Archives of “January 20, 2019” day

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TRADER’S PRAYER

  
  Education
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Stock and options trading is difficult to master, much like life at times. We all go through times of hardship.  I believe our country (and world) is going through one right now.  But difficult times have come and gone in the past and I have faith that this is just another one of those times.  Here is my prayer for the trader…in and out of the charts.
May the sun always shine bright with energy when rising and glimmer with comfort in descentTRADERS PRAYER
May your charts whisper to your burning ears

May your flowers be full of bees and your weeds choke on fallen nectar
May your wins humble and your losses teach
May still waters massage your aches and clean water quench your thirst
May fear give way to peace and greed surrender to charity
May the eyes of a child sooth the wrinkles of age
May a logical life give new meaning to an illogical chart
May you outlive your mother and father and die honored before your children
May the life within bring beauty to the life without

Ciana, New Frontiers in Technical Analysis

  
  Education
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For those of us without a Bloomberg terminal New Frontiers in Technical Analysis: Effective Tools and Strategies for Trading and Investing by Paul Ciana (Bloomberg/Wiley, 2011) is an idea book, not a plug and play manual. But even though some of the software tools described in Ciana’s book are not available on run-of-the-mill trading platforms (and where they are, they are available by subscription only) clever programmers may get inspired. Moreover, even without access to proprietary software the imaginative reader can add some new arrows to his quiver.
The six chapters in this book are written by six different authors: “Evidence of the Most Popular Technical Indicators” (Paul Ciana), “Everything Is Relative Strength Is Everything” (Julius de Kempenaer), “Applying Seasonality and Erlanger Studies” (Philip B. Erlanger), “Kase StatWare and Studies” (Cynthia A. Kase), “Rules-Based Trading and Market Analysis Using Simplified Market Profile” (Andrew Kezeli), and “Advanced Trading Methods” (Rick Knox).
Ciana provides some fascinating data about the preferences of those who use the Bloomberg Professional Service. For instance, Europe opts for log charts 47% of the time and Asia only 9% of the time. Asia prefers candlestick charts, the Americas bar charts. Worldwide the most popular technical indicators (excluding moving averages) are RSI, MACD, Bollinger bands (BOLL), stochastics (STO), directional movement index (DMI), Ichimoku (GOC), and volume at time (VAT). RSI is the clear winner, with a 44.4% worldwide preference; MACD comes in second at 22%. Some indicators have geographical ties. GOC has a 10.8% popularity rating in Asia as opposed to 2.5% in the Americas and 2.8% in Europe. VAT has a 5.3% rating in the Americas and only 1.8% in Europe and 1.6% in Asia. (more…)

OVERCONFIDENCE in Trading

  
  Education
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It is common for traders to complain of a lack of confidence in their trading, but very often it is overconfidence that does them in. Overconfidence results from a lack of appreciation of the complexity of markets and an underestimation of the challenges of trading them successfully. In a sense, overconfident traders lack respect for the markets. They think that reading about a few setups or buying the newest software will prepare them to make money. Overconfident traders don’t want to work their way up the trading ladder: they resist the idea that screen time is the best teacher. They also chafe at the idea of growing their account. Rather than start with one contract and wait until they’re profitable before trading larger size, they want big positions—and profits—right away. Because they’re so eager to make money—and so sure they can make it—overconfident traders generally trade impulsively. They won’t wait for the setup to form; they’ll jump the gun—and get whipsawed in the process. Instead of being patient and waiting for short-term patterns to align with longer-term patterns, they will take every trade, enriching their brokers in the process. (more…)

What To Worry About This Year

  
  Education
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Things to worry about:
Worry about courage
Worry about Cleanliness
Worry about efficiency
Worry about horsemanship
Worry about…
Things not to worry about:
Don’t worry about popular opinion
Don’t worry about dolls
Don’t worry about the past
Don’t worry about the future
Don’t worry about growing up
Don’t worry about anybody getting ahead of you
Don’t worry about triumph
Don’t worry about failure unless it comes through your own fault (more…)

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