If you have received life coaching from me then you will recognize much of what I have to say here. Today I am going to give a brief lesson in profiting from Day Trading.
The recent market volatility as measured by the VIX is the darling child of the Day Traders. If you are a learned student of Psychology inclusive of the sub-categories such as group think, extrinsic motivation and the other factors that relate to fear and greed then you are well on your way.
It helps to have a cursory knowledge of economics but alacrity in this field is not mandated. I am a psychology based Day Trader. That is I base my purchases or sales of stock as to the relationship between the price compared to actual economic conditions and overwhelming market psychology.
More simply stated, when the market is declining because traders fear that bad economic conditions are on the horizon and sell -- I buy. Conversely, when positive news bearing on the anticipated economic condition and potential profitability is released and traders feel they better start buying now before missing the next extended leg up -- I sell.
It's the old adage -- buy low, sell high.
Here's another adage -- You know how to get a million dollars Day Trading? Start with two million.
It is true; most Day Traders fail. The primary reason is that they respond to the market emotionally. That is their downfall. I am not saying be a sociopath but through my life coaching I have come to the realization that a significant portion of the troubles that befall most people are based upon an uncontrolled or adverse emotional reaction to an uncontrollable situation or one they perceive as such.
That emotion that I bring to your attention in this context is greed. So here is where I introduce you to the distribution plan that keeps greed at bay and maintains your ability to take advantage of opportunities.
Market rules require that Day Traders have an account balance of at least $25,000. However, to make it worthy of your time I suggest an account balance of $100,000 or more.
The first thing to do is pick your trading vessel. That is the company, fund or index that you will be trading. You want to ensure that yours is a liquid trading asset which is simply saying that it is traded regularly and in high volume.
I trade SSO which is a leveraged ETF [Exchange Traded Fund] that tracks the S&P 500. It is designed to move at twice the rate of the S&P 500. If the S&P 500 moves one percent then SSO will move two percent.
The initial trade
You first trade is going to be applying 10% of your cash balance towards purchasing your trading vessel. It is likely that you are choosing to start Day Trading following a market sell-off. So, don't try to time it, jump right in and buy.
So if you had done this yesterday then you would have purchased SSO around $40 per share. SSO has a 52 week range of around $33 as a low and $55 as a high. You are in the low end of the range, a good place to start.
I have no formula for selling but I do for buying to limit downside risk and maintain a cash balance for buying opportunities. Having a set buying schedule and a plan for holding shares that have lost value will ameliorate the losses and keep you from dumping at the moments immediately preceding a rise in value.
So here is the buying schedule. I can only accumulate shares upon a 5% drop until I have spent half my funds, then the next 30 percent of funds on incremental 10% drops. The final 20 percent is applied to a 25% drop. Additionally I always keep a limit buy order open for the next step down plus one at a 25% discount just in case we get a flash crash again. If more people did this that flash crash would have never happened.
Here is this buying schedule with $100,000 trading SSO starting at $40 per share.
$40.00 - Buy 250 shares = $10,000
$38.00 - Buy 263 shares = $10,000
$36.10 - Buy 277 shares = $10,000
$34.30 - Buy 291 shares = $10,000
$32.58 - Buy 307 shares = $10,000
then we move on to 10% drops
$29.32 - Buy 341 shares = $10,000
$26.39 - Buy 379 shares = $10,000
$23.75 - Buy 421 shares = $10,000
then the remaining 20% is set for bottom fishing at a drop of 25 percent
$17.81 - Buy 1123 shares = $20,000
This is the worst case scenario. Hopefully you don't buy in just as the market is starting a free fall into the abyss but if you do this plan limits your downside and provides great upside potential. You would now own 3652 shares at an average price of $28.38. That's about half of its 52 week high which I am confident will be achieved again. If it takes 10 years to achieve the previous high again that would still be a 7% annual return on your money plus the dividend.
However, In a market driven by volatility that is unlikely to happen. What I hope for is a roller-coaster pattern. Ups and downs over a period of days or in one day. So let's examine my trades for the past week which were quite modest as I have been very busy and did not have time to sit around watching the market and trading. The prices shown include the $7 transaction fee applied at both the purchase and selling points.
18-08-2011 - BOT [250] $40.38 = $10,102 - and the market kept going down
19-08-2011 - BOT [275] $37.70 = $10,374
22-08-2011 - SELL [275] $38.80 = $10,663 profit of $289
22-08-2011 - BOT [275] $37.85 = $10,416
23-08-2011 - SELL [275] $38.54 = $10,591 - profit of $175
24-08-2011 - SELL [250] $41.01 = $10, 245 - profit $143
24-08-2011 - BOT [250] $40.00 = $10,007
24-08-2011 - SELL [250] $41.12 = $10,293 - profit $286
That is a weekly profit of $893 based upon just a few transactions while dedicating less than an hour a day to this. Not a bad hourly rate.
As for selling I have no formula other than to sell for a profit. I make my sell decisions based upon momentum only. When I see the index moving higher than I feel is justified I sell. I usually aim for not less than a 1% move up in the index from my buying point.
If you have the self-control to not get caught up in the momentum of the herd Day Trading is a great vehicle to make money with little risk to your capital. Unfortunately for most people they lack the discipline to make wise decisions that are in their best interest.
Emotional decision making in parenting, business/finance and personal well-being exacerbates already existing difficulties oft times leading to a tumultuous lifestyle. If you need assistance with instilling discipline in yourself and achieving your goals please visit my website and contact my scheduler to make an appointment to meet with me.
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©2011 Stuart Showalter, LLC. Permission is granted to all non-commercial entities to reproduce this article in it's entirety with credit given.
Thursday, August 25, 2011
Simple Steps to Profiting from Day Trading
Thursday, August 18, 2011
Custody of Infants and Toddlers in Divorce or Separation
An article by Jennifer E McIntosh, PhD, Special Considerations for Infants and Toddlers in Separation/Divorce: Developmental Issues in the Family Law Context, published 27 June 2011 has received significant attention. After reading this article I think it warrants review for what is inclusive and omitted.
McIntosh notes at the onset the age of children relevant for this topic - under five years of age. Additionally she notes that the "emotional and developmental security of the infant" should be considered the "prime and determining elements in custody matters" by family law professionals.
Although there has been significant study of the effects of divorce and separation on school aged children, little has been studied of infants and toddlers. McIntosh admits to such.
McIntosh cites that the first four years of a child's life "is the peak period of attachment formation." Specifically, psycho-emotional development in infancy depends to a great extent upon continuous, predictable, emotionally-available care-giving. The quality of parenting in the first 2-3 years of life are particularly important to healthy development.
McIntosh then cites to three divorce related stressors; 1) parental conflict and violence; 2) diminished quality of parenting as parents cope with conflict; and 3) the effect of repeated separation of the infant from primary attachment figures.
McIntosh then seems to attack shared parenting time arrangements and asks: "under what conditions, and at what points in development does shared-time parenting pose a risk to developmental security?"
She then addresses current research as related to Shared Parenting arrangements. The question posed to the reader generally related to the effects of overnight parenting time and its relationship to the child's attachment to primary caregivers and emotional stress.
For children age 4-5 years research indicates no adverse outcome related to overnight parenting time. Again though, parental conflict is noted as an adverse reaction trigger. For children age 2-3 years who spent 2-3 nights per week with the parent who is not the primary residential parent showed greater problematic behaviours than those who had less overnights. Finally, for those under age 2 problems appeared greater for those who had more overnights when compared to those with less.
McIntosh cites that parents who remain acrimonious and have difficulty in ameliorating this during parenting time transitions add to the difficulties. She then notes that "warm, lively, attuned care-giving interactions between baby and the second parent appear to be central to the growth of attachment security in that relationship."
Before stating her conclusions McIntosh cautions that research into the field of Shared Parenting arrangements on children under five years of age is still in its infancy.
McIntosh concludes that care should be given when considering the parenting time arrangements for children in the studied age group. That parental conflict, inadequate resources and an inability to remain child focused pose difficulties for the child's development and attachment security in Shared Parenting arrangements. Finally, that the developmental resources available to the child should be the primary concern for decision makers.
McIntosh sees the implications for parents, service providers and policy makers as being based upon avoiding having children in the first four years of life exposed to parental conflict and violence. She proposes that separation from the primary attachment figure be for brief periods of time and not expanded until the fourth to fifth years. Overnight stays may be appropriate when convenient for the custodial parent and when the other parent has already been established as a source of comfort and security for the infant and time spent with that parent should foster this. Finally, that the primary consideration be given to the emotional security of the parent.
I think that McIntosh has, unfortunately, approached this subject with a bias and agenda disfavouring the growing acceptance and use of Shared Parenting by parents, practitioners and policy makers. I personally believe that Shared Parenting arrangements are best in most situations and have seen the benefits to the children in many post marital relationships among their parents.
Policy-wise I am often asked, primarily by fathers, to advocate for a mandate for Shared Parenting models in statute and policy such as the Indiana Parenting Time Guidelines. However, I refuse to support such mandates and believe that significant discretion should be left to parents, practitioners and judges in these cases.
With that said I am still resolute that there should be an unbiased presumption during the initial phases of child custody proceedings. To facilitate that there should be a presumption of a Shared Parenting model in all child custody cases followed by specific findings and conclusions consistent with Indiana Trial Rule 52 when a deviation is made from that presumption.
The overwhelming proportion of my comments here are simply anecdotal based upon my vast close and personal experiences with parents, children or families involved in child custody proceedings. This involvement includes such personal experiences as providing child care for the children, life coaching to parents and even living in households for brief periods. Still, I will cite to some material from studies by mental health professionals and researchers. Additionally, although McIntosh doesn't state it overtly I feel that her use of the term "second parent" relates to fathers as does most research in this area. Therefore, I will refer to fathers in this instance as for paternity cases there is already a legal presumption that the father is the "second parent".
I must first argue against McIntosh's contention that the primary focus in custody determinations should be the "emotional and developmental security of the infant". Although that is important and should be a significant consideration I am always looking for unintended consequences in any dynamic as I recently wrote about.
Having heard from many mothers and fathers, particularly their frustrations, I am concerned about the emotional well-being of the parents as well. I have received the middle-of-the-night phone calls from parents claimed that the only thing keeping them going is hope. I have held the crying parents who haven't had the experience of physical contact with their children in months, some not even able to experience communication with the children.
Children do need to develop significant attachments with both parents during these early years. Almost fifty years ago, the path-breaking work of Schaffer and Emerson (1964) provided evidence that the majority of infants formed an attachment to their fathers during their second year. The concept of exclusivity of infant–mother attachment did not reflect the social reality of infants in families. The study relied on maternal reports stating that by 18 months of age 75% of the infants protested separation from their fathers.
I postulate then that it is important to consider the needs of fathers to have meaningful and significant contact with their children so as to reduce the propensity for stress induced mental health issues. It is often the feeling of powerlessness by fathers that lead to frustrations which may be acted upon in negative ways. This is not a father only phenomena though as I have female clients who experience the same agony with their adolescent children.
Although McIntosh makes conclusions based upon the relatively new research she also notes that this research is in its infancy and is incomplete. I would recommend that policies not be based upon incipient research and data.
She goes on to state that a child's separation from the primary care-giver can be detrimental to the child's emotional development and believes that overnights with fathers during the first three years of life is unfavourable. I am curious as to what her thoughts would be about married parents who leave their children with grandparents, nannies or other care-givers on an overnight basis.
In our modern society we have numerous dual professional families where parents leave the children in the care of others who sometimes become secondary attachment figures and, at times, the primary attachment figure. This situation may be less than optimally desirable but it is a reality that is manageable when the parents engage in loving and attentive interactions with the children on a regular basis. Such could also be an effective norm for separated parents and their children.
In studying children at this age it is difficult to accurately assess their feelings and the impact of separation from a primary care-giver as it is difficult for them to articulate, some not even speaking. It is then left to researchers interpretations of behaviours exhibited in a clinical setting or reporting by parents, which may be subjective.
Custody determinations for young children will be extremely fact sensitive and discretion should remain for parents, practitioners and judges to establish the best plan that meets the needs of the children and parents. However, the policy trend that is favouring a presumption towards dual parenting for infants and toddlers should continue.
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Parents who would like to achieve the best outcome for their children in a contested child custody case should visit my website and contact my scheduler to make an appointment to meet with me. Attorneys may request a free consultation to learn how I can maximize their advocacy for their clients.
Connect with me for the latest Indiana child custody related policy considerations, findings, court rulings and discussions. 
Wednesday, August 17, 2011
The Real Reason Why New Year's Resolutions Fail
Every year people crawl into bed, if they actually make it that far, at some early hour in the morning on New Year's Day with a feeling that it must get better. They awaken to the face their same feelings of an immutable impasse in their lives but boldly declare their resolutions anyway. They are going to get closer with family, become more active, be healthier, lose weight, quit smoking, go back to school, get the credit cards paid off and get organized.
With an enthusiastic zeal they jump right in and start making changes that very day. They soon climb upon their electronic version of the proverbial soapbox and promulgate their their ambitious plan to everyone in their network of friends on social media sites. Updates of their rapid progress and flowing for days. Yet many of these changes are ephemeral. Within a few days or a few weeks, sometimes months for the most steadfast, the excitement, progress and matching public reports have all but disappeared. These once ebullient people slip back into the same destructive behaviours and bad habits which are sometimes exacerbated by the feelings of failure.
The pop-psychology pundits appear as quickly as the resolutions fade to give their annual assessment as to why such a significant portion of our populace is failing at this. It usually goes something like this: People have only made their resolutions because they have been cajoled by others to engage in this annual tradition. They were not ready to make their resolutions and therefore were not invested in them. They often relied upon the spurious advice of self-help gurus.
It should be no surprise then that people are not able to maintain their commitment to change. I disagree though. I believe people want to make the changes that they declare in their resolutions. I believe that the prodding by friends, the ritual timeliness and the advice of some self-help texts can be useful.
I believe that most see New Year's Day as a convenient and expected starting point. However, this is referred to as an external artificial stimulus which positions the person for failure. That is, the resolution was made not because the person was prepared and willing to embark upon the journey of self-improvement on that day but instead the declaration was made because society expects it to be done at that time.
I have seen many people face the same challenges when making their resolutions at any other time of the year. It may be a grandiose goal, seem too exacting, or be based upon some exhaustive schedule. What I feel binds these people to those ritual declarants on the first day of the year is a lack of clarification. A comprehensive plan to ameliorate the initial unpleasantness that some of these changes produce is necessary for effective change. One must delineate the plan in conjunction with the needs and abilities of the individual.
As an example I will use one common resolution which is one I have just completed with great success. That is, to lose weight. I shed 1/3 of my body weight and am now back tomy high school graduation weight.
The problem with most weight lose plans is that they are a weight lose diet. Weight lose diets don't work. Reread that one and let it sink in.
If they did work then you wouldn't be hearing about a new plan every year or so. Most only palliate the weight issue. For any modification of lifestyle to be effective the plan must delineate the process on you as an entire person. It is not necessary to endure unpleasantness as this can be a congenial experience.
There is more to losing weight than calorie restriction. Financial issues, employment, mental health, family discord and other health conditions are all relevant and must be inclusive. It is whether these different dynamics can be harmonized that will determine success or failure.
An effective weight loss plan can include as little as eliminating three food ingredients, while still allowing you to eat all the ice cream that you want. It must be part of a comprehensive life plan though.
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Parents who would like to achieve the best outcome for their children in a contested child custody case should visit my website and contact my scheduler to make an appointment to meet with me. Attorneys may request a free consultation to learn how I can maximize their advocacy for their clients.
Connect with me for the latest Indiana child custody related policy considerations, findings, court rulings and discussions.
Monday, August 1, 2011
Unintended Consequences – The Success Paradigm
I have been riding my bicycle on a route between Indy and Lebanon nearly everyday day recently. Often I am in downtown Indy or on other roads where I encounter heavy traffic loads and ride within close proximity to the vehicles. People whom I know sometimes tender their unsolicited advice about my safety. For many it is not without validation as I was once nearly killed in a collision with a vehicle. Still, their concerns are often based upon false pretenses or illogical conclusions.
I may straddle the white dashed lines or the solid yellow lines in a roadway as I weave my way through traffic. Sidewalks, alleyways and being tightly juxtaposed to turning vehicles allows me to get throughout downtown at a more rapid pace than most vehicles. I do all this riding without a helmet. That is a result of my paradigm for which I approach helmet usage based upon my introduction to bicycle helmets.
In the mid 1980's I was licensed by the United States Cycling Federation as an amateur cyclist. At my pinnacle I competed in about 100 races per year and rode about 500 miles in a typical week. In the few years of doing this I crashed three times. The final being the one where doctors stated that if I lived through the night I would survive. I was unconscious for about half a day. My rating on the Glasgow Coma Scale was low but the effects still remain. I was not wearing a helmet at the time of the collision.
So as I am riding along Lafayette Avenue heading to Lebanon a week ago I started thinking about helmets. I had been watching the final stages of the Tour de France and noticed nearly all of the riders wore helmets. When I was a professional cyclist such was not the case. Helmet usage by professionals was a rarity.
The exclusion of helmet usage by professionals is what hastened my ascent from an amateur cyclist to being licensed by US Pro as one of the less than 200 professional cyclists in the United States. The catalyst was the adoption of a helmet usage mandate by the United States Cycling Federation which was the governing body of amateur cyclists in the United States. The policy was a direct result of input from and consultation with insurance and legal professionals, not cyclist.
What all of these brilliant minds had acquired in formal training in their respective fields fell well short of what they lacked in intelligence, but such is often the case. It was the safety of those of us who were out there racing through the streets of our cities and winding roads of the countryside whom these academically astute consultants had no concern about. What they were unable to see was unintended consequences. They had no vision beyond that for which they had be guided through unsupported premises and theories and their end goal of providing the appearance of having a proactive safety policy.
Unintended consequences is a factually based result. This science requires its adherents to have the ability to think abstractly. It is this thought process that I applied to the helmet issue in 1989 and that which I still apply in life coaching today.
In 1989 the typical bicycle helmet was a modified version of a motorcycle helmet. It weighed about 3-4 pounds, completely encased the head with a hard styrofoam packed into a hard plastic shell with chin straps. The helmets impaired both visual and auditory input.
So here is the spoon-fed version of the helmet issue; 1) Cyclists get involved in collisions with each other or vehicles; 2) sometimes their heads come into contact with the vehicles or ground; 3) some of these contacts result in brain injuries or death; and finally 4) helmets reduce the severity of the impact and can reduce brain injuries or death in those cases.
Here is the unintended consequences version of the helmet issue.
Riders who were dislodged from their bicycles had a four pound weight attached to their head for which their necks had not been sufficiently reinforced to withstand the sudden acceleration or deceleration associated with the collision. This resulted in more neck injuries and more cranial contact with the ground.
Since these helmets impaired both visual and auditory input the cyclists were then more likely to collide with each other or vehicles which they could not see or hear. Thus, there were more collisions from which the helmets could “save” these cyclists from severe injury or death.
The solid shell design of these helmets resulted in no airflow around the scalp. Anyone who has engaged in high intensity workouts in the heat is keenly aware of the necessity for cranial airflow to help cool the body. This obstruction of airflow reduced the body's cooling capacity. Since racing 100+ miles in temperatures often exceeding 90 degrees was not uncommon incidents of heat stroke or passing out increased. The reduction in brain functioning or complete disengagement of the conscious mind because of heat related conditions led to an increase in wrecks.
In the end those who suffered from a cranial-rectal impaction who crafted such absurd policies rejoiced in the results of their misguided policy. For them they saw victory in that these cyclist who became much more dangerous that year and crashed more often were being saved from more severe injuries or death because they were forced to wear a helmet during these sanctioned events.
The wiser mind finds no solace in creating a danger from which to save someone. The professionals continued to race without these helmets and did so without harm.
If you allow yourself to be conditioned to accept the directed purpose and consequences of actions then you will continue to suffer the unintended consequences. He who has the wisdom to see past the disinformation of carefully worded marketing campaigns can excel in life. If you have read this and gleaned something new about the purported safety of bicycle helmets then it may be time to become a student of self-fulfillment.
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Make a suggestion for me to write about.
Parents who would like to achieve the best outcome for their children in a contested child custody case should visit my website and contact my scheduler to make an appointment to meet with me. Attorneys may request a free consultation to learn how I can maximize their advocacy for their clients.
Connect with me for the latest Indiana child custody related policy considerations, findings, court rulings and discussions.
