Our market friends named Ebb and Flo

The vix has collapsed, and the market is getting ready to catapult to new heights.
Or so it would seem.
But you and I know better, since we both have been around the block (a few times).
Here is a question for you to ponder:
What is the shortest distance between two points?
If you answered “A straight line”, then [...]

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Simulated profits

Paper trading is a great way to learn how we will adapt to market movements in real time. It allows us to “practice” without losing real money.
The trick is to ask ourselves, “If this was real money, would I make this trade?” If no, then we are just playing a video game.
In this article, the last paragraph discussing the [...]

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Wrong Way Charlie

Confusion, headfakes, and sleight of hand.
The market aways has a game plan, and it is up to us to decipher it.
Yesterday, mess with the shorts, then pullback and take profits, leaving the late longs stranded. Today, gap up and then pull back hard. Then chop small range, accumulate the shorts.
The late shorts then got taken [...]

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I don’t know

I don’t know, and I don’t need to know where Mr Market is going tomorrow.
The only thing I do need to know is where am I willing to take a risk, and what am I willing to risk.
Of course, targets and partial targets are also nice to know. That is part of our system, and as a day [...]

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Gold rush

“In a gold rush, get rich by selling ‘em picks and shovels.”
So it has been said about market guru’s dispensing their sage advice.
The real truth for me is actually quite simple. Organizing my thoughts about trading into this journal, crystalizes my thinking and allows me to prioritize the critical aspects of my trading mehodology.
Pattern recognition, along [...]

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Spaghetti charts

I have seen many charts in my day.  Recently I opened a popular author’s book and asked my wife to bring me a fork. With so many moving averages, trendlines, bollinger bands, It reminded me of a bowl of spaghetti.
The charts had too much information, making it impossible to see the truth with any clarity.
There is [...]

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Why the average trader loses

The last three days of market activity clearly shows how the “average” trader loses. The market had been working its way lower, with an unfilled gap at 1321.75
Expecting closure, many market participants stayed with the trade on Tuesday after it hit a marginal low of 25.25 hoping to capture those inevitable profits. Being option expiration [...]

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One is the loneliest number

Trading has got to be one of the loneliest professions I can imagine.
Sitting quietly and patiently, sometimes for a long time, like a cat stalking a bird.
To pounce or not to pounce, that is the question that runs through my mind.
Paradoxically, a technique that has served me well is to be very very patient waiting for [...]

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Yeehaa Day

If your system understood that today was a trend day wire to wire, congratulations, you made a lot of money. These days are even difficult for many professionals, because they defy gravity and our mind tricks us into thinking the market “has to pull back to some fib number” before moving on.
Dangerous thinking indeed.
I cannot stress enough [...]

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Which way are you swimming?

Are you swimming upstream or going with the flow?
How do you know?
Headfakes and illusions are all part of the trading game. My guess is that this artist would have been able to navigate his way successfully around the markets.
If you are a short term trader, and your trailing stops keep getting hit before you can [...]

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