Brett Steenbarger recently posted a link to four articles by Professor Andrew Lo that are helpful to trading. Dr. Steenbarger summarizes each article, and I recommend them also for deep reading on academic literature. Topics include academic studies on emotion, day trading, sentiment, risk taking, fear/greed, and randomness in the market. Dr. Andrew Lo’s website…
TickerSense recently posted the First Quarter Stock Market Returns sorted by Country, and the good news is that the United States is in positive territory for the first quarter. The bad news is that 65 (of the 87) countries (75%) beat the US stock market (S&P 500: up 0.18%) in the first quarter. Topping the…
Michelle, guest author at TraderMike’s site, posted an excellent observation regarding three different applications of “Time” in her post Time is on the Trader’s Side. A major quote: “Regard time, instead, as a wonderful and gracious friend, accommodating your need to focus and execute successful trades.” She notes that we get so stressed out because…
Dr. Brett Steenbarger posted a timely analysis entitled Traders and Information Processing: Why Traders Sabotage Themselves. This post is an absolute read. His concluding post reads: “Trading problems begin when we enter trades by one information processing system, and manage them by another.” To see what he means and learn his insights, visit the post…
I wanted to highlight two recent posts concerning whether or not to use stops, and what exactly is their purpose. From Move the Markets, Prospectus discusses “What Is a Stop Loss For Anyway?” The premise is that many investors make an error by placing a stop at the point where “the market will prove your…
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…
When beginning this blog, I think it is important to highlight one of the classic ideas from Price Headley concerning “The Four Fears of Trading” 1. Fear of Loss 2. Fear of Missing Out 3. Fear of Letting a Profit Turn into a Loss 4. Fear of Being Wrong (not being right/perfectionism) Links come from…
I ran across this link from Stock Bee and had to include it for further study. The post is about Mental Models and how Winners, or those who are successful, have different mental models from the “masses” who stay in mediocraty. The post is brief, but I’m sure the links will be worth careful additional…