My path to understanding
[dc]I[/dc]'ve been thinking a lot lately about why I do and believe the things I do as a trader. I would like to write a post here that might be…
Reader question: Cutting losses quickly or properly?
Reader Dan asks, in response to this post: Good article. A few questions/comments. Define "cut losses quickly?" If you are trading pullbacks and you set a stop loss that would…
Reader question: How do you calculate relative strength?
Trader-Socrates asks, in response to this post of relative strength leaders: What kind of RS do you use? What timeframe you mean by "short-term" RS? I am sure, that you…
Quantitative screens: relative strength scans
[dc]O[/dc]ne of the very real problems stock traders face is knowing where to focus their attention. Some traders are restricted to certain sectors or sets of stocks, but, even then,…
Reader question: Volume?
Nathan asks: Does volume play any role in your analysis? Do you look at increased volatility in conjunction with increased volume? Also, since the spot FX market does not have…
Midweek links and reading
Instinct can beat analysis. Read this. (Harvard Business Review) At one time, I did a lot of quantitative work on fundamentals. Not surprisingly, what most people think works in "fundamental…
And this little piggie… had an exit plan.
[dc]M[/dc]any years ago, a friend of mine shared an encounter he had with a successful investing club. This club was not like many of the others—they didn’t pool their money…
Volatility Clustering
[dc]I[/dc]t is certainly easy to find examples of real charts beside randomly generated charts--whether on websites and in books--and most traders know, by now, that it is very difficult to…
It’s 10:00 AM. Do You Know Where Your Stocks Are?!
[dc]I[/dc]'m going to start doing something new for my readers. Several times a day, I will update the page of market statistics that is available here. I will tweet when…
Four Trading Ideas
[dc]O[/dc]ur trading ideas, "setups", if you will, must change with market conditions. Certain types of trades are more relevant at certain times. For instance, if the market is dramatically overextended,…
Possible Trend Change in Cliffs Natural Resources (CLF)?
[dc]R[/dc]eader Tom points out and asks about a possible attempted trend change in Cliffs Natural Resources (NYSE:CLF). This is a good pattern, and a good opportunity to discuss a few…
Mid week links and reading
An important reminder of how backtests can different from real world performance. One of the most important lessons for investors: (A Wealth of Common Sense) In so many ways, it's…
Video Blog: Trading Pullbacks
https://www.youtube.com/watch?v=ElbjW1k4saw&feature=youtu.be This video takes a look at a possible setup developing in the US Stock market: what could potentially be the first pullback following at attempted trend change. (You could…
Keys to Mastery
[dc]I[/dc]n a post last week, I talked a little bit about the kind of commitment and emotional charge that I believe it takes to truly excel in any field. Whether…
Spikes in the VIX: Harbinger of a Coming Crash… or Not?
[dc]G[/dc]iven last week’s volatile spikes, there has been a lot of talk about the VIX and volatility in general. This is a good time to take a deeper look at…
Week 8 of the Free Trading Course
The videos for week 8 of my free trading course, dealing with pattern failures and the importance of discipline, are now online, and can be accessed from the course menu.…