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Trading Psychology Articles |
Written by Dr. Van K Tharp |
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I was recently approached by a top hedge fund about profiling the best traders in the world. Profiling really refers to finding those psychological characteristics that will best predict success. And I believe that I'm one of the world's experts in that area since we have a huge database of psychological profiles of traders. I've been testing traders since 1982 to help them discover their strengths and weaknesses. The instrument that I've developed, The Investment Psychology Inventory, does an excellent job of that. |
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Trading Psychology Articles |
Written by Jim Wyckoff |
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A main tenet of success in futures trading is the ability to accept losing trades as part of the overall trading process. This is not an easy undertaking--especially since many futures traders tend to be of a more competitive nature in the first place. Traders certainly don't have to enjoy losing trades, but they must accept the fact and move on. Those who can't accept the fact that losing trades are a part of futures trading usually don't stay in the business very long. |
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Technical Analysis Articles |
Written by Adam Rosen |
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The FX-market oscillates on a regular basis between range bound and trending markets. In range bound market conditions, traders typically adopt a simple buy low, sell high approach, where as trending market climates call for traders to trade with the trend. However detecting whether the market is currently in a range bound or trending environment can be tricky, and costly if applied inaccurately. With that said, the Fibonacci levels can provide a valuable insight to the current market climate and the appropriate trading approach. |
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General Trading Articles |
Written by Dr. Van K Tharp |
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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. |
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Money Management Articles |
Written by Dr. Van K Tharp |
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osition sizing is that part of your system that tells you “how much” throughout the course of the trade. And, assuming you have a positive expectancy system, that variable, along with your personal psychology, controls about 90% of the variability of your performance in trading. THAT'S HOW IMPORTANT IT IS. And yet most people totally neglect this variable. Mutual funds, for example, that have to be 95% invested at all times, don't really give it much thought. |
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Technical Analysis Articles |
Written by Cornelius Luca |
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One of the most common topics of conversation for traders is Elliott Wave analysis. Ironically, few traders actually apply this method because many are unsure about the intricacies of the Elliott Wave. In truth, correct analysis and counting of the waves can be a daunting task. However, even without the help of electronic wave analysis, traders should be able to enhance their profitability with a disciplined use of Elliott's method. |
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General Trading Articles |
Written by Jim Wyckoff |
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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). |
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Money Management Articles |
Written by Dr. Van K Tharp |
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Before we discuss this topic, let me give you some important background information. I tend to think of trading systems by the distribution of R-multiples that they generate. And the average R (or mean R) of the system's R-multiple distribution is the expectancy of the system. It tells you what to expect from the average trade. |
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Technical Analysis Articles |
Written by Ian Copsey |
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Why moving averages are my least favored trading tool. "What moving averages do you use?" Isn't that a common question? Is there and answer? Of course, many traders use moving averages. Which are the best periods to use then? My answer: "Depends on how much money you want to lose." |
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Technical Analysis Articles |
Written by Ian Copsey |
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There is reason for caution when analysts tell you that moving averages forecast price movement. Many analysts still claim that moving averages can be used to forecast the subsequent day's movement. I'm not sure why this is considered true as none of the tests I have ever done suggest that they are anything less than poor at the role. In fact, almost certainly they would lose money when used in this fashion. |
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General Trading Articles |
Written by TradingEducation.com |
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"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." |
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