Sr. Managing Director of Stocks
Have 3 reasons to do a trade, but only one to exit a trade.
Who is Chris?
Chris Brecher grew up in Jacksonville, Florida. After receiving a gift of $50.00 worth of stocks which appreciated to $500, Chris discovered his passion for the stock market. Upon finishing his degree in Paleontology and Marketing, Chris took a job in a stock market boiler room (think “The Wolf on Wall Street”). In watching his fellow brokers lose every time by taking shots in options, Chris wanted to find out who was making money on the other side.
He found the answer at the Chicago Board Options Exchange and moved to Chicago with very little money, to be a clerk on the floor. There he learned how to trade stocks and options from experienced floor traders. He then became a Discount Stock Broker for the commission-free trading. There, Chris honed his craft. His parents sent him $200 dollars and he parlayed that money in $23,000 in 2 years!
Figuring he was ready for the floor, he leased a seat, and started trading in the IBM pit. Subsequently he bought a full CBOE seat within the year. After 8 successful years on the floor, Chris realized that electronic trading was making more money than floor trading. He left the floor to work for a NYC day trading firm. While Chris was both opening offices and training the traders, he still managed to be in the top 5 out of 800 traders for all 9 years he was with the firm. When the firm was taken over in 2003, he decided to trade from home. Since 2003, Chris has traded on his own, opened his own trading educational site, and worked as a content provider for Simpler Trading.
Chris' Trading Plan
I have always loved trading.
Technical Analysis, Tape Reading, and Analyzing Market Moving Events
To make money for myself and teach others who are interested in learning how to trade.
I want to consistently make money through proper initiations while managing the risk and the amount of money at risk. I enjoy trading more if my risk and amount of money in the trades are limited.
Day Trading Stocks, Options, Futures, Bitcoin ETFs.
When deciding my timeframe on a trade, I always look at multiple markets. I will trade whatever timeframe shows a good setup. I look for:
- 1-minute huge probability patterns;
- Short term “panic trades”
- 15-minute trades with chart objectives
- End of the day trades
I focus on just a few high probability chart patterns for both short and long term trades:
- Head and Shoulders patterns
- Inverse Head and Shoulders patterns
- Bull and Bear flags
- A variation of the trend line trade, called a ledge trade
- The DOJI
- The Measuring Gap
Have 3 reasons to initiate a trade.
If the reasons I initiated the trade become absent, then exit or at least tighten my stop.
- Try to size your trades in 2’s and 4’s. This way a trader can take profit on half, or three quarters.
- In money management, I like to sell half of a winning trade and let the other half run.
When buying a stock, I try to place my stops under recent support levels.
Read the news on CNN, CNBC, WSJ, NYT, Bloomberg and TheFlyOnThe Wall; and built three different watch lists:
- Indexes and futures that are likely to influence my trading decisions
- Stocks that are in the news
- Stocks that are in my “main list” of stocks that I always watch
I look for stocks that have market breaking news before the next day’s opening or after the close.
I look for high probability setups.
- I like to use the MACD lines to see momentum changes and extremes.
- I use different variations of moving averages in different time frames.
- In addition to moving averages, I use the ATR Trailing Stop.
Since I started trading, I have watched hundreds of traders come and go. The most successful:
- Preparation. Most traders spend hours, before, during, and after the close, pouring over charts, reading news items, stock correlations, and other things that might give them an edge.
- Have 3 reasons to do a trade, but only one to exit a trade.
- Care about direction, not price.
- Have a short memory. So many traders complain about missing trades or losing trades, which bothers them so much, it affects their ability to make future correct trading decisions. I try to forget about past trades unless they help me hone my trading skills.
- Enjoy trading.
- Don’t care how much other traders claim to have made.
- Have no ego. I have often sold a stock at a loss, and then realizing my mistake, go back and buy the stock at a higher price than where I had sold it.
- Are able to “tone out” distractions. With most trading from home, traders must treat trading as a business, and not be distracted during the day. Every day, I get dressed, and approach my trading desk as if it is in a public trading room.
- Always know your exit point, when indicators and other factors determine that you are wrong.
- As seen when day trading, preparation is key.
- After identifying a trend, go to the short term chart, identify the pattern, and use indicators to time the entry.
- Try to position size in multiple’s of 2’s and 4’s.
- Try to let some of your position go to the maximum objective.
Chris' Must Read Books:
Technical Analysis of StockTrends
Technical Analysis of Stock Trends helps investors make smart, profitable trading decisions by providing proven long- and short-term stock trend analysis. This book is the perfect introduction, giving you the knowledge and wisdom to craft long-term success.Learn More
The Plungers & the Peacocks: 170 Years on Wall Street
The Plungers and the Peacocks is an entertaining portrait of the personalities and corporate battles of Wall Street, the most famous financial district in the world. Using interviews with "old-timers" who lived through the events of the Street from the 1920s to the 40s and memoirs, and letters, the author has produced a sweeping narrative of "the games people played" in establishing America's financial center. Dana L. Thomas recounts a roller-coaster ride of excitement and intrigue, from the slave auctions of Captain Kidd to the battle by Robert Young to gain control of the New York Central Railroad.Learn More
Manias, Panics, and Crashes: A History of Financial Crises, Seventh Edition 7th ed. 2015 Edition
This seventh edition of an investment classic has been thoroughly revised and expanded following the latest crises to hit international markets. Renowned economist Robert Z. Aliber introduces the concept that global financial crises in recent years are not independent events, but symptomatic of an inherent instability in the international system.Learn More
Ball Four: The Final Pitch
When Ball Four was published in 1970, it created a firestorm. Bouton was called a Judas, a Benedict Arnold and a “social leper” for having violated the “sanctity of the clubhouse.” Baseball commissioner Bowie Kuhn tried to force Bouton to sign a statement saying the book wasn’t true. Ballplayers, most of whom hadn’t read it, denounced the book. It was even banned by a few libraries.Learn More
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