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Conversation with a failed trader

Today I met a chap who is a failed trader. This was a rare opportunity. I had known him for about 3 months just from the odd conversation here and there. I knew that he had an interest in ‘stock markets’ and had some knowledge about CFDs. But it was strange how we ended up talking about his deeper interests in a kitchen! The important part of this conversation was that he regularly bought shares.Read More

Enquiry from a new trader

A new trader (who will remain anonymous) has contacted us to ask for some help. I’ll deal with each point, as it is of value to other new traders but largely for my own reflection. This is what we do, and we do this stuff for free and no obligation – ever! Note that I (or we) am/are as brutal as the markets will be. I (or we) am/are not here to encourage or facilitateRead More

The loser’s game

The news has been out from August 2018 that the European Securities and Management Agency (ESMA) has compelled all brokers (subject to its jurisdiction) to reveal their statistics on the percentages of losing trader accounts. See informative article headed, “ESMA Regulations Reveal: Where CFDs Traders Lose the Most“. The reported percentage of losing accounts ranged between 63.7% and 86%, with an average of 76.3%. Previous estimates of 90% of losing accounts weren’t that far off the mark.Read More

Bitcoin: Investor, trader, gambler or idiot?

In the last few months we’ve received inquiries from several about Bitcoin and various similar things, often referred to as cryptocurrencies. In essence many of these folk are the ones who missed out on making millions by not buying a few Bitcoin when it was dirt cheap. Now, they don’t want to make the same mistake so are looking around for a second chance. You can’t blame them of course – if the missed opportunityRead More

Is Parabolic Mayhem ahead?

On Tradingview I’ve put up a Vlog about this which is embedded below. I say what I see. I’m focusing on the form of movements of the US30 compared with the correction on the parabolic Bitcoin. The evidence is there, which I think everybody can see. Just to be clear nothing in this post is a prediction or recommendation. See our SYP disclaimer. The following vlog is downloadable or viewable in larger format on Tradingview.Read More

Extreme volatility

Whilst volatility is necessary in trading there are issues with extreme volatility that traders need to consider. The clickable chart below shows one example of extreme volatility with Copper (CUUUSD). The size of a reasonable stop-loss which is related strongly to account size, is a limiting factor. If your account is say £2000 how much of a hit can you take in one trade like this? Not much. You’d be depending on luck to jumpRead More

Disentangling currency pairs

Many a new trader will find listen to the news about which currency is doing well or badly. For example the news might say that the US Dollar strengthened, or something like that. Most of these news reports do not say how they know what they are reporting. Traders would normally be setting their brains against currency pairs e.g. USDJPY, or GBPUSD and so on. This is a ratio of one currency to the other.Read More

The nature of expectation in financial trading

On several occasions I’ve referred to ‘expectation‘ as against ‘prediction‘. I can expect a delivery of a package at my home this morning (for example) but that does not mean I know it is going to arrive for certain ‘this morning’ or that I predict that it will. ‘Expectation’ means a reasoned position/opinion based in information I might have or inferences I may make based on a range of things. How is expectation important inRead More

Stalking the microstructure of chaos

On occasions a trader may need to turn up the microscope and look deeply into the chaos. For what? A micro-fracture, a microtrend or a small bubble movement that is like the flap of a butterfly’s wings – from which evolves a hurricane. This is the nature of chaos. The chart below shows a small rising wedge down to the 5 min time frame. ‘We’ don’t know what will happen next. Rising wedges on anyRead More

Microtrends and risk aversion

Many a trader will have looked at the same chart (say AUDUSD) at different times (let’s say 4 hours apart), and had doubts or an urge to change their minds on what to do. This situation occurred recently with BTCUSD. On one day it appeared that there was as strong microtrend on a 2H time frame pushing against the big bearish daily trend. Then on the next day it appeared that the 2H trend mightRead More