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
Conventional wisdom: bubbles should only be in champagne and in a bath, not in asset holdings. My opinion: asset bubbles are awesome* when you own the asset in question. Irrational exuberance represents unearned returns or returns that have been pulled to the present from the future because a herd of investors are overly optimistic about… Continue reading Bitcoin, the Stock Market, and Other Asset Bubbles
Price action in the first half of January is one of many reasons why a trader (or investor!) should never have all of their money in a single asset or strategy. The biggest risk to new traders in these situations is that they try to force a trade or all of a sudden decide they’re… Continue reading Straight to the Moon!
And 38 minutes later, after all the sound and fury, it largely signifies nothing. I have to admit, managing money is kind of a dream job. A lot of the time you do nothing besides sit, read, think, and read some more. Maybe go for a walk. If you’re doing the job right, you don’t… Continue reading Ballistic Missile Inbound!