I tweeted the following this afternoon: there is “easy money” and “hard money” in trading. your longevity is determined by which one you choose to pursue…$$ I had quite a few responses. Some traders pointed out trading is not easy. And of course I agree with this. Trading successfully requires thousands of hours of practice and skill development. But once … Read More
When The Price Action Changes–Facebook
Facebook had been an great swing short since Tuesday morning when it made a new post IPO low. It continued to make lower highs and lower lows. The definition of a “downtrend”. You were hard pressed to spot two consecutive green bars on the 15 minute chart and the few times that did occur there was very little volume and … Read More
“Et Tu, Bruno?”: Lessons for Traders from JP Morgan’s Recent Loss
London’s “Whale” got harpooned. After being in the press for taking outsized positions in the credit derivatives market, it finally ended for Bruno Iksil, aka the Whale—and badly. JP Morgan’s recent multi-billion dollar trading loss caused a huge amount of angst in the financial press over its prop trading activities and risk controls. As traders, we should pay attention – … Read More
Facebook Friday And Rocket Science
Despite the fact that the fast majority of those hired by hedge funds and banks these days are literally rocket scientists (PHD’s in Physics, AstroPhysics, Mathematics etc.) trading is NOT rocket science. Of course being good at math and being able to write algorithms doesn’t prevent someone from successful market speculation it just isn’t a prerequisite. On Friday I outlined … Read More
How to Bounce Back From Failure in Trading
This is one blog post that I hope you never have to read. Why? Because it’s all about failure. The word “failure” has tons of connotations. Shame. Guilt. Disappointment. Anger. These are things that we try to avoid at all costs. If the world were perfect, you would never run into failure in your trading career. I hope that you … Read More
Four Quick Ways To Get Better At Trading
Four Quick Ways To Get Better At Trading Usually, the “quick fix” implies fixing something, but only temporarily and in a fashion that won’t help long-term. Luckily for us traders, there are several quick things that we can do that can readily improve our trading. They are quick lessons in that they don’t take much time to grasp, but their … Read More
Trading Lesson: The Bear Trap–Ouch!
A large part of successful trading is understanding how others are positioned in a stock and using that information to your advantage. One of the most common triggers for opening a short position in day trading is a drop of multi-day support. The idea being that many longs will have stop orders below this level, which will lead to a … Read More
Nasty Is As Nasty Does
On February 7th we discussed CSTR in the AM Meeting. It was gapping higher on a better than expected earnings announcement. But the price action in the pre-market was erratic. There were no clear pre-market trends and when it moved above/below s/r levels it would quickly reverse. This is a stock that I will not touch on the Open. Stocks … Read More