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Is volatility your friend?

Every trader knows that volatility is the thing that is necessary in order for the price to have movement. But there are different kinds of price movements. Some instruments move in fairly neat directions up, then retrace and move up again. We all love these. There are some others that are ‘all over the place’. The chart below shows a volatile situation on 15 min time frame. Degrees of volatility seen, depend a lot onRead More

No courses, no horses.

Over the last few months there has been much reflective practice. This is about looking back at what one has done in the past, learning and re-learning from mistakes, and understanding how novices to financial trading approach it. A mistake is usually, in simple language, recognising a genuine error that has happened. Learning from a mistake means doing something differently to avoid it happening again or reducing likelihood of recurrence. Understanding how the uninitiated thinkRead More

The Zanger interviews

These interviews may seem meaningless to new traders but in reality they’re worth millions!  See also: Who the devil is Dan Zanger and why should anybody care?

Caught a big fish

The infographic below shows a big fish on the hook. Well, big fish are probably harder to reel in but they’ll supply more protein – innit?!! They’ll compensate for most of the losses on small fish thrown back or lost. Yes, my line may be snapped – no problem – cuz I know there are other big fish in the sea. DISCLAIMER: The information provided herein is opinion only. Under no circumstances do any statementsRead More

Is common sense allowed in trading?

The answer to this question is ‘no’ – if you’ve been trained in some system of rules, which you’re meant to follow rigidly.  The beauty of trend-following methods, is that it allows for a degree of common sense.  Indicators are there to help paint a picture. Trend followers are not chained by indicators or rules. There are some traders who cannot trade well without a set of rigid rules. It is not the purpose ofRead More

Managers of chaos

The following thoughts came to me in the middle of the night. The natural human tendency when we see a pattern is to predict/expect what may happen next. This is a powerful ‘unconscious’ urge. Markets are chaos. We may see patterns in the chaos.  All chaotic systems form patterns. The patterns are meaningless to the chaotic system. Patterns have meaning for us, in that they represent probabilities. But the chaos does not obey patterns. InRead More

Separating missions, strategies, methods and goals.

In trading circles many new and seasoned traders use the words (or similar): strategy, method, targets, goals. But what do they actually mean? How do they all fit together? How are they organised? (see mindmap below). In this post I take the concepts apart and put them back into some sense of organisation. Some have confused and conflated strategies and methods – and have lost track of the ‘Grand Mission’.  Some seem to take theirRead More

What about Binary Options?

Binary Options (BO) trading is another way of making a few quid. It’s far simpler than spreadbetting in that you don’t need to set stop-losses or work out risk to reward ratios etc. [Please note our SYP.] The basics of one type of BO trading is this: 1. You decide if you’re going to bet if price on whatever instrument will end higher or lower than your entry point. 2. You place your bet. 3. YouRead More

Skill acquisition and training

It has been on my mind for some time, how new traders develop in their acquisition of skill. There are several different models out there on the net, not specific to traders but quite applicable. In the diagram below I present the Dreyfus Model of Skill Acquisition (adapted from Wikipedia) I think this is important for the following reasons: New traders can benefit by self-reflection by placing themselves at various stages of development. They seeRead More

The so-called Fearless State

Mark Douglas is commonly credited for coining the term ‘the fearless state’ in his book Trading in the Zone. Lots of other people have probably talked about this state of mind. But what is it exactly? I explore but I disagree with some of what he has said – or the meanings put on what he has said. For the avoidance of doubt, I’ve written this not to win a point or score a point.Read More