Relative Strength
[dc]O[/dc]ne of the very real problems stock traders face is knowing where to focus their attention. Some traders are restricted to certain sectors or sets of stocks, but, even then, quantitative screens can be a useful first step. For traders who have access to the entire universe
Readers Questions
Nathan asks: Does volume play any role in your analysis? Do you look at increased volatility in conjunction with increased volume? Also, since the spot FX market does not have any volume, does the volume in the futures FX carry any significance? Good question, Nathan. Short answer is no, I
General Comments
Instinct can beat analysis. Read this. (Harvard Business Review) At one time, I did a lot of quantitative work on fundamentals. Not surprisingly, what most people think works in "fundamental land" doesn't work as well or, in many cases, quite like we are taught (same is
Individual Traders
[dc]M[/dc]any years ago, a friend of mine shared an encounter he had with a successful investing club. This club was not like many of the others—they didn’t pool their money to trade stocks, do fundamental research, or, in fact, do any research of any kind.
General Comments
[dc]I[/dc]t is certainly easy to find examples of real charts beside randomly generated charts--whether on websites and in books--and most traders know, by now, that it is very difficult to tell which charts are real and which are random. The conclusion that some people draw is that,
General Comments
[dc]I[/dc]'m going to start doing something new for my readers. Several times a day, I will update the page of market statistics that is available here. I will tweet when it's updated. Sometimes I may also call out some interesting points, but often it
General Comments
[dc]O[/dc]ur trading ideas, "setups", if you will, must change with market conditions. Certain types of trades are more relevant at certain times. For instance, if the market is dramatically overextended, maybe we look for Antis, trend termination trades, or points to fade overextended individual names.
Trend Termination
[dc]R[/dc]eader Tom points out and asks about a possible attempted trend change in Cliffs Natural Resources (NYSE:CLF). This is a good pattern, and a good opportunity to discuss a few important points about trend change trades, in general. First, we do have to be very careful
General Comments
An important reminder of how backtests can different from real world performance. One of the most important lessons for investors: (A Wealth of Common Sense) In so many ways, it's a great time to be a trader. (TraderFeed) If you didn't see it, you might want
Pullback
This video takes a look at a possible setup developing in the US Stock market: what could potentially be the first pullback following at attempted trend change. (You could trade S&P 500 futures, SPY, IWM, etc. Similar patterns exist in most European indexes, but not Asia.) This is
General Comments
[dc]I[/dc]n a post last week, I talked a little bit about the kind of commitment and emotional charge that I believe it takes to truly excel in any field. Whether you are doing a martial art, studying music, learning to cook with excellence, or learning to trade,
General Comments
[dc]G[/dc]iven last week’s volatile spikes, there has been a lot of talk about the VIX and volatility in general. This is a good time to take a deeper look at the VIX and make sure we understand what it is, what it measures, and what it