Exactly What Is The S&P 500 Market? (Part 1 of 6)

Exactly What Is The S&P 500 Market? (Part 1 of 6)

A Brief Introduction

The Chicago Mercantile Exchange (cme) introduced the S&P 500 futures contract back in spring of 1982. The S&P 500 futures market has now become today's most actively traded equity futures contract. The S&P's futures contract represents roughly 90% of all us stock index futures trading. The S&P 500 is comprised of the largest 500 listed stocks, therefore allowing you to easily and effectively buy or sell an extremely well diversified portfolio of stocks in one stock index futures contract. This allows you to make trading/investing decisions based on your overall outlook of the stock market. Let me quickly give you a couple advantages of trading the S&P 500 stock index futures contract:

You can easily participate in broad market moves, with one trading decision (one chart) - instead of having to choose individual stocks (looking at many charts). Why bother looking at various stocks when you can trade the S&P 500 - one chart - one market.
You can easily protect the value of a portfolio during adverse markets without incurring high transaction fees.
And in October 1997 the Mini S&P 500 (symbol = es) was introduced - which is the same as the S&P 500 (symbol = sp), except it is one fifth the size in terms of point and tick size, discussed shortly.

Key Trading Guidelines & Procedures part 2

Guidelines & Procedures you Must Follow To Successfully Trade The Markets.

-Know What You're Doing Before You Act. Knowledge and practical experience in the markets are the most beneficial teachers. Although without the proper education before trading can literally stop you in your tracks right from the start. That's why you must find someone who has been doing it successfully and model their success - their trading strategies & techniques, etc. - a company like Trading Concepts, Inc. for example. See the paragraph entitled, "Learn From Role Models".

-Don't Put All Your Eggs In One Basket. One of the keys to success in trading is diversification.  If you're a day trader you shouldn't be trading more than a few markets at a time. Master a few markets first, then when you start making money on a consistent basis you can venture into other markets. Start off small and concentrate and focus on a few markets until you master them.

-Always Know Your Place. You can not control the market. It will move regardless of what you want it to do - period. It is inevitable that hope, greed and fear will cloud your vision and cause emotional responses detrimental to your trading, that's why you must master your emotions (see Avoid Your Emotions).

-Never Try To Pick Tops Or Bottoms. This is not easy for anyone to try and do. It's much better to find the trend and enter at logical levels into the trend. Most beginners try to pick highs and lows using what they think are some "magical indicators". Our suggestion to you is to avoid trying to do this. Unless you've got a few years trading experience under your belt, simply leave this alone. You really have to be quick and nimble in attempting to pick highs and lows. Only with the proper training and experience would we ever suggest doing this. Even then it's difficult. So, find the trend (i.e. according to 'Trend Determination' - as taught in this Course) and enter at logical levels - you'll be more successful - we guarantee it.

-Only Trade The best Chart Patterns & Formations. If you're unsure of a trade set-up, chances are the trading pattern isn't crisp and clear enough to risk any money. If you're not sure of a trade, stay out and wait for a better trading opportunity. Do Not Overtrade and wait for the absolute best trade set-ups possible (try no to trade more than 6 markets at one time). In fact, trade as little as possible and only take those trades that are setting up the best - remember, look for only the best Trading Opportunities.

-Be Patient and Discipline In Your Trading Approach. Patience is a virtue, especially when it comes to the trading business. If you are not patient, the markets are sure to get the best of you. Waiting for those special opportunities to make money is what this business is all about. Discipline will help prevent you from shooting from the hip and help you stay with a plan of action (i.e. as taught in the Trading Concepts Lifetime Mentoring Program). Discipline will also help you in becoming consistent in your trading approach, which is very Important in this business. Like in any other business, both Patience and Discipline is a must.

-Act On Your Decisions. Once you've decided what to do - If you hesitate too long, chances are you'll miss a good trade opportunity. The key ingredient in becoming successful is being able to act on what you see. You will never make money by standing on the sidelines. Have a mind of your own and don't rely on anybody else for your trading decisions.

-Avoid Your Emotions when trading. Your emotions can be your greatest enemy. When trading, your emotions must be under control and must be ignored. Do exactly what you're supposed to do without your emotions altering your decisions too much. Sometimes this can be difficult to do, but when you've mastered this you've truly overcome a major hurtle in your pathway to success in trading.

-Develop Winning Attitudes & Behaviors. A good way of doing this is by reading about the worlds greatest traders. This will also help motivate you and show you that great fortunes can be made in this perfect business. I suggest reading "market wizards I & ii, Interviews with Top Traders", by Jack d. Schwager. Besides learning how to trade, you must also spend some time developing yourself - self control, patience, discipline and a positive mental attitude (pma), to name just a few. An Important aspect of successful trading is the trader, not necessarily the trading methodology (though that helps a great deal).

          I truly hope you've enjoyed and learned a lot from this trading lesson. Please remember, there are many more to come in the following weeks, so please be on the lookout for them. And once again, please feel to visit my website: http://www.yourtradingconcepts.com/

Steps To Help You Become A Successful Trader - part I

(1) Learn From Role Models (Mentors). This is probably the most Important step in becoming a successful trader, although very difficult to find. Why reinvent the wheel when you can learn from a successful trader(s) who has been consistently successful for a long time. They've already paved the way by studying, experimenting and by trading successfully in real-time - in short you must learn from successful traders who have made the journey before you. They can tell you what works and what doesn't - in short they can show you the correct and profitable way to trade without you having to make the mistakes (which can translate into a lot of lost money, not to mention time). You must also select the right mentor (role model). A mentor that can make you a better and more successful trader -- and to help you achieve your goals. You'll also be able to learn from their mistakes. In general, you must take advantage of the lessons learned from successful traders who have already done it.

Once again, what you need is a Role Model(s), traders who are easily accessible and can really show you the ins and outs of trading. We know that our Trading Concepts Course will give you exactly what you need to be a successful trader/investor. But Please Remember: Tuition Alone Does Not Guarantee Success...our Course requires a personal commitment to excellence. We do not promote the idea of "wealth without work". Furthermore, we strongly advise you to be highly skeptical of any course, service, or system promising phenomenal results with little effort.

(2) Establish Good Habits. The only way to establish good habits as a successful trader is to be extremely organized. Getting organized will immediately start to put some discipline in your life, and give your day the structure that everybody needs. If you're not organized, you will set yourself up to be unfocused, thus you will ultimately fail. Do your homework, and prepare yourself each and every day. A successful trader must learn everything that they can in order to trade the markets. We can't begin to explain how Important it is to have good habits when it comes to successful trading/investing. Without good habits you are doomed to eventually fail.

(3) Set Realistic Goals: Goals are real Important in trading. If you don't have trading goals how do you expect to become a successful trader? Your trading goals can only be achieved through hard work and making sacrifices. And that goes for any type of goal you set out for yourself, not just trading. Goals are the individual steps that we must take in order to reach our dreams (i.e. to become a full-time professional trader). You must also be willing to consistently push yourself to attain your goals. Get excited about reaching the smaller goals, because a bunch of smaller goals eventually lead into reaching your bigger goals. Just realize that striving for excellence, striving for success is a never-ending process, something that has no end. Never stand still, always continue to try to get better. (1) To be a successful trader you must have a goal. Goal setting starts with a pad of paper, a pen and you, (2) a goal is created in three parts: * first is the mental picture - you must be able to visualize your goal(s) and where your goal(s) will take you * second is when you write down the goal(s) to help add clarity & dimension *third is when you take action towards achieving the goal(s). The best opportunities in life are the ones we create. Goal-setting provides you the opportunity to create a great life. And if becoming a professional full-time trader is your goal, there is absolutely no reason why you can't achieve that goal.

- Goal Setting:

-You must be Decisive             -Stay Focused           -Reward Yourself
-Write Down your Goals         -Plan Thoroughly      -Maintain Personal Integrity
-Involve Others (a Mentor)      -Take Action            -Expect Plan Changes

          I truly hope you've enjoyed and learned a lot from this trading lesson. Please remember, there are many more to come in the following weeks, so please be on the lookout for them. And once again, please feel to visit my website: http://www.yourtradingconcepts.com/

Trend Trading vs. Counter-Trend Trading

Trend Trading vs. Counter-Trend Trading

Many traders, believe it or not, aren't aware of what we're about to discuss here. Most absolute beginner traders try to catch tops and bottoms in the market, not even trying to trade the trends. We, like many other traders first starting attempted to do the same thing. We know this from not only our own personal experiences, but by teaching and talking to tens of thousands of traders that they tend to do the same thing. Many (if not most) traders feel that by trying to catch a market top or bottom is where the real money is. We on the other hand disagree completely. Catching just a little piece of a trend (and sometimes much larger than a little piece) adds up, not to mention easier (higher percentages) to do than trying to catch a top or bottom in the market. So, we thought by including this topic; Trend Trading vs. Counter-Trend Trading would be very helpful to you. We know this will give you more insight into both of these types of trades.

Let us first start out by saying that at least 80% of your trades should be those trading with the trend (as taught in my Lifetime Trading Mentoring Program - 'Trend Determination', etc.). The other remaining 20% or so can constitute counter trend (C.T) trades. We would highly suggest concentrating more (at least in the beginning) on the trend trades as opposed to trying to pick tops and bottoms (C.T trades). By not only teaching, but by speaking with students, especially beginners, we find that most traders simply just try to pick tops and bottoms as opposed to trying to enter the market with the (overall) trend. We'll go as far as to say you probably will not become a successful trader by trying to pick tops and bottoms when you first start off trading. Counter-Trend (C.T) trading takes a lot more experience. Believe us when we say that you'll not only find trading less stressful, but much more rewarding and profitable if you simply stick to trading with a markets (overall) trend. Look to make consistent profits utilizing the profit objectives (PO's) taught in my Personal Mentoring Program -- and of course you'll occasionally catch the bigger move (by utilizing the 'Trailing Stop' methods taught in this Course).

Of the 20% or so of trades that may become counter trend (C.T) trades, 80% of those trades should be buys. Why Buys? Simply put, because we've found that bottoms are much easier to pick than tops. If you think about it, the psychology of most traders are more biased to buying the market as opposed to selling the market as a whole. Traders in general seem to be more optimistic rather than pessimistic on the overall market. We've spoken to thousands of traders that have expressed to us that they feel more comfortable buying the market as opposed to selling it. We know that sounds ridiculous, and we agree, but many (if not most) traders, believe it or not, feel this way. That's one of the reasons why bottoms seem to be easier to pick than tops - traders are more prone to Buy than they are to Sell. Think about it, how many traders do you know that actually sell short? Not many, most traders buy in anticipation of higher prices. When the market gets extremely oversold and drops to levels where the big money comes in to Buy the market (oftentimes at a 5%, 10% & 15% overall market corrections), you'll oftentimes see the market move higher (spike up) and continue the markets (stocks) overall uptrend.

When the market is in a downtrend, the market not only drops three times quicker than it rises (making it much more volatile), but bottoms are put in place much quicker. This is evident in any chart you look at. On the other hand, when the market is trending up, the market generally moves much slower and much more gradual in nature. Therefore, trying to find market tops are much more difficult to do, at least that's been our personal experience. So, when attempting to buy on a Retest of a Low (Important), the market is generally in a Downtrend, and when attempting to sell on a Retest of a High (Important), the market is generally in an Uptrend. By knowing these two simple rules will help make Counter-Trend trading much more predictable in nature, rather than trying to buy when the market is in a-fall, or trying to sell when the market is going to the moon. At most, these rules will help prevent you from jumping in front of a freight train. Therefore, I suggest waiting for a retest of A high before looking to go Sell Short. Conversely, wait for a retest of A low before looking to go Long. Remember, Counter-Trend trades should only constitute roughly 20% or so of your trades. As mentioned before, C.T trades are definitely more difficult than trading with the markets overall trend.

A General Rule Of Thumb: When a market is Trending Up, the market tends to be a lot less volatile than when a market is Trending Down. Therefore, generally speaking a Down Trending market is much more volatile than when a market is trending up. A market falls roughly three times quicker than it rises.
          I truly hope you've enjoyed and learned a lot from this trading lesson. Please remember, there are many more to come in the following weeks, so please be on the lookout for them. And once again, please feel to visit my website www.YourTradingConcepts.com to read more about my extensive Lifetime Trading Mentoring Program.

Get all 20 Survival Skills for Traders here

What is Price Action?

Price action is simply the movement of price.

You see, many fundamental traders get wrapped up in the study of the management team, economic conditions, competitors, threats, price-to-earnings ratios and a whole bunch of other financial statement ratios to determine whether or not it's a good investment.

But, if the recent market crash has taught anybody anything ... it's that it doesn't matter how good a company is or how much cash it has ... the only thing that matters is whether or not investors would be willing to purchase the stock.

... and, the same holds true if you're trading the e-mini futures, Forex or options!

Price moves UP or DOWN based on what people are willing to pay for a particular stock, currency or commodity.

If investors aren't willing to pay the asking price ... the price will go lower until they find a buyer.

If investors aren't willing to sell their shares, lots or contracts at a lower price ... the price will go up.

It's the basic law of supply and demand.

And, as one of my friends always says: "There are reasons and results, the only thing that matters is the results."

... and, where fundamentals may try to come up with the reasons, the FACTS ARE IN THE CHARTS!

Master the charts and master your financial future.

Get all 20 Survival Skills for Traders here

Helpful Hints When Placing Entries & Exits In The Market.

Helpful Hints When Placing Entries & Exits In The Market.

          These numbers, believe it or not, are very Important when placing entries and exits in the market. I suggest using these numbers (whole & half numbers) for all market entries and exits when called for (i.e. when a potential entry or exit from the market is near a round [.00] or half [.50] number). In a nutshell, you never want to place a 'Buy' or 'Sell' order on a half (.50) or whole (.00) number when placing either your initial stop loss (ISL) or profit objective(s). On the other side of the coin, if you enter on breakouts you never want to place your 'Buy Stop' or 'Sell Stop' (entry order) on a whole number or a half number. You'll definitely want to be a tick above a whole number (.25) or below a whole number (.75). If you're near half numbers you either want to be a tick above (.75) or below a half number (.25). These crucial numbers (half [.50] & whole numbers [.00]) can help in entry and exit into the market. Take a look below to see what we mean:

Never buy 00's or 50's (for example: Never buy @ 1460.00 or Buy @ 1460.50)
Rather, buy .25's and .75's (for example: Rather buy @ 1460.25 or Buy @ 1460.75)

Never sell .00's or .50's (for example: Never sell @ 1460.00 or Sell @ $1460.50)
Rather, Sell .75's and .25's (for example: sell @ 1459.75 or Sell @ 1460.25)

Half Dectile Numbers: 1345, 1355, 1365, 1375, 1385, etc.
- Never buy or sell @ these whole (.00) or half (.50) numbers...
Rather buy @ 1345.25, 1355.25, 1365.25, 1375.25, 1385.25, etc.
Rather sell @ 1344.75, 1354.75, 1364.75, 1374.75, 1384.75, etc.

Dectile Numbers: 1210, 1220, 1230, 1240, 1250, etc.
- Never buy or sell @ these numbers...
Rather buy @ 1210.25, 1220.25, 1230.25, 1240.25. 1250.25, etc.
Rather sell @ $1209.75, 1219.75, 1229.75, 1239.75, 1249.75, etc.

Centile Numbers: 1200, 1300, 1400, 1500
- Never buy or sell @ these numbers...
Rather buy @ 1200.25, 1300.25, 1400.25, 1500.25
Rather sell @ 1199.75, 1299.75, 1399.75, 1499.75
Realize that floor traders tend to take prices to these levels (i.e. .00's & .50's) intentionally to stop traders out of the market. Notice how many times the high or low of a day, or any significant high or low that you see on a chart ends up in these half and whole numbers (i.e. 1450 or 1450.50). This is true of most all markets. So, if your entry or exit falls near a half (.50) or whole (.00) number, simply adjust your entry or exit according to what you just learned here.

I hope you've learned a whole lot from these Helpful Hints When Placing Entries & Exits In The Market. And please remember, there are many more useful and valuable trading lessons coming your way in the following weeks, so please be on the lookout for them.

Get all 20 Survival Skills for Traders here

Part 4: 20 Survival Skills For Traders from Todd Mitchell... (Trading Concepts Inc)

Now, let's move on to the last 5 Trader Survival Skills (16 thru 20) every trader must truly know and understand:

(16) Exercise Patience. Do not force trades when there are none.

(17) Exercise Diligence. Do your homework and preparation before each and every trade. Be willing to let time do its work. Hard work is required in this business.

(18) Anticipate, identify and take full advantage of momentum in the market. (for example, the 'Extreme Upside & Downside Running Patterns' as taught in this Course).

(19) Always select realistic entry and exit points and write them down. This goes hand in hand with doing your homework and preparation before each and every trade.

(20) Maintain a list of your current open trades, monitor them closely, and try to limit the amount of open trades you have on at one time. You really need to focus in on one market, and once you master it, then you can move on to trading other markets if you so desire. The E-Mini's have all the qualities in it in order for you to make as much as you want - as long as you master it - and that's what I'll help you do thru my Lifetime Mentoring Program.

          I hope you've enjoyed and learned a lot from these five - not to mention the last 15 Trader Survival Skills that you've received over the last few weeks. And please remember, there is many more useful and valuable trading information coming your way in the following weeks, so please be on the lookout for them.

 Get all 20 Survival Skills for Traders here