December 27, 2015

F2G Trading Strategy

Please read the disclaimer below, thank you!

F2G Trading Strategy - Are you the House or the Gambler?
The House may lose 45% of the time give or take in Vegas, but they always win in the long run.

Overview:
What to buy (volatile and liquid)
When to buy (partial first entry, full position second entry, or no trade if chart isn't clear)
When to sell (half position at 1R/2R, rest at major support or resistance, washout/spike, or trend reversal)
Notes

What to buy
Can trade ANY volatile and liquid security, commodity, or forex (futures preferred due to tax and commission benefits, forex and ETFs are a good alternative)
Something with a clear chart pattern and trade thesis, if not, avoid like the plague

December 20, 2015

How to Master Trading

Please read the disclaimer below, thank you!

In one of my previous posts, I discussed mastery and how important it is in trading. I'd like to go into more detail about this topic in this post. So what is trading mastery? I believe there are four pillars of trading mastery (think TAPER):

Technical Analysis
Planning
Execution
Review

Now let's go over each pillar in more detail.

Technical Analysis (TA)
-HTF support and resistance (horizontal and diagonal)
-HTF chart pattern (shows me where price is likely to go)
-LTF support and resistance (horizontal and diagonal)
-LTF chart pattern (shows me where high probability entries, stops, and price targets are)
-Update HTF and LTF TA continuously throughout the day

December 19, 2015

Streamlined F2G Trade Checklist

Disclaimer

F2G Trade Checklist (streamlined for maximum memory retention and maximum performance):

TL;DR: Focus on high probability entries at support or resistance, use "I dont care" position size, cut losses at the predetermined stop, take at least partial profits after quick moves or predetermined nearby prices. No excuses allowed, can always get back in if stopped out.

1. HTF & LTF technical analysis (see how below, also remember to continuously update)

2. High probability entry area and thesis (buy at support, sell at resistance)

3. Stop location that proves thesis wrong, respect it or the market will force you to take an even bigger loss

4. High probability price target for at least half of position, bat for singles to take advantage of compounding, take what the market gives you  (use LTF sup/res for these targets). Listen to what Einstein said about compounding: "Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it.”

5. Set position size/dollar risk (emotion and risk management)

Technical analysis steps:

1. Draw support and resistance price levels
2. Draw trendlines and trend channel-lines
3. That's it, rinse and repeat

The #1 Goal that Leads to Trading Success


I just won the trading competition at work by turning $100,000 into $214,000 in only two weeks trading SPY index options (paper money). That's a 114% return! I noticed there was one major thing that separated me from the other traders: I traded instinctively. I had finally mastered how to trade instinctively after more than 8 years of trying to learn to do so. During the trading competition I knew what to do, when to do it, and I fully believed in whatever had to be done. I then executed each trade according to what I had concluded from the price action with almost no effort. Simple and mechanical. That's not to say easy, but it was simple.

What I learned over the years was that, despite what everyone in the trading community tells you, there's really only one major goal in trading, and that everything else is either secondary or a waste of your time. And if you achieved this one goal, you could make it into the top 5-10% of successful traders after climbing out of the losing 90-95% of traders. So what is this #1 goal? The #1 goal is to learn to trade instinctively, and master it. That's the goal. Trading instinctively requires a trading system, with an edge, and your complete mastery of that system. Here's how people describe a trader when she's mastered her trading system and is able to instinctively execute it:

December 8, 2015

The F2G Trading System Checklist

Disclaimer: I'm now a registered representative with Series 7 and 63 qualifications. What I'm about to discuss is NOT ADVICE just what I believe and how I trade. This blog is for information and trading journal purposes only. Continued reading of this and ANY of my posts constitutes your acknowledgement of and adherence to this disclaimer. Thanks for your understanding.

The F2G Trading System Checklist:

1. Frequently update sup/res on all timeframes to better characterize the current price action

2. Plan your trade, trade the plan

3. Form trade thesis (HTF sup/res/chart pattern most important)

4. Set high probability entry based on HTF sup/res/chart pattern, LTF, or when something is wrong with the price action eg. market can't quite reach sup/res (remember HTF sup/res/chart pattern are always more important than LTF)

5. Set stop at the price that proves the trade thesis is wrong (risk management, consider reversing trade)

6. Set high probability profit target based on LTF sup/res/chart pattern for at least half of position to lock in profits, then HTF for the rest of the position. Focus on singles, not home runs, add to winners/re-enter if flat if trade thesis still correct

7. Select the proper position size (money and emotion/psychology/ego management)

8. If confused or if price action isn't clear, don't trade, wait for clarity because no trade is better than a bad trade

Questions? Submit them below in comments sections, or send me a private email and I'll respond when I get the chance. Thanks for stopping by F2G!

Credit: I've complied this trading checklist from my 8+ years of experience, but most of these lessons came from some of the most successful traders on the planet: @Modern_Rock, @_Lakai_, @InvestorsLive, @millerdon, @alphatrends, @mikebellafiore, @kroyrunner89, and @steenbab.

Fundamental Principals of F2G Trading

Disclaimer

Fundamental Principals of F2G Trading

The current market price is the collective vote of all market participants and takes into account all information, and the majority vote wins, which leads to the market direction, which we join like a surfer on a wave

The market is always searching for support (institutional buying) or resistance (institutional selling)

Support and resistance are horizontal (price level) and diagonal (trendline) lines, and drawn from highs to highs and lows to lows (including opens and closes)

The more touches a support or resistance level has, the more important it is, while HTF sup/res is always more important than LTF sup/res

Support and resistance are broken only when price closes strongly beyond them, broken support becomes resistance, broken resistance becomes support

Buy at support, sell at resistance (or when something is wrong, eg. market can't quite reach sup/res)

Focus on singles, not home runs, add to winners/re-enter if flat if trade thesis is still correct

Identify simple chart patterns such as channels/flags, triangles, wedges, and double tops/bottoms, then plan your trade and trade your plan

Cut your losses fast or the market will force you to take an even bigger loss (if you're trapped, chances are that other people are trapped too, so it all comes down to who comes to their senses first)

Questions? Submit them below in comments sections, or send me a private email and I'll respond when I get the chance. Thanks for stopping by F2G!

F2G Price Action Trading Announcement

The time has come.

After almost 9 years of trading and almost 3 years of day trading and thousands of dollars spent on bogus Guru trading courses resulting in nothing but failure, I've finally found my niche and consistent success. Disclaimer: I'm now a registered representative with Series 7 and 63 qualifications. What I'm about to discuss is NOT ADVICE just what I believe and how I trade. This blog is for information and trading journal purposes only. Continued reading of this and ANY of my posts constitutes your acknowledgement of and adherence to this disclaimer. Thanks for your understanding.

Ironically, the deciding factor to me being successful was not paid services. It was completely free information and videos you could find on the web right now. Consequently, I will release my personal F2G trading strategy to my blog readers because I paid nothing to actually learn how to be profitable. Let's get started:

September 20, 2015

Simple Trading System Update

Good afternoon and Sunday everyone. I just wanted to post a quick update to highlight the many refinements I've made to my simple trading system. I've tried my hardest to condense and simplify as much as possible because it's very difficult for me to keep track of all of this stuff while trading. The more I can condense and simplify, the more I can remember and apply in trading every day. Let me know your questions or comments below, thanks!

Trade Process
Journal thoughts and emotions (context, sup/res, MMs, BO follow-through vs reversal pressure)
Trade the Best Setups (trading range reversal, BOPB, spike BO swing, trend PB)
Plan your trade (context, risk, targets, trade management plan)
Trade your plan (become systematic and rule governed intuitively, can always get back in)

August 16, 2015

Trading Abbreviations, Acronyms, and Terms Explained

A user posted a comment in a previous post asking if I could explain the abbreviations and terms that I use in my posts, which I completely understand. And that's the goal of this post, to thoroughly explain the abbreviations, acronyms, and terms that I use on a daily basis. If you think I missed something or if there's a term you'd like me to explain in more detail, please let me know in the comments section below!

Trend
     Consists of higher highs and higher lows (bull trend) or lower highs and lower lows (bear trend).
Trading range
     Consists of sideways price action, big up, big down, failed breakouts, and big confusion.
Channel
     A channel is synonymous with a trend. For example, a bull channel is a bull trend.
Trend bar
     A trend bar either closes above its open (bull trend bar) or below its open (bear trend bar).
Doji bar
     A doji bar opens then closes near its open (one bar trading range).

August 10, 2015

Simplified Trading System

When it comes to a great trading system, just about every successful trader can agree on one characteristic: KISS (keep it simple stupid). Furthermore, a significant body of research in cognitive science highlights the limited capacity of the human brain and how difficult it is to retain even a few pieces of information in working memory (check out Dr. Brett's article for example). Because of these points, I wanted to condense my own detailed trading system down to its most crucial points. If I can succeed in creating a simple trading system that can be intuitively recalled in the heat of trading, I stand to gain immense confidence and decisiveness in the face of rapidly changing price action, horrendous volatility, and seemingly unpredictable markets.

What I learned while trying to condense my trading system into a simpler form is that it ain't easy. It takes a lot of effort! Additionally, simplicity isn't enough on its own. I realized over time that I had to pair simplicity with compartmentalization. What is compartmentalization? Basically I had to create main groups and sub-groups, much like chapters in a book. That made it much easier for my brain to quickly jump to the page/subject I needed answers to like "risk management." Once I mentally jumped to the risk management chapter, I could easily recall the condensed principals for that chapter. Let me show you what I mean by different chapters and simplified principals (check out this page for explanations of abbreviations and terms used below):

First, I condensed my daily routine down to just 6 critical components:

July 8, 2015

How to Trade Anything on the Planet

You've probably noticed the stock market has been going nuts lately. Up down, up down, up down, up down! Additionally, the Chinese stock market is imploding and the EU ECB can't seem to get Greece to agree to any austerity measures in exchange for more bailout money with better terms.

Many traders are complaining on Twitter, trading forums, CNBC, etc., that their trading strategies just aren't working like they used to. The market is just acting too volatile right now and shaking everyone out of their positions and racking up losses. Well I'm here to tell you that you can trade any market in any market condition if you know how to apply the right trading strategy for the current market condition, not the past one.

First off, let's get some market principles straight and then I'll break them down in more detail afterward:

1. Every trader's/investor's #1 priority is to protect the bankroll. Fight FOMO relentlessly by trading ONLY the best chart patterns and doing something else if boredom creeps in. NO trade is far better than a BAD trade!
2. Trading is fractal, only the time frame changes, not how you trade it.
3. Markets/stocks tend to trade like they have been trading (Newton's First Law of Motion).
4. Trading ranges (buy low, sell high, bet breakouts fail), Trends (bet breakouts succeed, buy high, sell higher and vice versa).

Now let me break down each market principle so we can navigate these choppy waters with ease and profits:

July 3, 2015

Trade Recap - FIT

Morning everyone! Let's take a look at my FIT trade on June 25th.

FIT was on my radar because it recently IPO'd and it's been a great momo stock for retail traders and institutions alike. On June 25th at around 2 pm, I pulled up the 1 hour chart and performed technical analysis (TA). My journal notes included "BO (breakout) of recent tight trading range and downtrend line (DTL), long biased but will short failures."


Next I pulled up the 5 min chart and performed TA. FIT had sold of big time in the morning and gave back all gains from the huge gap up (which is not surprising if you look at the previous big gap up two days prior--stocks tend to trade like they have been trading):

June 14, 2015

A Trader's Daily Routine/Process

What's up guys? I talk a lot about the importance of creating a routine for each portion of the trading day, including weekends. In fact, in my Laws of Trading blog post, I arrogantly stated that,

"A structured daily routine (a.k.a. process) is the single greatest predictor of a successful trader. Don't focus only on trading successes & failures or swings in P&L. Focus your energy on setting a clear routine for each portion of the day, as well as weekends, and adapt that routine as you evolve as a trader."

So in this post, I wanted to give you a better idea of what I meant and what my daily and weekly routine looks like. This is just my routine and hopefully it you gives you some ideas to work with in order to craft and refine your own routine to tackle the stock market.

Pre-market 8am-ish
Review today's trading goal.
Check watchlist stocks. Check TOS for stocks gapping up for chart patterns.
Perform TA then look for any of my best trade setups with good signal bars. 
Journal thoughts about chart and trade ideas to improve performance and reduce stress.

June 7, 2015

Stock Market Analysis and Trade Management

What's up everybody? I hope you've enjoyed your weekend. I've had a great weekend so far visiting family and getting to watch the final horse race for the coveted Triple Crown, the Belmont Stakes. Finally we have a Triple Crown winner in over 30+ years! I don't know about you guys but it felt like watching history! Anyway, enough slacking off and back to business.

In today's post I wanted to talk about how I find the best stocks to trade, how I analyze them, and how I trade them, as well as some key insights to remember. The following structured process continually evolves as I grow as a trader. Some of the terminology won't make sense unless you've been trading for a while or have read Al Brook's books on trading price action (I get zero referral fee if you're wondering).

I think it's important to reiterate I'm not a professional trader or a FURU masquerading as one. I'm an aspiring trader continuously learning about and adapting to the market. My process discussed below is the current culmination of lessons learned up to this point in my career as a trader (2+ years as of right now). And as always, I appreciate any feedback or constructive criticism in the comments below!

May 25, 2015

Trade Recap - CMCM

This is my first trade recap in a while so I thought I'd make it special. I'm going to highlight one of my favorite trade setups for the 2pm - 4pm part of the trading day and highlight another one of my favorites in the next trade recap. Without further ado, let's talk about CMCM.

CMCM hit my scan mid-May 2015 because it had gone up from about $16.50 in March to $35 in May, which is a very impressive run.


On May 20th, I pulled up the intraday chart around 2pm and noticed CMCM had been in a trading range all day, which meant the stock was starting to flag. Around 2:30pm, CMCM tested and failed at the high of day (HOD) and then immediately failed its uptrend line with a strong bear breakout bar. I should've shorted after the HOD failure because CMCM was in a trading range, but I just wanted more information. I entered short (smaller red arrow in the next picture) at the close of the strong bear breakout bar under the uptrend line. My risk was to the high of the breakout bar (blue arrow) with a target equal to my risk (1R and indicated by the yellow arrow). My target was hit and I covered as indicated by the green arrow.

May 8, 2015

The Laws of Trading

Disclaimer

Trading is one of the hardest endeavors/professions on the planet. Navy SEAL BUDS selection graduates a higher percentage of trainees than the percentage of successful traders. So if you aspire to become a successful trader and want to smoothen your learning curve now, review these Laws of Trading. Let me know your thoughts in the comments below.

A successful trader needs a growth mindset (my skills can always be improved) instead of a fixed mindset (my skills cannot be improved because of excuse X, Y, and/or Z). Watch this video by Stanford University professor Carol Dweck, Ph.D., on the power of a growth mindset. Or check out this shorter and just as great video by Bite Size Psych about the growth mindset and how it's absolutely vital to success in any endeavor.

Discover your vision of the future. What do you want your ideal future to look, feel and sound like? A clear vision helps identify the right goals to navigate you to your personal idea of success. But first, make sure to do a quick check of your biases of success, in other words, make sure your vision of success is just that, genuinely personal. You don't want to create a vision that society (friends, family, the media, etc.) has pressured you to adopt. This video by Bite Size Psych will help you check your biases and ensure that you select a vision that truly fits you, and not someone else.

Will power is very limited and almost entirely ineffective at helping us achieve long term goals or behavior change. So when you hear people say, "I just need more discipline/motivation/etc.," what they're really saying is that they need more will power. But will power will always fail them. What is effective at helping us become a better trader and getting to super successful land? Setting small and achievable goals (or new habits) to execute each day. That is the answer and holy grail to that question, and research proves it.

About Me

  My name is Jory and I'm an intelligence analyst by day and financial furu by night. I have passed both the series 7 and 63 exams.

  The Furu to Guru blog is my attempt to document my evolving journey as a student of the markets. My posts aren't advice nor recommendations to buy or sell any security. This blog is just what I believe about the markets and how I trade the markets.

  This blog is for informational and my own self-improvement purposes only. Reading of this blog and any of my posts constitutes your acknowledgement of and adherence to this disclaimer. Thanks for understanding.

  What is a Furu? A Furu is a charlatan, a fake person masquerading as a Guru on Twitter or elsewhere. A Guru is a true professional and champion of his or her craft.

  But why did I name my blog Furu to Guru (F2G)? Am I implying that I am a fake Guru masquerading as a professional? Nope, I'm a student of the markets trying to get better every day.

  This blog is intended to document my failures and successes and thoughts because it helps me learn faster. I also hope you learn along with me!

  Follow me on Twitter if you like helpful trading related articles and tips from the pros: @Cambro320

  If you have any questions just leave a comment and I'll reply as soon as I get the chance. Thanks for stopping by F2G!

Jory



Furu to Guru Breaking News!

What's up guys and gals? I know I haven't posted in a long time and I apologize for that. I had to stop trading to focus on personal things. But good news! I've finally found time to get some day trading in, and that means blog updates are coming back and they'll cover topics that aspiring traders will especially appreciate. After doing an analysis of my blog statistics, these are my most visited pages on Furu to Guru:

1. Resources Mega List
2. The Best Traders to Follow on Twitter
3. Why Trading is the Best Therapy
4. My Trading Rules

So based on these results, I'm going to focus my attention on delivering more powerful and useful resources, trading psychology research, and trading rules. Also, to give you guys an idea of how useful my posts are going to be, here is a little taste of what's to come. The following are my Laws of Trading based on extensive research that I've conducted in cognitive science, human behavior and motivation, and in interviews with ultra successful traders: