Archives of “Business_Finance” tag

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The Dollar Surge is a Sign of Emerging Market Troubles.

  
  Education
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A strong dollar doesn’t worry me, but a dollar that is THIS strong is a sign that something worrisome could be going on. Historically, substantial year over year increases in the dollar have been consistent with a flight to safety. With the recent European and Emerging Market turmoil we’re seeing huge demand for dollars as a good deal of foreign debt is dollar denominated.  The current surge in the dollar is a sign that there’s a flight to safety occurring and more turmoil in the financial markets than many might presume.

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Perseverance is one of the Best Traits to Have When Trend Following

  
  Education
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It is never easy…and those that promise you that are not telling you the truth.

Perseverance is one of the Best Traits to Have When Trend Following!
Trend following is a marathon. There will always be those that say it is over!

It takes losses in the stock market to make future great traders and learning from mistakes is one of the best teachers.

Have a trading plan….and more importantly…Make sure you follow your own rules!

Links For Traders -Investors

  
Education, LINKS
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Interesting reads:

Questionnaire for Traders

  
Analysis, Education
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The following questionnaire asks you to assess your emotional experience during your trading. Specifically, you’ll be rating how often you’ve experienced the following feelings over the past two weeks. Below, I’ll explain how to score the questionnaire; please complete the items before looking at the scoring. My next post will explain how to interpret your results.
Please use the following scale for your responses:
1 = rarely
2 = occasionally
3 = sometimes
4 = often
5 = most of the time
1) I feel happy when I’m trading _____
2) I feel stressed when I’m trading _____
3) I feel alert and energetic when I’m trading _____
4) I feel discouraged when I’m trading _____
5) I feel capable of succeeding at my trading _____
6) I blame myself when my trading doesn’t work out _____
7) I feel satisfied with my trading results _____
8) I feel edgy and frustrated when I’m trading _____
9) I feel in control of what happens in my trading _____
10) I make impulsive decisions when I’m trading _____ (more…)

The Mind of a Trend Following Winner

  
  Education
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All types of traders have different emotional responses to winning trades as well as losing trades. The mindset of a winning trend follower is much different than most. There is no excitement on a winning trade nor emotional distress on a losing trade. The reason there is no excitement on a winning trade is due to the humbleness of the winning trend follower. He or she did nothing different. They were consistent in their plan and the market moved. The reason is very simple why these small group of winning trend followers succeed. The winning trend follower has an exact plan and knows that he is playing the odds. He or she keeps their losses small…or try to do so…however there will always be gaps or limit moves against them. There is only 4 possibilities when we trade:

big losses
big wins
small losses
small wins… (more…)

Chess and Trading

  
  Education
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Many a trading firm looks for a history of athletic participation in the search for trading talent.  While athletics, as performance domains, share some characteristics with portfolio management and trading, the overlap is far from perfect.  Both athletics and trading are competitive activities, and both require practice and disciplined performance.  It is not surprising that the personalities that gravitate to competitive sports are also drawn to market competition.

What differentiate athletics and trading, however, are the requisite cognitive skills.  The pattern recognition and deep analyses typical of short-term traders and investors are not necessarily skills required of sprinters, weightlifters, baseball outfielders, or football linemen.  Many sports require rapid hand-eye coordination; not necessarily explicit decision-making under conditions of risk or uncertainty.  Across many trading firms and types of trading, I have not found a strong correlation between athletic achievement and trading success.

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20 Trading Thoughts

  
  Education
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1.    You have to have passion for learning to trade; passion is the energy that you need to take you to your goals.

2.    You have to have the perseverance to keep going after you want to give up.  90% of new traders quit when they were very frustrated while 100% of successful traders didn’t quit until they reached their goals

3.    New traders spend too much time looking for what to trade instead of focusing on who they are as traders.  You have to know who you are as trader first then you can start building your trading system.

4.    Traders have to be able to manage their stress by trading inside their current comfort zone. Traders have to grow themselves and trade size step by step.

5.    The vast majority of new traders fail simply because they did not do their homework before they started trading.

6.    A trader has to build a trading system that matches their own personality and risk tolerance levels.

7.    A trader that chooses to be master a specific type of trading method or trading vehicles has a much better chance of success than the traders that just dabble in many different things and never make much progress.

8.    A trader has to write a good trading plan while the market is closed to guide their trading while the market is open.

9.    A trading plan has to be followed with discipline to have a chance at success.

10.    A trader has to manage their behavior by acting consistently with their own rules. (more…)

15 Ways to Manage Trader Stress

  
  Education
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  1. Only risk 1% of total trading capital per trade with stop losses and proper position sizing. Proper positions sizing makes the emotional impact of any one trade only one of the next one hundred a totally different mental perspective than an all in/have to be right Hail Mary trade.

  2. Only trade a  position size you are comfortable with.
  3. Trade a method or system you believe in based on back testing of a positive expectancy.
  4. Know where you will get out of a trade before you get in.
  5. Only trade with a detailed trading plan.
  6. Believe in your ability to follow your trading plan. YOu must have faith in yourself to lower your stress levels.
  7. Know yourself as a trader and only take your kind of trades. Take trades that will leave no regrets because they were good trades regardless of out comes. (more…)

Visualizing How Plunging Oil Prices Affect Currencies.The world consumes 93 million barrels of oil, which is worth $4.2 billion

  
  Education
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PETRO STATE
 

Every day, the world consumes 93 million barrels of oil, which is worth $4.2 billion.

Oil is one of the world’s most basic necessities. At least for now, all modern countries rely on oil and its derivatives as the backbone of their economies. However, the price of oil can have significant swings. These changes in price can have profound implications depending on whether an economy is a net importer or net exporter of crude.

Net exporters, countries that sell more oil abroad than they bring in, feel the sting when prices plunge. Less revenue gets generated, and this can impact everything from balancing the budget to the value of their currency in the world market. (more…)

A Trader’s Real Opponent

  
  Education
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The day the trader stops blaming the markets, politicians, or ‘They’ and ‘Them’ for losses and starts taking responsibility for their own trading could be the day that they begin to change from losing money to making money. In the end the market is like the ocean and we are the surfer, we choose the surfboard and the waves and the ocean really doesn’t care what we do it’s just there. The quality of our ability to ride a wave is based on our skills, technique, and experience our emotions contain no edge. In the end we win or lose based on our ability to overcome our own weaknesses.

 Market price action is neutral to our existence, it is our method that determines our profitability and we choose how we will trade.

Profitability comes from our total trading profits being bigger than our total trading losses, we control our entries and exits. 

The size of our draw down in capital is determined by the quality of our risk management and we manage our own risk.

Trading too big for a trading account size almost guarantees failure, we control our own position sizing.

Profitability only comes from trading with an edge, we are responsible for finding and trading with our own edge. 

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