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The SimCast Ep. 9: Managing Panic Attacks and Anxiety with JTrader

Tag: day trading

J from JTrader.co sat down with us in episode 9 to discuss mental and physical health. Panic attacks and anxiety can be such a huge hurdle for many people. J, particularly, has suffered from these and wanted to share his experience to help other traders manage their stress and achieve balance in their lives.

J is a professional trader from a small republic inside the country of Italy. He’s been trading for a living for over 20 years and offers mentorship and a professional education service. J offers a very structured approach to learning how to trade. For the past 4-5 years, he has been focused mostly on small caps.

Be sure to follow him on twitter: @jtraderco.

JTrader banner

JTrader SimCast Topics and Chapters

You definitely don’t want to miss this episode whether or not you suffer from anxiety or not. Often times, anxiety sneaks up on us when we least expect it. J offers some really great wisdom on how to avoid this through proper balance and some tough talk on routine. Take note, and audit your current stress levels before it’s too late!

  • Intro
  • J’s History – 0:45
  • Panic Attacks – 4:45
  • Stress Tips – 13:40
  • Hard Work – 21:35
  • Physical Balance – 24:36
  • Community – 30:50
  • Quitting – 34:27
  • Outro – 41:00

Free Samsung G7 32″ Monitor Contest Rules!

We’ve teamed up with Nate Michaud of InvestorsUnderground.com to offer this awesome giveaway package. Not only will you get a free Samsung Odyssey G7 Series 32-inch Gaming Monitor ($700), you’ll also receive a free annual subscription to TradingSim.com ($400+) and a free 3-month membership to InvestorsUnderground ($697)!

That’s over $2000 in free giveaways! We hope this helps someone along their path to consistency in the markets.

Here are the Rules:

Only 1 entry per person, no spam or fake accounts:

  1. Like and Retweet the original pinned tweet on our twitter page: @tradingsim
  2. Tag 1 or 2 people that might be interested in the interview and contest.
  3. Only followers of @investorslive and @tradingsim are eligible, so make sure you follow Nate and TradingSim!

Contest entry will end on November 31, 2021 and a random winner will be chosen by Dec 1st.

About Nate Michaud

Nate Michaud is a legendary momentum day trader. He’s won and lost millions in a single day. With over 15 years of trading experience he’s been around the block, to say the least. In 2008, Nate started an educational service called InvestorsUnderground.com. It is known as one of the more active and heavy-hitting chat rooms for momentum traders. Many successful traders have come through the his service over the years.

Nate Michaud's Website
Nate Michaud’s Website

SimCast Episode 8

In light of the current landscape of day trading chat rooms, we thought it would be fun to sit down with Nate Michaud and discuss his thoughts on the situation. Along those lines, Nate gave us his best practices for using any education or chat service. Also, despite being known as a short-seller, Nate reveals a shocking secret about his long trades! You won’t want to miss that.

This episode is great for anyone just starting out and wondering, “how do I get started?” For more information on how to use chat rooms to your advantage, we recommend our recent post on the subject. Also, be sure to check out our tutorial on how to find an edge.

Don’t forget to follow Nate on Twitter and YouTube as he regularly sends out great free information:

Twitter: @investorslive

YouTube: Investors Underground

Chapters and Topics with Nate Michaud

  • Intro
  • Macro vs Micro – 0:28 
  • Excitement vs Process – 7:35
  • Beginner Best Practices – 10:45
  • Desensitization – 22:00
  • Chat Wars – 28:10
  • Common Mistakes – 36:20
  • Record! – 42:18
  • Outro – 48:53

The descending triangle pattern is a type of chart pattern often used by technicians in price action trading. The pattern usually forms at the end of a downtrend or after a correction to the downtrend. However, it can also occur as a consolidation in an uptrend as well.

Chart technicians can make use of the descending triangle pattern in order to trade potential breakouts.

Bearish or Bullish?

Contrary to popular opinion, a descending triangle can be either bearish or bullish. Traditionally, a regular descending triangle pattern is considered to be a bearish chart pattern. However, a descending triangle pattern can also be bullish. In this instance it is known as a reversal pattern.

To that point, the descending triangle can be viewed as either a continuation pattern or a reversal pattern. The triangle continuation pattern is your typical bearish formation. This pattern occurs within an established downtrend.

On the other hand, a descending triangle breakout in the opposite direction becomes a reversal pattern. Considered the opposite of the ascending triangle, this pattern is also known as the bearish triangle descending pattern.

A very important fact to bear in mind when trading the descending triangle is that it is very subjective. Therefore if you are new to trading the descending triangle stock pattern, you need to have a lot of practice. Familiarizing yourself with it in the simulator will allow you to build your own custom triangle trading strategies.

Characteristics of the Descending Triangle

The classic version of this pattern forms with a trend line that is sloping and a flat or a horizontal support line. The pattern emerges as price bounces off the support level at least twice. The completion of the pattern occurs after the end of a retracement in a downtrend.

The downside breakout from the support triggers a strong bearish momentum-led decline.

However, this textbook pattern seldom occurs in the real markets. In most cases, a descending triangle pattern can also see a sloping base as well. Instead of a flat support level, you can see higher lows being formed.

The illustration below shows an “ideal” descending triangle pattern, which is often labeled a descending wedge, as well.

Example illustration of a classic descending triangle pattern
Example illustration of a classic descending triangle pattern

Typically, the breakout from a descending triangle is triggered to the downside. The distance from the support to the first high is measured. This measured distance is then projected to the downside where the target price can be set.

However, not all descending triangles breakout to the downside. You can also see an upside breakout from the descending triangle. In this case, it becomes a continuation pattern instead of a reversal pattern.

The same concept of measuring the distance from the support to the first high is used to determine targets. This is then projected to the upside for the minimum price objective.

In the next section of this article, we illustrate five descending triangle trading strategies that can be used.

1. The Descending Triangle Breakout Strategy

As the name suggests, the descending triangle pattern breakout strategy is very simple. It involves an anticipation of a breakout from the descending triangle pattern. This strategy uses a very simple combination of trading volumes and asserting the trend, which can be used to capture short term profits.

The first step in trading this strategy is to pick a stock that has been in a downtrend or in a consolidation phase. The time frame of the chart is irrelevant as you can use this strategy across any time period. Once you have identified a stock and the time frame, wait for price action to contract.

Be sure to allow for some flexibility in charting the patterns. Simply watch for lower highs and lower lows being formed. Once you have identified this price action, the next step is to draw or chart the descending triangle pattern.

The basic premise of using this strategy is to look at volume once you’ve identified the pattern. You can typically observe that volume begins to diminish toward the end of the descending triangle pattern formation.

The chart below shows an example of the Microsoft (MSFT) daily stock chart. In the chart, you can see that the triangle pattern was formed after price action was trading sideways. After a brief consolidation, price falls lower before breaking out from the pattern.

Descending Triangle MSFT
Descending triangle pattern breakout strategy

Volumes are usually lower closer to the breakout. Once you identify the lower volume, simply measure the distance from the first high and low. Then you project the same from the breakout area which becomes your target price. We show this with the dotted lines on the chart above.

This simple volume based descending triangle pattern is easy to trade but requires lot of time to watch the charts.

2. Descending Triangles with Heikin Ashi Charts

Using Heikin Ashi charts along with the descending triangle pattern you can develop a powerful but simple trading strategy. Heikin Ashi charts visually stand out compared to the conventional chart types.

One of the main characteristics unique to Heikin Ashi charts is the fact that they can depict the trend easily. Most traders often struggle when it comes to identifying the trend. You can resolve this confusion by switching to Heikin Ashi charts.

In this strategy, traders simply need to wait for the descending triangle pattern to be formed. Once the pattern has been identified, the next step is to wait for the bullish trend to pick up. In most cases, you will find that the Heikin Ashi candlesticks turn bullish prior to the breakout. This can be used as an initial signal to prepare for long positions in anticipation of a breakout.

The next chart below shows the Heikin Ashi chart for Alcoa (AA) on the 60-minute time frame. Notice that, prior to the breakout, the Heikin Ashi candlesticks turn bullish.

Descending triangle with Heikin Ashi candlesticks
Descending triangle with Heikin Ashi candlesticks

Making Price Target Projections

The projections are based on the same strategy as before. Measure the distance from the first high to the first low and project the same from the anticipated breakout level.

Wait for the breakout from the descending triangle pattern. Initiate a long position after the first bullish Heikin Ashi candlestick. Then, project the measured distance from the breakout to get the target price.

Depending on your charting platform, you will notice that volume bars also change. This is because they reflect the bullish/bearish sentiment based on the Heikin Ashi candlesticks. Volume bars serve an additional purpose to alert you to a potential bullish breakout.

This descending triangle strategy with Heikin Ashi charts is effective to trade in the short term.

3. Descending Triangle with Moving Averages

Traders and intraday speculators can also combine price action techniques and chart patterns with technical indicators. Moving averages are one of the oldest and simplest of technical indicators to work with.

It is important to note that in this trading strategy we use the descending triangle pattern to anticipate potential breakouts. Along those lines, the moving average indicators serve the purpose of triggering the signal to initiate a trade.

In the following example, we use a 60-minute stock chart for General Motors (GM). We use a 10 and 20 period exponential moving average. Traders can experiment with their own settings on the period of the moving average; this depends on the time period that you use. For example, for a daily chart time frame, you can use the 10, 20 or 20 and 50 period settings.

Also note that using small periods (less than 10) could make your moving averages more sensitive to noise.

Descending triangle with moving averages
Descending triangle with moving averages

The above chart shows the 10 and 20 period EMA applied to the chart for GM. Notice that prior to the break out, the moving averages signal a crossover buy. The moving averages can be a great source to alert you when to initiate a trade.

There is no need to make use of volumes when trading with this strategy. Also note that you will not always see a bullish signal from the EMA’s prior to the breakout. After you get a bullish EMA signal and a breakout, it is an ideal signal to trade.

Projections and target price level methods remains the same as outlined in the initial strategy.

4. The Descending Triangle Reversal Topping Pattern

You can identify the descending triangle reversal pattern at the top end of a rally. This pattern emerges as volume declines and the stock fails to make fresh highs. The pattern indicates that the bullish momentum is exhausting. At the same time, price action forms a horizontal support level.

After price bounces off the support level multiple times, posting lower highs, we can anticipate a potential downside breakout. The minimum distance that price moves prior to the breakout is measured from the initial high. This distance is projected lower after price breaks out below the support level.

The descending triangle reversal pattern can be very easy to trade if you spot the pattern ahead of the breakout.

The next chart below illustrates the descending triangle reversal pattern in play. The stock chart for Morgan Stanley (MS) shows that after a strong rally, price stalls near the highs. Notice the support level that also stands out.

The Descending triangle reversal pattern at top
The Descending triangle reversal pattern at top

The resulting bounce off the support level leads to a lower high. Following this, price breaks down below the support with strong momentum. As you can see, the minimum measure distance is nothing but the project from the initial high.

5. Descending Triangle Reversal Pattern at Bottom

The descending triangle reversal pattern at the bottom end of a downtrend is the direct opposite of a distribution event. In this case, you will find that price action stalls at the end of a downtrend. A horizontal support level marks a bottom in price.

Multiple attempts to the upside lead to lower highs. Subsequently, price action eventually breaks to the upside from the descending triangle reversal pattern at bottom. Unlike the strategy mentioned previously, in this set up, you can trade long positions.

Traders can anticipate a potential upside breakout and trade the pattern accordingly.

Descending triangle reversal pattern at bottom
Descending triangle reversal pattern at bottom

In the above chart set up for Goldman Sachs (GS), you can see how price fell to the lows, establishing support. The horizontal support level holds the declines where the bounce off the support level leads to lower highs.

Eventually, price action breaks out from the sloping trend line. Measure the distance from the horizontal support to the initial high and project this distance from the breakout level. The projected distance becomes your target price level.

Tips when Trading the Descending Triangle Pattern

Subjectivity is essential when trading the descending triangle pattern. Traders who wait for the “classic” descending triangle pattern will often find themselves on the sidelines.

Familiarity and experience are the best ways to trade, and that can only come through practice.

Keep in mind that the descending triangle pattern is also know as a measured move chart pattern. A measured move chart pattern is when you measure the distance and project the same from a breakout.

Many other trading strategies can blend well with the descending triangle chart pattern. It fits perfectly well within an investor’s buy and hold strategy. The triangle pattern also works with technical analysis which can complement the fundamental analysis as well.

In conclusion, the descending triangle pattern is a versatile chart pattern which often displays the distribution phase in a stock. Following a descending triangle pattern, the breakout is often swift and led with momentum. This can lead to strong results when one becomes familiar with the trading strategies outlined.

Brandon has been a full-time day trader for over a decade. Getting his start in 2011, he has progressed from his early struggles to now making more than $100k in a single day. Known as “Cole Trickle” on his Twitter handle @crawfish-poboy, Brandon is an outspoken and very active trader, sharing his wisdom and trades with his followers.

In this episode, we dive into Brandon’s early years as a moderator at InvestorsUnderground, his progression through some really tough losses, how he manages risk, and some of his recent trades like DWAC. In fact, at the time of posting, Brandon hit a homerun trade, profiting more than $500k on symbol OCGN on both the long and the short side!

Brandon's OCGN trade
Brandon’s OCGN trade

Chapters and Topics for @crawfish_poboy

  • Intro
  • 2011-2014 — 1:00
  • A+ Strategies — 6:50
  • Chat Wars — 15:05
  • Trade Reviews — 24:45
  • Brandon’s Style — 37:13
  • Early blowups — 45:36
  • Risk Management — 53:09
  • Philanthropy — 58:35
  • Outro — 1:01:25 

When it comes to trading education, it can often seem like the wild west. Unless you go the route of a Chartered Market Technician certificate and study the old titans of technical analysis, your options for trading education are quite varied. Within this vast landscape is a myriad of day trading chat rooms, offering the opportunity to trade live with professional traders. In this post, we’ll offer up some advice on how to make the most of any chatroom, as well as what to avoid.

Free vs. Paid Day Trading Chat Rooms

These days, you’ve likely been bombarded with someone flashing their profit and loss statements in a 30 second YouTube commercial. Their goal is to attract you with the hope of making the same money by following their paid service.

Similarly, there are quite a few free chat rooms that have popped up since the pandemic hit. These chat rooms are run by professional traders as well, but don’t require any payment, obviously. Typically, you find out about them by word of mouth or within the social fintwit community.

Most of these chats, whether paid or free are migrating towards applications like Discord to run their rooms.

Custom Features in Day Trading Chat Rooms

Whether paid or free, you’ll likely find a lot of value in the features of these rooms. By this, we mean the ability to find information quickly. Some of the coders and developers are really creative in chat rooms.

For example, if you want to find statistics on a particular stock, many rooms have short codes pulling everything from float data, market cap, and even charts. This can be helpful when you are seeing a stock being mentioned in the room, but don’t know much about it.

Likewise, there are rooms which allow you to set price alerts, find accountability buddies, set alerts for specific members when they make comments, and even have specific sounds for certain keywords like “parabolic,” etc. Perhaps you’ll want to mute certain alerts because they don’t play into your strategies. Many allow this as well.

The Numbers

The amount of subscribers in any of these chat rooms can vary. You may find anywhere from a thousand to many thousands in paid chat rooms. Likewise, you may find as many as 10,000 or more in the free chat rooms.

This may seem daunting. And to many, it probably is. The struggle with trading can often be the loneliness that comes with it. Even in chat rooms, you can have a sense of “not belonging,” or getting lost in the crowd. To that end, let’s discuss a handful of ways to make the most out of these rooms.

How to Pick the Best Chat Rooms

It goes without saying that not all chat rooms are going to offer great services. We are not here to tell you which ones to avoid, either. However, you should be on guard. Any Joe Blow can make a dollar in the stock market and throw his PnL up on Twitter and start a chat service.

For that reason, we recommend doing a search for independent reviews. Ask around and see which rooms are the best for education and mentorship. How long have moderators been trading? Ultimately, there is likely something to glean from many of the chat rooms, if your search is objective. We’ll discuss what this means in a minute.

Secondly, joining chat rooms for stock alerts is risky business.

If you’re joining simply to have someone tell you when to enter and when to exit a trade, we’d advise caution. While we understand that many retail traders don’t have the desire to become self-sufficient in the markets, you must be aware that signing up for alert services may simply provide the liquidity that big players need to dump there shares into your hands. Granted, not all alert services will be this nefarious, but in this day and age, even large market participants may keep an eye on alert services knowing how to use them to their own advantage.

At the end of the day, even if you only want to do this part time, we recommend you find a day trading chat room that teaches you how to become self-sufficient. It will pay off in the end.

Studying the Educational Material of Day Trading Chat Rooms

This is far and away the best way to use day trading chat rooms as a beginner. If you are in year 1, 2, or 3 of your trading career, you should be devouring information. Here is how to do this quickly and efficiently.

  1. Subscribe to a reputable service with educational material and archived content.
  2. Devour the educational material as efficiently as you can.
  3. Study the charts and commentary of as much archived content from the professionals in the chat room as you can.

While doing this, you need to be objective. We discuss a lot of this in our post on “How to Find an Edge.” Here are the objectives you need to have:

  1. Does the education material fit your personality and schedule?
  2. Are you more long biased or short biased?
  3. Do the professionals give clear indications as to the probabilities of their strategies?

If you can’t find these answers, you may need to try another service. However, it is likely that you will be able to “piece together” the outcomes of specific strategies if you are diligent enough with your studying. Here’s how to do that:

How to Study Gurus

Gurus can offer a lot of wisdom, but not all gurus are great teachers. And that’s ok! We don’t blame them for it, honestly.

Think about it this way, some of the greatest performers in any field may have a hard time explaining in elementary terms how to get to their level. Once you reach such a level of proficiency, it is difficult to even remember what it was like to be a beginner.

Keep that in mind when you study gurus, but learn how to help them help you.

  • Take their material and find a way to dissect it.
  • Organize the educational and archived material in such a way that you can follow
  • Create a subset of categorized trades and replay them in the simulator

Let’s expound on the last bullet point:

If your guru offers premarket plans on a live stream, and has this archived, take advantage of it. Study in your free time by replaying their premarket video feed for a particular day, and then replaying the exact same market day in TradingSim. Document what worked, what didn’t work, and take annotated screen shots of your “categorized” setups and put them in a folder.

Do this enough times and you will build your confidence on why your guru takes certain trades. Consequently, you will build your own confidence in what trades you should or shouldn’t take.

Find Your “Core Group” from a Day Trading Chat Room

Post-Covid, the work-from-home phenomenon is accelerating. In a lot of ways, this can be great for people. The opportunity to trade and live in your pjs! However, for some people, the lack of meaningful human interaction can become lonely.

Along those lines, we recommend that you use the chat room to find people who resonate with you. We don’t mean finding people who only trade like you or only think like you. Instead, try to surround yourself with people who will make you better.

Even proprietary trading firms like SMB capital are finding that their traders are more consistent when they are paired into teams. Use this to your advantage, bring value to a team, and collaborate with other budding traders from your chat rooms.

Heck, some traders even go so far as to meet up in real-life. In our recent SimCast episode with Ricky Analog, he talks about how 60+ members of his chat service went to an adventure race together recently.

Find Mentors, or Move on

One of the most important aspects of day trading chat rooms is mentorship.

As we say above, there is always something to glean from anyone who has been trading for a while. You may find a new indicator, a new strategy, or some way to read the tape that you hadn’t considered before. Those are reasons to find value learning from others in a chat room.

However, if you are not finding proper mentorship along your journey, we recommend you find a new place to grow. Ricky Analog mentioned this in his talk at Traders4aCause this year. Ricky is a huge proponent of mentorship and recommends finding as many as you can along your journey.

We couldn’t agree more.

As a growing trader, you should never limit your perspective. Keep an open mind and keep growing by reaching out to new mentors. Just keep in mind that you will get out of mentorship what you put into it. Bring value to the table, and be willing to put in the legwork behind the scenes.

There are no free lunches in this business.

5 Things to Avoid in Day Trading Chat Rooms

While we certainly agree that live chat rooms can be a great way to learn how to day trade, there are a number of things to watch out for.

1. Avoid the US vs. Them Mentality

We live in a time where online gaming has become prolific. Much like competitive sports, the gaming mentality has found its way into trading now.

Many of the traders in paid chat rooms and free chat rooms are now watching both rooms at the same time. With tens of thousands of traders all watching the same tickers each morning, and keeping a check on all the chat rooms, what we’ve found is a competitive mindset creeping into the landscape.

Often times, one room will be more long-biased and others more short-biased. As you can imagine, this creates an “Us vs. Them” mentality akin to gaming.

We would advise you to steer away from this mindset. Most of what this centers around are the smaller, more manipulated stocks in micro-cap land. It’s entirely possible that so many followers in so many rooms could potentially have an effect on the price movement in these stocks. However, not all price movements are a result of a chat room “out to get you.”

Nonetheless, if you decide to trade these stocks, keep your eyes on the supply and demand. Trade the ticker, not the chat room. It can easily become a crutch to blame the price movements on this chatroom or that chatroom. But, at the end of day, it’s up to you and your ability to read volume and price action.

2. Watch out for Bias

Because of the herd mentality, it can be easy to find yourself affected by the biased comments in the room. To avoid this, always take an objective approach. Never take anyone’s comments at face value. Do your own homework on the trade and make a decision for yourself based on the homework you’ve done on strategies.

3. Avoid FOMO

Chat rooms can be exciting. And rightly so. It’s 1000s of traders getting together in one room to make money. Who wouldn’t be excited?

Stock Market Fomo Meter

But this is can be very dangerous. Keep in mind that the best trading is often very boring. Why? Because you know your probable outcomes and are less emotional knowing this. To that end, take care that you don’t fall prey to every news release or alert unless it fits your pre-designed trade plans.

Always have a plan, and avoid FOMO at all costs.

4. Be Aware of Success Theatre

Many people in chat rooms will share their good trades and leave the bad ones to themselves. Remember this when traders are posting all their massive gains in the chat room and you feel left out.

There really isn’t anything healthy about sharing wins or losses. Wins and losses are going to come no matter what. What matters is how well you review your process each day, regardless of what other traders are doing.

Unless you can reach out to someone for tips on what he or she did well in the trade, ignore the success theatre.

5. Drama & Profanity

You would think this goes without saying, but drama can be a real drain on the experience. Pick your chat rooms according to your personality.

We tend to treat trading like a business. For that reason, when we’re putting thousands of dollars on the line, we prefer a professional environment.

Perhaps you don’t. There are a myriad of differently run chat rooms on the web. If profanity and memes are your thing, there’s a chat room with that. If nothing but important news information is your thing, there are chat rooms that are tightly run for that purpose.

No two chat rooms will be the same, nor will their strategies. And, ultimately, no chat room is the “best.” It will be up to you to try them out and find the one that fits you the best.

Conclusion

As you search for a place to learn, we hope this has provided some benefit as to what to look for. Keep in mind, as with any industry, there will be well-run businesses, and those that are not run well. Guard your capital and your precious time. Be selective, and bring your own value to the table.

In Episode 6 of The SimCast, we had the opportunity to sit down with Ricky Analog of TrueTraders.net. In this episode we use one of Ricky’s recent trades in $CEI to discuss the importance of risk management and key technical levels. Pay close attention to how Ricky discusses waiting for the backside of the trade.

Ricky Analog the Mentor

We discuss a range of topics like how Ricky got started and how his early failures taught him to succeed. Mentors were a huge impact on his life. Now, Ricky spends a lot of time mentoring his own students.

Here’s one great quote from the interview that stands out about Ricky’s mindset on losses:

You’re not climbing out of a hole; that’s just where you’re starting from. You can’t win those chips back.

Ricky Analog

Ricky is an expert when it comes to digging for fundamentals and filings on stocks, especially pump and dumps. In fact, he’s got his own YouTube series teaching new traders how to DDIG for these filings. Be sure to check out that series if you are interested in learning how to comb through filings.

Also, be sure to follow Ricky for his Sunday prep on YouTube. He’s always offering up some great free advice and ideas every Sunday. You can find him on Twitter at @RickyAnalog.

SimCast Ep. 6 – Chapters and Topics

  • Intro
  • Background – 3:10
  • Early struggles – 5:30
  • Risk Management – 7:00
  • $CEI – 14:48
  • Pump Cults – 25:30
  • Mentorship – 42:00
  • Outro – 49:10