Trading Quotes

To have a method or a trading plan truly hardwired into your head takes many, many impressions or, ideally, many months or even years of demo or live trading. Gaining that experience takes discipline. [2010] - Jay Norris

There are three general categories of trading styles. Position, or end-of-day, trend trading tends to have the most favorable risk-reward ratio and also takes up the smallest amount of time per day. For swing trading you don't need to be sitting in front of a computer screen but you need to be able to enter orders from a portable electronic device. Day trading takes a high degree of concentration and requires the trader to be sitting in front of the computer; this type of trader has a higher winning percentage but a less favorable risk-reward ratio.  [2010] - Jay Norris

One of the drawbacks of end-of-day trading is that when you get into sideways or countertrending markets, you probably are going to take losses more frequently. [2010] - Jay Norris

One of the hardest things to do in trading is to allow a profit to run, particularly after a trader has had several losers in a row. Being a position trader often means going through periods in which you have more losers than winners. When you do get a winner and learn to let the trades run, you will find that on average your winners are much larger than your losers. [2010] - Jay Norris

We recommend always starting out with just one contract per position trade and keeping your stop far enough away from price. Your stop generally should be placed just beyond the last swing high or low on the chart. [2010] - Jay Norris

Swing trading involves shorter time frames than the daily charts; this generally means trading from the 240-, 60-, and 15-minute charts. The time you could be in a swing trade can range from hours to days, and the trade can be a trend trade or a countertrend trade. Swing traders in general are less concerned with long-term trends. They also rely on trailing stops and OCO (order cancels order) orders and other automated features on current trading platforms. [2010] - Jay Norris

Short-term, or day, trading means that the trader generally does not hold positions overnight and trades a lower time frame chart such as a 15-minute or a 5-minute chart or a chart with an even lower time frame. We recommend using the 15-minute chart for timing and patterns, the 60-minute chart for direction and confirmation, and 5-minute or 3-minute charts to help time entries and exits. [2010] - Jay Norris

In day trading, you always should exit your position 5 to 10 minutes ahead of major scheduled economic releases. After an important news release we do not enter trades until the candles on the charts with the shortest time frame stop showing dojis and start showing wider candle bodies. [2010] - Jay Norris

In our trading accounts we always look to risk no more than 2 percent per trade or 6 percent per day of our risk capital. [2010] - Jay Norris

Find markets in which the short-term trends on the daily and weekly charts are pointing in the same direction. Markets you need to be cautious about are those in which the trends on the weekly and daily charts are moving in the same direction but price is at or near historical low or highs (support or resistance) and in which there is double divergence or more on the daily chart as measured by the MACD. [2010] - Jay Norris

When we view our charts, we always want the proper amount of time visible to use in making our decisions. The preferred amount of time is as follow: Monthly chart = 7 years; Weekly chart = 2.5 years; Daily chart = 8 months; 240-minute chart = 1.5 months; 60-minute chart = 10 days; 15-minute chart = 28 hours; 5-minute chart = 8 hours. [2010] - Jay Norris

If a doji emerges during a rally, it increases the chances of a turn. [2009] - James Chen

Trends and patterns are usually much more reliable on longer-term charts like daily and higher. [2009] - James Chen

Knowing the trend at any given time is absolutely essential to analyzing charts effectively. A potential method that can be used for dealing with trends and timeframes is to concentrate on the trend indicated by a timeframe 4–6 times longer than the one traded. Although there are certainly a substantial number of successful counter trend technical traders, there are arguably more successful traders that are of the trend-following persuasion. [2009] - James Chen

Ideally, an uptrend is characterized by progressively higher lows and higher highs in price. An ideal downtrend, conversely, is characterized by progressively lower highs and lower lows. A low is considered a point of reversal between a downmove and an up move. A high is considered a point of reversal between an upmove and a downmove. Much more frequently, traders and analysts find on their charts uptrends that are only required to hit higher lows, and downtrends that are only required to hit lower highs. [2009] - James Chen

Systems using three different moving averages usually produce signals when the shortest period moving average crosses both longer moving averages, or when the shortest moving average crosses the middle one and then the middle one subsequently crosses the longest. Although crossover signals can often be exceptionally profitable, those traders that use them must be prepared for frequent losses resulting from common whipsaw action. The whipsaw is simply an unavoidable fact of trading with moving averages. [2009] - James Chen

The idea behind moving average trading methods, therefore, centers on the goal of gaining large profits during trending periods when crossovers are few and far between—-while at the same time withstanding the inevitable small losses during sideways whipsaw periods when crossovers are abundant. The greatest challenge with this type of trading lies in the ability of the trader to let the winning trades run while immediately closing losing trades. Only in this way can a trader using moving averages profit enough during trends to offset the many losses incurred during horizontal price activity. [2009] - James Chen

ADX is an important indicator that can help a trader determine whether to use trend-trading techniques or range-trading techniques. [2009] - James Chen

Many traders use MACD as their sole confirming oscillator. Some traders also take trading signals exclusively from MACD. [2009] - James Chen

RSI is a classic oscillator that excels at giving overbought and oversold signals in ranging markets. Its usefulness, like most other oscillators, tends to diminish considerably during trending markets.  [2009] - James Chen