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Patterns, Breakouts, and Making Money
Most patterns that form have breakouts. Many books and articles recommend buying or selling after a break of the resistance or support. I understand this is needed for confirmation, but it seems like the breakouts are up or down 5%-10%. How do you place a stop loss? How should one buy (or sell)...
KISS – Keep It Simply Sensible
Could you show with a suitable example involving real numbers how Risk-Reward or Profit-Loss ratios are calculated for a particular strategy. Let's say we use simple moving average crossovers as a buying/selling strategy for this example. This would be of great help to a lot of us amateurs in...
Like a Sick Horse, I Just Want the Economy to Recover
Last night, the youngest filly here decided she did not want to eat. She just stood off to the side and looked sad. I tried to hand feed her some grain to get her started, but she would have none of it. She turned her head away each time I tried to feed her, as if the smell of the grain was...
Get Inside to Get the Real Scoop
I understand – technical analysis is the cat’s meow for traders. Fundamental analysis is about as useful as a governor is in a racing car. I mean, what’s the point? A trader does not have time to search out the fundamentals of a market. The technical data says go, and so the trader goes. If...
Sometimes The Best Indicator is ...
The world of trading is wide, long, and deep, full of technical jargon, complex analysis, and often mind-challenging tools. The reality of this world, though, is that it is human-centric, which has its own set of complexities, however, the fact that the world of trading is simply humans buying...
Implied Volatility – One Indicator to Watch
A trader can look to the put/call ratio of any stock to ascertain the expected price movement of that stock. Although not fool proof, this indicator is helpful in gauging directional movement of a stock, especially when the volume suddenly spikes. The higher and quicker the volume rises, the...
Understand the Concept of Money Movement
Money doesn’t flow – it sloshes. Like water in a an overfull bathtub money moves in waves, as investors process information and balance competing desires to grow wealth and protect capital … As it sloshes, money creates a variety of measurable results, which signals how investors currently view...
Kick It Up a Notch - A Look at Market Indicators
Recently, I have spent quite a bit of time on the fundamentals of trading because the flow of questions I receive focused on this as a need. Today, however, I am moving up the ladder a wrung or two because I don’t want to ignore those who ask questions specific to trading. Although many of these...
Reduce the Gambling – Manage Your Risk
Clarification is a tool educators use to both reinforce ideas and to make sure others understand the point being made. As an educator, I would like to clarify a point I have made more than a few times in this column, as some of you have written to me questioning the notion that trading is...
One Win Helps Us All Move Forward
When I started writing this column, I had no expectations of a particular outcome, as I had no understanding of the folks who would read and respond to the column. Over time, that has changed, as I have found those who ask the most questions are those who want to start trading and have no idea...
How Much Can You Afford to Lose?
I saw your article about capitalization and I want to ask you, for a beginner how much initial capital is needed to invest in trading a market like Forex? No more than you can afford to lose and no less than need to reach your strategic goals. The main point here is that I cannot answer this...
Test drive, Experiment, and Select Rationally
One thing from yesterday’s piece stuck with me, and I want to follow up on that irritant today. Here is the part of yesterday’s Q & A that is bugging me … However, the strategies I use are very effective and can make money more than 70% of the time. How can the strategies you use be effective...
Sometimes, You Just Have to Pull the Plug
Once again, I have another lengthy question of import that I will break up into parts, as each part has independent value … I have been trading for over three years now, and there has not been a time when I have not lost money due to being emotional. I have lost more than I have gained, so,...
Free Your Mind From Frustration and Experiment
The nature of this column is that most everyone who writes to me for guidance is either a beginner or someone who has not had success with trading. This is fine, as a big part of what I do both in this column and in life is to educate. The problem is that I only have a small space to deal with a...
Dollar, Dollar Everywhere, and Mendels Too
Okay, so last week finished weakly for me. I ended the week tired and with a loss of motivation. This week, however, is starting out strongly, as I am excited about the economic news coming out. We have reports on consumer confidence, housing, investor sentiment, consumer sentiment, durable...
