General Comments
I spent much of the last two weeks or so traveling through the south west of France (think in the direction of Toulouse, toward Spain), and had a chance to visit some of the caves that were decorated with prehistoric cave paintings. Of course, seeing these paintings, deep in the
Psychology
Continuing from my last post, here are the rest of the questions my friend asked me to expound upon. What is Risk Management and should it be lumped together under Trade Management or separated? Risk management is one of the great buzzwords of our time. Who wouldn’t want to
General Comments
I received an interesting email from a friend who is doing a survey. In that email, he asked a few questions about trading. As I thought about these, I decided to treat them as writing prompts, and am sharing some answers with you. This part 1 of 2, and I&
General Comments
I'm sitting here at my desk looking out the window. On my desk is a (perfectly normal and fair) coin that I had been flipping a while. Question: can you tell me how many heads I flipped? Now, think about that question a few moments. If you had
General Comments
I just wanted to take a few minutes here at the end of the week and share some things I'm working on. Some of these things you will see soon, and some not so soon! New book First, I announced a few weeks ago that I have begun
Volatility
A lot of the questions I get from people are about volatility--how to measure it, how to trade, and even, in a basic level, what it means. I recently added a section on volatility forecasting to the research I write for Waverly Advisors, and I thought it might be interesting
Psychology
Our culture has an interesting relationship with creativity. On one hand, we hold creative artists in high regard, but many people secretly laugh at the arts as a career choice. We know that sometimes the solution to an impasse requires some out of the box thinking, business schools offer courses
Psychology
Here's an interesting question on a controversial topic--trading psychology. Reader Rob sent me a note asking: Hi. I hope you can help me with a question. I am a developing trader and am having a friendly argument with some trading friends. One person says that trading psychology is
Market Math
I ran a quick study this morning to look at what happens to stock market volatility following large single day volatile events. Note that we are looking at market volatility here, not direction, because the directional message is simpler and clear: historically, large volatile events in stocks have come after
General Comments
This will be the last post in a short series in which we have looked at ways to quantify and to understand a trading edge. This series was motivated by a reader's question, so here's Anthony's question again: First, I was messing with the
Market Math
Yesterday I wrote a post that looked at asset returns and how to compound them. That post was in response to a reader's (Anthony's) question, and I want to continue answering more of the question today. Here's the question in its entirety, with the
Market Math
One of my readers, Anthony, sent me a good question about doing some statistical analysis on stock indexes. I think there are some important lessons here. Here's the question First, I was messing with the SPY up/down N-days and the returns N-days after. It was evident that