Bclund - The Intersection of Markets, Trading, and Life!bclund.
How To Tell If A Trading Book Is Useful. As part of your desire to learn more and improve as a trader, you have probably checked out some books on the subject.
Some of them, like Market Wizards, are truly inspiring and excellent reads. Maybe some of them have been helpful but most likely a lot of them were bad. Similarly, if you go to a bookstore or browse online, there are innumerable books about the markets and investing out there. How do you save yourself the precious time and effort and thereby avoid a bad read ? How do you find a trading book that’s useful and informative and will leave you better off for having read it? The core of the problem is that people who possess a profound amount of trading knowledge have almost no incentive to share it. For journalists or professors, the financial incentives can certainly matter.
However, most people who do end up writing excellent books about the markets do so because they get some emotional reward out of the whole exercise. It’s easy to take their motives skeptically. The Secrets of The World’s Greatest Traders. MoneyShow.com: Profitable Advice from Investing and Trading Experts. MarketClub Trader’s Blog. I hope I'm not dating myself too much, but I remember when the neighborhood chain drugstore was almost a one-stop shop for human needs.
For example, you dropped off your film to get developed. You could get the ointment for that embarrassing itch. You could even get a BLT and some fries. (Not necessarily in that order.) The BLTs and fries are long gone, but the chain drugstore on the neighborhood corner has continued to evolve and embed itself into our daily lives. By far, the two biggest players in the drugstore space are Walgreen Co. Article source: The Path of Least Emotional Resistance « Systematic Relative Strength. We all want to feel good about ourselves.
As a result, humans have a strong bias toward structuring their emotional environment to preserve their self-esteem. We attempt to maximize the perception of good decisions and to minimize the impact of poor decisions. Usually this results in the view that we have never made any poor decisions! Bad outcomes are explained away by interference from external factors, while good outcomes are always the result of clever and thoughtful decision-making. In the financial market, psychological comfort is over-rated. Minimizing regret is a polite way to put it. The disposition effect shows that investors hold losers and sell winners. The investor is confronted with karma boomerang: in an attempt not to appear dumb, the investor makes decisions that actually are dumb. Joe Fahmy. Drunken Bob.
Finance-Stocks-Options. How much should I stake - Kelly's strategy. The answer to this question has quite surprisingly been around for ages though it is discussed, analysed and refined often.
Named after its author, John L Kelly Jr, if was first published in 1956. Quite simply, the strategy enables you to find the answer to a question that is common amongst speculators and gamblers. If you have a bank of X, how much should you stake on each occasion to maximise your gain but minimise your loss so that in the long run you can perpetually increase your wealth! Kelly considered the strategy of betting a fixed fraction of the bank on each occasion. In a favourable game, your fortune ought to grow exponentially, like compound interest. Kelly's answer was simple. Therefore if you started with a bank of £100 and you correctly assessed your chances as discussed above you would need to place a bet of £2.
In short the "Kelly strategy" maximises your long term growth rate by equalising it with your risk. Hunting Head and Shoulders can Lead to Decapitated Traders Dragonfly Capital. I have spotted a lot of potential Head and Shoulders patterns in the broad market and individual names the past couple of weeks.
If you are not familiar with it a definition can be found in Investopedia. But you already know this pattern, right, everybody does. This pattern has become extremely popular to talk about and to look for. You even see it coming up in advertisements for on-line brokerage trading tools. SNIPER LESSONS - Traders' Library Blog. One of the trader’s biggest psychological barriers to overcome is over trading.
Of course, over trading is relative depending on the type of trader you are and the time frame(s) used to make trading decisions. However, if you have a well formulated trading plan, you will know from past experience when you are walking the line between planned trading and over trading. Here are some of the symptoms of over trading: 1. not sticking to a plan or system 2. taking trades for no clear reason 3. taking on larger than normal positions.