There are some key concepts and principles to successful short-term trading that can catapult your trading success if you apply them consistently. We teach many of these in our short-term trading course, but I’m going to relate a few very important ones to you in this article today. The first principle I want to relate to you today is one I was originally exposed to from the work of W.D. Gann. Quite early in my trading career, I made the trek from Menlo Park California, where I lived, to Pomeroy […]
Financial freedom is an aspiration held by many, yet fully realized by few. One key to achieving this elusive goal lies in understanding and leveraging financial structures effectively. The difference that can be made by making small shifts in how one handles their financial structures is immense, and it directly affects how much money you can set aside, as well as how rapidly the money you do set aside can compound. Most people are restricted by what they can invest in via the tax-advantaged structures they have set up (like
Dave was an electrical engineer who hated Corporate America, loved numbers, and was drawn to trading because of its freedom. Dave has a trading system that is a mean reversion system in S&P’s. He likes this system because he gets validated quickly with quick and frequent wins. His system is correct 60% of the time, and when he is right, he makes 1x his risk. This system has an expectancy of .20. Dave thinks that he would be set if he could just increase his win rate points by 10%.
This past week was full of major market-moving events: the election, Pfizer’s vaccine announcement, Payrolls, and FOMC. We thought it would be helpful to share our recent market environment context update from Mark Boucher after the close on Monday, November 9 to help you understand the current environment. We thought we might also share some high-quality stock opportunities that we see right now. Market Environment Context News of a 90% effective coronavirus vaccine sent markets into a massive rotation away from lockdown and work-at-home beneficiaries towards cyclical recovery plays
Same Trades, Different Views Improve Your Results with Positive Reversion by, Chuck Whitman of Reed$Trader
Rarely do I see any discussion in the trading community about the impact of reversion on the profitability of trades. Many new traders are completely unaware of this concept and its impact on their trading. Value, Price, and Reversion I spend a great deal of time educating my student traders about the major market participants: commercials, large speculators, small speculators and market makers. I want students to understand the different behaviors of different participants. Learning about these different behaviors often opens the eyes of my students helping
Using market internals* has a great advantage in that they force you to focus on what investors are doing rather than on what they are saying. Our short-term trigger point of the 70% down-volume on February 21 came just two days after the all-time highs on the S&P. In the following days, our Bear Market signal happened in the midst of five distribution days. Since that first warning day, the stock market had eight 90% down-days and three 80% down-days over the next eighteen trading days for the largest
A famous CDA/Wiesenberger study took an interesting approach to explaining two different market strategies by creating two fictitious characters – Mr. Timing and Mr. Selection. The research used data from 1940-1973 in its first edition and then continued on through the early 1990’s in a later edition. Mr. Timing was capable enough to perfectly call every market swing of 10% or more. Mr. Timing bought at the exact low tick of every bottom prior to a 10% or higher move up and exited at the exact high tick before every