Opportunity Cost is what you forgo by taking the course of action you chose. Opportunity cost affects traders in multiple ways. For example, if you are spending your days trading and constantly losing, or only making a very small amount, you are giving up the opportunity to make more money doing something else (a job). […]
Trend analysis is a very valuable tool and at the heart of many strategies in use today. In a previous article, Introduction To Trend Analysis, I described the underlying trends that drive the markets such as the secular, primary and secondary trends. The secular trend is a measure of the economy and society as a […]
3 Ways to Use Moving Averages in Your Trading A moving average (MA) is one of the simplest trading tools and can help new traders spot trends and potential reversals. Here’s an introduction to the moving average, as well as three ways to use it. Moving Averages The Simple Moving Average (SMA) is the most […]
Making sense of trends and time frames is an often confusing task. At any one time, in any given time frame, multiple trends can be at play. There are long term secular trends, shorter term primary trends, still shorter term secondary trends and yet shorter still near and short term trends. Adding to the confusion […]
Lots of trades on the radar right now –here is a sampling of a few I am already in, and some others I am waiting for. GBPNZD The GBPNZD is bucking up against a strong resistance level and providing potential short entry, especially with the false upside breakout earlier today. Watch the spread on this […]
Whether you’ve heard it before or not, trading should be treated like a business. After all, you are starting out with some capital and devising a plan to make money off that money, hopefully enough that you can live off. Trading isn’t easy, but neither is running a business, which is why most business and […]
An all to easy pitfall for new and old traders alike is the failure to recognize the difference between a tool and strategy. A tool can be used for a strategy, strategies use tools but they are not the same thing. Failing to understand the difference between the two is a sure way to achieve […]
Many traders try to trade breakouts, but many of those breakouts fail resulting in a losing trade. A failed breakout is when the price moves beyond a former high or former low, making it appear like the price is going to continue to run in that direction. Instead, the price quickly reverses, trapping a bunch […]
It may seem a little strange but there are three types of diversification I commonly use when I day trade or swing trade. This is not a complex process, by diversification I am simply taking about having multiple trades on at the same time, and for different reasons. I will use the forex market for these examples, […]
Follow these seven guidelines and you are more likely to design a profitable trading system, and not fall prey to ridiculous marketing campaigns that promise you riches overnight. These principles can be applied to any research project, and are adapted from Perry Kaufman’s work in the book New Trading Systems and Methods. Find Your Premise […]