Risk Management
Sometimes, the thing you're afraid of turns out to be not so bad. Slippage is one of those things: as system developers, we know it will eat into our backtested performance, as daytraders we know that bad slippage can make a winning trade a loss, and swing traders
Individual Traders
Most people think about where to get into and out of positions. Most traders know how important it is to follow their rules, and most traders are always working toward being more disciplined. These are important pieces of a successful investment strategy, and most traders work on these things. But
Breakout
I thought it might be useful to step back and take a look at gold from a much longer-term perspective. First, the monthly chart (difference back-adjusted continuous futures): The first thing we see on the long-term chart is a big pattern of up then down. Keep in mind, this is
Podcast
The second part of a two-part miniseries on what to expect when you're learning how to trade. Highlights from this episode include: What do you need to give yourself the best chance of success? * Most importantly: realistic expectations. * Knowledge * Trading isn't about knowledge, but background knowledge
Psychology
One of the age-old questions is "why should any pattern work?" In this case, we're not simply talking about patterns on charts, but we could ask the same question of any fundamental, technical, or quantitative pattern: why should there be a seasonal effect? Why should low
Anti
Just a quick followup to this post, in which I suggested the US Dollar might be set for a fakeout rally (that has happened) that might fail into a sharp selloff (this could be setting up.) Let's look at what has developed since I published that post a
General Comments
Just a short note here as we head into the holiday weekend. I want to share a few updates and tell you about about some exciting new things that are coming very soon. * I will be launching a series of short publications soon--whitepaper and mini-book formats. The idea will be
Individual Traders
So you're a trader, huh? (Or investor... if you think of yourself as an investor, just read "invest" instead of "trade"; this message is for you too!) If you are a trader, what do you do? What is your job? It's too
Pullback
Markets move in alternating waves of with-trend strength (or weakness) interspersed with moves against the trend. We call these moves pullbacks or consolidations, and they create some of the most powerful and most useful trading patterns we have. (I've written about them here and here.) Many of the
Individual Traders
If you are an individual self-directed trader, expect setbacks and failures, especially in the first two years. Expect that your triumphs may be promptly followed by dramatic failures, that you will make mistakes in areas you thought you had mastered, and that any positive P&L may be quickly
Podcast
This episode of MarketLife answers a reader question: As trading is considered a zero sum game(if we forget the broker), and obviously we enter a trade to gain, it stands to reason that someone has to lose. Can trading be justified in terms of the above mentioned paragraph? Kind
Market Math
So the stock market sold off hard yesterday. If you were living under a big enough rock you might have missed it, but now the doom and gloomers, the technicians pointing at broken "levels" and trendlines, and the permabears will probably be saturating the media for a few