Investing Education

Market Masters: Random Distribution And The Development Of A Belief System

by David Blair There is a random distribution among winners and losers on any given set of variables defined as an edge. Like most any pursuit of mastery, stock trading requires a certain set of skills to be successful. But unlike others the skills required have very little to do with action and everything to do with belief. For example, the set of skills required to be an Air Force pilot

5 Ways To Interpret Research Like A Pro

If you want to become a professional investor (or trade like one), you need to interpret research like a pro. And this is as much to do with disciplined psychology as it is with general market knowledge and tact. Shortsighted responses to others’ investing related tweets or posts won’t make your stock go up or down in price. And it also won’t endear you to other investors. The nonstop flow

Market Masters: The Value Of A Multi-Disciplinary Approach To Investing

by Jesse Felder “I have no special talent. I am only passionately curious.” -Einstein This quote sums up my investment expertise very well. I have no degree in finance, no acronyms after my name to signify any professional designations, no certification in technical analysis or any real investment specialization at all. I have, however, spent over 20 years studying all of these things and more and, for better or worse,

Market Masters: There is a Bubble in Opinions, Noise and Bubble Talk

by Howard Lindzon     Earlier this week, David Einhorn – the famous short-seller of Lehman Brothers Holdings Inc., said in a quarterly letter to clients that “we are witnessing our second tech bubble in 15 years.” He announced that his fund is short a “basket of bubble stocks”. Last year, David also shorted the ‘overvalued’ Chipotle’s $CMG at $300 (now $520) and in his recent quarterly letter said he covered the loss at

Market Masters: Managing Risk With Trend Following

Everyone has a little bit of a different philosophy when it comes to following the market and managing risk.  Some believe that a buy-and-hold strategy that completely eliminates timing or risk factors is the way to go.  They try to ignore the daily machinations and focus on the long-term big picture.  Others find themselves tracking the individual ticks of hundreds of stocks as they try to glean an intra-day edge

Market Masters: How Standing On Your Head Can Reduce Investor Bias

by Chris Kimble       Warren Buffett famously said he’s not a fan of technical analysis because he got the same answer when he turned the charts upside down. Yet as a technical analyst, I’ve found that inverting a chart can sometimes give a valuable fresh perspective and help overcome any preconceived notions, also known as investor bias. The interesting field of behavioral finance has documented the often-harmful biases that we

Market Masters: Identifying Strong Bases For Explosive Trades

by J.C. Parets     Today I want to talk about bases. This is something that rarely gets discussed for whatever the reason, but I think they can provide some of the most explosive opportunities in the market. The old saying goes, “the bigger the base, the higher in space”. But what exactly constitutes a base? What are some of the characteristics that we should look for as market participants?

Market Masters: Trading Myths Revealed

I’m honored that Andy asked me to come back a second year for the Market Masters series.  Last year I focused on how I used sentiment in my trading; this year instead I’ll focus on common trading myths.  For years now the masses continue to follow the crowd and just assume old trading axioms are gospel.  “Sell in May,” anyone?  Well, May is actually up on average since 1980 and

Market Masters: Day Trading With Pivot Points, Tick, and Vwap

By Urban Carmel The Fat Pitch blog is about inter-day swing trading. So, with not a little irony, this post will be about day trading. Experienced swing traders are familiar with support and resistance lines drawn from prior lows and highs on a chart. Price is attracted to these levels; when it closes higher than a prior resistance level, that level becomes support and price normally looks to the next