How to Lose with a Winning Trading System

Does this sound at all familiar? There once was a trader, with a small amount of trading experience, who was doing very nicely indeed. So good, in fact, that his account was up almost 200% for the year. The world looked good. He had cracked this trading game. And perhaps all the promises the broker’s site had made when he opened the account were being fulfilled. Of course it was not the broker or anyone else that was to be credited for the success of his trading but his skill and ability to recognise an opportunity, take appropriate action and … Continue reading

The Limits of Positive Thinking

An industry of not inconsiderable size has grown around the exhortation in its various guises of the need to be positive: positive thinking, positive outlook, positive action. I could go on. It’s a simple basic idea which seems intuitively attractive: if you start on any course of action with a positive outlook then you are already ahead when compared to the alternative. However, it’s all too easy and too common that a basic requirement if you are to with this positive outlook and meaningful aspirations is omitted. This is the need to plan. By planning you discover what advantages you … Continue reading

Good Trades and Bad Trades

I’ve a quick question for you: What is the difference between a good trade and a bad trade? Seems pretty simple – a good trade is one where you win a profit, a bad trade is one where you lose. Right? Wrong. It’s not quite that simple. Look at it this way. You have a number of decisions to make and you can only really control a small number of the variables that will determine the outcome of any trade. You have total control over which market to trade, in what direction, over what time period and over the amount … Continue reading

4 Reasons a Trend will End

Does this sound familiar? You decide to trade with the trend. You identify the trend and enter a trade in that direction. The market then stops moving in the direction of the trend and you lose on the trade. If you have ever used a trend following strategy then you will recognise this outcome. It can happen so regularly that you may have decided that a better approach is to wait for the market to move in a clear direction and then trade against it. How did that work out? I don’t know when the trend of ever bigger beards … Continue reading