Thursday, December 28, 2017

The Truth About Trading & Discipline

Traders often blame their losses in trading due to "lack of discipline" and mental breakdowns. The truth is this isn't the actual problem causing you to lose money trading. There are many out there willing to sell their services to help you improve your trading psychology/discipline, these range from books, seminars and even expensive weekly one on one Skype sessions. The truth is these products will never help you long term and are flat out a waste of money. Many people who sell these products are exploiting inexperienced/naive traders out there.

The real underlying issue of why traders keep losing is because they lack a clear-cut profitable edge. Where an edge is defined as a set of consistent decisions (including a trading algorithm) used to buy and sell stocks. Following a profitable system will keep you "disciplined" because it guides all your decisions for you and removes emotions.

The list below is a series steps on how I use my profitable edge/system to buy and sell stocks (important to note real edges aren't given out to the public as the fear they will no longer be profitable once publicized).

Wednesday, October 18, 2017

Is IBM Finally Making A Comeback?

IBM Stock Chart Analysis

IBM has not had the best decade, and recently it was heading to retest yearly lows as the majority of large caps were making all time highs. However, with recent earnings IBM has reacted with pure strength, making a rare +9% move.

The way the chart is setup, and the strength shown by the RSI (currently overbought), this stock is likely to climb higher in the upcoming months. The first target would be the gap fill highlighted in the chart above which closes at $168. If this trade goes bad, at least there is a very nice quarterly dividend to help you "average down".

This might be the quarter were things finally start turning around for IBM, at the very least until next earnings date.

Saturday, September 2, 2017

Exploiting Your Edge In The Market

As a purely technical trader, I have to constantly ask my self "Do I have honestly have an edge"? Assuming the answer is yes, the next step I take is to break down my edge in as much detail as possible, and trade strictly based on it. This requires the utmost in discipline and constant backchecking of my edge. Requiring I review my trades making sure I am continually profitable.

I do not like to disclose the edge I have, and rather keep it proprietary (for fear it will no longer be profitable if public). I do, however, like to give out some hints on how to create a profitable edge. The key that many miss when it comes to their edge is it must be greater than the fees you pay to trade. One interesting consideration many don't take into account is, if your edge is break even, you will end up losing, as the fees it cost to trade will make you negative (possibly by a large margin). However, if you are breakeven including those fees, there is another way to make money.

That way is through bonuses of opening an account in the form of a stock trading bonus, or a forex trading bonus. This is much like the way online poker players make money. They are often are charged a rake (i.e. stock trading fees), where they are break-even poker players (including house/rake fees). Where they make their money is made through the bonuses of paying so much rake.