I recently answered the above question on Quora. ” I won’t know how long it will take you. It took me 2 years for forex. Maybe I am slower. There are many elements to learn in trading in order to be consistently profitable – understanding market structure and determining the edges are just two of many. Money management, trading psychology, […]
Whilst drawing up the trading plans I analyzed edges, key price levels, expected profits/losses, trade management, probabilities etc. After the trade has been executed, I became obsessed with the P/L (profits and losses). Traders who focus on the P/L will likely swing with changing short term accounts of the market environment. They will lose focus of the overall picture […]
Late last year, I asked a reasonably established trader friend if he would take 60% return per annum on equity with low risk strategies (aka close to no equity loss for the year). He was reluctant as he spiraled towards 5 to 10% return on any single trade, perhaps even 20% on a good day. His risk factor would be […]
(Found this interesting article I wrote many years ago whilst cleaning up old hard disks.) Worry the market has been too good? Not sure economic growth is really turning round … but do not want to miss the ride? With so many indices towering towards the sky, surely the sky will not fall…… Are there not many faithful riding the upstream […]
The Reward Risk (R:R) ratio helps a trader manage his trade – not provide a valuation of risk. R:R does not measure risk. Some strategies with “inferior” R:Rs are in fact safer (less risky) than some with higher R:Rs. A highly positive R:R ratio falsely assures many traders a risk is worth taking. If someone passing by my house tells me there is a large, hopeful gold vein in […]
Yesterday I was trying to explain to my young son what I actually do everyday. …… “So you must guess the price direction?” “Yeah, in a way, I try to guess intelligently of course.” “You must be really smart.” “Yeah, but smart has nothing to do with making money (in the markets).” “So you must be really lucky.” “That I […]
An old friend shared how discouraged he was with not being able to manage his impulsive trades. That evening we decided to observe how he traded the US session. He certainly was hard working and eyeballed every 5 minute bar. He had a reasonable trading strategy, but on several occasions strayed from the original plan, and “analyzed” various opportunities on the fly. Quite […]
I saw this on a T Shirt recently – “Second place is the biggest loser”. Most of us are indoctrinated against losing. We sing praises of those who overcome impossible odds, we hail the champions, and we immortalize heroes. In schools, at work, we battle to win, we do not learn to lose. Resilience is that resonant voice that picks up our spirits, and girds us […]
Nervy Third Quarter The last quarter (June – Sep 2015) was a tragic tale with many acts. Some US$11 trillion was wiped out as stock markets were brutalized across Asia, Europe and US. Commodities accentuated their downward spirals, and funds continued their flight from emerging promised lands, (nearly US$1 trillion drained away over 13 months till July, much of it […]
Oft times I am asked where a particular currency is headed. My usual answer – I am a short term trader and have little grasp on forecasting currency direction. Some are smarter and ask whether they should buy or sell a particular currency. My reply – both are acceptable, insofar as they have identified a buy edge or sell edge […]