During two video review sessions today price was undervalued by our traders. \u00a0For active day traders price matters. \u00a0One of our talented new traders bought consistently at poor prices and was negative trading RIMM, while almost everyone else on our desk was in the green. \u00a0Let’s talk about price some more.\u00a0<\/p>\n
Wharton Junior was trading GS and added to his position after GS broke above its upward channel. \u00a0The upward channel was 85c. \u00a0The exact price is not important, hence the reason it is not given. \u00a0Wharton Junior bought at 7c. \u00a0One of our experienced traders JToma gave him a hard time. \u00a0And I agree. \u00a0If the upward channel is 85c then the buy is not more than 92c. \u00a0As an active day trader there is a huge difference between your entry of 86c and 7c. \u00a0And when you review your trades you must ask if I buy GS when in breaks the upward channel 1000 times will I make money with a 7c entry. \u00a0And with Wharton Junior’s trade he wouldn’t. \u00a0Hence the JToma scolding.\u00a0<\/p>\n
Another trader Mozart Light was waiting to short CVX below 75c. \u00a0CVX got below 75c and Mozart Light hit the 59c bid to get short. \u00a0Again you must ask whether hitting 59c bid 1000 times will be a profitable technique with his given setup. \u00a0And watching the trade back 59c was not a good enough entry. \u00a065c would have been fine in front of a huge 68c offer. \u00a0 But 59c was not good enough. \u00a0And Mozart Light should have let the trade run without him if he could have gotten short at 65c.<\/p>\n
Wharton Junior risked an extra 21c on his trade. \u00a0Mozart Light risked an extra 6c on his trade. \u00a0If you are going to write 2m shares a month then 27c on two thousand shares is a huge deal. \u00a0And for active day traders you can’t be in these trades at the prices above. \u00a0 Price matters. If I get this stock at this price will I make money over 1000 like trades?\u00a0<\/p>\n
Learning to get stocks at the right price is a skill that good day traders learn. \u00a0And it’s a very important skill. \u00a0Do the math. If you learn to save 1c on average for every trade, and you write 2m shares in a month, how much extra will you make? That’s an extra 20k in your pocket.<\/p>\n
\u00a0Best of luck with your trading. \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"