Kara Crawford at kara@traderplanet.comadmin@traderplanet.comhttp://www.traderplanet.com/TraderPlanet.com offers its popular content for commercial syndication via RSS. The feeds include backlinks for the full articles and automatically assign author attribution, which is required. To syndicate these RSS feeds on a commercial Web site, TraderPlanet.com, LLC requires the execution of standard linking agreement. Contact Kara Crawford at kara@traderplanet.com for further details.en-ushttp://www.traderplanet.com/articles/view/69203-why_trading_small_can_make_your_account_bighttp://www.traderplanet.com/articles/view/69203-why_trading_small_can_make_your_account_big<div> <p>In an earlier article, I discussed risk, and how much risk a trader should take on for each trade. One of the best discussions I've found on the topic was from the book "Market Wizards," where one of the professional traders suggested that 2% should be the maximum risk per trade.</p> <p>One reader commented that even 2% was too extreme, and that 1% risk is a better number. This reader obviously understands the importance of minimizing risk, and I wish more traders, especially newer traders, were mo...</p></div><a href='http://www.traderplanet.com/articles/view/69203-why_trading_small_can_make_your_account_big'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/815/?a=1071><img src=http://www.traderplanet.com/themes/trader_plain/gfx/murphy.gif border=0 /></a></p> Kevin DaveyKevin DaveyMon, 08 Nov 2010 18:49:11 +0000http://www.traderplanet.com/articles/view/68649-learn_from_a_teacher_or_a_traderhttp://www.traderplanet.com/articles/view/68649-learn_from_a_teacher_or_a_trader<div> <p>There is an old saying "those who can do, and those who can't, teach." I'm not sure where that phrase originated, but it is true in many professions. Think of professional sports; there are many great coaches who never played the game, or if they did, weren't as good playing it as they are teaching and coaching it.</p> <p>The same thing holds true in trading. Especially on the Internet, many, many people claim to be gurus of forex, futures, stocks and every other kind of trading instrument. And som...</p></div><a href='http://www.traderplanet.com/articles/view/68649-learn_from_a_teacher_or_a_trader'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/624/?a=1067><img src=http://www.traderplanet.com/themes/trader_plain/gfx/dinapoli.gif border=0 /></a></p> Kevin DaveyKevin DaveyThu, 04 Nov 2010 02:07:01 +0000http://www.traderplanet.com/articles/view/43969-beware_of_backtestshttp://www.traderplanet.com/articles/view/43969-beware_of_backtests<p>If you've been looking into trading futures, commodities, forex or stocks, you've probably been exposed to "backtest" results. These results purportedly show what a trading method would have done in the past, had you followed it. They are one reason why the US government requires the phrase "past performance is no guarantee of future results" when discussing trading systems or approaches.</p> <p>Backtests are hypothetical, and may or may not have been actually traded with real money. It is even poss...</p><a href='http://www.traderplanet.com/articles/view/43969-beware_of_backtests'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/834/?a=1070><img src=http://www.traderplanet.com/themes/trader_plain/gfx/wyckoff.gif border=0 /></a></p> Kevin DaveyKevin DaveyWed, 07 Apr 2010 02:35:17 +0000http://www.traderplanet.com/articles/view/42831-castles_made_of_sandhttp://www.traderplanet.com/articles/view/42831-castles_made_of_sand<div> <p>Jimi Hendrix was an extraordinary guitarist, but most people focused just on his guitar playing abilities, not realizing his lyrics were often quite poetic. In one song, he sings "Castles made of sand, fall in the sea, eventually." This is a great phrase to think about while trading.</p> <p>There are two good lessons for traders in this simple song lyric. First, just as you should not trade based on a faulty idea, you should not use sand as a building material. Second, you need a solid trading plan...</p></div><a href='http://www.traderplanet.com/articles/view/42831-castles_made_of_sand'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/744/?a=1072><img src=http://www.traderplanet.com/themes/trader_plain/gfx/firman.gif border=0 /></a></p> Kevin DaveyKevin DaveyWed, 31 Mar 2010 02:45:04 +0000http://www.traderplanet.com/articles/view/36766-scaling_the_heights_with_forexhttp://www.traderplanet.com/articles/view/36766-scaling_the_heights_with_forex<div> <p>I was recently asked by a new trader about Scale Trading in the Forex Market.</p> <p>I hope this inexperienced trader and I are talking about the same idea when we mention "scale trading." In case you do not know what scale trading is , a link to an article I wrote about it can be found at the end of this article.</p> <p>With scale trading, you buy an instrument when it is at historical or near historical lows, and sell it at slightly higher levels. The general idea is that there is a floor that the tradi...</p></div><a href='http://www.traderplanet.com/articles/view/36766-scaling_the_heights_with_forex'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/832/?a=1073><img src=http://www.traderplanet.com/themes/trader_plain/gfx/jobman.gif border=0 /></a></p> Kevin DaveyKevin DaveyFri, 05 Mar 2010 17:41:00 +0000http://www.traderplanet.com/articles/view/36194-that_s_a_sneaky_trickhttp://www.traderplanet.com/articles/view/36194-that_s_a_sneaky_trick<div> <p>I saw an advertisement for a futures trading system the other day, and I'd thought I would discuss it here. Now normally, I trade only futures, forex and commodity systems I create, since I know exactly what goes in them, how they were tested, etc. That's not to say there aren't other vendors and systems out there that are good. Some are very good, and worth checking into.</p> <p>I usually scan ads to see what other system vendors in the industry are up to, and alert my readers and subscribers of s...</p></div><a href='http://www.traderplanet.com/articles/view/36194-that_s_a_sneaky_trick'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/624/?a=1067><img src=http://www.traderplanet.com/themes/trader_plain/gfx/dinapoli.gif border=0 /></a></p> Kevin DaveyKevin DaveyMon, 01 Mar 2010 15:53:23 +0000http://www.traderplanet.com/articles/view/35638-hot_for_tradinghttp://www.traderplanet.com/articles/view/35638-hot_for_trading<div> <p>At one of the websites I frequent, someone recently asked "Isn't trading exciting?" As someone who has been trading for 18 years, I thought I'd share my perspective.</p> <p>Good trading in stocks, futures, forex or options, whether it is long term or short, should be pretty boring. If it is "exciting," my guess is that it is stimulating your brain in a manner similar to gambling, which for traders who want long term success is VERY bad. As casinos will tell you, when people get excited while gambli...</p></div><a href='http://www.traderplanet.com/articles/view/35638-hot_for_trading'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/815/?a=1071><img src=http://www.traderplanet.com/themes/trader_plain/gfx/murphy.gif border=0 /></a></p> Kevin DaveyKevin DaveyWed, 24 Feb 2010 03:18:23 +0000http://www.traderplanet.com/articles/view/35239-the_90_percent_clubhttp://www.traderplanet.com/articles/view/35239-the_90_percent_club<div> <p>If you've been around investment circles long enough, you have undoubtedly seen ads for stock, futures, forex or commodity systems, services or newsletters claiming a 90% or greater winning trade rate. This, of course, makes the approach very enticing. I mean, seriously, how could you lose money if you win 90% of the time?</p> <p>In other articles, I've provided the math behind how to really evaluate a system, which includes winning percentage, average win and average loss, so I won't repeat it her...</p></div><a href='http://www.traderplanet.com/articles/view/35239-the_90_percent_club'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/624/?a=1067><img src=http://www.traderplanet.com/themes/trader_plain/gfx/dinapoli.gif border=0 /></a></p> Kevin DaveyKevin DaveyFri, 19 Feb 2010 16:15:15 +0000http://www.traderplanet.com/articles/view/34216-focus_on_the_negativehttp://www.traderplanet.com/articles/view/34216-focus_on_the_negative<p>With almost every decision in life, people tend to focus on the positive, and minimize the negative.  Think about buying a house - what entices you first?  Usually, it is curb appeal, and if your first impression is favorable, you'll tend to minimize negatives, like maybe the amount of rehab the house needs on the inside.</p> <p>It is the same thing with trading systems or strategies.  Most people tend to focus on the rate of return, or maybe even the winning percentage, and if that looks good, they...</p><a href='http://www.traderplanet.com/articles/view/34216-focus_on_the_negative'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/744/?a=1072><img src=http://www.traderplanet.com/themes/trader_plain/gfx/firman.gif border=0 /></a></p> Kevin DaveyKevin DaveyTue, 09 Feb 2010 18:36:49 +0000http://www.traderplanet.com/articles/view/33892-glitter_like_goldhttp://www.traderplanet.com/articles/view/33892-glitter_like_gold<div> <p>I smiled a little bit the other day, when I saw the grumpy old men in the corner coffee shop excitedly engaged in a conversation. I couldn't hear all of what they were saying, but based on the animated pointing and gesturing at what looked like a paper price chart of Gold , I knew it could only be one thing: Gold fever. And as a professional speculator, I knew good things were likely on the way for me. It turns out that extreme public interest is a good sign of a top, at least a temporary on...</p></div><a href='http://www.traderplanet.com/articles/view/33892-glitter_like_gold'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/834/?a=1070><img src=http://www.traderplanet.com/themes/trader_plain/gfx/wyckoff.gif border=0 /></a></p> Kevin DaveyKevin DaveyFri, 05 Feb 2010 17:27:51 +0000http://www.traderplanet.com/articles/view/33510-the_two_percent_rulehttp://www.traderplanet.com/articles/view/33510-the_two_percent_rule<div> <p>In the classic book "Market Wizards," one of the famous traders interviews recommends that traders risk no more than 2% of their capital on any one trade.  Any amount higher, the expert trader proclaims, is akin to being a cowboy gunslinger.</p> <p>Although everyone's circumstances are different, in general this is a very good rule.  Why?  Well, risking only 2 percent of one's account per trade makes it very difficult to get wiped out quickly.  As most people probably know, most new traders get wip...</p></div><a href='http://www.traderplanet.com/articles/view/33510-the_two_percent_rule'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/744/?a=1072><img src=http://www.traderplanet.com/themes/trader_plain/gfx/firman.gif border=0 /></a></p> Kevin DaveyKevin DaveyWed, 03 Feb 2010 01:28:57 +0000http://www.traderplanet.com/articles/view/33141-the_hidden_danger_lurking_in_high_leverage_tradinghttp://www.traderplanet.com/articles/view/33141-the_hidden_danger_lurking_in_high_leverage_trading<div> <p>I'm sure you've seen ads from forex or futures brokers touting the incredible leverage you can have trading.  While it is true that leverage is great when a trade moves in your favor, it can wipe out your account in an instant when it goes against you.</p> <p>For example, many forex brokers offer 100:1 leverage on forex trades.  Some even offer 400:1 leverage, but since 100:1 is extreme enough, we'll stick with that for this example.</p> <p>So, let's say you purchase 1 standard forex lot on the Euro to US...</p></div><a href='http://www.traderplanet.com/articles/view/33141-the_hidden_danger_lurking_in_high_leverage_trading'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/834/?a=1070><img src=http://www.traderplanet.com/themes/trader_plain/gfx/wyckoff.gif border=0 /></a></p> Kevin DaveyKevin DaveyFri, 29 Jan 2010 18:38:43 +0000http://www.traderplanet.com/articles/view/32715-when_lightning_strikeshttp://www.traderplanet.com/articles/view/32715-when_lightning_strikes<p>In today's electronic age of trading, everything seems very easy.  Just log on, point and click, and viola! - a trade is opened or closed.  Pretty simple.</p> <p>But, lurking under that simplicity is a huge hidden danger - what do you do when things go wrong?  Technology and infrastructure sometimes fail, and inevitably when they do, it will likely cost you money if you are not prepared.  It only takes one position that you can't close to go against you to do major financial damage. </p> <p>If you don't ha...</p><a href='http://www.traderplanet.com/articles/view/32715-when_lightning_strikes'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/744/?a=1072><img src=http://www.traderplanet.com/themes/trader_plain/gfx/firman.gif border=0 /></a></p> Kevin DaveyKevin DaveyWed, 27 Jan 2010 02:39:12 +0000http://www.traderplanet.com/articles/view/32428-walk_2_steps_forward_1_step_backhttp://www.traderplanet.com/articles/view/32428-walk_2_steps_forward_1_step_back<p>If you've been around trading for a while, you probably have seen system vendors tout their performance results via "backtest" or "walkforward test" reports.  Unfortunately, most people think these two types of tests are the same, or virtually the same.  Nothing could be further from the truth.</p> <p>So, what is the difference between backtests and walkforward tests? In a nutshell, with traditional backtest optimizations you take all data, optimize your parameters and then take the best parameters ...</p><a href='http://www.traderplanet.com/articles/view/32428-walk_2_steps_forward_1_step_back'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/815/?a=1071><img src=http://www.traderplanet.com/themes/trader_plain/gfx/murphy.gif border=0 /></a></p> Kevin DaveyKevin DaveySun, 24 Jan 2010 16:02:23 +0000http://www.traderplanet.com/articles/view/32126-scales_can_be_hazardous_to_your_financial_healthhttp://www.traderplanet.com/articles/view/32126-scales_can_be_hazardous_to_your_financial_health<div> <p>I have been trading futures for about 18 years, and many of the early years were consumed with searching for the "perfect" trading system.  One of the approaches I found that seemed to make sense was scale trading.  It is an interesting concept that "wins" most of the time, but is really only appropriate for those with very deep pockets who can stomach occasional enormous drawdowns.</p> <p>In a nutshell, scale trading buys futures in a physical commodity as it approaches a "bottom," and sells at sm...</p></div><a href='http://www.traderplanet.com/articles/view/32126-scales_can_be_hazardous_to_your_financial_health'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/834/?a=1070><img src=http://www.traderplanet.com/themes/trader_plain/gfx/wyckoff.gif border=0 /></a></p> Kevin DaveyKevin DaveyThu, 21 Jan 2010 01:48:22 +0000