This table shows the probability expressed as a percentage for the odds that you will have a certain number of consecutive losing trades in each 100 trade sample of your trading. For example if your win rate is 50% then 9% of the time you will have 10 losing trades in a row for each […]
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A drawdown is when your trading or investment account goes lower from its all times high in capital. Your account is either making new all time highs or in a drawdown. No trader or investor continually makes all time highs, everyone spends some time in a drawdown. One of the most powerful ways to insure
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When a market’s price action falls straight down making lower lows continuously without stopping or bouncing back it is considered a ‘falling knife’ on a chart because of its speed and trajectory. It’s not a good idea to buy into a chart with plunging price action that can’t find support before there is a signal
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An equity curve is a visual representation of the trend and variation in the value of an investment or trading account shown on a chart over a specified period of time. An equity curve that has an over all uptrend and is near all time highs usually shows that the investing or trading strategy used is profitable
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Here are five ways to effectively manage risk as an option trader: The first step in managing risk as an option trader is position sizing. When buying options the amount of capital you spend buying an option contract long is the most you can lose if your option expires worthless before expiration. The best way
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In trading and investing, risk management is defined as the process of understanding, identifying, adjusting and managing all of the potential risks that an account is exposed to so the size of losses and drawdowns are minimized for the magnitude of negative impact they will have on a systems risk of ruin and long term profitability. Some examples of possible risks to investment
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A death cross is one of the most popular bearish moving average crossovers in the trading world. It is a bearish signal that means the stock market is in a downtrend and could go much lower when the 50-day simple moving average crosses under the 200-day simple moving average from above. It shows a loss
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While many traders love volatility and need it to trade in their timeframe it creates as many risks as it does opportunities. If you are on the right side of volatility you can make a lot of money but being on the wrong side will cost you dearly. Here are the top 10 dangers that
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Moving averages are primarily used as trend indicators and trend filters. They are quantified technical trading indicators that can be used for backtesting and signal creation. Using moving averages to capture profitable trends are only one side of their usefulness. What enables moving averages to work as profitable technical trading tools is their ability to
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Why did the Coronavirus drop the stock market so fast? The stock market is a forward looking investment mechanism and is always pricing in the future earnings expectations today. The Coronavirus is a highly contagious and dangerous illness that has already caused the quarantine of Chinese cities, Italian towns, cruise ships, and travellers returning home
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