TRADE SMART - How to get started and use this site to Trade Smart

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-- Yes, I know there’s a lot of text on this page but -- the steps are really pretty easy to understand and if you’ve watched the Introduction Video, you already have the gist of it all. On this page I just go further into detail about my stock picking service and elaborate on questions you may have. None-the-less, it should be fun reading. So...  


...Congratulations! You’ve made the smart decision to become a Member of JayTradingLive.com. If you haven’t already watched the Introduction Video, then you should do that now. It will make the rest of these steps a lot easier to follow. That’s obviously STEP 1.


STEP 2:  Before the Stock Market opens, log onto jaytradinglive.com and check out the DOW DAILY and 60 MINUTE Chart Perspectives to get a feel for the market sentiment as a whole. This is our daily overview of the stock market and our directional trading decisions will be somewhat influenced by this compass. 


STEP 3:  Go to the MEMBER PAGE. There you will enter your User Name and Password. Abracadabra you now have access to the magic money-making potential of the Watch Box and Hit List. Not to mention, the Live Chat Room, Daily Market Notes and exclusive technical charting videos. If your morning schedule doesn’t allow for time to log onto my website, not to worry. In theory, you don’t need to visit it at all during the trading day because you will receive real-time email alerts whenever a stock from the Watch Box makes the Hit List. That’s kind of flying blind, but you’ve already learned from your 2 week free trial and my past track record that the stock picks I bring to the table are pretty darn sound.

If you do have time to park it on my site, then I definitely encourage it. You can read the Daily Market Notes to get a better feel for the market, see what stocks we will be following throughout the trading day and have fun interacting with other members in the live chat room. I kind of think of it as if we’re all on a big fishing trip and this is the boat were hanging out on, encouraging each other, and slapping each other on the back when we reel in a big one. Heck, you can even smoke a cigar if you like.


Pull up the charts of the stocks in the Watch Box with whatever charting service you use. Get a feel for the stocks we are watching on any given trading day. Again, you don’t have to do this, but it certainly doesn’t hurt. Look at their trendlines. Look at their MACD. Look at their stochastics. Look for channels or other stock patterns. Look at the 20, 50 and 200 EMA. Look for recent gaps, points of support and points of resistance. Look for well know candle patterns. try to put your mind in the head of other traders and visualize what they may be seeing. Essentially, get a feel for the stocks you may be trading that day.  


STEP 4:  BAM! A stock from the Watch Box hits its technical indicators and pops up on the Hit List. It’s posted in the Live Chat Room. An email alert pops up in your browser - You’ve Got Mail!


STEP 5:  Your heart starts beating faster. You may want to stand up and do some jumping-jacks. Throw yourself down and do some push-ups. But get yourself pumped up jack because this is a Smart Trade you could enter -- at or near the price point listed, at or near the time it is posted. But don’t wear yourself out. Save yourself some juice because there will more-than-likely be more trades popping up as the trading day carries onward. Some days there will be so many trades that Warren Buffett’s bankroll couldn’t cover them all. Some days there will only be a few. And on rare occasions there may not be any. None-the-less, trading smart does not mean being involved in every trade that makes it to the Hit List. Any stock that makes it to the Hit List is a stock I would personally be comfortable with trading, but I will not take them all. It would practically be financially impossible to take them all. Not to mention, that is too may trades to focus on when real money is at stake.


For more information on how I trade (I typically have 3-5 trades going at any given time) refer to the Day Trading 101 section. I would encourage you to only trade and take risks that are comfortable to your financial situation. Basically, there will be trades available almost every trading day so it’s not like you’re missing anything by not trading everything. Make sense. Good, let’s sail onwards.


STEP 6:  You use your own brokerage service to place your trades. I use Optionshouse.com because of their low commissions. You may or may not get the exact entry price of a stock that is posted to the Hit List. That is fine. As long as you get an entry price relatively close to that posted price and relatively close to the time it was posted to the Hit List, then you’re doing fine. You need to use your own judgement about that. I want to say this as clearly as I can -- Not every trade that posts to the Hit List is going to work. This system is not a silver bullet. I do not claim 100% success to my trading techniques. But I do trade for a living. This is my job and a job is only worth doing if it can allow you to sustain a living doing it. I can. I do. And I am sharing that with you. Trading can be quite profitable - but understand from the get-go, you can and will lose money in trades. It absolutely sucks when that happens, so I try not to let it happen very often. That is also why you never go all in on any single trade.


Don’t make trading a life or death situation to your financial self. You will not be able to think clearly when you are stressed to the max over a trade. You will not make smart trading decisions. I also want to say this as clearly as I can -- You are not going to get rich quick trading -- I don’t care what any other trading services tell you. I don’t care about the gains they promise, the percent returns, the mansions, sports cars, yachts and whatever else they claim. They are not being realistic with you -- and if you try the get rich quick methods you will more than likely, get broke -- quick. I like to make small to medium consistent gains on my trades with a few big gains mixed in for good measure. When I started trading I had a goal of making $100.00 a week. That was an extra $400 a month in my pocket. That may not sound like a lot of dough, but it built confidence and it added up in my trading account. I wasn’t greedy, I was realistic. And I am still here trading while others I have known who had more “excited expectations” have given it up altogether and have their money sitting in mutual funds because they ended up losing their money and their desire to trade that [insert expletive] market anymore.


We are trading for the long-haul here. We are trading with the goal of earning a living from the market. We are trading for financial independence. We are trading for our families, our retirement, to quit our job, or whatever other reason. Your trading goal should be to constantly and consistently make money trading. That’s it. That’s the plan. And when you do that for a few years, you will find yourself getting rich. It won’t happen over night, but it can happen. That’s all I’m saying.


STEP 7:  Hot dog! You’re in a trade. Now what? That depends. If it’s a trade on the 60 Minute Chart you can expect the trade to last anywhere from one hour up to a couple days. If it’s a trade on the Daily Chart you can expect it to last anywhere from one day up to a couple weeks. However closely you monitor your trades is up to you -- but please don’t stress yourself out by staring at your screen tic-by-tic watching candles paint. Very rarely does a trade move completely in a straight line in the direction you want it to go.


In general, I do monitor every trade that makes the Hit List and may from time-to-time make comments on some of them in the Chat Room. I will also post an exit for each trade when I see that an exit is warranted. You can find this in the Hit List Trade Exits box located on the Chat Room page. You will not receive an email alert for exits. When to exit a trade is completely up to you.


Why won’t you tell us when to exit? Why won’t you give us a target price to expect when we enter a trade? Why won’t you give us a stop loss if the trade turns against us? I will, and here’s your answers.


WHEN TO EXIT


Get out of a trade when you are happy with the gain but don’t be too greedy. That’s it. It’s that simple.


PRICE TARGETS


Stock bought for $20 - $30 -- Look to exit when you have a .75 cents - $2.00 per share gain

Stock bought for $30 - $35 -- Look to exit when you have a .75 cents - $2.50 per share gain

Stock bought for $40 - $45 -- Look to exit when you have a $1.00 - $4.00 per share gain

Stock bought for $45 - $50 -- Look to exit when you have a $1.00 - $5.00 per share gain

Stock bought for $50 - $60 -- Look to exit when you have a $1.00 - $5.00 per share gain

Stock bought for $60 - Up  -- Look to exit when you have a $1.00 - $5.00 per share gain


Obviously, $5.00 is not necessarily the cut-off. The market will sometimes give you a lot more than that, but for general guidelines, $5 is a pretty good move. And the .75 cents or $1 is not necessarily the starting point to take a profit. Sometimes the market will not even give you that much.


STOP LOSS


Exit a trade when you can’t stomach any further loss but don’t be too fearful. Typically, if I find myself at a loss of $1.00 - $3.00, I get out of the trade. I take small losses because my entries are based on near support and when that support is broken, my money can be better put to work in a different trade... because I know there is always another trade coming. So, don’t be afraid to take a loss. That is part of the whole fear and greed game. Yes it sucks, but sometimes you have to take it.   


-- Let me elaborate just a little further on these 3 questions:


If you’re new to trading I would recommend exiting when you’re up a buck, or fifty cents or seventy-five cents. That’s your target. You’re not experienced enough yet to understand indicators that will signal an exit so just be happy with a profit on your trades until you become more experienced. You will learn a lot and gain experience at a much faster rate just by being a member here -- watching the videos and participating in the Chat Room. Remember, there’s always another trade to get into so you don’t have to milk every last penny out of any single trade.


If you’re an intermediate trader and have some understanding of charting indicators, then you have a little bit more wiggle room but the basic answer is the same -- get out when you are happy with your gain. I just can’t stress that sentiment enough. Take a profit! There is nothing worse than having a profit and then watching the market take it all back from you. Take profits. Also, don’t sit in a trade if the stock is not moving. If it has barely moved after a few days, dump it and put your money into a new trade. There will always be trades available, so there is no sense sitting in a trade that isn’t moving.

       

If you’re a veteran trader, the same advice still applies. Get out when you are happy with your profit. You have the most wiggle room to let your trades dance, because you have probably developed your own exit criteria. You realize stocks don’t move in a straight line. You understand trailing stops. You have eliminated a lot of fear and greed from your trading. That’s great. That’s what everyone here should be working towards. You have hopefully created your own rules for exiting a trade and the best thing you can do is stick with them -- as long as they are working for you. If not, you will learn some new things here that will surely help.


All-in-all, if you are consistently making a profit from your trades, you’re doing great. The entries to trades that you will find in the Hit List are going to give you a big leg up in making that happen.


STEP 9:  Keep a record of your trades. Keep it in a notebook or on a spread sheet, or wherever you like, but keep a record. Date in: Time: Entry Price: Date out: Time: Exit Price: Profit or loss total. Total your weekly profits. Set a realistic goal for the next week. Total your monthly profits. Set a realistic monthly goal for the next month. This helps you understand where you are in your trading and how well you’re doing. Leave a little extra space and jot down what you learned from each trade.


STEP 10:  Wake up and do it again tomorrow. Have fun doing it and be proud of what you’re doing.