Latest Posts

rss

David Halsey,Trading the Measured Move -Book Review

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #

David Halsey throws out the old notion of a measured move: that you copy an AB move up (or down) and paste it on a retracement low (or high) of C to get your price target D. In Trading the Measured Move: A Path to Trading Success in a World of Algos and High Frequency Trading(Wiley, 2014) he substitutes Fibonacci levels.

He uses three trade setups: the traditional 50% retracement measured move (MM), the extension 50% MM, and the 61.8% failure. When a trade is entered, its target is 123% from a swing high or low (and sometimes from a breakout) that is followed by a retracement (50% in the traditional setup). That is, the target is AB + 23%. Halsey shows both successful and failed MM trades on charts—unfortunately usually grey bars on a black background, which makes them hard to decipher.

The measured move trade setups are not stand-alones. Halsey discusses the use of multiple time frames, seasonality, NYSE tools, tick extremes and divergences, and gaps. He also discusses how to manage positions and take profits, advanced (actually, pretty basic) risk management, trading psychology, and having a trading plan and journal. (more…)

What You Can and Cannot Control In Trading

  
  Education
#  #  #

-You can control how much money you put behind the idea.

-You can control which markets you trade in.

-You can control how much you are willing to risk per trade barring any gap downs, or halt situations that might impact you negatively.

-You can control what type of set ups you buy.

-You can control when you get in or out, barring a halt.

-You can’t control the outcome of the trade.

-You can’t control how the market will react to news, try not to impose your views too much.

The point is not to fret over what you can’t control, once you put the trade in along with your stop for the most part everything else is out of your control.

The Market Tricks You to Trade Poorly

  
Analysis, Education
  • The market behaves much like an opponent who is trying to teach you to trade poorly.
  • Since most small to moderate profits tend to vanish, the market teaches you to cash them in before they get away.
  • Since the market spends more time in consolidations than in trends, it teaches you to buy dips and sell rallies.
  • Since the market trades through the same prices again and again and seems, if only you wait long
    enough, to return to prices it has visited before, it teaches you to hold on to bad trades.
  • The market likes to lull you into the false security of high success rate techniques, which often lose disastrously in the long run.
  • The general idea is that what works most of the time is nearly the opposite of what works in the long run.
Go to top