Posts Tagged ‘Trading psychology’

Thrilling Thursday – Dow Hits Record Highs on Lower Earnings!

Why should we worry?

The Dow is at 16,580 so all must be well, right?  The fact that we're up here on low volume and even lower earnings is just one of those nit-picky things that won't matter a year from now, when TA people use the movement to draw new, bullish trend lines.

That's what the Fed is controlling, they are painting charts in broad strokes to keep things moving along – even when they aren't.  

Sure the US economy is only growing at a 0.1% annual pace and sure that's down shockingly from 2.6% last quarter but, hey, we EXPECTED to only grow at 1% – so it's ONLY a 90% miss – what, us worry?

The Fed says it's just bad weather slowing us down and, whether or not you believe that, they also promise to continue to stimulate the economy long after it is necessary.  The Fed is like Santa Claus, only they don't have to put in any effort to make their toys, so Christmas comes 365 days a year for the top 0.01%.  For the bottom 99.99% – well, it's 0.1% growth on the "trickle down" effect.  

4-30-2014 6-22-17 PM Corp CashIn fact, if you take out the Banksters, who are piling up the Fed's free money in their vaults and using it to manipulate the stock and commodity markets (and higher costs for Energy, Food and Health Care were the only reason our GDP wasn't -1% instead of +0.1%), then you can see that those companies not protected by the Fed are in big trouble

Not since 1999 has there been less cash relative to debt in Corporate America.  Yes, money is cheap, so why not borrow some but that money isn't being used to invest in plants, equipment or, God forbid, hiring and training more people – it's being used to buy back stock and pay out dividends to give the ILLUSION that earnings are improving, when it's actually only the share count that's being reduced.  

As you can see from this chart of the S&P, earnings are up just 25% from where they were in 2009, when the market…
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How to Get Off the Performance Roller Coaster

How to Get Off the Performance Roller Coaster

Munich Oktoberfest Preparations

By Brett Steenbarger 

Do you find yourself on a performance roller coaster? This is a situation in which you make money for a while, begin to think you have it all figured out, only to fall back, lose money, and feel like a rookie all over again. 

A while back, I wrote about the performance roller coaster and some of the emotional factors that sustain it. The gist of that important post was that how we process wins and losses affects our subsequent trading--and sometimes contributes to winning and losing streaks.

I just finished an enjoyable interview with Mark Wolfinger of the Options for Rookies site. One topic that came up was the way in which traders identify with their P/L. Once a trader’s sense of identity and esteem becomes caught up in profits and losses, the trader begins an emotional roller coaster simply due to the natural ups and downs of markets.

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See also: Addictive Trading: When Trading Becomes a Problem


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Educational Videos

The following is a collection of podcasts and videos from the Options Clearing Corporation and selected others.

The cover a lot of ground and new ones are occasionally added to their site.  They are not as good as the coursework from MarketTamer, who are Option Sage’s excellent group but these are free (as opposed to $99 a month with Sage’s PSW special) so take a peek at the subjects that interest you:

First up is a very good introduction to options basics from Adam Lass, a very good overview.  His next episode is the basics of call options – hopefully he’ll do more.  Then we have the podcasts from OCC: 

 

 
  Introduction to Financial Markets and Options Basics  View
 
 
  An Exploration of Basic Options Terminology  View
 
 
  Options Basics  View
 
 
 


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The Eight Beliefs of Successful Traders

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The Eight Beliefs of Successful Traders

Courtesy of Dr Janice Dorn at Minyanville

Editor’s Note: For those interested in both winners and losers, the 8 beliefs of unsuccessful traders can be found here.

One bright day in the middle of night, 2 dead boys rose to fight. Back to back they faced each other, drew their swords and shot one another. A deaf policeman heard the noise, and saved the lives of the 2 dead boys. If you don’t believe this lie is true, ask the blind man, he saw it too.

-Author Unknown

We’re hard-wired to believe — and to hold on to our convictions — often in the face of contradictory evidence. In life outside the markets, this may actually be a source of strength. However, it doesn’t usually serve a trader well. One of the most important questions for the trader to ask every day is: What do I believe that’s not true? 

So how do we know the truth? The markets tell us. It really is that simple — and yet, it’s so difficult for most to accept and practice on a daily basis.

It’s important for traders to be able to assess their beliefs regularly, because — at any given market moment — they’re a composite of those principles. Fortunately (for some) and frustratingly (for others), beliefs about the markets are fungible and fluid; they can change from minute to minute.

The successful trader is in the flexible flow with this — and changes accordingly.

Beliefs of Successful Traders

1. The markets provide a constant stream of opportunities.

2. If I miss an opportunity, another will come along.

3. If my position is stopped out, the hypothesis that got me into the trade was incorrect.

4. I take one trade at a time, and stay in the moment with it.

5. I strive for excellence, not perfection.

6. I maximize profits by losing small.

7. I am not my trade.

8. I take complete responsibility for my thoughts, feelings, and actions in the markets.
 

 


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The Eight Beliefs of Unsuccessful Traders

The Eight Beliefs of Unsuccessful Traders

Courtesy of Dr Janice Dorn at Minyanville

Editor’s Note: For those interested in both winners and losers, the 8 beliefs of successful traders can be found here.

Beliefs of Unsuccessful Traders

1. I must be trading something all the time.

2. If I lose on a trade, I feel angry, frustrated, sad, or sick. If I win on a trade, I’m a happy camper.

3. If I don’t get on board with the hot tip of the day, I’ll miss out.

4. The markets are out to get me.

5. I’m unwilling to take the stop-out, so I’m turning this trade into an investment.

6. If I just keep studying, looking, and reading, I’ll find the magical formula/indicator/guru to lead me to riches.

Buddha, trading philosophy7. Everything has to be perfect for me to get into a trade

8. If I win, I was skillful. If I lose, I was unlucky.

It’s only through daily assessment of convictions — and with radical honesty -- that a trader grows, develops, and thrives. Diligent examination of beliefs and the courage to change them is an ongoing challenge that must be conquered if the trader is to move to higher levels of success.

Buddha says:

"Believe nothing just because a so-called wise person said it. Believe nothing just because a belief is generally held. Believe nothing just because it’s said in ancient books. Believe nothing just because it’s said to be of divine origin. Believe nothing just because someone else believes it."

 


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Phil's Favorites

A Twist

 

A Twist 

Courtesy of Joshua Brown

?There’s been a twist in my thinking on crypto-currencies. I’m going to flesh this out shortly with a more comprehensive post but for now, I just want to mention the fact that I am no longer buying the prima facie scarcity argument for Bitcoin’s rise.

Last night I attended a very interesting crypto dinner with 20 or so of the most important software people on Wall Street, from big banks to giant hedge funds. It was super-informative and everybody got a chance to ask a lot of tough questions of the experts in attendance.

My friend Brian Kelly, who is as knowledgeable as anyone on this topic, helped confirm my thinking about the beta trade in coins / tokens. He’s killed it all year with...



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Digital Currencies

A Twist

 

A Twist 

Courtesy of Joshua Brown

?There’s been a twist in my thinking on crypto-currencies. I’m going to flesh this out shortly with a more comprehensive post but for now, I just want to mention the fact that I am no longer buying the prima facie scarcity argument for Bitcoin’s rise.

Last night I attended a very interesting crypto dinner with 20 or so of the most important software people on Wall Street, from big banks to giant hedge funds. It was super-informative and everybody got a chance to ask a lot of tough questions of the experts in attendance.

My friend Brian Kelly, who is as knowledgeable as anyone on this topic, helped confirm my thinking about the beta trade in coins / tokens. He’s killed it all year with...



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Zero Hedge

Bitcoin Futures Open Above $20,000... Then Dump

Courtesy of ZeroHedge. View original post here.

Both CME and CBOE Bitcoin Futures contracts opened above $20,000 this evening (with Bitcoin spot hovering around $19,000). However, as soon as trading started, Bitcoin futures got hammered lower.

Those expecting a surge in futs volumes on the CME vs the CBOE will be disappointed:

CME Bitcoin futures volume 150 ????

— Lee Saks (@Lee_Saks) ...



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Chart School

Tape Reading - Dow Jones Price Waves

Courtesy of Read the Ticker.

This is a continuation of price wave analysis.

More from RTT Tv

RTT Volume wave analysis like this helps the retail investor find price action that is true. The reference to 'tape reading' is by the definition of Richard Wyckoff (section 5M of the Wyckoff Course), you can learn more about RTT Volume Wave here.





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 ...

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Insider Scoop

Attention Contrarians: This Analyst Says JD.com Set Up Could Be In Your Favor

Courtesy of Benzinga.

Related JD Want Some Exposure To China's Growth? Stifel Says Buy JD Or Alibaba Q3 13F Roundup: How Buffett...

http://www.insidercow.com/ more from Insider

Biotech

Designer proteins that package genetic material could help deliver gene therapy

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

 

Designer proteins that package genetic material could help deliver gene therapy

Courtesy of Ian HaydonUniversity of Washington

Delivering genetic material is a key challenge in gene therapy. Invitation image created by Kstudio, CC BY

If you’ve ever bought a new iPhone, you’ve experienced good packaging.

The way the lid slowly separates from the box. The pull...



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ValueWalk

Tax Bill May Spark Exodus From High-Tax States

Courtesy of FinancialSense.com via ValueWalk.com

The following is a summary of our recent podcast, “Exodus – The Major Wealth Migration,” which can be listened to on our site here on on iTunes here.

It’s looking increasingl...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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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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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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