5 Great Trading Articles for Weekend Reading 10/25/14

25 Oct
October 25, 2014


Top Trading Tweets of the Week 10/24/14

24 Oct
October 24, 2014

8 Easy Ways to Blow Up Your Trading account

23 Oct
October 23, 2014


Almost everyone has read the statistic that 90% of active traders are not profitable and eventually quit trading. While I don’t have the exact numbers, I suspect that a lot of those traders blow their entire trading account before they quit. Even many legendary traders like Dan Zanger, Nicolas Darvas, and Alexander Elder lost a lot of money before they were millionaires. A new trader is like a 16 year old with a car; you know that eventually mistakes will be made, and you just hope that the mistakes are not too dangerous, or that they don’t cause any long term discomfort.

During the first year, the new trader needs to focus on learning and not trading. Why would you trade before you know what you are doing? When a new trader begins to trade, they should start small to avoid letting their decisions become influenced by emotion. When the trader gets up to speed, the focus should be on what can be lost more than what can be made. The new trader must learn what they should be looking for before launching directly into trading. Their focus should be on methodology, entries, exits, risk management, and a well researched trading plan.

Of course there is also a quick and easy way to just blow up a trading account. I do not recommend these paths to destruction.

  1. A losing trade? No Problem just keep adding to it until it comes back. It will eventually come back, right?
  2. The bigger the better; if you are right, you can make a lot of money, as long as you are never wrong.
  3. Short bull markets and go long in bear markets. You can pick all the right reversals, right?
  4. You are smarter than the market. You are so special you can predict the future. Trade your predictions, they have an edge, right?
  5. Be stubborn with losing trades. The losses can’t get too big, can they?
  6. Cut winning trades short while the profits are there. Can big losses and small wins lead to profitability?
  7. Follow someone else in their trades, not knowing their position size or stop losses. What could go wrong? 
  8. Spend a ton of money on snake oil salesmen that promise you the Holy Grail of trading. I wonder why these can’t lose money machines are so affordable?

10 Ways For Traders to Stay Inside the Circle of Profitability

22 Oct
October 22, 2014



“Stay in the center of the circle, and let all things take their course.” – Lao Tzu

For long term profitability a trader has to develop an edge over other traders, and then leverage that edge using discipline. Money comes from a trader’s ability to develop a system of robust entries and exits, and trade it using a plan that incorporates risk management. 

Regardless of what is going on around you in the markets, stay inside your circle of competence as a trader:

  1. Follow your trading plan.
  2. Take your trade entry signals and set ups.
  3. Manage your risk closely.
  4. Cut your losses when you are proven wrong.
  5. Keep trading within your own time frame.
  6. Keep following your own tested system.
  7. Don’t start trading out of fear.
  8. Don’t start to position size based on greed.
  9. If you are on a losing streak, trade smaller not bigger until you start winning again.
  10. Do not let others predictions and opinions influence your trading; trade price action.

15 Of My Most Popular Tweets

21 Oct
October 21, 2014