Friday Trading...like no other day.

WOW what a day, I got killed in the morning. I knew that the news on WEN that they might spin off Baja Fresh or sell it was going to reflect positively on the stock, so when it opened and started trading up meticulously I bought 500 shares, as it printed the eggs by printing 30k shares, I figured its still early to get another 500 shares. With my 1000 shares WEN printed .01 and my Esignal went down. As soon as I can boot it up again WEN was trading at .65. BOOOM out $450. One large print gapped it out from the high. What a start to the day. a FRIDAY!! (more about this later)

I remember when I use to trade consistently, when i was on top, I rarely traded the morning. last two days I got KILLED in the morning and made it back in the afternoon, I should have been two up days real good, but the morning put me in a disposition.

why do I and other traders LOVE trading the morning? Well for one....ITS SEXY! What other business can you make $1000 in 5 minutes. There is nothing like that rush of knowing you are right and getting paid off for it. It is what we have all seen on Wall Street, Trading Spaces, Boiler Room, THIS is why we became traders right? WRONG! We became traders to earn a living trading consistently; the satisfaction of love comes from being consistently right on the market, not hitting the homerun.


Back to the issue of FRIDAY trading:

Coming to your trade station on Friday expecting business as usual is a recipe for disaster. Where on a normal day you want to take a good position and let the market takes its course, Friday is not that day. On Fridays, no important economic news comes out, no important earnings, AND trading is light, its a perfect storm for a choppy market, GAURENTEED losses ahead. Because of the essential change of how the market trades, you must essentially change the way you trade. Where you would usually take a position and hold, Friday you must take healthy profits as you see them, treat the whole day as you treat the mornings, quick exits to bank profit on the first consistent pattern of opposite movement.

The machines in the end will always win on a Friday, and their job is to take your $$$. On a normal day the PROG trading software takes positions, but the human trading element seems to even this out, or assists the trend, so follow thru is more probable. But on Friday, the programs are still on, and the human traders are not in the office. Things just are not the same.

So what is the resolution? Expect NO follow thru, so on a normal day if you are use to closing out profits of .60, expect 25 on Fridays. If you have 1000 shares take off 700 after a good run, and leave the rest, if it starts trading against you or it starts trading with the market get out and leave the stock alone. Don’t buy breakouts because they are sure to snap in your face. Make sure they are CONFIRMED and DEFINATE moves.


On another note, to relive some of the stress of trading, and going on the idea that the more you know the better your trading will be, come into everyday with expectations. When the stock does what you expect, you know what you are doing because the stock has communicated a confirmation. For example WEN today, snapped me in the morning which was unexpected, so I let him push thru the low. But as he started holding higher ranges off the low, I fully expected the high and more, so as he started approaching the high I was confirmed that my initial instinct was correct, so I loaded up and held thru pullbacks knowing he would soon push the high, which he did. This is the proper way to trade. Early signs of strength will turn into STRONGER signs of strength for other traders to see and react to, when you see this AGGRESSIVE movement, you are getting out some shares because you are to be rewarded for spotting this early. You are a tape reader; you have this upper advantage that charts don’t.