Category: Trading Theory
First Quarter of 2012 Ends Flying High – Is it Time to Jump Ship?
The first quarter of 2012 has accounted for the largest index gains in several years and has brought the S&P to a lofty 4 year high, just shy of levels reached prior to the 2008 debacle. Has the United States economy recovered and people once more can contribute to this prosperity or are these levels [...]
Using Probability is Probably not a Good Idea
The roulette wheel spins once more and for the 10th consecutive time, the ball lands on black. What is the chance of that happening? About .09%. Now what is the chance of that happening once more? Because of the unusual and albeit unlikely odds that it will once again land on black, one may assume [...]
Hey, Lets KISS
Before you give me a weird look or come at me with a big ol’ pucker, let me first explain this acronym, how it pertains to trading and how it curtails into successful trading. KISS, besides the legendary rock band, is to Keep It Simple, Stupid. While I don’t mean to offend with the second [...]
Confusion of the Rationalist
The market is cold and emotionless, it does not care about you. It does not hold any stance on your portfolio, your emotion or your wishes. It will just keep on moving whether you like it or not and no amount of prayer can stop it. You should be adapting, not hoping because like the [...]
Price – The Ultimate Information Medium
There is a continuing argument over fundamental and technical trading strategy and which one is superior at predicting markets. Fundamentalists think that technical trading is nothing but luck that can’t hold its own in an uncertain and volatile market while technicians think that fundamental trading is hoping and betting on something that might not ever [...]
Managed Futures – Benefits of Portfolio Diversification
Everyone knows that it is always best to not put all of your eggs in one basket, in the world of investments, the stays very true. Diversification is a risk management technique that mixes different asset classes in a portfolio to prevent shock when a single asset gets hit hard. The rationale behind diversification is [...]
The Greatest Technical Indicator of them All – Price
With the growing number of advanced trading software, everybody has direct access to a plethora of different technical indicators. While technical indicators are great tools in the tool box of trading, they often overshadow the most important indicator of them all, and that is the price. Analysis paralysis is a real thing and as many [...]
The Zero-Sum Game – Cut Losses and Let Winners Run
The zero-sum concept is a peculiar idea that sparks a little bit of fear and intimidation into the soul of the futures trader. The thought that for you to win, one must lose is maybe a little morally disheartening while on the other hand, the thought that when you lose, somebody else wins and that [...]
Trading the Triangles
Trading the market is reacting on the movements themselves, not the expectation of movement however the expectation must first be created in order to establish your entry positions when the movements are made. When you trade on expectation, you leave yourself vulnerable to any reactions or interpretations that are not what you thought was going [...]
The Fibonacci Sequence
Technical analysis is as much understanding the human psyche as it is understanding a set of raw data, charts or numbers because of the evidence of psychological – likely subconscious – reflections of that in market price movements. Some of the explanation to the reason behind price movement does not come from the logic of [...]
