Articles by Leroy Rushing on ArticleSnatch.com

Uncovering Winning Trades

Sat, 30 Aug 2008 00:00:00 -0500

The glory of trading is that there is always a million dollar return lingering right around the corner. Think back 15 years to the start of the 1990s bubble and how many millionaires were made in just a few years, and then look at all the wealth that was wiped away in 2001 and handed to the shorters. Just a few thousand dollars in the 90s hottest internet stocks would have made you a millionaire in less than 5 years. Were talking life-changing results here. How to uncover winners Winning trades are right in front of our faces. With proven strategies on how to generate profits, even the most casual investor can strike it rich in a volatile market. Much of the technique to uncovering winners varies from strategy to strategy. Short-term traders favor technical analysis, while long-term investors look for solid growth and earnings prospects. For the short-term investor, technical analysis should be the most important part of a balanced trading plan. Technical analysis favors the short-term trader in that the study is based solely on price rather than outside factors.** End Summary**

About the Author:
Leroy Rushing is an active, professional day trader; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a provider of educational trading products and services that are available worldwide. Trading EveryDay has complimentary/FREE products, a Tools of the Trade eBook and a Trading Room Report , that are downloadable for your convenience.

Trading Breakouts and Breakdowns

Sat, 30 Aug 2008 00:00:00 -0500

Breakouts and breakdowns are extremely profitable, but mostly due to their rarity. A breakout of a trend is more likely to happen than a breakdown, where the price merely trades through the trend than with force. Profitable traders use breakouts to make large amounts in a short period of time. Breakouts Breakouts are forceful, usually happening from a sudden shift in positions. Many times, a breakout occurs when short sellers are forced to cover positions to exit a trade. This results in a large amount of buying, which inevitably pushes up the price. In a developed downtrend, short sellers take profits at the lower fringes, causing the price to rise again. When the amount of short interest becomes overwhelming, the volume of trading is no longer small enough to maintain a shallow trend, and thus, a very quick movement through the trend occurs. Contrary to belief, breakouts are caused by the premeditated thinking of many people who all make a similar trade in a certain period of time. Breakdowns Breakdown of a trend is far less common, and usually only happens in the case of sideways markets.** End Summary**

Navigating Your Trading Platform

Mon, 18 Aug 2008 00:00:00 -0500

Understanding your trading platform is important to producing profits. A trading platform is the place of business for traders, where all the information of each trade is listed with charts, data, and newsfeeds for trading. In any market, and with any kind of trader, knowing your trading platform is extremely important. Your own trading style has much to do with the importance of knowing the platform. Scalping requires that you know exactly how to order in split second trading, and investing means that you need to know where to find good financial data, such as annual reports or analyst outlooks. The platform is a place of business Professional traders know the importance of navigating their trading platforms. Many go so far as to edit their platforms to fit their own trading style; some change the colors on bars and charts to get a better feel, while others rearrange everything altogether. Brokerages and banks also understand the importance of a custom trading platform and give investors the ability to change colors and layouts to suit their needs. You should look at your platform as a place of business.** End Summary**

Enough Trading Knowledge to Make You Dangerous

Mon, 18 Aug 2008 00:00:00 -0500

Knowledge is the key to trading. The only thing that separates those at the top and those at the bottom is a complete understanding of the financial markets and their day to day rhythms. Anyone can be profitable if they follow a proper strategy; it just takes patience and experience to finally win over the market. Improve your trading There are plenty of resources available to the beginning trader to generate profits. Many come with an interactive classroom and a virtual library of resources that can be referenced when the market goes wild. This kind of support is great for the trader who needs a bit of confirmation before making any major moves. A live trading room also offers a great way to get feedback on a new strategy without risking any capital. From top to bottom, trading education and resource programs are a great way to zone in on your talents and abilities and produce consistent profits. Where to start A strong understanding of technical analysis is a great place to build the knowledge you need to become a dangerously profitable trader.** End Summary**

Thinking Like a Professional Trader

Wed, 13 Aug 2008 00:00:00 -0500

Professional traders are confident in their approach and trading plan, and they make no compromise. It takes this kind of dedication and trading discipline to produce consistent profits in some of the most volatile markets of the world. Professional traders are backed with profitable trading strategies and a complete trading plan which gives them guidance and the ability to produce profits in any market. The mentality of a professional trader A glance into the mind of a professional trader demonstrates many truths. Professional traders have a confident aura about them because they know they are able to beat the market, both in returns and on a trade by trade basis. However, professional traders must not get egotistical in their own earnings, as the mentality of winning all the time will weigh negatively on their own trading decisions. Those that get caught up in themselves and their success are even more likely to give it all back when the market turns against them. A professional trader doesnt get caught up in trading plan secrets or complex trading algorithms, but instead focuses on the basics: eliminate the role of emotions, stay positive, and always follow your trading plan.** End Summary**

The Basics of Engulfing Patterns

Wed, 13 Aug 2008 00:00:00 -0500

There are two types of engulfing patterns, the bearish engulfing or the bullish engulfing pattern. Understanding one of them is as easy as understanding both, as they are just opposites. The bearish engulfing happens at the top of the chart and is made up of a positive candlestick that is then engulfed by a negative candlestick during the next period. The bullish engulfing pattern is the opposite; it happens at the bottom of a chart and is made up of a positive candlestick that is then engulfed by a negative candlestick either the same size or larger. Complete change in mindset The engulfing patterns represent a complete change in price. The engulfing pattern on short term charts is usually the result of active trading in day trading or scalping. On a one minute candlestick chart, it wouldnt be unlikely to see many of these engulfing patterns as the price nears support and resistance. The change in investor sentiment is very common, especially when buyers and sellers duke it out around certain price points. On a longer term chart, an engulfing pattern wouldnt be so common, but certainly more accurate. Investing with candlesticks requires a keen eye for their patterns.** End Summary**

The Basics of Volatility

Thu, 07 Aug 2008 00:00:00 -0500

For the unseasoned trader, volatility can seem scarier than it is rewarding. Profitable traders are able to generate profits on volatile and slow markets alike, but the really big wins come from when the market gyrates up and down at a quick pace. How to trade volatility When the markets are on the fritz, strategies for gapping up, as well as strategies for gapping down, prove to be very profitable. Both are proven strategies that make money when the markets are uneasy because of the breakout potential that exists in a volatile market. Strategies for gapping up are only used when the markets are volatile for good reason; gaps only occur in an ever changing market. Very rarely do prices gap up in a slow moving market; by default, you could make a case that the definition of volatility is many large gaps up or down. Finding volatility The stock market actually has an index for gauging volatility in the market. Called the VIX, it is a measurement of how wildly the markets are trading. A higher number means greater volatility, while a lower number indicates better trending and less wild movements.** End Summary**

Whats Inside Relative Strength

Thu, 07 Aug 2008 00:00:00 -0500

When stated in a mathematical sense, RSI seems more difficult than it actually is to both use and understand. To evaluate the relative strength by hand, the trader must know the formula for doing so. The RSI is simply 100 minus the quotient of 100 divided by 1 plus the relative strength. Relative strength is equal to the average gain divided by the average loss. The average loss should be stated in a positive number to make this work. After looking at the math, its no wonder that professional traders use computers to decipher the RSI. Short, quick trading, such as scalping or day trading, would never allow the time needed to make these calculations on each bar. Understanding RSI and how it works though is very important; it is one of the most popular oscillators and even one of the most profitable indicators, if used correctly. Many professional traders use the RSI in the form of convergence or divergence, momentum trading, or to show trends and produce consistent profits. Best kept secret The RSI might just be one of the best kept professional insider secrets. Relative strength is nothing more of an idea, but its refinement by J.** End Summary**

The Dos and Donts of Shorting the Market

Tue, 29 Jul 2008 00:00:00 -0500

The Dos and Donts of shorting is actually very straight forward, yet many traders heed this advice only to lose money. Shorting any tradable good is a dangerous position by nature; short sellers can lose more than their investment while potentially profiting only as much as 100%. Both day traders and swing traders alike have much to gain from short-term short positions, which allow them to capitalize on the dropping value of a security. Often, it is a failing company or a bursting bubble which can yield large returns on the downside as it did on the upside. Dos of shorting Do use technical analysis as a way to study short positions. Shorting is a very sensitive investment because it requires that much emphasis be placed on the entry point. The active professional trader uses technical analysis as a way to study the future of a price while ignoring the traditional fundamentals. Do use a comprehensive trading plan. Selling short requires more in depth studies than that of long positions. A comprehensive trading plan for shorting is usually in much greater detail and highlights virtually every outcome of a possible position.** End Summary**

Dont Give Back Profits

Tue, 29 Jul 2008 00:00:00 -0500

To maintain a healthy bottom line, traders must learn not to give back profits. After racking up a very healthy trading portfolio, many traders get the idea that they are infallible and every trade will come as easy as the last. After gaining some experience, nothing should motivate traders as much as a trading plan that monitors trading structure, while helping the trader follow through only with quality trades. Following through with a plan To avoid a dip in account balance, the active, professional trader knows that following a trading plan is the ultimate way to succeed. Having trading discipline is the key to growing your portfolio. While the market and its variables change minute by minute, trading plans offer plenty of consistency that any trader can fall back on while keeping active in the market. Proven techniques and strategies produce profits consistently by involving traders in only quality trades those that can be won more than they are lost. Quality not quantity One of the few suggestions for holding your own while trading is to make only quality trades and refuse to chase returns.** End Summary**

Treating Day Trading Like a Hobby Versus a Business

Sat, 26 Jul 2008 00:00:00 -0500

First, lets start off by understanding that there is no such thing as a day trading hobby. Traders must have superior trading habits that come from knowing their strategies and their trading. Trading discipline and making only quality trades is something that comes from experience that can only be created from an active role in the financial markets. The active, professional trader is far more profitable due to experience and knowledge from consistent trading than the hobbyist investor will ever be. Hobbies dont make money If youre trading for a hobby, youre likely to be in a position where youre willing to accept losses. If this is your position, then more power to you, as youre able to do something that most people cant, while accepting any possible losses. Hobbyists do not need to pay as much attention to trading structure or even trading success, but should be willing to pay the price for both in limited gains or even losses. Trading as a hobby is difficult, as the time constraints and limited reason to produce profits will make many traders unprofitable.** End Summary**

5 Important Aspects of a Trendline

Sat, 26 Jul 2008 00:00:00 -0500

Trendlines are the classic heroes of technical analysis, forming the basic trading fundamentals for many portfolios. Trendlines are placed to forecast the future change in security prices. Trendlines plot out uptrends, downtrends and even sideways trends as a way to predict how prices change over time. Subsequently, profitable traders make use of trendlines to predict movements and profit from the ups and downs of cyclical markets. Day trading strategies, combined with some creative techniques of your own, will help you make the most out of trendlines and generate consistent profits. 1. Well defined tops and bottoms of trends A trendline should mark tops and bottoms that are well defined and conform to the line. Though it is not necessary to be perfect, a trendline should connect the tops of bottoms of movements together to show support and resistance. 2. A confirmation Trendlines should be confirmed with a higher bottom near your own support, resistance lines, or by the change in short interest over a period of time. Confirmation of the trend helps you determine where buying and selling interest is the highest.** End Summary**

The Unorganized Trader

Fri, 18 Jul 2008 00:00:00 -0500

The unorganized trader is in a slightly worse position than an organized trader, but there are many tools meant for the unorganized trader that can improve returns. There are a few products out there that can turn even the most unorganized trader into an organized, profit making machine. Trading plans Developing a trading plan is usually the best thing that happens to an unorganized trader. Plans require a trader to become organized, putting their tools and techniques all on one piece of paper. Developing a trading plan can be a liberating feeling, relieving you from the strains of your own personal feelings, but instead backing your trading with your own proven strategies. A trading plan planner will help solidify your trading plan blueprints into a workable strategy. Traders should be able to translate their own trading style to a trading plan that suits them best. Professional traders know what works for them, and thus, develop a trading plan around what they believe. A complete trading plan includes everything needed to produce profits right from the get go.** End Summary**

Sitting on Your Hands Trading Strategy

Thu, 17 Jul 2008 00:00:00 -0500

Often times, the best trade is not taking one at all. Rather than expose yourself to risk, let the trades go while you formulate your plan and your trading goals. Set and forget trading The sitting on your hands strategy is best mixed with a set and forget approach. The set and forget approach is made up of a very short process: place trade, set stop losses, take profits, and then let the market do the rest. The sitting on your hands strategy and set and forget trading reduces the amount of influence your emotions have on your returns and protects your trading account from irrational decisions. Following a trading plan is made far easier by the sitting on your hands strategy. Dont micromanage each trade It is very easy to micromanage each and every trade you take, rerunning your technical analysis studies, checking your custom indicators, and then deciding the trade was wrong to take. How often do novice traders skew a trade because they are too quick to modify and even cancel trades long before they are allowed to let run?** End Summary**

Learn to be a Day Trader Not a Daily Trader

Tue, 08 Jul 2008 00:00:00 -0500

A daily trader focuses on trading once a day, while a day trader focuses on trading stocks throughout the day. Though in context the difference may seem small, the trading discipline and trading success that comes out of taking trading seriously is done best by day traders. The active, professional trader A daily trader is more interested in trading daily, not focusing on profits or on quality of trades, but merely the frequency. The active, professional trader is akin to a day trader determined to producing profits from quality trades. The professional trader is focused on profits and the financial freedom from full-time day trading around the world clock. Professional traders arent interested in meeting a quota of trades; most would rather earn their living from just a few trades each day. Becoming a day trader Day traders are the product of experience more than anything else. Many day traders actually start as long-term investors, who acquired enough knowledge in the market to make it a career, eventually trading every day as a way to generate an income. Becoming a day trader isnt difficult, but requires discipline and desire to do well.** End Summary**

Feel the Fear of Being a Losing Trader

Tue, 08 Jul 2008 00:00:00 -0500

Emotions are something that every trader fears, but they should also feel the fear of being a losing trader. Nothing is worse than consistent losses, particularly when the rewards of your labor are the sole earnings for the month. Many unsuccessful traders find themselves in a position wondering where their next meal will come from, and certainly it wont be from the thousands of dollars in losses that they have incurred. Trading plan planner A trading plan planner is the key to avoiding losses and creating profits. Trading plan planners help build a quality trading strategy around your own creative techniques. A trading plan planner should be the first stop for anyone serious about preserving trading capital. Knowing how to plan, what to plan for, and why you need a plan is often the fastest way to eliminate losses and produce consistent profits on a day to day basis. Professional traders understand the importance of learning to plan. Losing traders all have one thing in common: either a losing plan or an inconsistent plan.** End Summary**

The Undisciplined Trader

Wed, 25 Jun 2008 00:00:00 -0500

The undisciplined trader is likely to lose more than can ever be gained. Discipline is at the very basis of success in the market because traders need to be consistent in order to yield consistent profits. Granted, striking it rich every once in a while seems great, but consider the gambler than wins $50,000 one trip out of 50 and loses $2,000 every other time. Instead of profiting, they come out very much behind. Trading goals With discipline should come a respect for your own trading goals. Your trading goals should include elements such as how much you want to earn, how much risk you can handle, and most importantly, how to generate profits. In life, were taught to do what we want, rather than picking a career based solely on earnings, but in trading, the successful trader picks trades on how much they can make, rather than how much theyll enjoy taking it. Trading goals will help you better define why youre trading and hopefully add an element of discipline, as we know the only way to meet most goals is with disciplined investments.** End Summary**

Are Moving Averages Really Simple to Use?

Wed, 25 Jun 2008 00:00:00 -0500

Moving averages are used by amateur and professional traders alike for very rewarding results. Finding moving averages that work for you might be a difficult task, but after finding the perfect pair, moving averages provide huge results with little work. Moving averages can make up a whole strategy Many profitable traders have built proven strategies around a few moving averages. Whether in an uptrend or downtrend, moving averages are a great way to identify the major trend while placing positions that are set for the highest profits. Moving averages can be used in a variety of ways. Many professional traders use moving averages to smooth out a price over the long term to ascertain a reasonable price, while others use a combination of averages to find when the market is entering a reversal. Regardless of the technique, moving averages provide for great profits when combined with other day trading strategies. Moving averages are some of the easiest technical indicators to use because they are the easiest to understand and can be used in practically any market type: uptrend, downtrend or sideways trend.** End Summary**

One Chart is Worth a Thousand Words

Tue, 17 Jun 2008 00:00:00 -0500

A chart is the traders guide to ultimate profitability. For each trading style, from scalping and day trading to swing trading and long-term investing, a chart is worth a thousand words. Professional traders rely on their charts for consistent profits and for guidance on how to act next. Charts and trading plans coexist In many ways, a chart is as much of a trading plan as anything else. It maps out the history of the price in many different scenarios. The chart is just as much a historical reference as anything else, allowing the trader to see how the price has changed over time and proving that results are obtainable with a good trading system. Just take a look at the ups and downs of a stock chart or foreign currency pair, and youll see many moves that happen just over a few months that could have made you a millionaire had you been in the market, that is. Charts show the future through the past Professional traders make their living deciphering the code of the ever changing chart.** End Summary**

Day Trading Money Making Machine

Tue, 17 Jun 2008 00:00:00 -0500

Day trading can truly be a money making machine. Many experienced day traders can make more in a few seconds than what most people make in a week. This also comes with some risk, but for the trader armed with technical analysis and proven strategies, producing profit can result in consistent income. Technical Analysis for Quick Trading Technical analysis is to day trading as birds are to flying. Day trading is not so much investing as it is buying and selling based on price differences, rather than a fundamental difference in the company. Technical analysis will help spot price movements without a fundamental catalyst, giving the day trader an advantage over others. Proven strategies, such as moving average crosses or using your own custom indicators, can significantly lower the risk with day trading. Modifying a relative strength index to 17 might help you smooth out the bumps you incur on a 14 period chart, while giving more flexibility and trades than a 25 period RSI. Strategies for gapping up are very profitable for day traders and thus used by many.** End Summary**

How to Get Added Value and Confirmation

Thu, 12 Jun 2008 00:00:00 -0500

Accuracy is an important characteristic in a growing, profitable portfolio. There are several strategies to be positive with your investments and make winning trades. Professional traders use many indicators to pick a position. Profitable traders are able to look at a trade, find which position they would like to take, and then use their own technical indicators to confirm a movement. The duo of forward and lagging indicators makes trading very profitable. There are different mixes for different timeframes and scenarios. Downtrend In a downtrend, professional traders will look for a forward indicator, and then confirm it with a lagging indicator. A downtrend is easy to break, as short sellers have to cover their positions. Unlike a sideways trend, a downtrend has a definite pattern: down. Proven strategies for downtrends include moving average crosses and divergence on momentum indicators. Uptrends Uptrends work similarly to downtrends, but just opposite. An uptrend is hard to break without a strong catalyst, as many traders get the fever to fuel the fire with new investment. Profitable traders know that a news report or a short term trendline can break a long term trend.** End Summary**

Learn to Follow a 5 Step Trading System Rather Than Your Emotions

Thu, 12 Jun 2008 00:00:00 -0500

A five step trading program is the best way to maintain your composure during wild markets, while allowing enough room to fit in all the variables you need. Step #1 - Check All Chart Timeframes The best way to boost trading profits, while limiting losses, is to be aware of your surroundings and that includes other time frames. Financial freedom comes from making quality trades, not quick trades based on your emotions. Youll have to survey all timeframes and keep on the lookout for developments on a larger scale that may affect small scale profits. Technical analysis is much more efficient for finding problems on other time frames, as fundamental analysis usually only covers a very specific time frame. Step #2 Trading Execution Establish a point at which you are ready to place a position. This can be tricky, as placing it too far away from the current price means you might not ever get in the market, while too close means that you could be in for a whipsaw ride up and down. Support and resistance levels should be checked to avoid any dangerous positions.** End Summary**

6 Skills Every Trader Should Have Going Into Trading

Wed, 04 Jun 2008 00:00:00 -0500

Whether day trading, scalping, or investing, there are fundamental skills that each trader should master. Skill-building activities will help you sharpen your ability to make money and cash in on critical market movements. 1. Dont Be a Perfectionist Consistent profits are achieved from winning more than you lose not winning every single trade. There are plenty of professional traders who generate profits by winning just 10% of their trades by maximizing gains and minimizing their losses. 2. Stick to a Trading Plan Developing a trading plan is extremely important. Day trading around your own set plan for each position will produce consistent profits. A trading plan planner should be your best friend when developing your own trading style. The key is sticking to what youve written down on paper. 3. Know the Odds You should know the payoff odds for each trade that you take. Scalping produces large gains from small movements with higher risk than swing trading. Your trading plan should include a way to regulate how much capital youre willing to risk on each position but you should never risk more than 2% of your total account value. 4.** End Summary**

5 Steps To Understanding Volume And Liquidity

Wed, 04 Jun 2008 00:00:00 -0500

Understanding that volume and liquidity will boost trading profits puts you one step closer to financial freedom. The active, professional trader should know how to act in any market, liquid or illiquid. 1. High Volume Means High Liquidity Stocks with a high volume are very liquid, not to mention they have lower spreads between the bid and ask prices. Technical analysis works best on liquid stocks because trends are more fluid and give more data on which to base a decision. High volume stocks are preferred. 2. Late Day Breakouts and Volume Late day breakouts occur mostly in periods of low volume. In after hours trading when most traders are back at home, the market slows and each trade affects the price more and more. While 1000 shares is a drop in the bucket during live trading sessions, it is a garden hose after hours. Day traders love to play the late day breakouts that happen after hours, even in an illiquid market. 3. Average Volume Average volume is a great way to judge the days trading activity. Around news releases and important events, volume will spike higher than average, giving traders a distinct advantage with entry and exit points.** End Summary**

Why Moving Averages are Popular

Sat, 31 May 2008 00:00:00 -0500

Moving averages are used by every trader, even those that dont favor technical analysis. Why is this indicator so prevalent, even among traders who enjoy fundamental investing? KISS: Keep It Simple, Stupid One of the biggest reasons that moving averages are so popular is due to their simplicity. While profitable traders have been using a moving average on their charts for quite some time, the moving average remains one of the most simplistic forms of technical analysis. Uptrend, downtrend, or sideways trend, moving averages have been perfected for their use as support and resistance lines and as a general prediction of where the markets are headed. Day trading strategies with any trader frequently involve the use of one or many moving averages to guide the price. Professional traders use moving averages to coincide with the thinking of the big boys on the market. Many investment firms and trading houses employ moving averages to see the previous X days of price movement. Creative techniques are used with moving averages to perfect their predictions.** End Summary**

About the Author:
About the Author: Leroy Rushing is an active, professional day trader; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading.

Articles by Leroy Rushing on ArticleSnatch.com

Uncovering Winning Trades

Trading Breakouts and Breakdowns

Navigating Your Trading Platform

Enough Trading Knowledge to Make You Dangerous

Thinking Like a Professional Trader

The Basics of Engulfing Patterns

The Basics of Volatility

Whats Inside Relative Strength

The Dos and Donts of Shorting the Market

Dont Give Back Profits

Treating Day Trading Like a Hobby Versus a Business

5 Important Aspects of a Trendline

The Unorganized Trader

Sitting on Your Hands Trading Strategy

Learn to be a Day Trader  Not a Daily Trader

Feel the Fear of Being a Losing Trader

The Undisciplined Trader

Are Moving Averages Really Simple to Use?

One Chart is Worth a Thousand Words

Day Trading Money Making Machine

How to Get Added Value and Confirmation

Learn to Follow a 5 Step Trading System Rather Than Your Emotions

6 Skills Every Trader Should Have Going Into Trading

5 Steps To Understanding Volume And Liquidity

Why Moving Averages are Popular

Whats Inside Relative Strength

The Dos and Donts of Shorting the Market

Dont Give Back Profits

Sitting on Your Hands Trading Strategy

Learn to be a Day Trader Not a Daily Trader

Day Trading Money Making Machine