Wednesday, September 06, 2006

Coaching Call Week 11

Today was the last formal coaching call that covers a chapter of the manual. The chapter title is "Trading Systems: Pulling It All Together." As the chapter title implies, this covers the ideas of daily routines, money management, trading rules, etc...

Rob started out of the manual by asking me the question: "What is the first thing you do each day?" I initially started with "Look through your hotwatch stocks..." but paused and interrupted myself, feeling that I was slightly off. Rob then followed up with "If you were going sailing, what would be the first thing you need to..." I cut him off: "Of course, check the broad market indexes, which I am already in the habit of doing, I just skipped that step and got ahead of myself." These weekly calls are in the AM, and have I mentioned that I'm not really a morning person? ... Chalk the initial answer up to the caffeine not having quite hit the bloodstream yet.

The start of my daily routine is an analysis of the broad market sectors (S&P, DJI, COMPQ) followed by a look at what's in the news and any events that may be coming up that will affect the markets (economic announcements, etc...). Follow this up with a dash of analysts opinions, set the oven for 350 and let your dough rise. Along with the typical sources of news, Rob pointed me to the following free resources, and Both can be useful as they can supply you with another trader's opinion of market conditions.

After knowing pertinent market information and pending news it's time to manage our current open positions. Knowing the general market conditions can help evaluate the viability of each open trade. Some time should also be taken to look at news items affecting a given stock and sector. A look through the intraday charts with a keen eye on volume spikes can help offer some clues as to the strength or weakness of your position. Often times it's as simple as deciding how to adjust our stop-loss.

Finally, it's time to look through watchlists for trades that will likely match the current market setup. If you're expecting the general market sectors are about to go up because a recent round of profit-taking, you can look for bullish positions. Or if you're seeing an imminent round of profit taking or the early signs of a bearish market reversal, you can give a little more weight to your bears watchlist when looking for good setups as a general market pullback may be enough to send one of your bears plummeting.

What began as a bleary-eyed, stumbling, stammering start ended up being a very enjoyable call that really does help pull it all together.

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