Is it possible that market success can be achieved by going against common knowledge and popular ‘rules’ in the market? We accept as a fact (whether true or not) that 80% or more traders fail after their first six months or year of dedicated trading. Many people attribute this to emotional failure or a variety…
Momentum can also be a leading indicator when divergences between price and momentum arise and can lead to some profitable, high probability trades. Please understand that the set-ups I am about to discuss are countertrend tactics, and as such, you must employ a hard stop in the event that the trend reasserts itself and you…
“No pain, no gain.” “No risk, no reward.” In order to achieve success and realize your dreams, you must take on risk and manage it properly, despite the biases of your previous experiences and your personality. Some of us love risk while others hate it. Assuming the right amount of risk not only is difficult,…
I want to highlight the market principle “Momentum Precedes Price” by a past chart example and the possibility that we are seeing a similar set-up in the market. You know all the caveats about market advice; I am posting this for education – not for trading advice. First, let me post a daily chart of…
While thousands of posts and articles have been written on why traders are not achieving the success they desire (or worse, are failing), I wanted to point out three quick ideas that summarize behaviors that lead to failure in the market by newer traders. Traders play for large targets and “swing for the fences” and…
Do you run an internal dialog with yourself that oscillates between praise and criticism? Encouragement and discouragement? While we can’t always stop this ‘inner critic,’ we can redirect its questions from negative criticism to positive encouragement with a few tactics. First, you must identify your internal thoughts and call them to attention. What is that…
When you enter a trade, you expect prices to move in your favor and gain profit from your temporary assumption of risk. The outcome is not always profit, however, and losses can be very frustrating in the market. Even though human nature primes us to put more emphasis on current events (and outcomes), trading success…
I wanted to highlight a crucial post by Brett Steenbarger at his TraderFeed blog entitled “Resilience and the Courage of Your Convictions.” In trading, there are so many uncertainties and so many “head-fakes” and false moves that true success may arise only from confidently holding your carefully analyzed (or even intuitive ‘gut’) position in the…
Kirk at The Kirk Report summarized ten steps to a trading edge from George Fontallis (author of The Stock Market Course and The Options Course) and – while I will not list all ten (visit his site!), I wanted to expand on a few of them that are pertinent to trading psychology. 1. Understand the…
Did the most recent stock market decline come as a surprise to you? My guess is yes, and to be honest, its violence and rapidness came as a surprise to me – but I had been sensing things just weren’t right with the market for some time. Unfortunately, this intuition kept me sidelines and missing…