Description
Book SynopsisLook inward for the missing piece to your trading strategy The Art of Trend Trading bucks the trend of technicality to show readers how instinct and strategy can unite to bring about consistent investment success. Rather than diving ever-deeper into the overdone world of complicated modeling and forecasting techniques, trader, CEO, and bestselling author Michael Parness explains how making intuition a part of your investment strategy tends to result in more long-term profit. Using animal spirits as a metaphor and tool, Parness helps readers understand how their natural tendencies may run counter to their strategy, and how this dichotomy may be the shackle holding them back from true market success. Readers will learn how this perspective lifted Parness from homelessness to making millions in both Bull and Bear markets, and will start developing their own market instinct as they refine and tune into their own natural intuition.
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Table of Contents
Foreword ix
Michael Di Gioia
Chapter 1: Wishing You a Slow Rise 1
Setting Goals 2
1 Percent aDay Keeps the Ka-Chingos Comin’! 3
Don’t Be in Such a Rush to Lose Your Money 4
Chapter 2: Bear with Me 5
The Achilles Have It 6
Identifying Your Achilles’ Heel 6
Chapter 3: Breakout City and Riding the Horse to Gains 11
The 10 a.m. Intraday Break 11
The Play 12
The Technical Breakout 16
The 52-Week-High Breakout 16
Buy Low and Sell High? 18
The All-Time-High Blue Skies Breakout 24
Chapter 4: Power Trading 25
Be You…Be Powerful! 26
Intraday Primer 26
Time Frames 29
9:30–10:00 a.m.: Gaps 30
10:00–1:00 p.m.: 10 a.m. Rule in Effect 32
1:00–2:30 p.m.: Lunchtime Lull/Reversal 33
2:30–3:20 p.m.: Post-Lunch Activity 34
3:20–3:40 p.m.: Afternoon Lull 34
3:40–4:00 p.m.: Market on Close/End of Day 35
8:00–9:30 a.m./4:00–8:00 p.m.: After-Hours, News Rules! 35
Time Frame Examples 37
News Trader 38
Swing Trades 40
Gap Me, Baby 41
Laggards 41
Market Close 42
After Hours 42
Chapter 5: $12,500 to $3.8 Million 45
Bull, Bear—I Don’t Care! 45
Chapter 6: Options (Pretty) Basic Primer 49
What Are Options? 50
Underlying Assets 51
Rights and Obligations 52
Weekly Options 55
Option Strategies Introduction 60
Spreads 62
Chapter 7: Trading Options 65
Out-of-the-Money Options 65
More than One Month Out 69
Leveraging and Hedging 71
Index Options 73
LEAPs 77
Straddles 78
Strangles 82
Bull Spread 83
Bear Spread 85
Chapter 8: Trading Gaps Animal Spirit Guide (Stalking, Leopard) 87
What Are Gaps? 87
Planning Your Gap Trade 92
Daily Gap Goals! 92
Contents vii
Objectives 94
News/News/News 95
Come Out, Come Out, Wherever You Are, Mr. Gap! 96
Order Flow 97
Managing Risk 98
Know When to Hold ‘Em or Fold ‘Em 100
Believe! 102
Trading Gap Downs 103
Trading Gap Ups 106
Chapter 9: My Favorite Animal Spirits 109
Gap Fades 110
Earnings Runs 113
Earnings Straddles 121
FOMC Fades 123
10:00 a.m. Rule Plays 126
Chapter 10: Trading Gaps Using Technical Analysis 133
Reversal Bars 134
Doji 134
When to Enter 136
Reversal Bars 141
The OOPS Entry 145
Gap and Goooooooooo!!! 147
Exit Strategies 152
Taking Profits 156
Know When to Fold ‘Em 159
Using Stops 161
Gaining an Edge 165
Chapter 11: News Rules! Trading News 171
Laggard News 171
Guidelines for Trading News 172
News Stories 174
Potential News 183
Managing Risk 185
Chapter 12: Trading Laggards 187
What Is a Laggard? 187
If It Looks Like a Laggard, and It Smells Like One… 188
Watchlists 188
Sectors 188
News and Laggards 192
Chapter 13: Trends Are Your Friends 193
Stick with the Trend! 194
Window Dressing 196
Earnings Runners 199
FOMC Runs 206
The January Effect 210
Chapter 14: Finding Your Own Animal Spirit 215
Next Steps 215
Choices 216
Laws of Attraction 216
Are You a Leopard? 218
Chapter 15: Zen and the Art of Rich 221
Society 221
Control… 222
Money 223
Cockroaches 224
Integrity 225
Zen 226
Chapter 16: What Animal Spirit Are You? 229
About the Author 231
Index 233
