Much of trading can be broken down as conditional probabilities. And there’s a distinct benefit in understanding what is likely to happen if some condition (or set of conditions) is true or not. For example, is tomorrow more or less likely to close higher if we are above the 200 day moving average…
Stock Market: Markets Don’t Peak Quietly Over the past few weeks in my newsletter, “On The Mark,” I discussed some things that generally occur at major stock market tops. Here is a brief synopsis. Major stock market tops are generally accompanied by lengthy divergences with respect to market internals and longer-term…
Measuring price moves is the name of the game. However, measuring price moves given recent context can add additional benefits to your trading performance. At times, the market can get very quiet which can make a 1% price drop feel like a 10% price drop (think summer trading). At other…
Curve-fitting is almost certain death for a trading or investment strategy. So, what is curve-fitting? Well, you know when you test a trading or investment hypothesis, fall in love with the historical results, and then the idea fails to generate similar (or even positive) returns once you decide to trade…
What Rick Barry and the Atlanta Falcons can teach us about risk management “Something about the crowd transforms the way you think” – Malcolm Gladwell – Revisionist History With 4:45 remaining in Super Bowl LI, Matt Ryan, the Atlanta Falcons quarterback, threw a pass to Julio Jones who made an…
Many people with various diverse backgrounds come into the market to try and make money every single day. With these traders is an almost limitless array of strategies for finding an edge. And amid all these different approaches, one thing stands out as the common denominator. Do you have a…
For those serious about trading for a living, the following is a list of characteristics found in every highly successful trader. Realize that 1% of the people who play this game take 99% of the profits. That means 99% of people who call themselves “traders” are forking over all their…
When starting out with options, a natural place to begin is with covered calls. It’s a very easy to understand strategy for those that are familiar with stock ownership. The strategy involves buying a stock (if you don’t already own it) in lots of 100 shares. The total size will…
Tuesday January 2nd, the NYSE Tick, which is a ratio of stocks that last ticked up versus ticked down made a high tick at the same time the market made a high price. So what does this mean? The NYSE Tick is a way for short term day(s) traders to…
One of the great things about investing is the many ways that people approach it. Throughout history it’s been shown that hundreds (if not more) ways have been used to turn a profit within the stock market…. Whether you use fundamentals, technicals, astrology, or hire a monkey to throw a…