My journey as a trader,is like a treasure hunter, collecting simple n short nuggets
of wisdom along the way.Then money will auto come when i apply them correctly.
Polished gems of wisdom as follows:
Market Wizard Linda Raschke’s Technical Trading Rules
1.Buy... the first pullback after a new high. Sell the first rally after a new low.
2.Afternoon strength or weakness should have follow through the next day.
3.The best trading reversals occur in the morning, not the afternoon.
4.The larger the market gaps, the greater the odds of continuation and a trend.
5.The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.
6.The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.
7.The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.
8.High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.
9.The first hour’s range establishes the framework for the rest of the trading day.
10.A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.
11.There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings.Principle One: A Trend Has a Higher Probability of Continuation than Reversal
Principle Two: Momentum Precedes Price
Principle Three: Trends End in a Climax
Principle Four: The Market Alternates between Range Expansion and Range Contraction!
12In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.
==================================================
William o Neils
#1 He sells a stock he is holding after it has gone down 7% from his purchase price.
“I make it a rule to never lose more than 7 percent on any stock I buy. If a stock drops 7 percent below my purchase price, I will automatically sell it at the market – no second-guessing, no hesitation”
#2 One of the major keys to his profitable trading was only having small losses when he was wrong.
“The whole secret to winning in the stock market is to lose the least amount possible when you’re not right.”
#3 William O’Neil studied historical chart patterns relentlessly and read thousands of trading books.
“90% of the people in the stock market, professionals and amateurs alike, simply haven’t done enough homework.”
#4 He invested in an industries leading stocks not its laggards and dogs.
“It seldom pays to invest in laggard stocks, even if they look tantalizingly cheap. Look for, and confine your purchases to, market leaders.”
#5 O’Neil ‘s investing style lead to big winners and small losing trades.
“Investors cash in small, easy-to-take profits and hold their losers. This tactic is exactly the opposite of correct investment procedure. Investors will sell a stock with profit before they will sell one with a loss.”
#6 He did not waste his time and money playing the short side in bull markets.
“Cardinal Rule #1 is to sell short only during what you believe is a developing bear market, not a bull market.”
#7 Fundamentals told O’Neil what to buy and the chart told him when to buy.
“The number one market leader is not the largest company or the one with the most recognized brand name; it’s the one with the best quarterly and annual earnings growth, return on equity, profit margins, sales growth, and price action.”
#8 O’Neil knew exactly what he was doing in the markets. He had a trading plan, trading principles, and rules.
“Some investors have trouble making decisions to buy or sell. In other words, they vacillate and can’t make up their minds. They are unsure because they really don’t know what they are doing. They do not have a plan, a set of principles, or rules to guide them and, therefore, are uncertain of what they should be doing.”
#9 O’Neil traded price action not his own opinions or of anyone else.
“Since the market tends to go in the opposite direction of what the majority of people think, I would say 95% of all these people you hear on TV shows are giving you their personal opinion. And personal opinions are almost always worthless … facts and markets are far more reliable.”
#10 He watched a stocks volume as part of his trading plan.
“The best way to measure a stock’s supply and demand is by watching its daily trading volume. When a stock pulls back in price, you want to see volume dry up, indicating no significant selling pressure. When it rallies up in price, you want to see volume rise, which usually represents institutional buying.”
=====================================
http://www.newtraderu.com/2018/02/20/day-trading-big-winners/...
==================================================
50 Tips for Better Trading by David Bergstrom
Quantify your edge
Diversify across markets
Diversify across timeframes
Diversify across trade durations. Have strategies that trade quickly and some that look for big moves.
Trade multiple uncorrelated strategies
Trade mean reversion, trend following, and price pattern strategies
Use Monte Carlo simulations to create proper expectations
Use out of sample testing
Don’t rely on one strategy or indicator
Test everything. Did you know the day after a bearish engulfing bar in the S&P500 has a bullish tilt?
Backtest your strategy. A good backtest does not guarantee good forward results. But a bad backtest almost always will lead to bad forward results.
Stress test your strategy
Use alternative data and be creative
Keep entry rules simple
Negotiate for reduced commissions
Use Monte Carlo to understand drawdown possibilities
Trade strategies that suit your personality
Have a balanced life
Define what a good system is prior to attempting to create one
Do not cherry pick trades – take every single as long as your results remain within expectation
Allow law of large numbers to play out
Converse and chat with other traders
Be properly funded
Understand ways to determine if properly funded
Test new code execution with reduced size or on sim account first
Have clear rules when to turn off a strategy
Remove and manage as much emotion as possible
Test different stop levels
Include different market regimes in backtest
Read more and tweet less
View and understand seasonal tendencies
View and understand time of day tendencies
Have ample sample size (trade count)
Do not compete with high frequency traders
Vary the noise in the data set and test again
Understand tax advantages of different markets (futures for US traders, e.g.)
Ignore personal opinions and preconceived notions when researching and trading
Invest in a Virtual Private Server if algorithms are trading all hours
You get what you put in – be research oriented and work hard
Educate yourself… continuously
Do not hunt for the holy grail strategy! The holy grail is a portfolio of systems not one amazing system
Understand profits are additive and cumulative but drawdowns (if uncorrelated) are not.
Automate your execution if possible so you have more time to research/refine your edge(s)
Assess performance monthly not trade by trade
Do not hedge every single trade your systems make
Do not compare yourself to others – you never know how much risk they are taking or capital they have
Align your profit (and risk) expectations with your account size
Track how your strategy performs live compared to a sim account : real-time slippage
Do not underestimate transaction costs (slippage, commission, missed entries, etc.)
Use multiple timeframes and Use intermarket signals
===============================================
Technical Guides: by Richard Donchian
1.A move followed by a sideways range often precedes another move of almost equal extent in the same direction as the original move. Generally, when the second move from the sideways range has run its course, a counter move approaching the sideways range may be expected.
2.Reversal or resistance to a move is likely to be encountered 0n reaching levels at which in the past, the commodity has fluctuated for a considerable length of time within a narrow range on approaching highs or lows
3.Watch... for good buying or selling opportunities when trend lines are approached, especially on medium or dull volume. Be sure such a line has not been hugged or hit too frequently.
4.Watch... for “crawling along” or repeated bumping of minor or major trend lines and prepare to see such trend lines broken.
5.Breaking of minor trend lines counter to the major trend gives most other important position taking signals. Positions can be taken or reversed on stop at such places.
6.Triangles of ether slope may mean either accumulation or distribution depending on other considerations although triangles are usually broken on the flat side.
7.Watch... for volume climax, especially after a long move.
8.Don’t count on gaps being closed unless you can distinguish between breakaway gaps, normal gaps and exhaustion gaps.
9.During a move, take or increase positions in the direction of the move at the market the morning following any one-day reversal, however slight the reversal may be, especially if volume declines on the reversal.
=================================================
Top 10 Things to Look for in a Stock by Steve Burns
1.Growing sales is a must for almost every business. Growing sales shows the business is getting the votes of customers and taking sales from other businesses.
2.Growing profits traditionally was a great reason to inspire investors to bid up a stock price. However concept stocks can go up for other reasons.
3.Expectations of great market share, earnings, or sales in the future can cause the market to price in future possibilities into current stock prices.
4.A company with a new edge in technology, business model, cutting operating expenses, new product, or new service can drive a stock price higher on speculation.
5.Hope for an acquisition can drive a stock price up if investors think that their stock is a target to be acquired by a big company.
6.A sector leader is a stock you want to buy, the stock that is dominating an industry.
7.A monopoly stock that is so successful that it is possible that it could be broken up due to antitrust laws as it can almost control prices in an industry due to the lack of competition.
8.Your stock needs to have a great visionary and leader as the CEO not a caretaking of the status quo.
9.Your company has to be innovating and improving to keep up with competitors and the competition. A stagnant company leads to a declining stock.
10.You... want to see the company have a high barrier against new competitors coming into the market and competing easily with them.
===================================================
https://macro-ops.com/trading-edge-exploiting-errors/...
========================================
Top 12 Signs Of A Range Bound Market by Steve Burns
1.The major market indexes have long term defined resistance and support levels.
2.You... have many growth stocks having trouble getting through their resistance levels.
3.You... can safely buy support that bounce off key short term moving averages or support levels.
4.Traders and investors are surprised that the market is not breaking out in either direction.
5.Bad news hits the market but the market holds key support levels because it is already priced in.
6.You... can not identify any clear trends between risk on and risk on assets.
7.Market... leading stocks are trading inside strong price bases
8.Stock traders are waiting for key momentum break out signals.
9.Fear of missing out on the next rally replaces the fear of losing money on sudden drops. There is a lot of holding and waiting for a the up trend to resume.
10.The majority of traders do not believe the range will last and are waiting to trade the breakout in which ever direction it happens.
11.Short term moving averages have gone flat.
12.Buying momentum and selling weakness short is a money losing strategy.
=============================================================
Trading Enlightenments by Moritz
If you target less than 5 pips regularly, commissions and spread will eat your account balance.
You absolutely have to find a vent to release pressure and adrenaline – sports, drinking, painting, anything that helps.
If you can manage to find a mentor in which you believe, you will make it much faster.
Your trading style has to fit your personality and your lifestyle, or cognitive dissonance will get the better of you.
Meditation sucks, doesn’t work for me.
Don’t trade more than 4 hours per day, but those 4 hours with all the focus you can bring to the table.
Overtrading is your death.
Once you are comfortable missing a move, you will be able to trade profitably.
Not trading the news does not make sense at all – during news there is real liquidity and a real interest to push prices in one way or another. Let the market show its hand, then get in.
Let it turn, let price create structure, THEN get in, with the structure as protection in your back.
Don’t system hop, but adapt the system of your choosing to your needs.
Don’t trade overleveraged.
Yes, it is possible to turn a small account into a huge account, but don’t expect it to happen overnight, and don’t expect to be able to do it before your fifth (or so) year of trading.
Some are faster, some are slower, some will never get it.
Risk per trade is a function of the volatility of your strategy and your psychological ability to deal with swings in your equity.
Know exactly why you are trading, and what you want to achieve – which career path will be yours?
Daytrading is not easier than swingtrading or vice versa. They both simply require different skillsets, different abilities (yes, some people are just too slow for daytrading) and different preparation routines.
Trust your gut. Absolutely love the trade? Get in. Don’t love it? Just stay out.
No pain, no gain. Demo trading is ok, but don’t do it for too long. Risk micro amounts of money, get used to losing money. Because you will lose for the rest of your life if you want to be a trader. It’s part of the game. You “just” need to win more than you lose.
Listening to music while trading can be a good thing – just know yourself. If I listen to aggressive music in the car, I will push the pedal to the metal. The same happens when trading.
Have a trading journal and review, review, review.
Work on your psychology, but don’t underestimate the power of knowledge. Fear stems from not knowing. Work hard, know more, be more confident. Most psychological issues will dissolve into thin air.
Yes, I said: don’t system hop. But for the first year or two, try out everything you can. Every market, every strategy, every trading style. How can you know what fits your personality if you don’t know what’s out there? Finally, decide and take the leap of faith.
Screen time alone won’t help you. Again: review. REVIEW! You need an effective feedback loop or you will repeat the same mistakes again, and again, and again. There is no learning by doing in trading.
You don’t need to be hyper intelligent to be a trader. The best traders I know are “simple” minds. They do what works, they have no ego, and they disregard what does not make sense to them.
Do not have monetary goals. Have process-oriented goals.
Do not look at your P&L during your trading session or you WILL trade your P&L. Before and after a trading session, the money in your account is money, yes. During the session, however, the money in your account is ammunition that has to be spent in order to acquire more ammunition, if that makes sense.
If you read only two books about trading, these should be Pitbull by Marty Schwartz and Diary Of A Professional Commodity Trader by Peter Brandt.
Trading with the trend is not easier than trading against the trend. Trading with the trend is the last thing I learned and every single trader I know seems to have the hardest time following a trend.
If you want to pay for education, do your research. It is very possible to differentiate the scammers from the real traders. If something sounds too good to be true, run as fast as you can.
Never forget to be grateful at the end of the day. You are given the chance to make money by clicking a mouse from the comfort of your home. How many people on earth can say the same?
Trading fulltime is often romanticized but can quickly turn into a social nightmare. Keep up that work-life-balance.
Find other mental challenges for your brain than trading. Feeding your body McDonalds everyday will, and nothing else, will kill you. Trading every day without reading a good novel once in a while will make you braindead.
Twitter is actually a really good place to learn trading and to connect to great minds, unlike most forums, where 95% of posts are rubbish.
Likewise, there are lots of videos on Youtube with quite good content. You need to find a way to distinguish the goodies from the baddies.
Don’t be mistaken, trading is gambling. You want to be a professional gambler? Make up your mind.
A structured pre-trading routine is one of the best things you will ever do in your career as a trader. Take your time to create and establish it.
Learn your basic and classic price patterns such as Head & Shoulders, Wedges, Triangles, etc. It takes a week to get them all into your head and you will profit from that knowledge for years to come.
Never pick tops and bottoms. Take the middle of the moves and your results will improve.
Believe in your abilities and trust your strategy or you will be destroyed.
======================================================
Jesse Livermore’s 25 Trading Lessons
1. Watch the market leaders.
Watch the market leaders, the stocks that have led the charge upward in a bull market.
That is where the action is and where the money is to be made. As the leaders go, so goes the entire market.
If you cannot make money in the leaders, you are not going to make money in the stock market. Watching the leaders keeps your universe of stocks limited, focused, and more easily controlled.
2. Markets are driven by humans and human nature never changes.
There is nothing new on Wall Street or in stock speculation.
What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence. Of this I am sure.
All through time, people have basically acted the same way in the market as a result of greed, fear, ignorance, and hope. This is why the numerical formations and patterns recur on a constant basis.
I absolutely believe that price movement patterns are being repeated. They are recurring patterns that appear over and over, with slight variations. This is because markets are driven by humans — and human nature never changes.
3. Markets are never wrong but opinions often are.
The market will often go contrary to what speculators have predicted.
At these times, successful speculators must abandon their predictions and follow the action of the market. Prudent speculators never argue with the tape.
Markets are never wrong, but opinions often are. Remember, the market is designed to fool most of the people most of the time.
4. It was never my thinking that made the big money for me. It always was my sitting.
They say you never go broke taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.
I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.
The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but also the intelligence and patience to sit tight.
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.
5. You can win on a stock, but you cannot beat Wall Street all the time.
First, do not be invested in the market all the time.
There are many times when I have been completely in cash, especially when I was unsure of the direction of the market and waiting for a confirmation of the next move.
Second, it is the change in the major trend that hurts most speculators.
Always remember; you can win a horse race, but you can’t beat the races. You can win on a stock, but you cannot beat Wall Street all the time. Nobody can.
There is the plain fool, who does the wrong thing at all times everywhere, but there is also the Wall Street fool, who thinks he must trade all the time.
No man can have adequate reasons for buying or selling stocks daily– or sufficient knowledge to make his play an intelligent play.
Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.
6. It is what people actually did in the stock market that counted – not what they said they were going to do.
7. Successful trading is always an emotional battle for the speculator, not an intelligent battle.
8. I believe that the public wants to be led, to be instructed, to be told what to do.
They want reassurance. They will always move en masse, a mob, a herd, a group because people want the safety of human company.
They are afraid to stand alone because they want to be safely included within the herd, not to be the lone calf standing on the desolate, dangerous, wolf-patrolled prairie of contrary opinion.
9. I believe that having the discipline to follow your rules is essential.
Without specific, clear, and tested rules, speculators do not have any real chance of success. Why?
Because speculators without a plan are like a general without a strategy, and therefore without an actionable battle plan.
Speculators without a single clear plan can only act and react, act and react, to the slings and arrows of stock market misfortune, until they are defeated.
10. If you can’t sleep at night because of your stock market position, then you have gone too far.
If this is the case, then sell your position down to the sleeping level.
11. Remember that stocks are never too high for you to begin buying or too low to begin selling.
12. I never argue with the tape.
When I am long of stocks it is because my reading of conditions has made me bullish.
But you find many people, reputed to be intelligent, who are bullish because they have stocks. I do not allow my possessions – or my prepossessions either – to do any thinking for me. That is why I repeat that I never argue with the tape.
13. Not taking the loss — that is what does damage to the pocket book and to the soul.
Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.
14. I trade on my own information and follow my own methods.
15. Trade along the path of least resistance.
If after a long steady rise a stock turns and gradually begins to go down, with only occasional small rallies, it is obvious that the line of least resistance has changed from upward to downward.
Such being the case why should anyone ask for explanations? There are probably very good reasons why it should go down.
16. I don’t buy long stocks on a scale down, I buy on a scale up.
When I’m bearish and I sell a stock, each sale must be at a lower level than the previous sale.
When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stocks on a scale down, I buy on a scale up.
17. Don’t be fooled by the charisma of other traders.
It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urging of a magnetic personality when plausibly expressed by a brilliant mind.
18. Know yourself.
A man must know himself thoroughly if he is going to make a good job out of trading in the speculative markets.
19. Fear and greed are your greatest enemies
When the market goes against you, you hope that every day will be the last day – and you lose more than you should, have you not listened to hope.
And when the market goes your way, you become fearful that the next day will take away your profit and you get out – too soon. The successful trader has to fight these two deep-seated instincts.
20. Trading is not a get rich quick scheme.
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get rich-quick adventure. They will die poor.
21. Being a little late in a trade is insurance that your opinion is correct.
Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader.
22. Never average losses.
It is foolhardy to make a second trade if your first trade shows you a loss. Never average losses. Let this thought be written indelibly upon your mind.
23. The trend is your friend.
Successful traders always follow the line of least resistance. Follow the trend. The trend is your friend.
24. Always trade with a stop loss.
When you make a trade, “you should have a clear target where to sell if the market moves against you. And you must obey your rules! Never sustain a loss of more than 10% of your capital. Losses are twice as expensive to make up. I always established a stop before making a trade.
25. Don’t try to play the market all the time.
Every once in a while, you must go to cash, take a break, take a vacation. Don’t try to play the market all the time. It can’t be done, too tough on the emotions.
=========================================================
http://tradingcomposure.com/trading-psychology-truths/...
===============================================
50 Ways You Know You Are an Emotional Investor
You know you are an emotional investor if:
You pull a quote for your favorite stock and cheer when you find that it is up even a penny.
You call your broker atleast once a day to find out his or her opinion of your holdings.
You pee your pants when you find out the money you invested for Grandma is down 20%.
You get all excited when you get a “big tip” from a friend on a stock you know nothing about.
You bite your nails while watching CNBC the closing bell.
As you watch your positions on your streamer, you give it your undivided attention every time the lights blink red or green.
When your stock is in the red midday you flip your hat upside down and declare the rally is coming.
You call every friend and family member after selling a stock for a big profit.
You have buzzers next to you like Jim Cramer does on Mad Money, and use them religiously.
You yell at the TV while watching CNBC.
You want to strangle someone when it takes more than one second for your pending market order to process, “cccccccoooommmmeeeeeeee onnnn!!! GGGGGGOOOOOO!!!!!!!” is all you can say until it is filled.
You break keyboards every other day.
You pull out a bowl of popcorn as you watch your stock run up after hours when earnings hit big.
You and your friend get together after every “rough day” in the markets, hug eachother, then proceed to eat ice cream to feel better.
You exclaim, “That’s right! YES” if you see your latest call being featured as a play on CNBC, Mad Money, or Fast Money.
You double your position every time a stock you own gets upgraded.
You declare you are going to Disney World when your call options triple after the company announces they are going to be bought out. And no, you don’t have any kids.
You sell a whole position when it gets downgraded by an analyst.
While watching your stock tank real time on your streamer you put your hands on your forehead and ask yourself, “why me?” over and over again.
You tell all of your buddies that you never EVER make money in the stock market, and later that week when you do you spend all of your profits throwing a party.
You throw your chair like Jim Cramer does when the market doesn’t go your way.
You pray to the “stock gods” each and every night for a good trading day.
You yell at the “stock gods” after a bad trading day.
You place stop loss orders less than 1% below your purchase price because you can’t bare “big” losses.
You burn copies of the Investors Business Daily (IBD) when they are wrong about a recommended stock you lost money on.
You keep an extra mouse or two in the closet because you break them so often by throwing them against the wall.
You cry more than your wife.
After a bad day in the markets you spend the whole rest of the evening ranting about your bad luck.
You celebrate profits while they are still unrealized gains.
You get pissed at yourself for celebrating those profits after the stock falls 5% the next day.
Anyone that thinks your picks are bad you tell them to go to hell.
You take screenshots of your computer screen when your stock is up more than 10% in one day.
You film your favorite stock’s ticker while its running up in after hours trading because of some big news.
You contemplate selling out of your position every time your stock slips more than $.20.
You stand up out of your chair when you think you see an institutional buyer start to buy up shares of your stock.
You get drunk after realizing your favorite stock is now bankrupt and you have been holding since the top.
You drive over to your broker’s office and high five him or her after a big winner.
You yell when you talk about anything to do with the market.
You take off your shirt and swing it around in the air above your head when your stock announces its record setting earnings.
You play “Eye of the tiger” everyday just before the market opens to get yourself pumped up.
You grab your monitor with both hands, shake it, and yell, “what! what!” or “how could you do this to me!?” when your call is selling off heavily.
You watch Mad Money every day.
You contemplate what you are going to buy with profits that aren’t realized yet.
You refresh your portfolio summary page every few minutes like you do your e-mail box.
You wear a sweatband while you trade.
You wear the same pair of underwear for good luck everyday until your stock has a losing day.
You join chat rooms and tell stories of your greatest trades to everyone in the room.
You join a friend online and together announce the orders like a soccer game as they come in real time.
You get pissed when your order gets manipulated by a market maker.
You blog about ways you know you are an emotional investor because you are an emotional investor.
===============================================================
50 Bite Size Trading Tips and Tricks by Nick Radge
Don't try to read into other people's trading decisions.
By all means like a stock, but don't try to be best friends with it forever. Instead, spend time nurturing positions that are being kind to you.
Beware the Beginners Cycle. The want to be right will cause you to collect courses and books and will only be a costly and frustrating exercise. The secret is elsewhere.
Actually, there is no secret. It's all in the maths.
Losses when trading are inevitable, but losses should always be limited.
Have a prepared trading plan so you don't rush into bad decisions. Time spent planning will help you avoid catastrophic losses, riding the emotional roller coaster, and other unnecessary headaches.
Get off your high horse. Your ego will eventually cost you dearly.
Validate your strategy before you risk your capital.
Don't waste your time on other trader's successes. The only person you're competing against is yourself.
10. Ignore any broker that tells you to buy when there is blood in the streets. You can be sure it's not theirs.
Outsource to people who do the stuff they're better at so you can do the stuff you're better at.
Make haste slowly. Ensure you have a validated strategy that has an edge and ensure you have a full understanding of the journey ahead of you. The markets will always be there. What won't be there if you're in too much of a hurry is the capital in your account.
Understand positive expectancy. When you see it, you'll get it.
Ask someone you trust if you are unsure.
Risk a small amount of capital on each trade.
Sentiment will drive the market, or a stock, a lot further than logic ever will.
Only fools claim to know the future.
Don't be a dick for a tick. Saving a few cents here and there will only cost you dollars later on.
You can't control the market. Don't waste your time by watching every trade tick along.
Find a strategy that makes sense to you.
Be curious and keep a trading diary. Don't be scared to learn something new.
Explore new ideas and opportunities often.
Let go of things you can't change. Concentrate on things you can.
There is no point questioning the market.
The market will pay you when it's ready. You just need to be there when it does.
Find a strategy you actually enjoy following.
Realize that the harder you work, the luckier you will become.
Risk not thy whole wad. There is a reason why compounding is the 8th Wonder of the World.
However good or bad a situation is now, it will change. Accept that positive expectancy sometimes takes time to show its hand.
Realize that being right does not equate to profits.
45% of trades will tend be profitable. 45% will tend be losses. 10% will be breakeven. Your job is to make the winners count.
Make mistakes, learn from them, laugh about them, and move along.
Successful trading is not a sprint. Buffet didn't earn his reputation in a single year - or decade.
The only thing you can control is the amount of money you're willing to lose on each trade.
Don't over think things. Simple works best. Complex will eventually break.
Understand why your strategy makes money.
If you can't pull the trigger it's usually because you don't trust the strategy you're using. Stop and re-evaluate.
Trends can't not exist.
The biggest hurdle to overcome is between your ears.
Don't fear the market. It can't actually hurt you. You can hurt you though.
The object of gaining a trading education isn't knowledge; it's to enable action.
Never move a stop backward. You're mind is screwing with you.
Rules you can't or won't follow are of no use to you.
Your initial reaction to any adverse situation is usually wrong.
Risk and volatility are not the same. Volatility can increase returns. Risk can increase losses.
Think long term with regard to strategy application. Performance and trade outcomes in the short term are random.
The keys to success are consistency, discipline and patience. They cannot be bought.
Every stock that goes bankrupt exhibits a sustained downtrend first.
Any strategy is only as good as the person using it.
Take responsibility for every decision you make.
==============================================
https://tradingsim.com/blog/first-hour-trading/...
==============================================
https://tradingsim.com/blog/price-action-trading-strategies/...
==============================================
https://tradingsim.com/blog/exhaustion-gap/...
Conclusion
The gap signalizes that the trend might be exhausted, which creates a strong reversal potential on the chart.
Therefore, traders use the exhaustion gap to trade trend reversals.
The gap represents a big decrease in the people who trade with the trend, followed by a strong opposite force.
There are two types of exhaustion Gaps:
Bearish: starts with a bullish trend, bullish gap and a bearish reversal.
Bullish: starts with a bearish trend, bearish gap and a bullish reversal.
The 7 steps for recognizing and trading the Exhaustion Gap are:
Find a Trend
Identify Low Volumes during a Gap
Identify Increasing Volumes During the Reversal
Confirm the Exhaustion Gap
Open a Trade
Place a Stop Loss
Exit the Trade
================================================
http://www.trivisonno.com/trade/exhaustion-gap...
================================================
https://tradingsim.com/blog/descending-tops/...
Conclusion
The descending tops chart pattern is associated with bearish trends.
To identify descending tops, you need to spot a price top, followed by a lower top.
The confirmation of the descending top pattern comes with the third top, which is supposed to be lower than its ancestor.
To trade a descending top pattern, you have to follow these rules:
Open a trade when the price creates a third lower top and bounces downwards
Place a stop loss above the last top
Stay in the trade until the price action breaks the bearish trend line (if any), or until an ascending top appears on the chart
Two methods for trading descending tops is by applying the following indicators:
Channel Indicator
Descending Tops Breakout Indicator
==================================================
https://tradingsim.com/blog/shooting-star/...
Conclusion
The shooting star is a single candlestick pattern used in trading.
This is among the most popular bearish candlestick patterns.
The shooting star falls into the “Hammer” candle family.
The identical twin of the shooting star candlestick pattern is the inverted hammer.
The shooting star candle pattern has a strong bearish potential on the chart. Thus, traders use the shooting star to set short entry points on the chart.
One of the most reliable single candle patterns is the shooting star because:
It has unique structure – small body with long upper candlewick
There is a strong psychology factor behind the shooting star – exponentially growing bullish pressure, which quickly frazzles and ends up sending the price down.
There are three basic tricks for trading the shooting star candlestick figure:
Sell the security after the creation of a bullish trend, a shooting star candle, and a bearish confirmation candle.
Put a stop loss right above the upper candlewick of the shooting star figure.
Stay in the short trade for a bearish price move equal to at least three times the size of the shooting star candle including the upper and the lower candlewick.
This shooting star trading strategy contains around 3:1 Win-Loss ratio.
==================================================
https://tradingsim.com/blog/flags-and-pennants/...
To quickly recap, in this article we covered three strategies for trading flags and pennants:
Identify the strongest trends with retracements less than 23.6%
Identify multi-day trends that break through a flag or pennant on the open
Use the Ichimoku Cloud to validate flag or pennant breakout
====================================================
https://tradingsim.com/blog/day-trading-cup-breakouts/...
Conclusion
The cup and handle is a continuation chart pattern.
The pattern itself represents a consolidation between two trends in the same direction.
The body of the pattern resembles a “U” shape and the handle looks like a channel in the direction opposite to the trend.
Day trading cup and handle pattern rules are:
The 1-minute chart is a good time frame for trading the cup and handle.
The 35-period SMA is a great tool for monitoring trend health.
Use a 2-day time frame.
A valid pattern will most likely be formed during low or decreasing volumes.
The breakout usually occurs with an increase in volume.
The price push needs to go above the high/low of the previous day.
The cup and handle pattern target equals the size of the pattern itself.
Use price action to extend your profit potential:
Open your trades when the price breaks the handle of the pattern.
Place a stop below the lowest point of the handle.
Stay in the trade for the size of the pattern at least. You can always extend your target by using price action rules.
The opposite equivalent to the cup and handle is the inverted cup and handle:
It is a bearish pattern.
The body of the pattern looks like an upside down “U”.
The handle looks like a small bullish channel.
==============================================
of wisdom along the way.Then money will auto come when i apply them correctly.
Polished gems of wisdom as follows:
Market Wizard Linda Raschke’s Technical Trading Rules
1.Buy... the first pullback after a new high. Sell the first rally after a new low.
2.Afternoon strength or weakness should have follow through the next day.
3.The best trading reversals occur in the morning, not the afternoon.
4.The larger the market gaps, the greater the odds of continuation and a trend.
5.The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.
6.The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.
7.The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.
8.High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.
9.The first hour’s range establishes the framework for the rest of the trading day.
10.A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.
11.There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings.Principle One: A Trend Has a Higher Probability of Continuation than Reversal
Principle Two: Momentum Precedes Price
Principle Three: Trends End in a Climax
Principle Four: The Market Alternates between Range Expansion and Range Contraction!
12In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.
==================================================
William o Neils
#1 He sells a stock he is holding after it has gone down 7% from his purchase price.
“I make it a rule to never lose more than 7 percent on any stock I buy. If a stock drops 7 percent below my purchase price, I will automatically sell it at the market – no second-guessing, no hesitation”
#2 One of the major keys to his profitable trading was only having small losses when he was wrong.
“The whole secret to winning in the stock market is to lose the least amount possible when you’re not right.”
#3 William O’Neil studied historical chart patterns relentlessly and read thousands of trading books.
“90% of the people in the stock market, professionals and amateurs alike, simply haven’t done enough homework.”
#4 He invested in an industries leading stocks not its laggards and dogs.
“It seldom pays to invest in laggard stocks, even if they look tantalizingly cheap. Look for, and confine your purchases to, market leaders.”
#5 O’Neil ‘s investing style lead to big winners and small losing trades.
“Investors cash in small, easy-to-take profits and hold their losers. This tactic is exactly the opposite of correct investment procedure. Investors will sell a stock with profit before they will sell one with a loss.”
#6 He did not waste his time and money playing the short side in bull markets.
“Cardinal Rule #1 is to sell short only during what you believe is a developing bear market, not a bull market.”
#7 Fundamentals told O’Neil what to buy and the chart told him when to buy.
“The number one market leader is not the largest company or the one with the most recognized brand name; it’s the one with the best quarterly and annual earnings growth, return on equity, profit margins, sales growth, and price action.”
#8 O’Neil knew exactly what he was doing in the markets. He had a trading plan, trading principles, and rules.
“Some investors have trouble making decisions to buy or sell. In other words, they vacillate and can’t make up their minds. They are unsure because they really don’t know what they are doing. They do not have a plan, a set of principles, or rules to guide them and, therefore, are uncertain of what they should be doing.”
#9 O’Neil traded price action not his own opinions or of anyone else.
“Since the market tends to go in the opposite direction of what the majority of people think, I would say 95% of all these people you hear on TV shows are giving you their personal opinion. And personal opinions are almost always worthless … facts and markets are far more reliable.”
#10 He watched a stocks volume as part of his trading plan.
“The best way to measure a stock’s supply and demand is by watching its daily trading volume. When a stock pulls back in price, you want to see volume dry up, indicating no significant selling pressure. When it rallies up in price, you want to see volume rise, which usually represents institutional buying.”
=====================================
http://www.newtraderu.com/2018/02/20/day-trading-big-winners/...
==================================================
50 Tips for Better Trading by David Bergstrom
Quantify your edge
Diversify across markets
Diversify across timeframes
Diversify across trade durations. Have strategies that trade quickly and some that look for big moves.
Trade multiple uncorrelated strategies
Trade mean reversion, trend following, and price pattern strategies
Use Monte Carlo simulations to create proper expectations
Use out of sample testing
Don’t rely on one strategy or indicator
Test everything. Did you know the day after a bearish engulfing bar in the S&P500 has a bullish tilt?
Backtest your strategy. A good backtest does not guarantee good forward results. But a bad backtest almost always will lead to bad forward results.
Stress test your strategy
Use alternative data and be creative
Keep entry rules simple
Negotiate for reduced commissions
Use Monte Carlo to understand drawdown possibilities
Trade strategies that suit your personality
Have a balanced life
Define what a good system is prior to attempting to create one
Do not cherry pick trades – take every single as long as your results remain within expectation
Allow law of large numbers to play out
Converse and chat with other traders
Be properly funded
Understand ways to determine if properly funded
Test new code execution with reduced size or on sim account first
Have clear rules when to turn off a strategy
Remove and manage as much emotion as possible
Test different stop levels
Include different market regimes in backtest
Read more and tweet less
View and understand seasonal tendencies
View and understand time of day tendencies
Have ample sample size (trade count)
Do not compete with high frequency traders
Vary the noise in the data set and test again
Understand tax advantages of different markets (futures for US traders, e.g.)
Ignore personal opinions and preconceived notions when researching and trading
Invest in a Virtual Private Server if algorithms are trading all hours
You get what you put in – be research oriented and work hard
Educate yourself… continuously
Do not hunt for the holy grail strategy! The holy grail is a portfolio of systems not one amazing system
Understand profits are additive and cumulative but drawdowns (if uncorrelated) are not.
Automate your execution if possible so you have more time to research/refine your edge(s)
Assess performance monthly not trade by trade
Do not hedge every single trade your systems make
Do not compare yourself to others – you never know how much risk they are taking or capital they have
Align your profit (and risk) expectations with your account size
Track how your strategy performs live compared to a sim account : real-time slippage
Do not underestimate transaction costs (slippage, commission, missed entries, etc.)
Use multiple timeframes and Use intermarket signals
===============================================
Technical Guides: by Richard Donchian
1.A move followed by a sideways range often precedes another move of almost equal extent in the same direction as the original move. Generally, when the second move from the sideways range has run its course, a counter move approaching the sideways range may be expected.
2.Reversal or resistance to a move is likely to be encountered 0n reaching levels at which in the past, the commodity has fluctuated for a considerable length of time within a narrow range on approaching highs or lows
3.Watch... for good buying or selling opportunities when trend lines are approached, especially on medium or dull volume. Be sure such a line has not been hugged or hit too frequently.
4.Watch... for “crawling along” or repeated bumping of minor or major trend lines and prepare to see such trend lines broken.
5.Breaking of minor trend lines counter to the major trend gives most other important position taking signals. Positions can be taken or reversed on stop at such places.
6.Triangles of ether slope may mean either accumulation or distribution depending on other considerations although triangles are usually broken on the flat side.
7.Watch... for volume climax, especially after a long move.
8.Don’t count on gaps being closed unless you can distinguish between breakaway gaps, normal gaps and exhaustion gaps.
9.During a move, take or increase positions in the direction of the move at the market the morning following any one-day reversal, however slight the reversal may be, especially if volume declines on the reversal.
=================================================
Top 10 Things to Look for in a Stock by Steve Burns
1.Growing sales is a must for almost every business. Growing sales shows the business is getting the votes of customers and taking sales from other businesses.
2.Growing profits traditionally was a great reason to inspire investors to bid up a stock price. However concept stocks can go up for other reasons.
3.Expectations of great market share, earnings, or sales in the future can cause the market to price in future possibilities into current stock prices.
4.A company with a new edge in technology, business model, cutting operating expenses, new product, or new service can drive a stock price higher on speculation.
5.Hope for an acquisition can drive a stock price up if investors think that their stock is a target to be acquired by a big company.
6.A sector leader is a stock you want to buy, the stock that is dominating an industry.
7.A monopoly stock that is so successful that it is possible that it could be broken up due to antitrust laws as it can almost control prices in an industry due to the lack of competition.
8.Your stock needs to have a great visionary and leader as the CEO not a caretaking of the status quo.
9.Your company has to be innovating and improving to keep up with competitors and the competition. A stagnant company leads to a declining stock.
10.You... want to see the company have a high barrier against new competitors coming into the market and competing easily with them.
===================================================
https://macro-ops.com/trading-edge-exploiting-errors/...
========================================
Top 12 Signs Of A Range Bound Market by Steve Burns
1.The major market indexes have long term defined resistance and support levels.
2.You... have many growth stocks having trouble getting through their resistance levels.
3.You... can safely buy support that bounce off key short term moving averages or support levels.
4.Traders and investors are surprised that the market is not breaking out in either direction.
5.Bad news hits the market but the market holds key support levels because it is already priced in.
6.You... can not identify any clear trends between risk on and risk on assets.
7.Market... leading stocks are trading inside strong price bases
8.Stock traders are waiting for key momentum break out signals.
9.Fear of missing out on the next rally replaces the fear of losing money on sudden drops. There is a lot of holding and waiting for a the up trend to resume.
10.The majority of traders do not believe the range will last and are waiting to trade the breakout in which ever direction it happens.
11.Short term moving averages have gone flat.
12.Buying momentum and selling weakness short is a money losing strategy.
=============================================================
Trading Enlightenments by Moritz
If you target less than 5 pips regularly, commissions and spread will eat your account balance.
You absolutely have to find a vent to release pressure and adrenaline – sports, drinking, painting, anything that helps.
If you can manage to find a mentor in which you believe, you will make it much faster.
Your trading style has to fit your personality and your lifestyle, or cognitive dissonance will get the better of you.
Meditation sucks, doesn’t work for me.
Don’t trade more than 4 hours per day, but those 4 hours with all the focus you can bring to the table.
Overtrading is your death.
Once you are comfortable missing a move, you will be able to trade profitably.
Not trading the news does not make sense at all – during news there is real liquidity and a real interest to push prices in one way or another. Let the market show its hand, then get in.
Let it turn, let price create structure, THEN get in, with the structure as protection in your back.
Don’t system hop, but adapt the system of your choosing to your needs.
Don’t trade overleveraged.
Yes, it is possible to turn a small account into a huge account, but don’t expect it to happen overnight, and don’t expect to be able to do it before your fifth (or so) year of trading.
Some are faster, some are slower, some will never get it.
Risk per trade is a function of the volatility of your strategy and your psychological ability to deal with swings in your equity.
Know exactly why you are trading, and what you want to achieve – which career path will be yours?
Daytrading is not easier than swingtrading or vice versa. They both simply require different skillsets, different abilities (yes, some people are just too slow for daytrading) and different preparation routines.
Trust your gut. Absolutely love the trade? Get in. Don’t love it? Just stay out.
No pain, no gain. Demo trading is ok, but don’t do it for too long. Risk micro amounts of money, get used to losing money. Because you will lose for the rest of your life if you want to be a trader. It’s part of the game. You “just” need to win more than you lose.
Listening to music while trading can be a good thing – just know yourself. If I listen to aggressive music in the car, I will push the pedal to the metal. The same happens when trading.
Have a trading journal and review, review, review.
Work on your psychology, but don’t underestimate the power of knowledge. Fear stems from not knowing. Work hard, know more, be more confident. Most psychological issues will dissolve into thin air.
Yes, I said: don’t system hop. But for the first year or two, try out everything you can. Every market, every strategy, every trading style. How can you know what fits your personality if you don’t know what’s out there? Finally, decide and take the leap of faith.
Screen time alone won’t help you. Again: review. REVIEW! You need an effective feedback loop or you will repeat the same mistakes again, and again, and again. There is no learning by doing in trading.
You don’t need to be hyper intelligent to be a trader. The best traders I know are “simple” minds. They do what works, they have no ego, and they disregard what does not make sense to them.
Do not have monetary goals. Have process-oriented goals.
Do not look at your P&L during your trading session or you WILL trade your P&L. Before and after a trading session, the money in your account is money, yes. During the session, however, the money in your account is ammunition that has to be spent in order to acquire more ammunition, if that makes sense.
If you read only two books about trading, these should be Pitbull by Marty Schwartz and Diary Of A Professional Commodity Trader by Peter Brandt.
Trading with the trend is not easier than trading against the trend. Trading with the trend is the last thing I learned and every single trader I know seems to have the hardest time following a trend.
If you want to pay for education, do your research. It is very possible to differentiate the scammers from the real traders. If something sounds too good to be true, run as fast as you can.
Never forget to be grateful at the end of the day. You are given the chance to make money by clicking a mouse from the comfort of your home. How many people on earth can say the same?
Trading fulltime is often romanticized but can quickly turn into a social nightmare. Keep up that work-life-balance.
Find other mental challenges for your brain than trading. Feeding your body McDonalds everyday will, and nothing else, will kill you. Trading every day without reading a good novel once in a while will make you braindead.
Twitter is actually a really good place to learn trading and to connect to great minds, unlike most forums, where 95% of posts are rubbish.
Likewise, there are lots of videos on Youtube with quite good content. You need to find a way to distinguish the goodies from the baddies.
Don’t be mistaken, trading is gambling. You want to be a professional gambler? Make up your mind.
A structured pre-trading routine is one of the best things you will ever do in your career as a trader. Take your time to create and establish it.
Learn your basic and classic price patterns such as Head & Shoulders, Wedges, Triangles, etc. It takes a week to get them all into your head and you will profit from that knowledge for years to come.
Never pick tops and bottoms. Take the middle of the moves and your results will improve.
Believe in your abilities and trust your strategy or you will be destroyed.
======================================================
Jesse Livermore’s 25 Trading Lessons
1. Watch the market leaders.
Watch the market leaders, the stocks that have led the charge upward in a bull market.
That is where the action is and where the money is to be made. As the leaders go, so goes the entire market.
If you cannot make money in the leaders, you are not going to make money in the stock market. Watching the leaders keeps your universe of stocks limited, focused, and more easily controlled.
2. Markets are driven by humans and human nature never changes.
There is nothing new on Wall Street or in stock speculation.
What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence. Of this I am sure.
All through time, people have basically acted the same way in the market as a result of greed, fear, ignorance, and hope. This is why the numerical formations and patterns recur on a constant basis.
I absolutely believe that price movement patterns are being repeated. They are recurring patterns that appear over and over, with slight variations. This is because markets are driven by humans — and human nature never changes.
3. Markets are never wrong but opinions often are.
The market will often go contrary to what speculators have predicted.
At these times, successful speculators must abandon their predictions and follow the action of the market. Prudent speculators never argue with the tape.
Markets are never wrong, but opinions often are. Remember, the market is designed to fool most of the people most of the time.
4. It was never my thinking that made the big money for me. It always was my sitting.
They say you never go broke taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.
I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.
The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but also the intelligence and patience to sit tight.
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.
5. You can win on a stock, but you cannot beat Wall Street all the time.
First, do not be invested in the market all the time.
There are many times when I have been completely in cash, especially when I was unsure of the direction of the market and waiting for a confirmation of the next move.
Second, it is the change in the major trend that hurts most speculators.
Always remember; you can win a horse race, but you can’t beat the races. You can win on a stock, but you cannot beat Wall Street all the time. Nobody can.
There is the plain fool, who does the wrong thing at all times everywhere, but there is also the Wall Street fool, who thinks he must trade all the time.
No man can have adequate reasons for buying or selling stocks daily– or sufficient knowledge to make his play an intelligent play.
Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.
6. It is what people actually did in the stock market that counted – not what they said they were going to do.
7. Successful trading is always an emotional battle for the speculator, not an intelligent battle.
8. I believe that the public wants to be led, to be instructed, to be told what to do.
They want reassurance. They will always move en masse, a mob, a herd, a group because people want the safety of human company.
They are afraid to stand alone because they want to be safely included within the herd, not to be the lone calf standing on the desolate, dangerous, wolf-patrolled prairie of contrary opinion.
9. I believe that having the discipline to follow your rules is essential.
Without specific, clear, and tested rules, speculators do not have any real chance of success. Why?
Because speculators without a plan are like a general without a strategy, and therefore without an actionable battle plan.
Speculators without a single clear plan can only act and react, act and react, to the slings and arrows of stock market misfortune, until they are defeated.
10. If you can’t sleep at night because of your stock market position, then you have gone too far.
If this is the case, then sell your position down to the sleeping level.
11. Remember that stocks are never too high for you to begin buying or too low to begin selling.
12. I never argue with the tape.
When I am long of stocks it is because my reading of conditions has made me bullish.
But you find many people, reputed to be intelligent, who are bullish because they have stocks. I do not allow my possessions – or my prepossessions either – to do any thinking for me. That is why I repeat that I never argue with the tape.
13. Not taking the loss — that is what does damage to the pocket book and to the soul.
Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.
14. I trade on my own information and follow my own methods.
15. Trade along the path of least resistance.
If after a long steady rise a stock turns and gradually begins to go down, with only occasional small rallies, it is obvious that the line of least resistance has changed from upward to downward.
Such being the case why should anyone ask for explanations? There are probably very good reasons why it should go down.
16. I don’t buy long stocks on a scale down, I buy on a scale up.
When I’m bearish and I sell a stock, each sale must be at a lower level than the previous sale.
When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stocks on a scale down, I buy on a scale up.
17. Don’t be fooled by the charisma of other traders.
It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urging of a magnetic personality when plausibly expressed by a brilliant mind.
18. Know yourself.
A man must know himself thoroughly if he is going to make a good job out of trading in the speculative markets.
19. Fear and greed are your greatest enemies
When the market goes against you, you hope that every day will be the last day – and you lose more than you should, have you not listened to hope.
And when the market goes your way, you become fearful that the next day will take away your profit and you get out – too soon. The successful trader has to fight these two deep-seated instincts.
20. Trading is not a get rich quick scheme.
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get rich-quick adventure. They will die poor.
21. Being a little late in a trade is insurance that your opinion is correct.
Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader.
22. Never average losses.
It is foolhardy to make a second trade if your first trade shows you a loss. Never average losses. Let this thought be written indelibly upon your mind.
23. The trend is your friend.
Successful traders always follow the line of least resistance. Follow the trend. The trend is your friend.
24. Always trade with a stop loss.
When you make a trade, “you should have a clear target where to sell if the market moves against you. And you must obey your rules! Never sustain a loss of more than 10% of your capital. Losses are twice as expensive to make up. I always established a stop before making a trade.
25. Don’t try to play the market all the time.
Every once in a while, you must go to cash, take a break, take a vacation. Don’t try to play the market all the time. It can’t be done, too tough on the emotions.
=========================================================
http://tradingcomposure.com/trading-psychology-truths/...
===============================================
50 Ways You Know You Are an Emotional Investor
You know you are an emotional investor if:
You pull a quote for your favorite stock and cheer when you find that it is up even a penny.
You call your broker atleast once a day to find out his or her opinion of your holdings.
You pee your pants when you find out the money you invested for Grandma is down 20%.
You get all excited when you get a “big tip” from a friend on a stock you know nothing about.
You bite your nails while watching CNBC the closing bell.
As you watch your positions on your streamer, you give it your undivided attention every time the lights blink red or green.
When your stock is in the red midday you flip your hat upside down and declare the rally is coming.
You call every friend and family member after selling a stock for a big profit.
You have buzzers next to you like Jim Cramer does on Mad Money, and use them religiously.
You yell at the TV while watching CNBC.
You want to strangle someone when it takes more than one second for your pending market order to process, “cccccccoooommmmeeeeeeee onnnn!!! GGGGGGOOOOOO!!!!!!!” is all you can say until it is filled.
You break keyboards every other day.
You pull out a bowl of popcorn as you watch your stock run up after hours when earnings hit big.
You and your friend get together after every “rough day” in the markets, hug eachother, then proceed to eat ice cream to feel better.
You exclaim, “That’s right! YES” if you see your latest call being featured as a play on CNBC, Mad Money, or Fast Money.
You double your position every time a stock you own gets upgraded.
You declare you are going to Disney World when your call options triple after the company announces they are going to be bought out. And no, you don’t have any kids.
You sell a whole position when it gets downgraded by an analyst.
While watching your stock tank real time on your streamer you put your hands on your forehead and ask yourself, “why me?” over and over again.
You tell all of your buddies that you never EVER make money in the stock market, and later that week when you do you spend all of your profits throwing a party.
You throw your chair like Jim Cramer does when the market doesn’t go your way.
You pray to the “stock gods” each and every night for a good trading day.
You yell at the “stock gods” after a bad trading day.
You place stop loss orders less than 1% below your purchase price because you can’t bare “big” losses.
You burn copies of the Investors Business Daily (IBD) when they are wrong about a recommended stock you lost money on.
You keep an extra mouse or two in the closet because you break them so often by throwing them against the wall.
You cry more than your wife.
After a bad day in the markets you spend the whole rest of the evening ranting about your bad luck.
You celebrate profits while they are still unrealized gains.
You get pissed at yourself for celebrating those profits after the stock falls 5% the next day.
Anyone that thinks your picks are bad you tell them to go to hell.
You take screenshots of your computer screen when your stock is up more than 10% in one day.
You film your favorite stock’s ticker while its running up in after hours trading because of some big news.
You contemplate selling out of your position every time your stock slips more than $.20.
You stand up out of your chair when you think you see an institutional buyer start to buy up shares of your stock.
You get drunk after realizing your favorite stock is now bankrupt and you have been holding since the top.
You drive over to your broker’s office and high five him or her after a big winner.
You yell when you talk about anything to do with the market.
You take off your shirt and swing it around in the air above your head when your stock announces its record setting earnings.
You play “Eye of the tiger” everyday just before the market opens to get yourself pumped up.
You grab your monitor with both hands, shake it, and yell, “what! what!” or “how could you do this to me!?” when your call is selling off heavily.
You watch Mad Money every day.
You contemplate what you are going to buy with profits that aren’t realized yet.
You refresh your portfolio summary page every few minutes like you do your e-mail box.
You wear a sweatband while you trade.
You wear the same pair of underwear for good luck everyday until your stock has a losing day.
You join chat rooms and tell stories of your greatest trades to everyone in the room.
You join a friend online and together announce the orders like a soccer game as they come in real time.
You get pissed when your order gets manipulated by a market maker.
You blog about ways you know you are an emotional investor because you are an emotional investor.
===============================================================
50 Bite Size Trading Tips and Tricks by Nick Radge
Don't try to read into other people's trading decisions.
By all means like a stock, but don't try to be best friends with it forever. Instead, spend time nurturing positions that are being kind to you.
Beware the Beginners Cycle. The want to be right will cause you to collect courses and books and will only be a costly and frustrating exercise. The secret is elsewhere.
Actually, there is no secret. It's all in the maths.
Losses when trading are inevitable, but losses should always be limited.
Have a prepared trading plan so you don't rush into bad decisions. Time spent planning will help you avoid catastrophic losses, riding the emotional roller coaster, and other unnecessary headaches.
Get off your high horse. Your ego will eventually cost you dearly.
Validate your strategy before you risk your capital.
Don't waste your time on other trader's successes. The only person you're competing against is yourself.
10. Ignore any broker that tells you to buy when there is blood in the streets. You can be sure it's not theirs.
Outsource to people who do the stuff they're better at so you can do the stuff you're better at.
Make haste slowly. Ensure you have a validated strategy that has an edge and ensure you have a full understanding of the journey ahead of you. The markets will always be there. What won't be there if you're in too much of a hurry is the capital in your account.
Understand positive expectancy. When you see it, you'll get it.
Ask someone you trust if you are unsure.
Risk a small amount of capital on each trade.
Sentiment will drive the market, or a stock, a lot further than logic ever will.
Only fools claim to know the future.
Don't be a dick for a tick. Saving a few cents here and there will only cost you dollars later on.
You can't control the market. Don't waste your time by watching every trade tick along.
Find a strategy that makes sense to you.
Be curious and keep a trading diary. Don't be scared to learn something new.
Explore new ideas and opportunities often.
Let go of things you can't change. Concentrate on things you can.
There is no point questioning the market.
The market will pay you when it's ready. You just need to be there when it does.
Find a strategy you actually enjoy following.
Realize that the harder you work, the luckier you will become.
Risk not thy whole wad. There is a reason why compounding is the 8th Wonder of the World.
However good or bad a situation is now, it will change. Accept that positive expectancy sometimes takes time to show its hand.
Realize that being right does not equate to profits.
45% of trades will tend be profitable. 45% will tend be losses. 10% will be breakeven. Your job is to make the winners count.
Make mistakes, learn from them, laugh about them, and move along.
Successful trading is not a sprint. Buffet didn't earn his reputation in a single year - or decade.
The only thing you can control is the amount of money you're willing to lose on each trade.
Don't over think things. Simple works best. Complex will eventually break.
Understand why your strategy makes money.
If you can't pull the trigger it's usually because you don't trust the strategy you're using. Stop and re-evaluate.
Trends can't not exist.
The biggest hurdle to overcome is between your ears.
Don't fear the market. It can't actually hurt you. You can hurt you though.
The object of gaining a trading education isn't knowledge; it's to enable action.
Never move a stop backward. You're mind is screwing with you.
Rules you can't or won't follow are of no use to you.
Your initial reaction to any adverse situation is usually wrong.
Risk and volatility are not the same. Volatility can increase returns. Risk can increase losses.
Think long term with regard to strategy application. Performance and trade outcomes in the short term are random.
The keys to success are consistency, discipline and patience. They cannot be bought.
Every stock that goes bankrupt exhibits a sustained downtrend first.
Any strategy is only as good as the person using it.
Take responsibility for every decision you make.
==============================================
https://tradingsim.com/blog/first-hour-trading/...
==============================================
https://tradingsim.com/blog/price-action-trading-strategies/...
==============================================
https://tradingsim.com/blog/exhaustion-gap/...
Conclusion
The gap signalizes that the trend might be exhausted, which creates a strong reversal potential on the chart.
Therefore, traders use the exhaustion gap to trade trend reversals.
The gap represents a big decrease in the people who trade with the trend, followed by a strong opposite force.
There are two types of exhaustion Gaps:
Bearish: starts with a bullish trend, bullish gap and a bearish reversal.
Bullish: starts with a bearish trend, bearish gap and a bullish reversal.
The 7 steps for recognizing and trading the Exhaustion Gap are:
Find a Trend
Identify Low Volumes during a Gap
Identify Increasing Volumes During the Reversal
Confirm the Exhaustion Gap
Open a Trade
Place a Stop Loss
Exit the Trade
================================================
http://www.trivisonno.com/trade/exhaustion-gap...
================================================
https://tradingsim.com/blog/descending-tops/...
Conclusion
The descending tops chart pattern is associated with bearish trends.
To identify descending tops, you need to spot a price top, followed by a lower top.
The confirmation of the descending top pattern comes with the third top, which is supposed to be lower than its ancestor.
To trade a descending top pattern, you have to follow these rules:
Open a trade when the price creates a third lower top and bounces downwards
Place a stop loss above the last top
Stay in the trade until the price action breaks the bearish trend line (if any), or until an ascending top appears on the chart
Two methods for trading descending tops is by applying the following indicators:
Channel Indicator
Descending Tops Breakout Indicator
==================================================
https://tradingsim.com/blog/shooting-star/...
Conclusion
The shooting star is a single candlestick pattern used in trading.
This is among the most popular bearish candlestick patterns.
The shooting star falls into the “Hammer” candle family.
The identical twin of the shooting star candlestick pattern is the inverted hammer.
The shooting star candle pattern has a strong bearish potential on the chart. Thus, traders use the shooting star to set short entry points on the chart.
One of the most reliable single candle patterns is the shooting star because:
It has unique structure – small body with long upper candlewick
There is a strong psychology factor behind the shooting star – exponentially growing bullish pressure, which quickly frazzles and ends up sending the price down.
There are three basic tricks for trading the shooting star candlestick figure:
Sell the security after the creation of a bullish trend, a shooting star candle, and a bearish confirmation candle.
Put a stop loss right above the upper candlewick of the shooting star figure.
Stay in the short trade for a bearish price move equal to at least three times the size of the shooting star candle including the upper and the lower candlewick.
This shooting star trading strategy contains around 3:1 Win-Loss ratio.
==================================================
https://tradingsim.com/blog/flags-and-pennants/...
To quickly recap, in this article we covered three strategies for trading flags and pennants:
Identify the strongest trends with retracements less than 23.6%
Identify multi-day trends that break through a flag or pennant on the open
Use the Ichimoku Cloud to validate flag or pennant breakout
====================================================
https://tradingsim.com/blog/day-trading-cup-breakouts/...
Conclusion
The cup and handle is a continuation chart pattern.
The pattern itself represents a consolidation between two trends in the same direction.
The body of the pattern resembles a “U” shape and the handle looks like a channel in the direction opposite to the trend.
Day trading cup and handle pattern rules are:
The 1-minute chart is a good time frame for trading the cup and handle.
The 35-period SMA is a great tool for monitoring trend health.
Use a 2-day time frame.
A valid pattern will most likely be formed during low or decreasing volumes.
The breakout usually occurs with an increase in volume.
The price push needs to go above the high/low of the previous day.
The cup and handle pattern target equals the size of the pattern itself.
Use price action to extend your profit potential:
Open your trades when the price breaks the handle of the pattern.
Place a stop below the lowest point of the handle.
Stay in the trade for the size of the pattern at least. You can always extend your target by using price action rules.
The opposite equivalent to the cup and handle is the inverted cup and handle:
It is a bearish pattern.
The body of the pattern looks like an upside down “U”.
The handle looks like a small bullish channel.
==============================================
No comments:
Post a Comment