our mindset.  Your goal should be to lose well, in the right way.  Focusing only on how much you want/need to make sets up surprise and frustration. 2)  Take Breaks - After large gains and large losses, it's easy for P/L to get in our heads.  Always take a break after a large trade, clear your head, and assess the opportunity set with fresh eyes.  It is just as important to reset after big wins as big losses .  Both can lead to taking trades for the wr...

  The first post in this series and the second post took a look at the NYSE TICK and its relationship to price action as a way of identifying:  a) whether buyers or sellers are dominating the market and b) the degree to which their buying or selling activity is actually able to move the market directionally.  A valuable short-term edge sets up when buyers or sellers cannot move the market meaningfully higher or lower and then become trapped, setting up a move in the opposite direction.   If you click on the chart above, you'll see a different TICK statistic, the NQ TICK, which assesses buying and selling activity (upticks vs. downticks) for the NQ100 stocks.  (Friday, 5/21; chart from Sierra Chart ).  The horizontal yellow line represents the zero level for the NQ TICK and the white line is a short-term moving average of the one-minute TICK values.  At the bottom of the chart, we see the QQQ ETF.  Notice the blue arrows showing areas where ...

  In the first post in this series , we took a look at the NYSE TICK and how it measures the moment to moment sentiment in the overall market.  We also took a look at a pattern with edge, where buying pressure in the market cannot take prices higher.  Eventually, those buyers are forced out of their positions when sellers come in and that takes the market lower.  That pattern played out nicely in yesterday afternoon's market, which we see depicted above.  My cycle work was looking toppy and I tried to enter short positions in the market three times in the morning only to get stopped out with small losses.  Then I saw the TICK pattern play out in the afternoon and left the short position to run, more than making up for the losses, particularly given the overnight action.  One takeaway is that our best trades occur when the longer time frame picture and the shorter term market behavior line up.  It pays to be patient and wait for that alignment. In ...

  So much of intraday trading boils down to pattern recognition.  When you view market activity day after day, year after year, you internalize patterns that recur.  Those can provide a meaningful edge in trading. As long-term TraderFeed readers know, one of my favorite market indicators is the NYSE TICK (shown above; $TICK on most platforms).  The TICK is updated many times per minute and captures the number of stocks in the NYSE universe trading on upticks minus the number trading on downticks at every moment.  So we can think of the TICK as a moment to moment measure of trader sentiment across the market.  It tells us what traders are actually doing in the market, which is an important clue as to the psychology of the marketplace.  Trading psychology is not just about our own psychology; it's about understanding the psychology of those we're competing with.  We can pick up tells in the market just as we can at a poker table.   If you ...

  I want to thank the traders who participated in the first Traders' Virtual Happy Hour session on Sunday evening.  Over time, these efforts will get better and better at connecting traders with others to accelerate development and improve performance.  At the networking event, I presented two unique edges in the stock market and we heard about a unique approach to maximizing trading performance and quality of life.  We also heard about tools for evaluating where large market participants are buying or selling--a huge potential edge in the market.  Most of all, we provided a forum for traders to share what they're up to and connect to one another. I am totally convinced that the most successful traders are those that are best at networking and learning from and with others.  When people share their successes, failures, and ideas, they accelerate their learning and become broader as well as better. The wrong way to network is to focus on what you want to lea...