General Comments
I received an email from a reader named Doug, about my recent blog post: “…I'm definitely a skeptic with the psychology portion of trading - but as a futures day-trader, it may be even more important for me. I'm finally at the point where I have
Psychology
In my previous blog post, I explored how our desires shape trading outcomes—everyone gets what they want from the market. The problem is that wants are not simple—on some level, some people want to lose. Some people want escape; they want to feel that they are superior when
Psychology
I’ve been doing some exciting and challenging work recently, and want to share some of it with you. A quick biographical sketch, for those of you who don’t know me: I’ve been trading full time more or less continuously since the late 1990s. I found my first
Breakout
I want to share a few of the things I have been thinking about and focusing on in the market. This market environment is not that different than "business as usual", so we have lessons here that will apply to most markets, most of the time. Cycles I
Psychology
A few thoughts on shorting stock markets, which may prove to be especially relevant here, as we head into the end of 2022. Long-term stock bias One of the most important things any stock trader must keep in mind is that stock markets have a strong upward bias over any
Psychology
There are about ten thousand ways a trade idea can go wrong. You don’t have to trade very long to seemingly encounter most of them in your first handful of trades! The goal, of course, is to manage behavior and to collapse all of those possibilities to a few
General Comments
Yesterday, a trader I have worked with a bit over the years (let’s call him M) pinged me with this real-money equity curve: (For the record, that's a pretty good equity curve, aside from the last trades. (I'd also ask some questions about the nearly
Psychology
I’ve been thinking and writing a lot about uncertainty lately—and about making decisions with incomplete information. Over the past two years, we've all had to make decisions in an uncertain environment as the world struggles with Covid. There are many other lessons and parallels from other
General Comments
One of the interesting developments of the past ten years is the gradual death of the “life hack” approach. This is a good thing. The reason this movement has died is because most “hacks” simply don’t work. But if you’re trying to develop a trading approach, you need
General Comments
I took part in an interesting exchange in a Facebook group last night, in which a trader was asking “should I buy puts or calls for the spy or qqq?” This trader, by his own admission, was a consistently losing trader. The question began with something like “I’m going
General Comments
How do we learn? For most things, a pretty simple plan works: do something and evaluate the results. Make some changes to what you do, and see how the results change. If your results get better, do more of the thing. If your results get worse, go the other way.
Psychology
What is different and what stays the same? This is one of the key questions traders who trade on different timeframes or in different markets face. We often hear the argument that a technical tool or pattern works just the same on any market or any timeframe, that we can