Become a Successful Trader

September 5, 2012

A Month Long Hiatus? Not Quite…

So let’s talk about August, or not.

By now, you’re probably saying to yourself “where’s Tim been?” It wasn’t my intention to neglect the blog these past 30 days, so I apologize for my lack of posts. I spent the month of August treading lightly in the markets trading half size, taking Friday’s off, and reviewing my trading plan and money management rules.

I’ve also put together some rules for my breakout strategy that I’ve spoke to a few of you about. I will be sharing those in the weeks ahead.

In years past (most notably the post 2008 era) August has been a really lousy month for trading. For whatever reason, volatility seems to shrink along with technical trade setups. Perhaps it’s due to end of summer vacations and getting the kids ready for school. Following Labor Day and into the fall however, things pick up as the bigger players get back in the swing of things. My post about Market Cycles gives a more detailed look at the various times of year that are best for trading.

They’re Back! Monday Night Webinars

Monday night webinars will begin again on September 10th at 8:00PM EST. Just click the ‘webinars‘ tab at the top for more information. These 60-90 min webinars will consist of everything from market recap, trade analysis, helpful money management techniques, and specific trading strategies. We’ll even take a look at some stocks worth swing trading. The idea here is to give you some practical trading concepts that you can apply the very next day in the markets. The special rate for the trading webinar membership is $27 /mo. and gives you access to the full webinar archive as well.

The Precious Yellow Metal

Gold has been quietly building a base (the GLD) at the $150 level and begun to rise on increasing volume, now sitting just shy of $165. It’s not often I talk about the shiny metal (or things outside the futures markets), but I think it’s worth looking at. My target on Gold is $2200 /oz. (220 on the GLD). Time horizon of 1-1.5 years (so this time next year). Not only do I beleive Gold will be on the rise, but commodities in general as the markets continue to push higher.

Gold Breaking Out of Year Long Wedge Formation

Gold Breaking Out of Year Long Wedge Formation

It’s the Economy Stupid!

The top line figures (S&P, Dow, NASDAQ, and Russell) have been fairly quiet this summer. The slow grind higher has lead to building a tight consolidation up near highs. These are not all-time highs, but in the case of the S&P,  highs since 2008. The NASDAQ is leading the move higher, followed by the Russell, the Dow, and S&P. This progression makes sense when you think about the innovation stemming from the tech industries and small start-ups in the U.S. Companies that have exploded onto the scene turning billion dollar valuations in less time than it takes most companies to get off the ground.

S&P500 Nearing 2008 Highs

S&P500 Nearing 2008 Highs

That famous saying used by the Clinton administration ‘It’s the Economy Stupid which, as we head into the 2012 Election seems to make that much more sense to the voting public. Are we better off than we were 4 years ago? If you ask the stock market the answer is yes and no. There is a large disconnect between the economy and the stock market. For those who just look at the closing price of the S&P500 the answer would be no.

As I stress on the blog, being a trader involves more than just buying and selling. It’s prime objective is to maximize profit, while limiting risk. Making our money work for us, adapting to changing market conditions, identifying opportunities in the markets and taking advantage of them. I encourage you as we head into the final third of 2012 to read through your trading plan (or write one if you haven’t done so) and find ways to eliminate the excess, narrow your focus, and develop clear concise actionable rules you can follow.

More to come, so talk to you soon,


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About Tim Racette
Tim Racette is a day trader of 15+ years in the E-mini futures and swing trader of stocks. Mountain biker, lover of the outdoors, and explorer. Tim is an ASU Sun Devil and a Chicagoland Native now living in sunny Scottsdale, AZ.
  1. hi tim

    glad you’re back with the monday night webinars…..i would like to trade euro early and i was just getting started in creating a plan for that….

    tried to get into last monday 9.10.12 webinar, but couldn’t…don’t know what the challenge was…hope it will be posted soon….thanx, fran

    • Hi Fran, creating a plan is the best place to start. You can begin by taking what you have or writing down your rules for the markets you current trade, and then begin to tweak the entry and stop criteria for the new market. Let me know if you have any questions along the way.

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