Archive for the ‘Book Club’ Category

Mind over Markets

PSW member Mark says:

Probably the most important thing to think about when trading (who’s playing the space and at what times?).  very good knowledge to have.  I’ve said this in past posts many times buy I HIGHLY suggest everyone read this book:  Mind over Markets (by James F. Dalton).

Not a holy grail or system trading, just a methodical approach to understanding the players in the market and when they’re in it.  Even if you don’t use the CBOE Market Profile, you’ll learn a lot about who’s in the market when with this book.

As a useful add-on to the book, member Alfred Toy adds:

Mind over Markets. If you are really interested in studing Market Profile. See Cisco-Futures
Also Dr Brett has an article on Market profile and some good links to reading material. (In addition) notice Jim Dalton now has a website with free pdf and video on Anatomy of Market Profile.





The Three Vices of Trading

Do you have one of The Three Vices of Trading?

Dr. Brett Steenbarger (psychiatrist) who wrote "The Psychology of Trading" (which is a book club selection)list’s just 3 (although I can think of a few more) "negative behavioral patterns" that get in the way off good trading.  I very much agree with his statement:

"Remember, observing and interrupting your patterns are the first steps in altering them! Your patterns lose control over you as you become better at not identifying with them. When you become an observer to your patterns, you are separating yourself from them. What great progress that is!"

Perfectionism: Perfectionism is often the chief culprit when the pain of losing exceeds the pleasure of winning.  Even when there’s a profit on a trade, perfectionists will look for the portion of the move that they did not participate in.  If they caught most the move, they will reprove themselves for not trading a larger position.  By focusing on the portion of their performance that doesn’t match their ideals, perfectionists transform successes into defeats, losses into failures.

Beating myself up” is how many perfectionists describe their self-talk.  The way to beat perfectionism is to make a concerted effort to talk to yourself the way you would talk to a good friend in a situation where things went wrong.

Ego: When traders invest their feelings about themselves in their trading, they are operating with maximum emotional leverage.  It inevitably affects decisions about cutting losses, letting profits run, and entering and exiting in a timely fashion.  The successful trader wants their trades to work out; the ego-involved trader needs them to be profitable. 

If trading has us truly depressed, we know that it’s not just our trading account that’s hurting.  Market success can be the frosting on the cake of your successful life, rarely can it substitute to the cake itself.

Overconfidence: Because they’re so eager to make money – and so sure they can make it – overconfident traders generally trade impulsively. They won’t wait for the setup to form; they’ll jump the gun – and get whipsawed in the process. Instead of being patient and waiting for short-term patterns to align with longer-term patterns, they will take every trade, enriching their brokers in the process.

Overconfident traders overtrade. They fear missing opportunities more than they fear
continue reading





 
 
 

Phil's Favorites

Should You Be 100% Long Stocks?

 

Should You Be 100% Long Stocks?

Courtesy of Joshua Brown

The New York Times is out with an investing column that posits the following: You should be 100% stocks in your portfolio because, given enough time, they should outperform everything else you can possibly own in an investment account.

And here is the data that “proves” it – as long as you’re willing to bet that the future will look precisely like the past:

I’m troubled by this idea, although I do agree that there are select cases where this could make sense. The author is David A. Levine, a former chief economist at Sanford C. Bernstein & Company. And, to his credit, he does pay lip service to the...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Global trade is worse than it was during the financial crisis (Business Insider)

"It is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn't look like going up soon. Freight rates are lower. The external conditions are much worse."

Bond Investors Looking Out for Stimulus Hint in Draghi Testimony (Bloomberg)

Investors will look next week for a whiff of confirmation from Mario Draghi that they weren’t wrong to push bond yields to record...



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Zero Hedge

Central Banks Are "Malicious Tools Of Wholesale Cultural Destruction"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Originally posted at The Daily Bell,

Stock markets suspect Federal Reserve has interest rate jitters ... Hints that the Fed won't raise interest rates in March are proving to be good news for miners and oil producers' share prices The Federal Reserve's William Dudley said further strengthening in the dollar could have 'significant consequences' for the health of the US economy. – UK Guardian

Blame it on the dollar!

The Federal Reserve hiked a tiny bit an...



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Chart School

Power of Mean Reversion

Courtesy of Read the Ticker.

The power of reverting to the mean. Life time buys, or miserable bust! The rubber band does smack back eventually!

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NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote...

.."There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks h...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

Big test for those that have been wrong, says Joe Friday

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

In May of last year, the S&P hit a key level and stopped on a dime. We applied Fibonacci tools to the highs in 2007 and the lows in 2009, to the chart above. The 161% Fibonacci extension level came into play in the 2,150 zone last year and when hit at (1), the markets stopped on a dime.

If your tools or adviser has suggested to be long and strong since May of 2015, that advice has been costly.

Our take, “Free advice that is wrong, is expensive!!!”

Below looks at stock i...



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OpTrader

Swing trading portfolio - week of February 8th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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ValueWalk

Why Most Investors Fail in the Stock Market

 

Why Most Investors Fail in the Stock Market

Courtesy of ValueWalk, by  

Throughout the past 30 days of wild volatility, here’s what I didn’t do.

Panic. Worry. Sell.

In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our  mind and ignored it.

If you read Howard Marks latest memo, ...



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Digital Currencies

2016 Theme #3: The Rise Of Independent (Non-State) Crypto-Currencies

Courtesy of Charles Hugh-Smith at Of Two Minds

A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.

We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.

The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.

This doesn't just open t...



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Sabrient

Sector Detector: New Year brings new hope after bulls lose traction to close 2015

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Chart via Finviz

Courtesy of Sabrient Systems and Gradient Analytics

Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.

Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...



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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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