TRADINGSIM DAY TRADING BLOG

Welcome to the Tradingsim Blog.  Please browse the various trading categories which cover everything from trading psychology to chart patterns.  Another great resource we offer is our trading simulator which allows you to practice placing trades against real historical tick data.

6 Reasons Day Trading While at Work is a Bad Idea

I totally get your motivation of day trading while at work. Odds are you are a logical person and fully understand the risk you are taking by even considering trading as a means of income. Naturally you say to yourself, “I have a job and are able to pay my bills, so why place my Read the full article →

5 Ways to Identify Blow Off Tops

IWM Breaking Down

In this article I will cover 5 ways to identify that a stock has had a blow off top. Because blow off tops are so violent, it’s best to allow the 5 events I will describe in this article to play out before jumping into the stock. At the end of this article you will Read the full article →

How to use the NYSE Summation Index as a Trading Guidepost

NYSE Summation Index

Why Care about the NYSE Summation Index Let me first start off by saying that this article will not cover the nuances of how the Summation Index was created, all the detailed math behind the equation or even exactly how it works. The purpose of this article is to dive into how to use the Read the full article →

5 Reasons Why Not to Overreact to the Death Cross

Death Cross

The death cross sounds so dramatic.  The death cross is when a short-term moving average crosses to the downside through a long-term moving average.  The most commonly used moving averages when assessing a death cross are the 50-day moving average and the 200-day moving average. After reading the above paragraph, that’s pretty much all you will find Read the full article →

8 Reasons Why Not to Sell a Stock Short

XOMA 30-Week Moving Average

Selling Short requires more skill than going long.  That statement alone may trigger a response from my readers, but I believe that is an accurate statement for a number of reasons. First, the market has a bias to the upside, as most market participants buy and hold stocks.  Secondly, depending on how you hedge your Read the full article →

What are the components of a stock chart

line-chart

First Why Use Charts? Before I start diving into this article, all you experienced traders out there can skip this one as I will be covering the basics of how to analyze a stock chart. So, now that we have addressed the elitist – why use charts?  For me it’s about being able to quantify Read the full article →

Learn How to Pull the Trigger on a Trade

5-6-2014 8-48-02 PM

First Let’s Try to Understand Why you are Afraid? Fear is one of the emotions that can hold you back from reaching your full trading potential.  Trading is primarily a mental game and those that exercise clear judgment have the greatest odds of success. So, before we can delve into why you are having trouble Read the full article →

How to Sell a Stock at Resistance

sell-order

Why Selling at Resistance is a good idea The purpose of trading is to make money.  It’s not to pick up an expensive hobby, or a place to gamble away your retirement fund.  So, while this article may sound like a common sense topic, far too many traders forget that selling or closing a position Read the full article →

How to buy a Stock at Support

Buying Pullback to Support

Overview of buying a stock at support Buying a stock or security at support is a tried and tested strategy that has proven to work successfully over the years. This principle is based on the basic laws of supply and demand. To put it simply, buying at support is the process of identifying when the Read the full article →

How to Calculate Point and Figure Price Targets when Swing Trading

One Box Count

I can honestly attribute the use of point and figure charts as one of the turning points in my trading career.  Earlier on as I studied the works of Richard Wyckoff, point and figure (P&F) charts were a staple of his trading methodology. As I began to define and refine my own trading systems, I Read the full article →

Why I no longer obsess over the Broad Market

NYSE Broad Market Tops

What are broad market indicators? Broad market indicators are breadth indicators that attempt to identify the underlying strength of the market.  Essentially, these indicators will uncover how many stocks are participating in a rally or decline, thus providing further insight to you the trader as to how you should weight the significance of a move Read the full article →

How to Trade with Margin

What is trading with Margin? Trading with margin is simply using borrowed money to buy or sell stocks short.  Brokerage firms will allow you to use your cash on hand as equity in determining the amount of margin you are allocated in your trading account. This leverage is different for the types of markets you Read the full article →

How to Identify When a Stock is Starting to Trend

P&F Chart Example

In now my fourteenth year of trading, if I had to boil down one of the key turning points in my ability to consistently make profits it would be my ability to understand when a stock is starting to trend.  This concept earlier on in my career would baffle me because I could not find Read the full article →

Is Day Trading Like Gambling – 8 Signs You have Lost Your Way

Dice

This answer to this question is based on the strategy and investing style of the participant.  I can tell you without a doubt that trading in the markets is not like gambling at all. Gambling has a fixed odds system for all major games, while trading in the markets is truly unpredictable.  The “house” or Read the full article →

How to Let Your Winners Run – 7 Tips for Success

How to Let Your Winners Run

Letting your winners run is a topic which polarizes traders.  There are those that swing for consistency and trade with strict profit targets.  These are the traders who likely view letting your winners run as a sure fire way to lose your focus and open yourself up for more risks. Then there are those traders Read the full article →

Why You Should Avoid Day Trading Schools

Day Trading School

Let me first start off by saying that if you have landed on this article you have realized that the search results for day trading schools are slim.  While there are quite a bit of results from Google; however, there aren’t many of what I would call “traditional” schools in the search results. You are Read the full article →

How Stocks Work – From a First Graders Perspective

How Stocks Work

How does the Stock Market Work? Stocks, oh where do we begin?  Let me first commend you for taking the time to try and understand how the stock market works.  When researching this topic you will notice a lot of people attempting to sound super smart.  Far too often the explanations for how stocks work Read the full article →

How to find Stocks on the Rise

Market Scanner

What is the correct definition of stocks that are on the rise?  Is this a two-week rise or two-year rise?  More importantly, what is the average percentage gain for a stock on the rise?  Lastly, how do you identify a stock market on the rise? These are the types of questions I will clarify throughout Read the full article →

Trading Days in a Year – So How Many are There Really?

Trading Days in a Year

How to calculate the number of trading days per year Since you have posed the question question of how many trading days in a year, let me first provide you an answer.  On average there are ~ 251 days per year.  This calculation is broken down into the following inputs: # of Days in the Read the full article →

Stop Loss Orders – Why They Don’t Work

Stop Loss Orders

How do Stop Loss Orders Work? If I had to define a stop loss order, it’s just that, a protective order which stops you from losing more money than you would like.  In a nutshell these are orders that are placed a certain distance from your entry price and if reached your position is closed.  Read the full article →