guy yawning

How to trade in the current market environment

As you’ve probably heard or seen, the market has super low volatility with not much going on. This is a bad thing for the traders, as we are constantly looking for action to profit off of.

My Etoro strategy is still getting me a few plays per week, but the overall market situation is really boring. It makes me want to yawn like the guy above. Daily.

Volatility index

Above I’ve added a graph of the volatility index VIX. This shows how the volatilty has dried up like an african river during drough season. Yes, there are some spikes here and there but that is basically all you are getting. No big buying or selling.

Whenever there is some sort of overall sentiment prevalent in the market, there tends to be a lot more action. In today’s market however the overall sentiment is that noone seems to know what is happening. Everyone is sort of waiting something to happen and does nothing meanwhile.

This leads to this calm water situation.

My action plan given the existing market conditions

The best thing to do is to work like a sniper. You now need to aim for only the perfect set-ups and expect that there will be less volatility and momentum with strategies that depend on them. Take your profits sooner if momentum is your choice of set up.

So to sum up, trade like a sniper and only put your money into plays that are the most like a “sure thing”. Otherwise the market may play a trick on you.

This is what I’ve been doing and it has been working great so far. Your overall earnings may not suffer from this, despite trading less. Now you are able to really focus on the few plays that exist and try to play them perfectly.

day trading strategy

Day Trading 101 – My Trading Strategy

My trading strategy

In this article I’m going to go write about one of my main strategies that I use to try to take money from the trading gods. And that is trading against the crowd. This aint the typical day trading 101 stuff, but heck, read on I think it will help you out in your trading career. Or you could copy my strategy.

I get the data, what everyone else is doing from Etoro social trading platform (read this Etoro review for more info if interested). The site shows what majority of the users are long or short and since they have millions of users, I can see a good picture of what the average investor is thinking in regards to the investment object.

Logic behind this style comes from the fact that most traders lose money in the markets, which would mean that if you trade against everyone else, then you should be able to make money.

Also I am an opponent by nature, I like to argue against everything. When some of my friends talk about something, I always try to find a way how to prove them wrong, I’ve always done it and this is just how I am. This is also why the strategy suits my personality.

My idea is to try the strategy with 100 trades and make statistics from my results. If I see that the strategy is working, I will continue on, if not. I will see if I can prove my trading somehow and try to do another 100 trades.

I will be posting pictures of the ideas into my “trades” page. Also I will be providing data on how I’m doing overall every once in a while.

The main style I use is day trading, meaning that I will close most of my positions during the day. I do not want to leave trades hanging over night, as the uncertainty is big. I also closely monitor the Etoro platform to find if the common opinion has changed or not. If it has, I try to exit the position, because the original reason for the trade is no longer there.

In terms of choosing the positions to take, I try to look for stocks, currencies and commodities where at least 70 per cent of people are making their trades one way. I also keep track of the statistics as said earlier, in a way that I write down what was the initial common opinion (how big % was for one side) and after every 10 trades I check how my trades went.

Also I adjust my strategy as I go. This is not set in stone, because I am not profitable yet and the strategy was made up by myself.

If interested, you can read about this strategy more from Investopedia.

Please leave a comment if you have any questions or write to me directly –  antoine@avignon-alfa.org

Why I want to become good at trading?

I have come to realise, that quite often you start out with a goal that you initially get really excited about, but eventually the motivation dries out.

There have been so many ventures that I have started without ever getting anywhere. Most things I start, end up dead. Main reason being that I am lazy, yes, but there is something else.

I’ve come to realise after reading a number of  books on the subject and from actually thinking about it, that all ventures die out because the WHY is not big enough. It’s just that I dont want it bad enough. Me wanting to be lazy and do nothing is a bigger wish than actually doing the thing I want done and this is a big issue. I think it is for many of you too.

How to fight this nasty thing? I know how – you need to want to reach the goal badly enough that taking action is not that painful anymore and you will have more motivation and continued motivation, not just a short term spike.

With trading, I have realised that my drive comes from me being really passionate about it and wanting to quit my day job. I know, I know – so does every other sucker that is lured into this world and ends up with a thinner wallet and a strong feeling of regret.

However from some reason I do not care, I know that the downside is me being back to square 1, which is where I am at right now. I dont want to be here. I currently have to work 10 hours per day, make only enough to support my family and have 1 trip per year.

I dont think that this is all that life has to offer, so I am going to really put effort into doing all I can to get out of this rat race. If I fail, I will land back on my feet and be in the very same position. So downside is capped (losing 5K€ – nothing too much), but upside is getting to live on my own terms, work from where I want and take a day or week off whenever I feel like it.

So that’s my why. What is yours?

Remember, you need to find it in order to really have the motivation to follow through with all the hardship.

Have a good day!

Antoine

stock market trading fees

The Devil is in the Details

We have all heard the famous saying that the devil is in the details. That is deffinately true in case of trading and investing.

Where exactly? The answer is in the trading fees.

Most of you probably do not turn much attention to this, but I have come to notice that the costs are huge and that is especially the case with small accounts such as mine.

I’ve battlered with this in both trading and investing. When I first did statistics of how much I win or lose per trade, I discovered that I win 35% of the time, but my wins were usually bigger than my losses.

Overall I was bleeding cash, but I found out that one of the biggest reasons for my failure was the trading costs. I was paying 6.95 per trade and on an average day I did 5 round trip trades on average. That amounted to 35$ per day. My account was 2000$ so it means that I lost almost 2% per day on trading costs alone.

That is some sick statistics if you think about it. I would have to make 2% per day just to remain flat and 2% per day is 500% per year. I would take that result every day of the week. And the only way to actually make money was to make more than that.

All you need is a working brrain to realise that this is insane.

In a later post I will try to explain how to avoid all this. But for now, I highly recommend you to audit your trading costs too. You need to know the mathematics behind it and realise if you have any chance of success to begin with. Otherwise your better off in a casino as I was with my 2000 account and 6.95 trade cost.