Monday, October 31, 2011

What Kind of Trader Are You?

I don't have a buy or sell stock pick this week. I suggest getting ready to sell-short for the short term. I see the SP500 index making a short-term top here now at 1292.66 with 1074.77 support as my target and below to buy in for a very low-risk high-reward upside bear-market rally after that. Some think that now there's a supposedly a European Union solution for the Greek debt default, that its a bull-market again. I don't think so, but a lot of pressure has been released to keep the markets from continuing crashing hard and fast it seems. Short-term now I'm selling short looking for the break of 1074.77 on the SP500 then cover, and buy long.

What Kind of Trader Are You?

The idea of being a successful trader is exciting. The reality of becoming one is another thing. You need to understand more than the markets -- you need to understand yourself.

EWI's Senior Analyst Jeffrey Kennedy knows what it takes. He has analyzed and traded the markets for over 15 years. Jeffrey has learned what it takes to be successful, and he has the discipline to apply that knowledge. Enjoy this excerpt from his free Club EWI eBook Best of Traders Classroom, in which he answers: What kind of trader am I?

As a trader, it is imperative that you define your approach to the markets. For instance, do you follow the trend or do you like to play breakouts? Are you a commodity trader or an index trader at heart? What's your trading time frame, five minutes or five weeks? Moreover, how do you analyze markets, fundamentally or technically? Do you prefer using a black box type trading system or making your own calls?

My trading style is to trade with the trend. Specifically, I like to buy pullbacks in uptrends and sell bounces in downtrends. My markets are commodities, and my time frame is three to five days. If I catch a trade that has some legs to it, and it lasts a little longer, that's fine with me. Bottom line, though, I'm a take-the-money-and-run kind of guy. This is who I am as a trader.

In addition to the Wave Principle, I include basic chart reading and bar patterns in my analysis. While I do use a few select technical studies in arriving at my decisions, I have always believed that "price" is the ultimate indicator and that everything else is secondary.

Remember, success in trading comes from the consistent application of a proven methodology. If you don't define your methodology, then your trading style could change with each new issue of Stocks and Commodities magazine. Trying a variety of analytical techniques rather than consistently following one is a problem for traders, and it's also a great way to lose your trading account.

Read more of Jeffrey's lessons in his free 45-page eBook: The Best of Trader's Classroom. This valuable eBook, adapted from the $189 set of the same name, offers the 14 most actionable lessons every trader should know.

Click here to download your free eBook now.

Click here for the video Portfolio Profit Results report card on some very successful traders.