Hi Day Traders,

It's Thursday afternoon before Good Friday. Since I
never trade the afternoon before a holiday, (It is
usually thin with a lot of stop running.) I thought
it would be a good time to write this week's Day Trade
Secrets.

In his recent book, "Long-Term Secrets To Short-Term
Trading", Larry Williams made the statement "Dopes
hope; Winners are spinners."

I just love that expression. And it's so true for
day traders. One of the most difficult problems that
we face are the psychological ones. When we enter a
trade, naturally we want it to be a winner. Thus, we
almost instinctively begin to hope. While there is
nothing wrong with that in itself, it can lead to
disaster if we do not keep a tight reign on it. 

All we can do as traders is play the probabilities.
No one knows with certainty what the market is going
to do next. We may know that because the market has
done X, then there is an 80% probability that it will
now do Y. But it will not follow that pattern every
single time. Therefore, you must keep your HOPE in
perspective. When the market makes a move that
nullifies the pattern then you must not continue to
hope, but take your loss or small profit and get out.
And perhaps even go the other way, thus being a
spinner. (A spinner by my definition is one who
reverses his position on a dime when the evidence
dictates it.)

Winners do not continue to hold onto hope when the 
market is clearly telling them they are on the wrong
side. Winners are spinners.

Let me give you an example. On 4-17 at 3:00 EST on a
3 minute chart, the June S&P traded at a high of
1392.00 for the fourth time of that day. It had
traded at that price 10 minutes earlier and also
earlier that morning, but could not penetrate it.
A short was in order with a stop a little above this
level. However, my DC oscillator indicated that on a
longer term basis, I should be looking to get long.
I got a buy signal at 3:12 at 1379.00 and the market
never looked back. But the point I am making is that
once that high of 1392.00 was taken out, if you were
short, it was time to be a spinner, not a hoper.
The market confirmed this by closing at 1413.40.

That's it for this week. Have a great weekend.

P.S. If you want to learn to be a winning day
trader, sign up for my training at 
http://www.choicedaytrades.com/training.htm 

Yours for success,
Ellery Coleman

The trades referred to in this article are trades that were sent to our Choice Day Trades subscribers as they happened. We have no way to verify whether or not all or any of these trades were taken in real time since we did not take them in our account. Therefore they should all be considered hypothetical.

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