This Zone and Motivation from and old GW student

I really hate to bore some of the seasoned traders with this, but I am running into a few "snags". Well, let me take that back.... I have run into a few rips and tears!

I am having some issues with the execution of my trades. The daily volatility has gotten excessive-from what I can see. Unfortunately, I am having candles run for a shorter period before turning. I am also not escaping the change in option prices-when my candles start to reverse. This feels like old times, and I do not like it.


What have I learned? First of all, Gary is a darn guru. People can say whatever about this guy, but there are some things he released in his training that is as consistent as I have ever seen. If we choose not to follow, listen, and apply, it is not his fault. I said all of that to say this......I have done some basic backtesting regarding something he said in 2-5. He said stocks go up year after year after year from September til January or something like that. I remember him say, "Year after year after year". Well, I just randomly picked some stock that I either trade or follow. I really just pulled them from the hat. The stocks I pulled were, AAPL (463-521). FB (45-51), NFLX (287-331), V (178-198), MA (633-730), CF,GOOG, and FOSL. I just stopped because I was about to lose my mind! I pulled up a Daily Chart and started simply scrolling back to September on ALL of these stocks. Every, single one has gone up since September- EVERYONE OF THEM! I ran the numbers on a few and put those in () behind the ticker symbol. I am simply blown away! Of course, we all knew this would most likley happen, but to physically go back and see it, makes me a little sick. I assume some of the BC traders got a chunk of some of those positions.

I know a buddy/old man who bought AAPL back in September. He still has those options. He spent $150,000 on call options in September and bought out til January. He has other positions, but AAPL is by far his largest position. He told me yesterday that he might sell just before Thanksgiving and re-buy during the middle of December. He is one of Gary's students who has traded under his concepts for 8 years.

Just sharing some things that he stated to me. He is an older man who is pretty wise. He has constantly warned me to not deviate too far from what I have been taught in WSB. He does not think my style of trading will stand through the test of time. He thinks it is short lived and will nickel and dime a trader out of his basket. He trades EXACTLY as Gary taught! I mean he took all that Gary offered, including all the Advanced stuff. He will never deviate from Q-Charts. Yes, he pays over $200 a month for them. He has briefing. He has read all the books- Yes, ALL OF THEM. He follows the three-legged approached to perfection. He trades from the trading leg, He has a W/O account that he dumps money from his TL in every month. He earns a minimum of 5% a month on W/O. He also has a vault that he manages. This guy works at woodyard, but noone knows that he is a millionaire. He wears old New Balance shoes (would not be caught in those "Catheads", and very old, quality clothes that last forever. Last thing about him is, he will not entertain RTT. I told him about it, but he thinks Gary's students would not be interested in the noise from others. He feels he trades well without any assistance or noise from anyone else.

When I get frustrated, I call or go to his house and talk for hours. Lately, he has made it clear that he does not want to hear about an "E" or any of that non-sense. He says trading should not be stressful. We should always trade with confidence. Do not enter a trade, unless you are willing to laydown in front of it. If not, do not trade it. He loves to "Harvest the Money" by buying 5 to 6 months out, trading smaller position (20K a trade) off the 55, 233, Daily, earn his 5%+ off his W/O, and he manages his vault. He said he makes more money putting those those 4 elements together than he ever would have dreamed. I asked him if he is a millionaire- because I am nosey and wanted to see if he would say, "That is not any of your business". He said, " Let me put it this way, my wife and I will never have to work again. My kids and their kids should never have to hurt for money. Find out which book was on Gary's Book list that explains what a decamillionaire is". I shocked him. I said, I have read the books on the minds and practices of millionaires. I said, Damn dude, you working with that kind of change-10+ million?". He laughed and said, "Rookie, you are too stubborn to do it the right way. You are content with that "chicken change", but when you want to make significant money and not stress about, learn to do it Gary's way. Go back through the class and do it again and again, until you get it". I lost my basket more times than I want to admit, but I learned more and more after getting my butt handed to me". I was like a kid listening to every word from his father. He is so confident in his trades until he will tell me when he goes in-immediately. I saw him make 35k in 2 hours about 2 weeks ago on NFLX- on a PUT! Normally, he is in a trade for several days. He never flinched or got excited. He just popped the trade and acted as if it was nothing. I would have needed oxygen-immediately.

I just think it is important for all of the newer people to know that there are people who roll really big-maybe not in an open forum because of disclosing their personal business, but Gary's students are out there and doing well very, very, well. I have known this guy for over 3 years. He has two kids who have been in private schools for 5 years. He pays a total of 81K a year for his children to attend the schools. He and his wife take flights practically every weeked to some area of the country-either to see their children or to enjoy the weekend. He lives in a little town outside of the city that is about as exclusive as you can imagine. I guess the average house in the town is about 500K. About 2 or 3 months ago Darcy disclosed a bit about her earning over the last several months. These kind of experiences motivate me to keep pushing and working hard. My old stubborn guy says trading has become as easy as breathing.

Have a great weekend!

Thanks Rookie - that was very motivating to me. Does he watch and trade only a small number of stocks? You mentioned AAPL now and in the past as respects your friend, and now NFLX. I'm wondering if he sticks to a handful of stocks or if he has a big workspace that he searches for "knife" trades.

I had another long time GW trader tell me the following:

"Typically at the beginning of a week I will pick out trades that are forming on "all star" volatile stocks and wait for those to set up. I do that because if I am waiting on GOOG to set up then I don't want to waste my time and capital entering a less volatile stock and be stuck in that one waiting for it to come to fruition and end up missing my all star".

He also said that he finds himself sticking to a few stocks (because they move so well) even though the qcharts workspace that we were given in RTP has over 100 stocks to watch on a daily basis. Those stocks have been GOOG, AMZN and LNKD.

Please continue to share the tidbits you gain from your mentor.

You had me at "few rips and tears". I was rolling on the floor when I read that!

Tis motivation and confidence building for the rest of us. It gives me confidence when I hear someone on the journey ahead of me, can say that Gary is right. That tells me that if they can do this, then I can too. Gary once said, "if you can guarantee the work, I can guarantee the results". Problem is, we can sometimes seldom "guarantee" the work. I suppose it is human nature to look for short cuts... even when there aren't any.

Good write up. I enjoyed reading it.

Yep. We will all trade differently. I am more interested in trading, the printing press and buying stocks with good dividends than I am in W/O.

I love the E along with GW's charts. Not everyone will and that is okay with me.

I was talking to a fellow tader a while back and he had said that when he took GW's RTT class GW showed where he was up $420,000.00 on a GOOG trade. GW was riding the bollinger band up the trade. I think some of us could retire if we made $420,000.00 per trade.

I am willing to stick to my $3,000.00 - $5,000.00 buys. I am happy there at least for now. Making big bucks once learning how to trade well is not difficult as seen by GW's GOOG trade. The more contracts one buys the more one will make if one is trading well. Take Pete Najarian (CNBC contributor) for example...all he does is trade the market using techniques like GW taught in his Advanced Class. Now if you want difficult trades try those taught by GW in his advanced class. Those are trades you have to really "work" on and worry over!



Edited 1 time(s). Last edit at 11/04/2013 12:11PM by Darcy2.

It is correct that alot of trader who mimic Gary's approach trade only a handful of stocks. My friend made literally millions off AAPL when it was jumping leaps and bounds. At one point he traded AAPL about 95% of the time.

Yes, it is a little different to hear him talk about GW. It is almost as if he idolizes the guy, but I can think of about 10 million reasons why I would probably idolize him too. As with a lot of us, my friend started with almost nothing. After taking one of the Advanced courses, Gary gave everyone in the class hints of what would happen regarding a stocks movement. This was Gary's way of helping them recoupe their money. He never said, go and trade this specific stock, but only a fool could not have read between the lines. My friend said he and the others in the class went home, gathered as much money as they could afford, and they all took positions. Guess what happened? Yes, the stock not only did what Gary said it would do, but it doubled what he anticipated. He said he called Gary and asked him when to get out. Gary was not happy that he had to call him for guidance, but he made it clear, that he was out of the trade. Of course that was his indication that he better sell the position. My friend said, he did not lose a dime and basically took the class for free- well he earned more in the trade.

My friend only watch AAPL, FB, NFLX, GOOG.

I agree with Darcy as well. If you are "killing it" and making money-regardless of what approach you are taking, cash in. This market has being settling and cannot decide where it wants to go. As a result, those who are seasoned drivers, and who has experience with this kind of market, know how to trade it. I do not. I have chosen to sit on the sidelines and not "Trick Myself" into thinking I am better than I am. I will wait until my setups start back coming. In the meantime, I am learning from some of the big chart traders because I will not be able to retire, if I am forced to sit around and not trade for a couple of months. Well, that is the way I see it now. I will be patient, unitl we start having days of clear market direction. When the DOW sits between 20 up and 20 down, I am stuck.

One other thing from GW student. He hates the summer Zone. He will trade it, but he does not like nickels and dimes. He would rather not trade the summer, if he anticipates a 1 or 2 dollar move on AAPL. He has basically reduced himself to only trading HRFP that are too obvious and his nuggets. He does good to enter 2 or 3 trades a month during the summer. He said his position sizes are too big to risk his money with a lot of fearful traders. He said the big money has gone on vacation and will return in August. He said if the little "Whipper Snappers" move a stock against him, he risks losing 50K-100,000K in a trade.

I hope your trading is going well. If I depended on last weeks trades to feed me, I would not be volunteering at the "Soup Kitchen"- I WOULD BE EATING THERE!

I am enjoying eavesdropping in on this conversation. I only wish I had something worthwhile to contribute...

Rookie, the story about your friend has got me thinking and considering my approaches to trading. Darcy, as always, your thoughts are much appreciated.

At this point I don't see a time when I'll be making $50K/trade - let alone $400K, but I am totally fine with that. Starting where I am with my W&O leg (I call it my "Retirement Leg" - "RL" at around $10K, if I make 5%/month, contribute several hundred dollars to it from my monthly pay check, and continue this out only 3-5 years, I can be very financially satisfied with where I am so when I am retirement eligible from my current job in 8 years I can be ready to fill my time with working toward achieving my goals and not my boss's. Of course I won't be withdrawing anything from my RL, so it will just compound. And this is without any contribution from the trading leg (TL).

With the help of this great forum I will improve my TL skills and further contribute from there.

Though I may not achieve what Rookie's friend has financially, I am okay with that. But I still have so much to learn.

Kars, I could not have said it any better. My thought process is very similar. I want to be financially stable in retirement. I do not need millions of dollars. I just do not-as my dad would say, "want to hit a lick at a snake". It motivates me to see what a person can achieve through trading and having no limits to the size of trades. Again, he is not alone in his success. There are people who are on this forum who have achieved wealth also. I can assure you of that. I guess that is why it is so motivating to be apart of this forum. I feel there are positive thoughts flowing and there are people who genuinely want to see everyone succeed- I am one of those people.

I am not looking to change my basic concepts of how I trade. I just want to ride positions a bit longer than a couple of hours. raise my trading size to 10K trades is not what I want to do with short, quick trades. This is the amount of money I will need to invest in each trade, if I plan to make enough money to grow my basket. Having to Again, the process works, but I am beating myself up with stress and anxiety- especially as we transition through zones. Keep in mind, when trading small charts, if you miss the entry for whatever reason, that loss could be significant. Some would say I need to work on my entry. It takes precision and an iron clad process to make solid entries off small charts. I guess that is why Darcy's S/O use a 1 minute chart as part of his process. I have never used anything smaller than a 5. I took a position off the 55 and 233 yesterday. I entered off an 8. So far, I have some "fat" underneath me, but I will discuss the trade-once I am out. Scared to jinx myself. I discuss my trade with my friend. Of course, Gary's student will never give too much advice, but I got the impression that he was surprised I am as well versed on Gary's concepts when using the 8, 55, 233, and Daily. He trades the stock I played, so I think the trade will be ok. If not, I will need to UP THE MEDS!

I am simply sharing a bit with you guys as I transition into trading a more GW traditional style of trading. I think overall, I will be extremely pleased with my trading results.

GW said that on W/O you can make 60% from Oct 25th to Jan 15th. That means the market rises most of the time. That means continuation patterns on smaller charts will work. That also means you may be in a trade over night or longer because this is a slower zone.

Traders such as myself find this zone harder because we do not trade like BCT. This is his zone for sure. That doesn't mean I can't make money if I am patient. Because this is such a slow time, to be in a trade and out in one day will not bring the bigger $'s probably such as the trans zone or summer zone unless one is willing to hold. TSLA is a fine example of a continuation of a great trade. I am pleased and still in the trade. I am considering however in this zone to buy one month out rather than the month I am in (maybe).

After selling LNKD yesterday and seeing how difficult it was to sell lead me to believe that the stock was going up. The E signal happened on the 10 chart @ the candle close of 11:10. What I am studying now is the signal to leave a trade once in and TSLA has not given that signal. I am of the opinion that

MAYBE

during this zone leaving a trade on the E charts would be too soon since this is the slow time. I would suggest to anyone who is new to the E to practice that thought before trading real money.

Just my thinking..................

"I was talking to a fellow tader a while back and he had said that when he took GW's RTT class GW showed where he was up $420,000.00 on a GOOG trade. GW was riding the bollinger band up the trade. I think some of us could retire if we made $420,000.00 per trade."

Plase do not become enamored by Garys trading or success. I dont know how many times I have heard him say that every student wants to make this type of money per trade. What you dont know is that hes probably got a couple mill in the trade. Its all relative. If you get good and practive enough the $$$ figure wont matter.

I would like to point out that it is not a mystery of what stock is going to have a "continuation pattern". All you need to do is analyze the next 2 larger time frames and thhe MACD of the trade chart.


BCT

No... I am not enamored with GW's big $ trades. What I was pointing out is that you can make big $'s in a trade if you are buying in big blocks of $'s or contracts. I keep my trades to $3,000.00 to $5,0000.00 which I have repeatedly stated.

When I first practiced on virtual I put 3 million into my account. I started small and then when I got to the point where I could see the move I traded huge. Will I ever put that much into a trade? Probably not.

However if one follows GW's 5 year $ plan he does have you trading $30,000.00 at the end of the 5th year. If you practice with $30,000.00 trades you will see a much larger return. Am I suggesting practicing with that amount? Sure. Am I suggesting anyone here do that with real money? Nope not by a long shot and I have said more than once I limit my trades to 3-5 g's.

In fact at the end of the first year you are suppose to be trading $8,000.00 according to GW's trading plan. I am past the first year but I still do not trade that much. I am happy with my smaller trading investment and comfortable there.

What I took from GW's $420,000 gain was that was more than enough to retire on and that many professional traders make a great living trading. I would say many on the forum want to retire in the W/O leg. But the "job" I have is not a "job" but my own business. S/O also has his own business which we both have no intention of selling but passing on to our children therefore we have no intention of retiring. I have said this also more than once.

I have no problem being called a trader rather than an investor...none. I will buy dividend stocks that can be passed to my children as well. I love trading Printing Press rather than W/O. I have never been a piano sitter. I can pound on one but it never makes the beautiful music needed to be heard.

We all have dreams. I doubt if any of our dreams are alike. I do not need a 8,000 - 15,000 square foot house, maids or chef's, 3-5 new cars, diamonds or more stuff. I've got all the stuff I can handle. I have other reasons for trading and those are not to pile more stuff on top of the stuff I already have that truthfully gets in my way!

As promised..... I traded NFLX. I am going to make this short and sweet because it was a good trade, but ended up being a disaster. I bought calls on 11/04 based on the 233 as my trend chart. The 55 was my decision. The 8 was my action. I entered at around 11:20ish. I have been in the trade until today. All was going well, so I had no reason to get out on yesterday. Now the darn, rookie mistake was made.... I did not set that damn thing to protect my gains (stop- limit or whatever). I have never needed it because I am always in and out within a couple of hours. I am not sure how to do that anyway. This is what happened..... I knew I had some "fat" underneath me. I also knew I had a meeting at 10:00 this morning that would last until nearly 1:00. I am thinking ok, I will have some time to get out of the trade after my meeting, and it has not finished running because MACD still looks strong and I am looking good on the Daily. My dad would always get mad at my brother and I when we would do something wrong and say, "Boy, you are a crack brained fool". Well, I was a crack brained fool and left for that damn meeting and did not return until after 1:00! When I got out, I was toast- just that darn quick. I gave basically all of it back. I will not be able to get over this one for a while. I am back practicing. I hear you guys all the time talking about setting those stops or limits or stop/limits. I just do market order trades (dumb and not taught to do that).

What did we all learn from this besides, I am a crack brained fool? When you have profit on the table and you will be away from a computer, set those "things". I gotta learn how to do that. Another lesson learned is, greed is a powerful monster. You gotta do it ALL RIGHT. Not just part of it- ALL OF IT! When you do not dot your i's and cross your t's, you can fall prey to a trade like this. As I have told you guys in the past, I will share the good and the bad with you. I am transparent. We all make mistakes. I had this one in the bag, but let it out just before closing it.

Rookie,

You need to learn how to set protective stops and sell orders using the active trader on TOS. You can set a bracket order using the active trader. When your stop or limit sell is hit, it will cancel the other order and you can set and forget these trades. They are server based, so it doesn't matter if your computer is on or not.

I learned this method when I used to trade the S&P emini futures contract.

It works the same way on options or stock trades with TOS.

Thanks for the idea. I have put a call into my guy at Scottrade. He is pretty good about working with me, so I anticipate a meeting with him early next week.

Just a side note......
Everyone might want to take a look at the Seasonal Outlook on the main page of RTT. The historical data on the NAS, DOW, and S and P are showing a lot of strength over the next month. We all know the big market typically goes up, but my point is, be really careful about playing puts in a strong historical uptrend. I am pretty shocked that my friend/mentor carried a large put position overnight on one of his expert stocks. Again, he is not great with puts- good, but not great. I told him a few weeks ago that buying puts should come far and few between during this time of the year. I also told him to never hold a put play overnight. Please do not think I am trying to advise anyone, but I am just sharing my conversation with him. He seemed to understand. Well, he was in a profitable put position going into the closing of the 7th this week. He entered NFLX late evening on the 7th off the second 233 and tried to ride it over into the 8th. I see his logic, but I knew how puts typically run strong for a short period, but they turn quickly- at least those have been my experiences. On the 8th, he called me and started cursing! I do not think those put options he was referring too actually could hear what he was saying. When listening to him rant and rave, you would think he and his put trade were having an argument. He kept referring to the trade as an SOB, saying, " You stupid SOB. How dare you blankidy with with my blankidy blank money". I am like, "This dude has lost his everlasting mind". He kept asking me, if I would have made that trade. I said, "Heck no. I will not hold puts overnight in an historical uptrend". I told him again, he should invest in RTT, so he can clearly see what the market and his stocks have done historically. Again, he started cursing out his put trade, RTT, Me, you, and everyone else he could think of. He wanted to know why in the blankidy I would not have made that trade. I just told him, but he wanted me to say what he wanted to hear-lol! I just listened and allowed him to vent. He is my guy, and I am there for him through the good times and bad. I would never be where I am with him taking me under his wings and teaching me how to trade, but this lets you know, the best of them can get creamed. He never told me how much was invested in the position-nor how much he lost, but I will guarantee he lost more in that one trade than I earn all year.

Great post rookie, I enjoyed reading it along with all of your post. I would have been skeptical about the put based on the resistance of the 50ma on the 233 along with the support to the 20ma on the daily and uptrend off the weekly.