My typical morning is easy, low stress, and somewhat predictable. My kind of trading! A typical trading day goes like this: I am up by 5:45 am Pacific Time. I flip on Bloomberg for the first hour of the market open and then it is turned off (exception: FED MEETING, PRESIDENT SPEECHES, Major Events). . . As most know these marjor events are at or around 10AM EST. But some come after lunch 2PM EST. By the time the markets open at 6:30 a.m. I am at my computer. I do no research before the market opens, but I like to look for overnight news that might get the market moving. A moving market in either direction is good for my trading system. On my screen I have a one-minute chart of the current month emini S&P futures contract with plain price bars, no indicators or oscillators. Around 6:40, the first pattern usually appears and I get ready to trade. By 6:45 I am in a trade and by 6:50, or sooner, I am out. Some time after 6:50, a second pattern usually appears and shortly thereafter I am in the second trade. Usually by 7:15 I am out.
Most of the time I end up with a profit, but to be honest, some times I take a loss. I have learned to accept losses as a part of trading (tutition paid in full). From losses I learn the most about my emotions and how they adversely affect my trading. And, because of these losses I am motivated to continually improve my trading. But for the most part I take a profit when it is given most of the time. I'm am an an active trader, so some of you know that you must take'em if you got them!
Options trading with DTIM offers a combination of your best leverage with minimal premium decay, which leads us to our next tip. Be careful which series you purchase. Okay, you've found a stock at a support level and you want to buy some calls or puts options. Which ones do you buy? Do you buy at the money? Out of the money? Deep in the money? For our style of trading, we like to look at 1 to 2 strike prices in the money. For example, if we are looking at puts on KSS (Kohls) and it is at $62.00, we will mostly likely buy the 65 puts. In the above KSS example, let's say that it is September 15. The September option series will expire in a week (the third Friday of every month). Do you buy the September series or go the next month out and buy October? In this instance we would go out the next month and buy October. With short term option trading, you generally want to stick to the near month option series until you get about two weeks from expiration. At this point it is a good idea to start looking out at the next month. If you are wrong on an option that expires in two days, the premium will disappear faster than you can type in your panic sell order.
I know you really want to know how much can be made in a typical day. It varies, depending on the morning action. Quiet days will produce modest results, while big news over night will increase the action and therefore the profit potential.
Successful traders take time off from trading. Before and After (PnL). Take a week off every quarter and regain your objectivity.
