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Eyes Wide Shut

  
  Education
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Why does it take so long for a trader to learn?

eyes wide shut

Like I’ve said before, I’ve seen as much so-called wisdom over the years that I’ve eventually learned to hold as inviolate truth, as that which should be thrown out with yesterday’s garbage. Yet why does the eventual accumulation of pertinent knowledge translate so slowly into one’s trading results? If we are capable of weeding out the good stuff from the bad, why doesn’t the good stuff just take over and guide us directly towards success?

Aside from the fact that I might just be a dumbass, one thing I’ve figured out is that the distance between the brain and the finger might not be so close as you’d think — if you’re not careful. I know I’m not the only trader who has a tendency to repeat the usual mistakes, or variations of same, despite having berated myself 10 times in the previous week to make an effort not to do it again. My contention is that old habits die hard. Real hard. And only if you go out of your way to kill them outright. (more…)

4 Elements Required to Trade Successfully

  
  Education
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There are 4 elements you must master:

  • Idenifying support and resistance. If you are trading in the middle of the range, you will be more suseptible to what seem to be reversals, but are actually just noise in between a trading range. Do not enter if your stock has moved more than 5 percent above support or the breakout point.

  • Identifying volume patterns. If you buy a dip on high volume, there’s a higher probability of getting caught in the midst of a reversal. Same goes for low volume breakouts.

  • Set appropriate stops, based on support, resistance and percentage of your trading portfolio. Even if you take the appropriate cautions, you can still get reversed. It shouldn’t hurt when you do.

  • Do not trade scared. Trust your analysis and risk parameters.

It has taken me time to master these four elements to trading, and at times I still fall into my old habits. The key is to constantly assess both the technical and mental aspects of your game. There are 4 elements you must master:

  • Idenifying support and resistance. If you are trading in the middle of the range, you will be more suseptible to what seem to be reversals, but are actually just noise in between a trading range. Do not enter if your stock has moved more than 5 percent above support or the breakout point.

  • Identifying volume patterns. If you buy a dip on high volume, there’s a higher probability of getting caught in the midst of a reversal. Same goes for low volume breakouts.

  • Set appropriate stops, based on support, resistance and percentage of your trading portfolio. Even if you take the appropriate cautions, you can still get reversed. It shouldn’t hurt when you do.

  • Do not trade scared. Trust your analysis and risk parameters.

It has taken me time to master these four elements to trading, and at times I still fall into my old habits. The key is to constantly assess both the technical and mental aspects of your game.

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