Market Math
I ran a quick study this morning to look at what happens to stock market volatility following large single day volatile events. Note that we are looking at market volatility here, not direction, because the directional message is simpler and clear: historically, large volatile events in stocks have come after
Market Math
Yesterday I wrote a post that looked at asset returns and how to compound them. That post was in response to a reader's (Anthony's) question, and I want to continue answering more of the question today. Here's the question in its entirety, with the
Market Math
One of my readers, Anthony, sent me a good question about doing some statistical analysis on stock indexes. I think there are some important lessons here. Here's the question First, I was messing with the SPY up/down N-days and the returns N-days after. It was evident that
Psychology
As markets languish in the summer doldrums, Glenn comes back with a good philosophical question: Example: Every retail trader in my community is long oil.. The sentiment is overwhelming and no one is short... However all these traders where long oil for the past couple months and obviously they have
Psychology
I saw this interesting article from Bloomberg last week, with the almost-clickbait title of "Train your brain for trading (No, Really!)" I just happened to click on it, and found that it was actually an interesting perspective on some earlier research. When I wrote my book (which you
Market Math
It can difficult to dig into someone else's work and research. I wrote a post a few years ago about why using the slope of a moving average, moving average crosses, or trend indicators based on multiple moving averages might be a very bad idea. (Answer: because it
General Comments
I thought it might be useful, since most markets are about as exciting as drying paint right now, to take a few steps back and consider some basic tools that most technical traders use. Today, I'm drawing from an early draft of my book, and sharing a few
General Comments
An interesting debate emerged in the comments to one of my posts. In the post, I had suggested the discipline was the most important thing; a reader countered that patience was more important. Now, I could (and did) argue that patience is a subset of discipline, but the discussion could
Breakout
Glenn comes back today with another good question. Here's his full, unedited question: If your system has you trading a certain way and you can execute those trades with precision life is great right( huh maybe not) .... So let say you job is to enter a trade and
Podcast
This episode kicks off a mini-series in which I work with a beginning trader to learn the very fundamentals of the business. We will cover method, psychology, risk, learning techniques, money management, and much more, and hopefully we will get to see Austin have some success along the way! Look
Psychology
I wrote a few posts last week about how to never miss the move. Today, I want to dig into that idea a little bit deeper, and think about why, sometimes, you really do want to miss the move! Understanding this idea gets right to the heart of what it
Psychology
This post might make you mad. You might think I'm blind to risks or that I don't understand the world. You might end up telling me how wrong and stupid my view are. That's ok, because this post can also help you, and that&