|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Achieving success in futures trading requires avoiding numerous pitfalls as much, or more, than it does seeking out and executing winning trades. In fact, most professional traders will tell you that it's not any specific trading methodologies that make traders successful, but instead it's the overall rules to which those traders strictly adhere that keep them "in the game" long enough to achieve success. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
I have told my readers that one of the best methods to trade a market is to jump on board when prices "break out" of a congestion or "basing" area on the charts and begin a new trend. I have also stressed to my readers that one of the most risky and least successful trading methods is trying to pick tops and bottoms in markets. Now, I'm going to muddy the waters just a bit and discuss contrary opinion. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Some traders are reluctant to put on a position because they are torn between what they perceive as conflicting market factors. Here's a typical quote from such a trader: "The moving averages are positive, the market is trending higher, but the RSI shows the market as being way overbought. What should I do?" |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Many traders attempt to find the single-most "robust" trading strategy possible by looking for one set of rules which works for all markets. Such systems don’t take into account the fact that markets can change quickly and dramatically due to a news event, according to Perry Kaufman. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Trading futures and stocks involves the use of some of the more arcane terms found in any field of endeavor. Those less-experienced traders who are trying to break into an already-difficult business are many times even more frustrated by "phraseology" they do not understand and which seems to make no sense at all. I wish you could have seen the look on my wife's face when she overheard a telephone conversation in which I told a customer we were seeing a "deadcat bounce" in a market! |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
Your trading style forms a basis for your beliefs about how to enter the market. This is important because you really only trade your beliefs about the market. It's very hard to trade something that's going up if you believe it is overvalued. Similarly, it's very hard to trade something that's considered undervalued, if you believe (because it is going down) that it will continue to go down. |
|
Read more...
|
|
|
General Trading Articles |
Written by IFTC Financial Studies |
|
|
It is not too far when the veteran traders got used to draw the trend lines using pencil and paper. Whereas the market data sent by mail to them and there was no computer and a trading desk. Were they really wrong by not using super analytical charting platforms? Were they all losers? I bet they were not only doing great but comparing to my fellow traders (Including me) they were absolutely sophisticated traders. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
An elite group of traders and technical analysts gathered in Las Vegas last weekend to educate and enlighten several hundred attendees of the 21st annual TAG (Technical Analysis Group) conference. For two and one-half days, these respected market watchers shared their trading secrets and strategies. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
I base the majority of my trading decisions on technical indicators and chart analysis--and also on market psychology. However, I do not ignore important fundamentals that could impact the markets I'm trading. Neither should you. In this feature I'd like to share with you the types of fundamentals in various markets about which technically oriented traders should be aware. While this article will be most beneficial to beginning and intermediate traders, the experienced traders may enjoy it as a "refresher." |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
A lot of email has come in from readers asking me how to improve upon "pulling the trigger" to enter a trade. How many traders out there have ever pondered a potential trade for so long that once they actually got ready to execute it, they then got cold feet due to concern they had missed the move? |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Experienced futures traders know there are many correlations among futures markets - some of which are valuable guides in helping to determine specific market trends, and some of which are fickle. This educational feature will examine some basic correlations among futures markets, and will likely be most beneficial to the less-experienced traders. However, it just might be a good refresher for the experienced traders who may have forgotten a few of the market correlations. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
A fellow emailed me recently, asking: "Without giving away any precious secrets, could you tell me a way to improve my entries and exits (on trades)? It seems nobody wants to share their system." Well, first of all, I don't have any trading "secrets." What I do have is many years of market experience, including studying the markets and technical analysis--and listening carefully to the best and brightest traders share their philosophies on successful trading. (You should be suspicious if anyone tries to tell (or sell) you any trading "secrets.") |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
In this tip I want to briefly describe my ten favorite trading books. I'm not going to give them in any particular order, because I'm not sure I can rank them that concisely. However, these are my ten favorites and I've ranked them alphabetically by author, except that three of the books are my own and I've included them at the end. In addition, most of them are classics, so my description of each of them will be brief. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
If you buy a newsletter, you probably get a monthly trading recommendation. And that is usually a recommendation to buy an investment. The newsletter will also have its own stop rules (those that do have stops). As a result, the newsletter will generate a set of profit and loss statements which could be treated as R-multiples. In fact, if the newsletter does not give you initial stops, then you can probably simply use 25% of the entry price as the stop. Thus, I'd recommend risking 1% on that investment and having your total investment be 4% of your portfolio. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
I have discussed in past articles how volume and open interest can be used to help identify and confirm market situations and trading opportunities. I'll take open interest one step further in this column by examining the Commitments of Traders (C.O.T.) report, issued by the Commodity Futures Trading Commission (CFTC). |
|
Read more...
|
|
|
General Trading Articles |
Written by TradingEducation.com |
|
|
"When it comes to planning, many traders can be compared to the German army during World War II--in that the invasion of Britain was planned but never executed, while the Battle of Britain was executed, but never planned," said John C. Tirone, senior technical analyst for Chase Manhattan Bank in New York, and a trader for 30 years. "Many traders and investors go through their sometimes very short investing lives planning trades they never execute and executing trades they never plan." |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
The first variable in the snow fight metaphor was the wall of snow. If the wall is gone, you have no protection from the snowballs. Hopefully, all of you figured out that the wall stands for the equity in your account. And generally the bigger your equity, the safer you are from disaster. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
My ideas for educational feature topics usually come from readers' suggestions or from tidbits I have gleaned from many years of studying and trading futures markets and stocks. I also get educational topic ideas from discussing markets with my peers in the newsletter and trading advisory services industry. For this educational feature, I don't have any one topic that I will focus upon, but instead will give you a few more trading "nuggets." |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
In the trading arena, most people focus on one of these variables, the ratio of white to black snowballs, and ignore the rest of them. That should give you a good clue what that variable means. But hopefully, even from the metaphor, you can see the importance of the other variables. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
I get a lot of questions from less-experienced traders regarding how to best learn about and study "fundamentals" in markets. There is no quick and easy way to study market fundamentals, and I don't know of any books that focus only on fundamentals that impact all the futures markets. The reason books on fundamental analysis of futures markets are so rare is because the subject matter is so enormous. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
When you design an exit for your system, one of the key things that you need to consider is the purpose behind that exit. In the second edition of Trade Your Way to Financial Freedom, I identified four possible purposes that you might have for such exits. These include each of the following: |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
How can you your exits help you catch a strong trend? Well, in a random entry system the first thing to consider is that when you exit, you'll enter back into a trade again and lose another $100 for slippage and commissions. Thus, you want your initial exit to be large enough to make sure that you don't exit very often. At the same time, you don't want to enter into a trend in the wrong direction, which would cause you to pile up huge losses. Thus, to make the random entry system work, I needed an initial stop that was big enough to keep me in the market while it was just making random noise type movements or moving sideways. And one such exit is three times the 20 day volatility or average true range. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
Tom Basso (who is featured in the New Market Wizards) and I were giving a systems workshop, but we were primarily emphasizing the importance of psychology, exits, and position sizing. As a result, someone in the workshop said, "I suppose that means that you could make money with just a random entry?" Tom said he hadn't thought about it, but he went home and testing out his exits and his position sizing with a random entry system and sure enough, it made money. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
I noticed at the beginning of my career as a trading coach that when people talked about a trading system, what they were really taking about is what I would today call the setup to a system. Yet, setups are a very small part of what is necessary for a complete trading system. And interestingly enough, today people still claim their setup conditions as their systems. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
There are many different types of traders and one way you can classify them is by the basic concept that they trade. Chapter 5 of the new edition of my book Trade Your Way to Financial Freedom presents nine different concepts that you can use to trade. And each concept is carefully explained by an expert in the area. Some concepts are diametrically opposed (i.e., trend following versus band trading) but you can trade any of them if you believe in it enough and practice the low-risk idea concepts presented in the book. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
Many of you might not want to spend a lot of time on this particular topic because it involves a lot of internal searching. But understanding this topic and figuring out what's right for you is one of the keys to Holy Grail trading. It's certainly one of the keys to developing what's right for you. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
. This tip contains the key ways that you can grow your business, especially when capital isn't the problem. Instead, your problem is finding the best uses of your capital. And when you think about these methods, they might be obvious, but most people don't think about them enough. So here are they key ways you can grow your business. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
My first experience in the futures industry was as a young (and naïve) reporter working right on the trading floor of the Chicago Mercantile Exchange. It was a unique and very rewarding way to start my career in the fascinating field of markets and trading. I was able to talk face-to-face with floor traders and analysts, and as a reporter got to ask many questions in my quest for knowledge. |
|
Read more...
|
|
|
General Trading Articles |
Written by Forex618 |
|
|
There are many different methods, systems and strategies which traders, "newbies" and old "pro's", apply to the market to make a profit from the movements in the prices. Each trader will assert that his or her methods are the best and the most profitable, but the truth is that each trading system has its strengths and weaknesses. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Entry and exits points in trades most times should be based on some type of support or resistance levels in a market. For example, in the coffee market at present, many traders think prices are close to a bottom. But I won't go long in a coffee contract just because I think it's close to a bottom. I need to see some strength in the market. I will wait for the contract to push up through a resistance level and begin a fledgling uptrend. Then, if I do go long, I'll set my sell stop just below a support level that's not too far below the market. And if the trend does not develop and the market turns back south, I'm stopped out for a loss that's not too painful. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
"The Trend is Your Friend" is a tried and true market adage that is indeed one of the most valuable futures trading tenets. However, history shows that most markets tend to move in a non-trending, or "sideways" fashion more of the time than they are in a trending mode. There are several methods by which to trade non-trending markets. One popular method is called "swing trading." |
|
Read more...
|
|
|
General Trading Articles |
Written by Peter Bernstein |
|
|
We used to be in a trading room where the leader constantly complained that making trading system development tools so accessible made everybody think they're a genius. He would say "Everybody wnats to be a doctor but nobody wants to go to medical school". The first time you see a system like TradeStation with all the preprogrammed indicators and strategies it is hard not to imagine yourself discovering the 'holy grail' of trading. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
I enjoy receiving email messages from my readers worldwide, and I do try to answer each and every one of them. A frequent question I get from readers goes something like this: "Here is my own trading system (or trading plan) and what do you think of it?" The reader then explains in detail the trading system parameters or the trading plan. My answer to this question is usually this: "If your trading system or plan works for you, then stick with it and don't make major changes to it. The old American saying, "There's more than one way to skin a rabbit" certainly rings true in successful futures or stock trading methods. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Achieving success in futures trading requires avoiding numerous pitfalls as much, or more, than it does seeking out and executing winning trades. In fact, most professional traders will tell you that it's not any specific trading methodologies that make traders successful, but instead it's the overall rules to which those traders strictly adhere that keep them "in the game" long enough to achieve success. Following are 10 of the more prevalent mistakes I believe traders make in futures trading. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
For many years I was a futures market reporter with the FWN wire service (now called OsterDowJones). I spent time working right on the futures trading floors in Chicago and New York. Most of the time my daily reporting "beat" involved interviewing traders and analysts and then writing three daily market reports. For months at a time I would cover the same markets, day in and day out. It was a fantastic learning experience and an opportunity that very few get. |
|
Read more...
|
|
|
General Trading Articles |
Written by John Forman |
|
|
For a lot of new traders, the transition from paper trading to real trading is a traumatic one. The relaxed, confident individual is replaced by someone who is suddenly compelled to watch the market tick-by-tick, someone who hesitates to pull the trigger on trades, someone who second-guesses her/himself, and/or someone who finds her/himself less willing to take on risk.. |
|
Read more...
|
|
|
General Trading Articles |
Written by John Forman |
|
|
Trading requires time in a couple of ways. The first is the time dedicated to developing a trading system. This can be thought of as a one-off thing, but in reality it is more an on-going process. Once a system is in place, time is required in terms of monitoring the markets for signals, executing transactions, and managing positions. |
|
Read more...
|
|
|
General Trading Articles |
Written by John Forman |
|
|
So you want to trade, eh? Or have you already started? What drew you to it? Was it the huge profit potential? Maybe it was the excitement. Or perhaps you're like me and love the challenge of solving a big, multi-dimensional puzzle. Whatever the case, there's certainly a number of things that make trading the financial markets worthwhile. |
|
Read more...
|
|
|
General Trading Articles |
Written by John Forman |
|
|
Traders deal with two different kinds of returns when they speak of profits and losses made in the markets. Realized returns, often referred to as "booked", are those which come about as the result of a position which has been closed out. Unrealized, or "paper", gains and losses are those which involve open positions. |
|
Read more...
|
|
|
General Trading Articles |
Written by TradingEducation.com |
|
|
Everyone would probably agree that the "fundamentals" – or at least traders' perception of them – are ultimately the driving force underlying market prices. Much of today's market analysis is based on prices, but it is the fundamentals that produce the prices. The challenge for traders is how to best learn about and study fundamentals in markets. Unfortunately, despite their significance, there is no quick and easy way to study market fundamentals, and you can't find resources that focus only on fundamentals that impact all markets. |
|
Read more...
|
|
|
General Trading Articles |
Written by TradingEducation.com |
|
|
Many investors talk about getting into trading as a business, but before you can do that, you really need to have an idea what the business of trading is all about – the instruments you can trade, the role that various participants in the industry play, how to pick the right instruments and the right firms for you, how to conduct your trading, etc. |
|
Read more...
|
|
|
General Trading Articles |
Written by TradingEducation.com |
|
|
If you decide to become a trader, it's difficult to just jump into a market and be one. Before you can even move into the nuts and bolts of trading, there are some basic concepts you need to understand – the idea of trading itself, your perception of trading, your resources, the use of money, the role you play in the trading process and a number of other items that deal mainly with the trader and not the trading. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
The title of Mark Cook's lecture at a recent conference in Las Vegas may seem a little odd at first. However, successful traders know it's the amount of profit realized in trading that's important--not just the percentage of winning trades. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
Achieving balance would certainly would rank as one of my top ten tips to you. Here's why balance is so important. First, we'll talk about balance between profits and losses. If you can understand that portion of it, then it will be easier for you to understand the importance of balance in other areas. |
|
Read more...
|
|
|
General Trading Articles |
Written by Dr. Van K Tharp |
|
|
What happens when someone gives you a tip or idea about the market? Do you get very excited about it and want to act? In some cases, you probably do act. Do you become skeptical and suddenly distrust the person giving you the tip? Or do you notice if the tip fits into your game plan? If it fits, you then do more evaluation according to the criteria that you use in your plan. If it does not fit, then you simply discard it, saying that's not something I know much about. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
Achieving success in futures trading requires avoiding numerous pitfalls as much, or more, than it does seeking out and executing winning trades. In fact, most professional traders will tell you that it's not any specific trading methodologies that make traders successful, but instead it's the overall rules to which those traders strictly adhere that keep them "in the game" long enough to achieve success. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
A "Trading Checklist" of prioritized criteria not only will help you decide when to execute a trade, but will also help you identify potential winning trades. What kind of stuff should a trader put on a Trading Checklist? That depends on the individual trader. Each trader should have his or her own set of criteria, or rules, that helps determine a market to trade and the direction to trade it--including when to get in and out. Below are my Top 10 rules on my trading checklist. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
A trader emailed me a while back, asking for some advice on a good money manager for him. He said he was a "lousy trader" and tired of losing money. I doubt there is one non-rookie trader reading this story who has not experienced at least a small run of poor performance in trading futures. I've said before that most successful veteran traders have more losing trades than winning trades in any given year. The key is maximizing profits on the winning trades and minimizing losses on the losers. |
|
Read more...
|
|
|
General Trading Articles |
Written by Jim Wyckoff |
|
|
I derived much of my information on Richard Wyckoff from two good books: The first is "How I Trade and Invest in Stocks & Bonds," by Wyckoff. This book was first published in 1924 by "The Magazine of Wall Street." The second book is "Charting the Stock Market: The Wyckoff Method," first published in 1986 by Jack Hutson, the publisher of the magazine "Technical Analysis of Stocks & Commodities." |
|
Read more...
|
|
|
General Trading Articles |
Written by Jay Lakhani |
|
|
Have top strategies and rules, excitement alone wont guarantee success, so follow your golden rules to make your trading more bankable. For example one of your golden rules could be, Trade with the trend: No Trend, No Trade! Or Plan the trade ? Trade the plan! Buy at support, sell at resistance! The list is endless, but you should ideally get a short list of at least 10 rules. Display your golden rules in your office or trading area, and read it every day. |
|
Read more...
|
|
