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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

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

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

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

So did you get it right?

Did you get it right? This is an important question for new and seasoned traders to think about – but there is a problem with it. So you made your best risk assessment, decided your entry point and stop-loss and you entered the trade. What happens next? Many a new trader would spend some time looking at price movement shortly after. There’s a ‘Yes!!‘ sort of feeling if early on price moves into positive equityRead More

Another look at stop-losses

Stop-losses are very important to all new traders. In this post I look at it more deeply. The infographic below is about fixed targets which are relevant to most types of trading strategies. It is not very relevant to trend-following methods. 

Blood bath on Wall Street?

For those who have been watching the US30 or the SPY or the DJI, there is some crazy stuff going on. The on the night of the Trump victory, the bears mauled the bulls – as you can see on chart below. The bulls rebelled within hours. The market rallied to a new high. But all is not well for the bulls. This could turn out to be a blood bath! I’m not predicting anything.Read More

Looking again at Earnings Releases

This recent bounce on DEERE & CO has got me looking again at Earnings Releases.   For those who would play ER’s a Guaranteed stop maybe advisable (cost of this need to be factored into the equation) or Reward to Risk ratios. Alternatively no guaranteed stops may be taken but risk of significant slippage would need to be assessed.