Risk in trading is inevitable, but bad risk is avoidable. In this interactive session, we will discuss how to make good vs. bad risk decisions, as well as how you can manage your trades to balance your risk vs. reward calculations. ...
As an individual trader or investor, you cannot trade directly on a Stock Exchange. For that, you will need a âbrokerâ or âbrokerage account.â A broker is simply an intermediary that gives people access to a Stock Exchange. For day trading, you need a good direct-access broker. In fact, you donât need just a good broker; you need an awesome broker. Your broker is your vehicle to trade. If you have a bad broker, you lose...
Trade the Best, Leave the RestAs part of the algorithmic trading by computer systems, the majority of stocks will trend with the overall market unless they have a reason not to. So, if the market is moving up, the majority of stocks will be moving up. If the overall market is going down, the prices of the majority of stocks will also go down. But there will inevitably be a handful of stocks that will...
Dear Traders, Another volatile week has commenced, with the market gapping down over 1% but then rebounding in the Open session. I am in the United Kingdom, and actually staying in Windsor, near the castle grounds where Queen Elizabeth II will be laid to rest. It is quite the historic moment to be in Windsor today! I did not trade, and most likely cannot trade in the next few days, but I know you are in for...
What Are Candlesticks? Candlesticks are a very common way to chart the price of stocks. They allow you to see the opening price, the highest price in a given time period, the lowest price in that time period, and the closing price value for each time period you wish to display. Although some people prefer using other methods of charting, I like candlesticks because they are an easy-to-decipher picture of the price action. You can easily...
Dear Traders,The markets were destroyed yesterday, with the technology sector QQQ down over 6%. More aggressive hikes are on the way, and central banks all around the world (with the exception of China and Japanâs) will continue to raise interest rates. Today, the market found some stability, and I made one great trade on TSLA. You can watch the recap that Brian and I posted here. Ardi and I have opened many cash secured puts on...
Dear Traders,Happy inflation number day! Inflation did not ease as expected in August 2022, with an 8.3% rise showing that the squeeze on consumers remains persistent even when gas prices fell. The market is falling apart as I am writing this newsletter, with the tech sectorâs QQQ dropping over 4% and SPY over 3%. The Federal Reserve will be even more hawkish hunting down investors and consumers. These days are scary times.Although Wall Street is...
Some traders focus heavily on technical indicators like the RSI (Relative Strength Index), the moving average convergence divergence (also known as the MACD), or the moving average crossover. There are hundreds, if not thousands, of sophisticated technical indicators out there. Some traders believe they have found the Holy Grail of technical indicators, and it might be a combination of RSI or the moving average crossover. I don't believe having a large number of technical indicators will...
Dear Traders,I had a âmehâ trading day with a heavy loss on AMD and a great win on TSLA. You can watch the recap that Brian and I posted here.The market rallied for the second day as investors assess whether monetary tightening (high interest rates) is getting closer to being already priced in and thus new lows in the market no longer make any sense. Treasuries, oil, and gold are all up today. If you...
Why You Need to Manage Risk Risk management is the science, and often the art, of limiting the losses your trading account may suffer. All professional and great traders lose money. What distinguishes the successful ones from the burnouts is that they manage their risk well. There are two elements in risk management: a proper risk/reward ratio and position sizing. Risk/Reward Ratio A proper risk/reward ratio is defined by your entry, your profit target and your stop loss. New traders...