Vadym Graifer has been a professional trader for the past 9 years. He has also been a Headtrader and Managing Partner of RealityTrader.com, a training company for equity traders offering real-time scanning, trading suggestions and personal mentoring. Vadym is an author of two books, Techniques of Tape Reading (McGraw Hill, 2003) and The Master Profit Plan (Trafford, 2005).
Vadym has presented his real time trades, with ongoing interpretation and comments, in a unique video course, “How To Scalp Any Market.” He is a featured speaker at International Trader's Expos, Financial Forum Conferences and private seminars. He has also published articles and interviews in industry magazines, corporate product newsletters and trading forums.
I really enjoyed my recent interview with veteran trader Vadym Graifer who brings a very refreshing perspective to the markets. This is the third and final installment of my interview with Vadym Graifer.
Optionetics: What kind of advice would you give a person just now beginning in trading the markets?
Vadym: Build your trading plan from a foundation up. Start with philosophy, general approach, and decision of what it is you are going to trade: trend? range? trend following? trend fading? Make sure that you pick setups and indicators matching your decision. Align all the components between themselves: if you buy on Cup and Handle breakout on 1 minute chart and hold a failed trade for months because fundamentals are good (true example!) - something is horribly misaligned. Start slowly; control your risk tightly because you will need time to get it right so you need to survive long enough. Use your trading journal to fine-tune your trading method. This is a long discussion, hard to put it in a few sentences... I devoted a entire book The Master Profit Plan to this process and I wish someone wrote it for me to read when I started. Would have saved me much grief.
Optionetics: Can you describe what your average trading and analysis day entails from preparation to execution?
Vadym: As an intraday trader and scalper, I don't have much to say about preparations. It's mostly done in the past when I tuned my real time scanner to hunt for my setups. In a course of a day I simply watch scanner's alerts, look at the charts and when I see recognizable situation with risk parameters within my tolerance - I click entry button. Market tells me what it is, win or stop. Out. Next. Repeat. Repeat. Repeat. Routine... The most interesting and exciting situations appear when I see the divergence between information and price action - that's the best opportunities.
For instance, market is selling, scanner spits out mostly short signals. Day, another day, third... The moment comes when the bunch of bad news comes out. Economic numbers, earnings, hurricanes, oil shortage, you name it. The tape is all red, selling is relentless, yet the price is holding. No more downticks, all the selling is getting absorbed. If you keep on a backburner several stocks that haven't made new lows and even tried to bounce during last day or two, that's the most beautiful moment to buy. When all the information is out, the move is over...
Optionetics: What kind of decision-making process do you go through before deciding on a particular trade and a particular sector of the market that would be worthy of putting on a position?
Vadym: Right setup and alignment with the market. That's all. I see a strong sector in so-so market; I start keeping an eye on that group of stocks. I pick those that form one of my setups and wait for the market to show the directional support. Stocks that trigger at this moment are my trades.
Optionetics: What type of analysis methodology do you employ to find great trading opportunities?
Vadym: Price and volume. Those same principles of tape reading I mentioned earlier. Distinguishing between Smart Money and Public action in order to take the right side. This gives me a direction. Timing is dictated by setups and their triggers. I hunt for several specific chart formations, pretty well known. I have Bollinger Bands on my charts as well, just to have a general feel of where the stock is. There is nothing fancy in all this, I keep it very simple.
Optionetics: Thanks, Vadym, for detailing how you approach the markets as well as sharing your experiences in the trading business to our Optionetics reading audience.
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