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Why You Don’t Need to Care About the Market
After netting $140,000 in three days last week, Sami Abusaad’s trades are on fire. And now he’s letting you in on his actionable swing trade ideas for this week. Sami’s using the Qs and the SPY to inform his forecast for the upcoming week. He expects a sloppy, choppy market this week, lacking much follow through. But, there’s a fantastic way around this: if you play stocks on their own page, you don’t really need to care about the market. Of course you’d like a stellar market environment so you can trade in the same direction. But, in reality, you don’t really need it. With that in mind, Sami gives you some swing trade ideas that he can’t wait to play despite the upcoming messy market. Plus, Sami’s spotted a major pattern forming in one index’s monthly chart. This is where you’ll want to put your attention today. Get these ideas, and plenty more, straight from Sami’s winning playbook.
Continue Reading -->How the 3-Bar Rule Can Help You Deal With Failed Setups
Our Trading the Pristine Method® Home Study Course teaches traders a unique approach to trading candlestick price patterns. What make it unique? It is 100% objective and systematic, and eliminates all guesswork from the buying and selling process. We teach identifiable patterns that stocks trade in, and then show the exact strategies of what to do in each stage of a stock’s movement, including how to enter, manage, and exit the trade. That said, not all trades work. No pattern makes money 100% of the time, and the failures must be watched for 3 reasons: 1) To see and capitalize on a “new opportunity” when a pattern fails but immediately sets up again 2) To know how best to manage a position before it fails by evaluating the charts objectively. 3) To help you in disaster management mode in the event you are in a position that has failed. One Failed Pattern we teach is the Three Bar Rule. Whether that means to exit the trade or enter as new opportunity depends on the overall pattern and market environment). Let’s assume you entered a stock with a perfect “quality” price pattern that suggested an immediate move up with bullish market internals. It could have been a T3 Buy Setup (T3BS), a Climactic Buy Setup (CBS), or a T3 Breakout (T3BO), timed with the futures at the 10 a.m. reversal period. The T3 Three Bar Rule states: If the setup is not doing as suggested within three (3) bars, either exit or reduce the position. That begs an important question, “How does one know when the setup is not doing as suggested?” Note that this must be used only in the time frame being used. Some traders will incorrectly bail on a daily setup because the intraday pattern is not moving. They should be using the daily chart to judge the setup. Here are a few questions to ask in considering whether to close a trade early before the stop is triggered: 1. Did the trade violate every single reason for entry? Did it take out major intraday pivot lows? Is it a healthy consolidation that might actually be an opportunity to add to your position? 2. Assess the situation from the standpoint as if you were not in the trade, based on your training. What would you tell a friend about the technical setup? Is the pattern’s “quality” decreasing? For example, are the intraday charts getting very volatile, with overlapping bars, No Follow Through (NFT) to bullish/bearish bars; Breakout Bar Failures (BBF), shakeouts, etc.? 3. How far has the stock already moved? Is the current stop and reward-risk still adequate? 4. Are multiple time frames in alignment? 5. Are market conditions (broader market, sector analysis, and market internals) favorable for the trade direction? 6. Did the stock move with the sector and market internals, or is it lagging, showing relative weakness? 7. What time of day is it? Is it a low volume doldrums summer day with everything going sideways, or is your position underperforming? 8. Is the position distracting you from other trade opportunities? You must overcome the temptation to act prior to gaining information needed out of fear of missing the trade. Selling out of fear that the market will move against you must be fought. You must have the patience and discipline to logically apply the setup. Always have at least two scenarios when entering trades, no matter how bullish or bearish. This will keep you open to other possibilities. Remember, anything can and will happen at times.
Continue Reading -->Sami Abusaad Interview: Getting to Know a Top Trader
To help you get to know T3 Live’s growing bench of trading talent, we’ve launched a series called “Meet the Traders” so you can get an inside look at how our team operates. Today, we are proud to introduce you to Sami Abusaad, T3 Live’s Director of Education, and creator of our Strategic Swing Trader and Strategic Day Trader programs. 1) How did you first get involved with the markets? In 2005, I had $20,000 saved from an accounting job and I didn’t know what to do with it. I then found out that the second richest man in the world made all of his money from investing. That man was Warren Buffett, and I immediately became fascinated by the markets. I also read about a 21 year old kid from New York who made $1 million in less than a year. That provided a sense of hope to me. I thought “if he can do it, I can do it too!” I opened a brokerage account and funded it with $16,000. In six months, I made about $10,000. In a year, I was at $50,000. I did this by playing swing longs in a bullish market. My brother was as amazed by my results as I was, and he gave me the following words of wisdom: “If you can make that kind of money through “Buy and Hold”, imagine how much you could make trading actively!” He was referring to stocks on the“Highest Gainers/Losers” list for the day. I listened to his advice. I started trading actively every morning. Within a few months, I lost all my profits… and another $15,000. That’s when I realized that I didn’t know quite as much as I thought I did. A few months later, while scouring the Internet for trading resources, I came across Zacks.com, a financial website similar to Yahoo! Finance. Zacks.com was running a one-year trading challenge and the winner of that contest would receive a $100,000 job offer. I participated in that contest, and guess what? No, I didn’t win. But I did receive something better than winning the challenge — I became friends with the winner: he had turned $100,000 into $2 million in less than a year. He told me he had been a full time professional trader for 15 years – and that he learned it all from a small company called Pristine. He encouraged me to read their book Tools and Tactics for the Master Day Trader. Not only did I read it immediately, I registered for all of the free workshops available at the time and then went on to take Trading the Pristine Method (TPM) and Advanced Technical Strategies (ATS), which was known as TPM II. The rest, as they say, is history. (Editor’s Note: T3 Live acquired Pristine in 2014) 2) So what are you doing now? I am an active day and swing trader, averaging seven trades per day. I focus on stocks in my trading, but my trading style can be applied to all markets, including futures, commodities, options, forex, and more I am also an educator for T3 Live and serve as Lead Moderator for the T3 Live Strategic Day Trader room. As much as I enjoy trading, I think teaching is my calling. I run several education programs, including our Earnings Engine course. And in 2017, we launched a new swing trade coaching program called Strategic Swing Trader. 3) Do you use a specific trading methodology? Yes, I trade primarily 3 proprietary strategies in day trading. Gaps: I focus on professional gaps that break long-term trends and ignite new trends. Climactics: Stocks that experience a parabolic price acceleration to the point of exhaustion. 15-Minute Chart Plays: These are afternoon plays that trigger off the rising or declining 20 ma on the 15 min chart. It could be a pullback-type entry or a breakout/breakdown. In Strategic Swing Trader, I primarily focus on catching stocks during their bottoming/topping period, or later while they are transitioning. I use various patterns and advanced tactics to enter into those plays, and I try to catch them early on. Trading earnings is also very important to me. 4) How do you unwind from the ups and downs of trading? I like to take evening walks and play sports, including basketball and soccer. 5) Do you believe in setting stop losses? Yes, absolutely. But often, traders wrongly think of a stop as an exact point on a chart. I use an area, rather than an exact number. 6) Are you concerned about high-frequency and algorithmic trading? Yes I am, because they make the market more efficient. A more efficient market means fewer opportunities. However, smart traders can still find plenty of opportunities to make money each day if they put the work in. 7) What is 1 thing traders can do today to start getting better results? Trade in samples and evaluate each sample dispassionately like a scientist. This way, you can figure out what you’re doing right and what you’re doing wrong. Don’t let emotions or pride get in the way of improving. 8) What would you be doing if you weren’t a trader? I would dedicate more time to the outdoors. But in the meantime, I’m having a lot of fun teaching and trading. P.S. Looking for a more effective and consistent approach to trading? Check out Strategic Swing Trader and Strategic Day Trader.
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