موقع التقني

  It's a common misconception that acting rationally means eradicating emotion from our thought processes.  Indeed, the opposite is the case, as psychologist Nathaniel Branden observes.  Our greatest ideas are ones that we feel deeply, that resonate with us.  That is what traders mean when they refer to having "conviction" in a trade.  Our worst trading occurs when we feel things and react to those impulsively.  In those cases, our reacting prevents us from reflecting and thinking clearly.  Everyone feels uncomfortable when markets move against us.  The question is whether you use those emotions as information or allow them to control your next actions. Most traders have had the experience of looking at market information, discussing ideas with others, and scouring research and suddenly see where things are lining up and making sense.  That aha! moment is a great example of feeling deeply.  Our greatest ideas are ones that come to us wit...

  In the first post in this series , we took a look at how traders often lose their ideas when their stop levels are hit.  In this post, we'll examine a different, but related, cognitive mistake.  Many traders will place trades based upon price patterns and "setups" without truly understanding how their market is behaving.  This is a particular problem when market regimes change and markets change their behavior.  Knowledge is necessary, but not sufficient, in trading success.  We also need to understand what is happening in our markets so that we can profit from the behavior of other market participants. One variable important for understanding is volume and especially changes in trading volume.  If volume is increasing in a stock, index, or other instrument, it means that new participants have entered the market.  We want to examine how our market responds to this expansion of participation, because that will provide us with important clues as ...

  Yes, it's true that problems with our mindset can interfere with good trading.  It's equally true that bad trading can interfere with our mindset.  In coming posts, I will highlight mistakes I see traders make and what we can do about them: The first mistake I see traders make is confusing the idea being traded with the actual trade that is placed - Traders develop ideas about the markets or stocks they're trading.  Those ideas often reflect what is happening over time with growth and other fundamentals, price action and trends or breakouts, etc.  For example, I might develop the idea that a data release is a game changer for the stock market and should lead to new highs in SPX.  Once we develop an idea, we have to translate that idea into a specific trade.  What will tell us that traders and investors are acting on this idea?  What will give us favorable reward-to-risk in putting on a position to profit from the idea?  Too often, traders ...