Category: Educational
This is worth your next million
Lots of new traders are looking for a magic solution to make money. They come into trading as a sort of flirtation – to see ‘if it works for them’. It doesn’t. There are no hard statistics on this but Charlie Burton estimates that about 80% of people who begin trading a live account will leave within 6 months. That’s about our estimate as well. There is no single method or trick to making moneyRead More
What is gambling?
Gambling is a bad word and a bad thing for most people. Strangely enough at September 2014, it was estimated that “70 per cent of UK adults, more than 32 million people, play the lottery on a regular basis.” This means that 70% of the UK population are gamblers. The percentage of people taking chances on the Lottery have varied from 32% to 70% in 20 years. Concepts So what is gambling? Some say investing in stocks is gambling. OthersRead More
On luck, chance and prediction
In several posts the issue of luck and chance were touched on. There is a need to explore this further, as many who know little about financial trading believe it’s largely about luck and chance. Introduction It is important that words like luck and chance are defined here. Luck as a concept is outlined in the infographic below. A chance is a probability that is known or foreseeable. We separate luck and chance, though in many circlesRead More
FAQ on derivatives
Big disclaimer: The information provided herein is opinion only. Under no circumstances do any statements here represent a recommendation to buy or sell securities or make any kind of investment. You are responsible for your own due diligence. No investment advice, is provided nor are any claims or promises made that any information here will lead to a profit, loss, or any other result. All expressions are for educational purposes only. What is a derivative?Read More
The limitations of demo trading: of pain and gain
Demo or paper trading is very advantageous to new traders in learning much of the basics of financial trading. This site strongly recommends all new traders to blow up demo accounts of any size at least 5 times!! One of the issues with that, is that new traders may come to feel demoralised and then decide that they “can’t do this”. Well that could well be true. Note however, that nearly every successful trader hasRead More
Where the big action is – 4H
This is a short one. Over the last 3 years I’ve come to appreciate – and more so in the last year – that the really big action is on the 4H time frame. Yes – for sure there is even bigger action on the daily (1D) time frame on lots of markets/charts. But 4H is where most of it happens. 4H is also a good time frame for new traders and seasoned traders –Read 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.
NZDCAD Long
I’ve been stalking NZDCAD for some time. It is a most interesting and challenging currency pair. In August I was stalking NZDCAD for a short. At that time there was a weekly zone of resistance. Now here at the end of November, the picture has changed. Sound traders shift their mindsets as new information emerges. I’m long on NZDCAD, having contracted to lose a controlled amount (alias stop-loss). This means that I do not know whatRead More
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