In my Facebook trading group, I asked the question: “What is your most important trading rule?” As usual, I got a ton of great answers. The most common response was: “Always follow your trading plan.” followed by “cutting losses”, and “keeping losses small.” This should hit home for new traders. If you do not have a […]
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For a trader to be successful their intellect must defeat their ego. A trader must use probabilities to overcome their own personal opinions. A trader has to use risk management to overcome the hope that a losing trade will turn around and just take the original stop loss plan. A trader must allow the actual
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There are two different issues that I have seen traders face: #1 Not knowing how to turn off their trading. Obsessing about every trade and watching every tick even when no value is added. Tying their self worth to their trading results. A trader has to have an ‘off’ switch along with their “on”
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You can control when you enter and what will cause you to exit but where price goes in the mean time is up to the market itself. You can decide how big of a position you want to trade but you can’t choose your profit amount that is up to the market. You can’t decide
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So far the stock market in 2014 does not care about anything but the central bank IV drip. The bulls continue to run wild in the energy sector $XLE as they wait for some clarity in Iraq. $XLE did finally fall back to reality under the 70 RSI. 2104 has been the year
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In order for my option book “Show Me Your Options” to become an official “Bestseller” on the Amazon Kindle platform… I need to have real customers with real sales and real testimonials posted on the Amazon website. What’s surprising is that it doesn’t take a million orders to become a best seller. By my estimations,
The Five-Step Process of System Development by Richard Weissman: pages 11-13 When to not play: a poker lesson for traders by Brett Steenbarger CNBC Viewership Drops To Lowest Since 1997, Cramer Has Worst Month Ever The Dunning-Kruger Effect: Why Every Novice Thinks They Can Trade The Psychology of Getting More Done (In Less
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Don’t worry, America. If the game is going the wrong way, the Fed is prepared to intervene in the 2nd half. #USAvsPOR — Rudolf E. Havenstein (@RudyHavenstein) June 22, 2014 “@drunkNnaughty: I have CDO. It’s like OCD, but the letters are in alphabetical order. Like they should be.” — Joseph Fahmy (@jfahmy) June 21, 2014
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While all of these may not fit into your own trading plan, some of these rules could help individuals decrease drawdowns. Make limiting your drawdown in capital your number one priority, not your profits. It is much easier to be profitable when you don’t lose a lot of money. Never lose more than 1% of
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Winning traders take responsibility for all their trades win or lose. Whining traders play the victim of algos, the Fed, and blame the markets for their losses. Winners have a trading plan Whiners have emotions, ego, and blame. Winners find a way to be profitable. Whiners find an excuse why they are not. Winning
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They say things like “I have been pounding the table on this trade” or want some kind of brownie or cookie for “calling some market movement” it is about making money not wanting to be pet on the head for being “right”. Foolish traders are focused on predicting the future instead of trading what is
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This post is courtesy of Simon Goodchild posted originally in my Facebook trading group. Reprinted here with his permission. THE SUPERMAN THERUM I often hear that one should not trade unless one has sufficient capital to trade, and it’s true most traders are under-capitalized, but there’s absolutely no reason a trader can’t start with
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This market continues to grind higher with tiny pull backs making it difficult for buy the buy the dip traders to even get a good dip to buy. Volatility is very low making it difficult for option sellers to collect enough premium to make it worth their risk while options stay so cheap. Even intra-day
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10 Facts About The Apple Chart Survivor bias: why following success could doom you to fail Avoiding Stupidity is Easier than Seeking Brilliance Chasing Success Why Is Calling a Market Top So Hard?
Weekend Reading for 6/21/14 Read More »
Every day trader is now a soccer analyst. — 3:30 Ramp Capital (@RampCapitalLLC) June 12, 2014 FOMC statement having no impact on my Tinder feed — Greg Harmon, CMT (@harmongreg) June 18, 2014 Sentiment is very bullish right now, but I did see one bear at lunch today…eating by himself 🙁 pic.twitter.com/ElsQu4NIWL — Joseph Fahmy
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Government document that calls #momentuminvesting “magical thinking”? You bet. Eventually make it illegal? All beta, alpha outlawed. — Michael Covel (@Covel) June 18, 2014 “This is a very strong bull market, and betting against it is a bad idea,” said Clenow. http://t.co/n4ZLq52YDX — Andreas Clenow (@clenow) June 18, 2014 Market Update Thursday 19th June 2014
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Image courtesy of 401kCalculator.org Good traders and good trading systems have losing streaks and that is just a fact of trading. Overbought and oversold can become more so, bull markets have no long term resistance and bear markets have no long term support. Sometimes losing streaks have nothing to do with how good a system
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What is a ‘Zero-Sum Game’? Zero-sum games are the total opposite of win-win situations – such as an agreement that creates value between two counter-parties – or lose-lose situations, like war and mutually destructive relationships for instance. In real life, however, things are not always so clear-cut, and winners and losers are often difficult to
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I see so many traders that seek the “Holy Grail” of trading and search for it for years. They are always students and are very light with their trading of real capital because they are always waiting and trying to ‘figure it all out”. The truth is that there is just a few things to
Read This Blog Post When You Are Tired Of All The Trading Bullshit Read More »
There is a high probability that volatility continues to rise next week off recent lows with the perceived and expected headline risk in Iraq and the uncertainty about its future. It would create some better set ups for equity traders if the market uses Iraq as an excuse to take profits and bring the $SPY
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