Here are some of the more popular posts, in terms of hits, from the last year (or 6 months or so that the blog has been going).
It would appear that we all like something that is free, even better if it is helpful as well. There are quite a few good free online trading, investment magazines and when I find something new I add it to the list.
Something for free - online trading/investment magazines
What time frame are you trading/investing in
Should you follow the news?
Vodafone
Dividend Payers
Technical Analysis
US Fiscal Cliff
Showing posts with label Education. Show all posts
Showing posts with label Education. Show all posts
Wednesday, 2 January 2013
Wednesday, 19 December 2012
Some observations on choosing a time frame to trade
This is a follow up to the post what time frame are you trading/investing in.
Choosing a time frame to trade that fits your personality and psychological makeup is one of the most important steps to make if success is to be achieved in the trading game. Some people like action, fast moving markets and volatility while others prefer a more slower, cautious approach. It's difficult to be able to do both and can be a nightmare if you get involved in a type of trading that you are simply not suited to, so it's better to find out as early as possible what time frame of trading you feel comfortable with. However, each time frame that can be traded throws up its own questions, so based on my own experience I thought I would post a few observations.
First, short term trading. I found very quickly that this did not suit me. To be a good short term trader, day trading where you may be using the tick,1, 3 or 5 minute chart, you have to be able to handle volatility and market noise. Many of the market moves over the very short term time frames are noise, with many potentially false signals, not only do you have to be able to trade quick, but also get rid of potential losing trades quickly. On shorter time frames potential big moves while they do happen tend to be rare. While it's certainly possible for those with the right psychological makeup to make decent money on perhaps just 5-10 winning points a day, no one should kid you that it's easy. If you like action then this time frame may be for you, but by and large, at least according to many reports, most traders, especially spread bettors who choose this "action" type day trading tend to lose.
Choosing a time frame to trade that fits your personality and psychological makeup is one of the most important steps to make if success is to be achieved in the trading game. Some people like action, fast moving markets and volatility while others prefer a more slower, cautious approach. It's difficult to be able to do both and can be a nightmare if you get involved in a type of trading that you are simply not suited to, so it's better to find out as early as possible what time frame of trading you feel comfortable with. However, each time frame that can be traded throws up its own questions, so based on my own experience I thought I would post a few observations.
First, short term trading. I found very quickly that this did not suit me. To be a good short term trader, day trading where you may be using the tick,1, 3 or 5 minute chart, you have to be able to handle volatility and market noise. Many of the market moves over the very short term time frames are noise, with many potentially false signals, not only do you have to be able to trade quick, but also get rid of potential losing trades quickly. On shorter time frames potential big moves while they do happen tend to be rare. While it's certainly possible for those with the right psychological makeup to make decent money on perhaps just 5-10 winning points a day, no one should kid you that it's easy. If you like action then this time frame may be for you, but by and large, at least according to many reports, most traders, especially spread bettors who choose this "action" type day trading tend to lose.
Tuesday, 18 September 2012
Traders' magazine, trader Interviews issue
A while back I posted about free online trading/investment magazines, the original can be found here.
Traders' magazine was one of those included and the latest edition is an interview special with 10 popular traders speaking about their strategies – including Scott Redler (proprietary trading, T3 Group), Larry Pesavento (more than 50 years trading experience, pattern trading), Peter Milman (Hedge Fund-Startup, proprietary trading before that) Tim Bourquin (TraderInterviews website and swing trader) and Harry Boxer (Swing and day trading) to name 5. I've read a few of the interviews and it's worth getting especially as it won't cost you anything.
You might have to sign up to the site, the link and full list of free magazines can be found here.
Traders' magazine was one of those included and the latest edition is an interview special with 10 popular traders speaking about their strategies – including Scott Redler (proprietary trading, T3 Group), Larry Pesavento (more than 50 years trading experience, pattern trading), Peter Milman (Hedge Fund-Startup, proprietary trading before that) Tim Bourquin (TraderInterviews website and swing trader) and Harry Boxer (Swing and day trading) to name 5. I've read a few of the interviews and it's worth getting especially as it won't cost you anything.
You might have to sign up to the site, the link and full list of free magazines can be found here.
Saturday, 11 August 2012
Something for free - online trading/investment magazines
There are quite a few good online trading and investing magazines that are free to view either online or to download as a pdf and provide a useful educational resource. Here are some that I have come across. Some you will have to sign up for and you may get some emails in your spam, but are worth it for the information provided free.
Traders' Your Personal Trading Coach.
http://www.tradersonline-mag.com/
YourTradingEdge
http://www.yourtradingedge.co.uk/
Spreadbet Magazine
http://www.spreadbetmagazine.com/
SFO Magazine (stocks, futures and options)
sfomag.com
Shares Magazine Archive (back issues, usually 1 month since publication available free to view/download, but buy the magazine if you like it and want the up to date information on the day of publication)
http://www.sharesmagazine.co.uk/view/archive
If you know of any others please mention them in the comments box below.
Traders' Your Personal Trading Coach.
http://www.tradersonline-mag.com/
YourTradingEdge
http://www.yourtradingedge.co.uk/
Spreadbet Magazine
http://www.spreadbetmagazine.com/
SFO Magazine (stocks, futures and options)
sfomag.com
Shares Magazine Archive (back issues, usually 1 month since publication available free to view/download, but buy the magazine if you like it and want the up to date information on the day of publication)
http://www.sharesmagazine.co.uk/view/archive
If you know of any others please mention them in the comments box below.
Friday, 13 July 2012
Four reasons why first time traders often fail
High expectations. When starting something new at almost anything in life we may have high expectations and high hopes of success. Often we rate our own abilities to do something that others can't too highly. We think we are better or at least the equal of others. After all, when it comes to shares, how difficult can it be to trade the markets? All they do is go up and down. Occasionally they stall and consolidate, but for the most part they go up and down, it looks like a 50/50 game, they go one way or the other. Yet if statistics are to be believed 80-90% of traders lose and first time traders will often blow one, two or more accounts before giving up and moving on to something else. Even worse, statistics tend to suggest that if you give your money to a professional money manager, most of them tend to underperform the market as well, but at least they get a fee to keep them solvent.
There is nothing wrong with having high expectations and a positive outlook as to what you can achieve, but it is important to remember that trading and investing is a marathon not a sprint. Survival, continual learning, money preservation and staying in the game is what counts. Many traders have stories of not making any money or even losing for several years before they got it right. Excepting losses and failure is part of being a trader. Failure can be a good thing provided you learn from the mistakes you make. Anyone who expects trading to be easy will find that the markets will probably bite them back sooner rather than later. Aim to survive and you just might join the 5-10% that do well.
Lack of Discipline. Most beginner traders lack discipline, whether that is to stick to a plan, their chosen market or watchlist, lacking patience and waiting for the right opportunity. There are many reasons why discipline breaks down, one of which is feeling the need to be doing something. Trading, especially if your psychology is more geared towards longer term swing and position trading opportunities can be very boring. The waiting game is something that many traders have to get use to. Long periods of time where your strategy and trading plan may not be generating any signals. If you have a plan, and you should have one, then discipline is required to stick with it. You have to give it a chance to work, chopping and changing, whether it is the markets you are trading or chart patterns and indicators that you are using, will work against you if you cannot settle on your plan.
Frustration. The markets can be a very frustrating place, most of the time it is likely that they will not be doing what you expect them to. Expecting markets to behave in some rational or logical way is likely to get you into trouble big time and this can be very frustrating for those new to the game. Remember that this is a game of fear and greed. One day the news will be full of events that make the market fearful, a few weeks later those fears might be priced in and the market reacts positively to exactly the same fears that it was negative to previously. Then before you know it, they are fearful again.
For those that say that technical analysis doesn't work, all a chart really does is reflect in a historical way those fears and greed in a series of up and down movements. A chart is a past reflection of human, and increasingly computers programmed by humans, behavior in the markets. Past behavior is a reasonably good guide to what people will do in the future, because we do tend to be creatures of habit. Charts can help tell us what we need to know and if you can get past your frustration of what the markets are doing when you think they should be doing something else, learn to go with the flow and accept that the market doesn't care what you or I think, you might start to see some sense of what is really going on.
The search for the holy grail of trading. Straight up, there isn't one. There are good traders and bad traders. Good investments, bad investments. Find a way that works for you and that in a sense will be your holy grail. Chances are it won't work for everyone else. Doesn't matter what it is, if you can make money from trading a couple of moving averages, do you need anything else? Finding what works for you is the holy grail.
There is nothing wrong with having high expectations and a positive outlook as to what you can achieve, but it is important to remember that trading and investing is a marathon not a sprint. Survival, continual learning, money preservation and staying in the game is what counts. Many traders have stories of not making any money or even losing for several years before they got it right. Excepting losses and failure is part of being a trader. Failure can be a good thing provided you learn from the mistakes you make. Anyone who expects trading to be easy will find that the markets will probably bite them back sooner rather than later. Aim to survive and you just might join the 5-10% that do well.
Lack of Discipline. Most beginner traders lack discipline, whether that is to stick to a plan, their chosen market or watchlist, lacking patience and waiting for the right opportunity. There are many reasons why discipline breaks down, one of which is feeling the need to be doing something. Trading, especially if your psychology is more geared towards longer term swing and position trading opportunities can be very boring. The waiting game is something that many traders have to get use to. Long periods of time where your strategy and trading plan may not be generating any signals. If you have a plan, and you should have one, then discipline is required to stick with it. You have to give it a chance to work, chopping and changing, whether it is the markets you are trading or chart patterns and indicators that you are using, will work against you if you cannot settle on your plan.
Frustration. The markets can be a very frustrating place, most of the time it is likely that they will not be doing what you expect them to. Expecting markets to behave in some rational or logical way is likely to get you into trouble big time and this can be very frustrating for those new to the game. Remember that this is a game of fear and greed. One day the news will be full of events that make the market fearful, a few weeks later those fears might be priced in and the market reacts positively to exactly the same fears that it was negative to previously. Then before you know it, they are fearful again.
For those that say that technical analysis doesn't work, all a chart really does is reflect in a historical way those fears and greed in a series of up and down movements. A chart is a past reflection of human, and increasingly computers programmed by humans, behavior in the markets. Past behavior is a reasonably good guide to what people will do in the future, because we do tend to be creatures of habit. Charts can help tell us what we need to know and if you can get past your frustration of what the markets are doing when you think they should be doing something else, learn to go with the flow and accept that the market doesn't care what you or I think, you might start to see some sense of what is really going on.
The search for the holy grail of trading. Straight up, there isn't one. There are good traders and bad traders. Good investments, bad investments. Find a way that works for you and that in a sense will be your holy grail. Chances are it won't work for everyone else. Doesn't matter what it is, if you can make money from trading a couple of moving averages, do you need anything else? Finding what works for you is the holy grail.
Wednesday, 4 July 2012
What time frame are you trading/investing in?
The time frame that you are using to trade or invest in has to be one of the most important decisions when it comes to putting together a system and trading plan for the markets. I use a trading platform with a charting package which you can trade from ticks to minutes, hours, days, weeks and months, all offer a different view of what a share or index price is doing. On some the price will be going up while on others it will be down. Some will show a move is just beginning while others show it looks advanced and about to turn. Regardless of whether you are a short term trader or long term buy and hold investor, knowing what your time frame is, or combination of time frames, is important to achieving success.
On forums, blogs and financial websites in general, I often comes across people arguing that x or y is cheap and undervalued, or z is overvalued and due a fall. On fundamentals such analysis may well be correct, but often the information is totally irrelevant as there is no reference to time frame. What time frame are they trading or investing in? Without information relevant to time frame, if someone says they expect the FTSE to rise, or fall, it's pretty pointless.
If you are a technical trader than you have to be trading a time frame, whether it is short term day trading, or longer term swing or position trading. In fact it will be a combination of time frames as someone trading the 4 hour chart may well use the one hour and then 5 minute chart to time an entry, but long term buy and hold investors who base their decisions on fundamentals should also be looking at the charts. After all, even if you think that x is a good company and on your buy list, why would you buy it if the trend on the monthly and weekly charts is clearly down? Even if you are only using a few basic moving averages and an indicator like MACD, this will give you a reasonable amount of information as to whether the trend is turning. Yet often, long term buy and hold investors will buy company x because it looks cheap. They are then surprised when 3 months later it is cheaper still, when one look at the long term charts may well have told them that it is trending down and they could have got a better price had they waited, or at least buying at the higher price is better if the trend is with you. The trend really is your friend.
The trouble is that fundamental buy and hold investors often see technical analysis as voodoo or that charting and market timing doesn't work. I believe this to be false, what doesn't often work is our psychology towards the market and our ability to trade/invest to a plan, be patient, wait for signals, etc. Get this right and you are on the way to winning.
On forums, blogs and financial websites in general, I often comes across people arguing that x or y is cheap and undervalued, or z is overvalued and due a fall. On fundamentals such analysis may well be correct, but often the information is totally irrelevant as there is no reference to time frame. What time frame are they trading or investing in? Without information relevant to time frame, if someone says they expect the FTSE to rise, or fall, it's pretty pointless.
If you are a technical trader than you have to be trading a time frame, whether it is short term day trading, or longer term swing or position trading. In fact it will be a combination of time frames as someone trading the 4 hour chart may well use the one hour and then 5 minute chart to time an entry, but long term buy and hold investors who base their decisions on fundamentals should also be looking at the charts. After all, even if you think that x is a good company and on your buy list, why would you buy it if the trend on the monthly and weekly charts is clearly down? Even if you are only using a few basic moving averages and an indicator like MACD, this will give you a reasonable amount of information as to whether the trend is turning. Yet often, long term buy and hold investors will buy company x because it looks cheap. They are then surprised when 3 months later it is cheaper still, when one look at the long term charts may well have told them that it is trending down and they could have got a better price had they waited, or at least buying at the higher price is better if the trend is with you. The trend really is your friend.
The trouble is that fundamental buy and hold investors often see technical analysis as voodoo or that charting and market timing doesn't work. I believe this to be false, what doesn't often work is our psychology towards the market and our ability to trade/invest to a plan, be patient, wait for signals, etc. Get this right and you are on the way to winning.
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