Unrequited Passion

Recently I completed work on a short term trading system based on holding a trade for a longer duration (approximately 4 hrs to 30 hrs holding time).  Before this I held my trades anywhere between 5 mins to 6 hours, and was used to trading exclusively in the first halves of the Asian and European sessions.  You can imagine how much havoc the […]

Risk Off ? – 26 Sep 2013

Except for quick action scalpers, most short term players still have to identify risk on / risk off scenarios. What is risk on / risk off? Simply – risk on is when traders  and investors become optimistic and are willing to bear more risks, running up equities and other high yielding trades.  Risk off pertains to heightened levels of conservatism, “flight” to safer […]

No Money Management = Gambling

Money management. Most people have heard but care little to implement this wisdom correctly. A stop loss is not money management. Position sizing is not money management. These two are merely arms and legs of money management. Ralph Vince conducted an experiment with 40 Phd students using a computer trading game that gave 60% winning odds to the player (which […]

Impulsive Trading

For The Impulsive Day Trader Impulsive traders tend to take action with less forethought than others at the point of entering the trade.  It does not help even if they had thought through the trade the night before.   This is because impulsiveness blinds or blocks out assessment and recall ability, and for a short term trader this will likely lead […]

Let Profits Run ……. How Far?

Today, my friend bittered how he chickened out and exited a profitable trade too early. As a short term trader, how far can we let profits run? If we keep a tight stop, and we let profits run, we risk losing part or all of our profits if the market pulls back quickly, or take out our trailing stop, and then […]

Help – Where To Place Stops?

WHERE TO PLACE PRE-EMPTIVE STOPS Should we place stops –  10 pips from entry?  At 3 times the ATR (average true range)? At the extremes of noise levels around support/resistance lines?  When price crosses a SMA support?   Must it be 10 pips – can’t it be 3 pips instead?  At the last pivot point or 50% Fibo retracement?  At the last swing high or low which […]

Trading Is Unfair Play

Is trading really like poker? In both cases, the player makes decisions with incomplete information, reacts with strategies and risks important resources for rewards or losses. There are many similarities – the player must know when to fold, when to push on with larger stakes, and maintain a sensible composure in the most exhilarating and daunting of times. In a […]

The Pride of The Day Trader

I consider day traders to be the most elite class of Traders. Absent of frontal cortex pride and highly risk efficient, these traders bang the markets with unusual fortitude and calm. Arresting tantalising emotions and soothing traumas with well practiced routines that cater to all expectancies (including a “I don’t know what’s gonna happen next” category), we are deftly proficient […]

Lesson From Day Trading

Of all the lessons I learnt from trading, perhaps “Patience” was the most difficult. For a day trader, waiting for an opportunity can be distressing. Waiting for one hour during an active session is a long time, a whole day burns like eternity, a whole week makes you wonder “what’s gone wrong”. Whilst trying to keep in tune with the […]