Never let a trade turn into an investment. Trading has many truisms that are based on behavioral biases and shortcomings. One of the common ones for both traders and investors is the tendency to enter a position then hold onto it as it drops in value instead of sticking with a predefined stop loss or… Continue reading Core Trading
So much of investing is the avoidance of doing dumb stuff. If you're not sure what "dumb stuff" entails in investing then let me provide you a very incomplete list: Selling a broad index fund after if dropped 20+ percent and going to cash. Putting more than 5 percent of your portfolio into a single… Continue reading on the need to do something
The best part about financial markets is the mythos that the amateur can compete or even out-compete the professional. How many other ultra-competitive activities does that hold true? Would you step onto the field against an NFL team? Would you wager millions of dollars playing against a chess or golf pro? Arrayed against you is… Continue reading What’s your edge?
The best part about only managing your own money is that you're incentivized to always do the right thing because it's your own money. My goal is to maximize wealth within the context of a risk management framework. I don't have a boss that's constantly pushing me to gather new assets or maximize revenue. So… Continue reading Fiduciary Standard & Radical Financial Transparency
Based on where the market was trading when I wrote Bitcoin, the Stock Market, and Other Asset Bubbles there weren’t any terribly attractive mainstream asset classes. Volatility! Trade Wars! Trump! The headlines are creating noise to try to explain what’s going in the market these days. The good news is that none if it is going… Continue reading Bridesmaid Momentum
What's your benchmark: trend trading vs buy & hold.
The two biggest causes of failure among new traders are bad trading systems and unfettered emotions. Bad Trading Systems Trading is a game of probabilities and sequence of returns. Systems run the gamut from trend following and breakout systems on one end that have low win rates but (hopefully!) big winners to short-term mean reversion… Continue reading How to Fail as a Trader
Or why position trading works. I recently had a conversation with my wife about what options exist to solve the mass shooting crisis in America. She’s come a long way from being 100 percent anti-guns when we met to meeting me halfway in the middle. We’ve both learned from each other – I grew up… Continue reading Appearances vs Reality
Signalee is ostensibly about position trading. But there’s a second point that is important to make for anyone trying to create a large trading account: adding a relatively small amount of money on a periodic basis to your account initially “compounds” the value of your account faster than the position trading strategy we use. Using… Continue reading Savings vs Returns vs Trades
This past Tuesday, February 6th, one of the hottest trades for the past two years, the so-called easy money trade, blew up in a most spectacular fashion. After peaking around $145 halfway through January, XIV started to slide until it closed at $99 by the end of the day on Monday, February 5th. The next… Continue reading XIV – A Friendly Reminder