Psychology
Rhythm is a fundamental aspect of the human experience: our bodies pulse with the rhythm of blood and breath. We experience the rhythms of day and night, and the longer cycles of the seasons. Rhythm is fundamental to music, whether it’s the relentless pounding bass of a rock song,
Chart of the Day
I wanted to share a video that I do weekly for my research subscribers. (More information and a free trial is available here.) This is something a bit different from what I usually do here on this blog; I tend to keep the blog a bit more "classroom"
Technical Patterns
In my last blog post, I made an argument that the details of patterns do not matter--get the idea and the big picture right, and everything else is much easier. While I firmly believe that this is true, it does leave some important questions unanswered: mostly, exactly where, when, and
Technical Patterns
When I started trading, like many people, I was drawn to traditional technical analysis. I spent hours and hours studying different variations of patterns, often after creating the charts myself on graph paper. I measured ratios, looked at different kinds of averages, relationships of highs and lows within bars within
Volatility
How many emails do you get promising to show you how to find "hot stocks now"? How many screeners out there want to show you the movers and shakers in the market? How much attention does the media focus on big movers, and how much does social media
Anti
I received a good question from a long-time reader on a trade he executed in CREE. Here's Jim's (edited) question: I’ve been trying to swing trade for a few years now... Regrettably, the broad market indices usually leave me in the dust each month. An
Individual Traders
I did an interview a week or so ago with Abraham Thomas, one of the co-founders of Quandl. I love doing interviews because a thoughtful interviewer makes me ask questions and think about things in a new way. (Stay tuned for some more insights from that interview, and I'
Psychology
Every trader faces fear, sooner or later. In a perfect world, we'd be fearful at exactly the right times and use that fear to manage our risk, but we all know it doesn't work like this--markets naturally seem to provoke the "wrong" emotions at
Pullback
One of the key challenges for discretionary traders is balancing short-term and longer-term information. Err too far on either side, and bad things will happen: Focus too much on short-term, and we are overly responsive to every jiggle of the market, constantly stopped out by market noise. Focus too much
Trading tools
We all focus a lot of attention, perhaps too much attention, on where to buy and sell a market, on where to enter trades. Today, let's spend some time looking at the other side: where are you getting out? Some categories are useful here, and they are not
General Comments
Matt asked a question that I sat on for quite a while. I wasn't sure how to write a reasonably concise answer to a good question, but I'll try today. First, the question: I see you don't believe in Fibonacci ratios, but it seems
General Comments
One of the problems swing traders in stocks face is correlation; the sad reality is that stocks mostly move together, and trades in stocks mostly win and lose together. If you buy four names and short four at the same time, there's a pretty good chance that one