Reblog | StockArchitect

Reblog: 7 Habits of Highly Successful Traders

There are seven things that I believe are pretty common in the successful traders I have known, read about, and seen in action. Whether it is stock trader Nicolas Darvas in the sixties, commodity trader Ed Seykota in the twentieth century, or Jesse Livermore at the turn of the last century, many of their principles hold true to this day. The closer I get to these principles, the better I trade. The farther I stray from them, the worse I do. In trading, discipline pays. Adopt these seven habits of highly successful traders.

Traders must have the perseverance to stick to trading until they are successful. Many of the best traders are the ones that had the strength to push through the pain, learn from their mistakes, and keep at it until they made it.
Great traders cut losing trades short. The ability to accept that you are wrong and put your ego aside is the key to personal and professional success.
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stockarchitect May 2, 2018

7 habits / habits / newtraderu.com / Steve Burns / success / successful / trader / Trading / Trading Psychology /

Reblog: How to find an edge in the markets (a proven approach)

A few weeks back, I heard someone asking this question:

“How do you find new trading strategies and setups?”

Now the truth is… setups and strategies are useless if it doesn’t have an edge in the markets. You can have the best risk management, correct trading psychology but, without an edge, you’re still going to lose money in the long run.

Instead, a better question would be… “How do I find an edge in the markets?”

Now, if you are interested to know, then today’s video is for you.

Because you will learn…

The SECRET to finding an edge in the markets
How to profit from losing traders (by thinking one step ahead of them)
Practical trading techniques which give you an edge

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stockarchitect April 30, 2018

Rayner / setup / Trading strategies / TradingwithRayner / www.tradingwithrayner.com /

Reblog: How Do ETFs Work? An In-Depth Look at Exchange Traded Funds

2017 was a banner year for Exchange Traded Funds (ETFs).

According to data from Charles Schwab, Bloomberg, and Investment Company Institute, ETFs saw a record inflow of more than $800 billion in 2017. That inflow came at the expense of mutual funds, who saw an outflow of about $200 billion.

(Image Courtesy of Business Insider)

What’s even more impressive about ETFs earning a record $800+ billion inflow in 2017 is that the record before this was in 2016 …. At $286.5 billion.

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stockarchitect April 25, 2018

Bloomberg / Charles Schwab / ETF / ETFs / Exchange Traded Funds / Mutual Funds / simplertrading.com /

Reblog: What a Complacent Investor Looks Like

During three separate interviews this week I was asked if I was seeing any signs of complacency among investors, markets, or clients.

If anything, the people I talk to are more concerned with the high probability of lower market returns in the future but my view is surely clouded by the clientele and readers I deal with on a regular basis.Whether my sample size is representative or not, measuring market sentiment is getting harder and harder these days. Everyone now has a megaphone to voice their opinions — social media, blogs, 24-hour financial television, podcasts, conferences, magazines, financial news websites, etc.I don’t see how you can reliably track sentiment when it comes at you every day like a wave that changes form and shape depending on people’s mood that day. There’s just not much signal in all of the noise anymore.Of course, investors have been given plenty of excuses to be complacent. It feels as though volatility and bear markets have been outlawed in 2017 and stocks in the U.S. haven’t seen a down year since 2008.Since I don’t see any reliable way to track the potential complacency of investors as a whole, I tend to look at different ways investors can be complacent depending on which type of market environment we’re in.For example, last month I read the Schroders Global Investors Study which surveyed over twenty thousand investors from around the globe to get their expected portfolio returns over the coming 5 years. The results show this group was a tad ambitious: Investors expect an annual return of 10.2% on their investments over the next five years, according to a major new study.The Schroders Global Investor Study (GIS) 2017, which surveyed 22,100 people from around the globe who invest, found millennials even more optimistic. Those born between 1982 and 1999 expected their money to make average returns of 11.7% a year between now and 2022.Older generations were more realistic. The Baby Boomer generation – born in the two decades after the Second World War – anticipated 8.6% a year.Millennials (born 1982-1999, aged 18-35): 11.7% Generation X (born 1965-1981, aged 36-52): 9.8% Baby Boomers (born 1945-1964, aged 53-72): 8.6% Silent Generation (born 1923-1944, aged 73+): 8.1%Double-digit annual returns over the next 5 years from current valuation and interest rate levels seems like a stretch to me. I could be wrong but investors with such lofty expectations after we just went through a period of above-average returns (at least in the U.S.) seems to be somewhat complacent to me.Here’s another example (although this is more delusional than complacent):

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stockarchitect April 23, 2018

awealthofcommonsense.com / Ben Carlson / Investor / Return / Risk / Risk Management / Volatility /

Reblog: Avoid These 7 Beginner Trading Mistakes

When you first start trading, the most likely short term outcome bar far is that you will blow up account.And then quit. But it doesn’t have to be this way! If you avoid these simple beginner trading mistakes then I guarantee that you will have a better shot at trading long enough to become consistently profitable.

Ninety percent of traders lose ninety percent of their money in ninety days. Or so we are told. No one really knows if that is true. Avoid these 7 beginner trading mistakes and hopefully you will avoid become a trading casualty statistic!

Trading too large

Blowing up your account need not be inevitable. But if you insist on risking five, ten, twenty…even one hundred percent of your account on your first trade, I can almost guarantee you that you will eliminate your trading account long before the ninety days are up.

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stockarchitect April 18, 2018

Beginner / Bloomberg / Book profit / mistakes / Stop Loss / Tips / Trading / twoblokestrading.com /

Reblog: How the Fibonacci sequence Helps Predict Market Moves

Fibonacci Sequence

The Fibonacci sequence is being used by traders to get some indication of how the market is likely to move.

Advanced trading education sometimes involves figuring out quite strange and seemingly illogical concepts. But these could make the difference in your performance in stock trading.

Can the Fibonacci numbers help predict market moves? According to experienced analyst Martin Tillier, they apparently can, though he was skeptical when initially introduced to the concept. When you think about it, it doesn’t quite seem logical to believe that calculating major stock market levels on the basis of some mathematical sequence actually works. Can the figures thrown up by a numerical relationship affect the real world stock prices?

The Fibonacci Sequence

LiveScience defines the Fibonacci sequence as number series where you get to a number by adding the two numbers just before it. So if you start with 0 and 1, and the sequence is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, etc. The concept has its origin in the theories of many scholars of ancient Indian mathematics, particularly Pingala in 200 BC, Virahanka in 700 AD and Hemachandra in 1150. It was introduced to the Western world by Italian mathematician Fibonacci in his book Liber Abaci in 1202.

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stockarchitect April 16, 2018

Fibonacci / Golden Ratio / Hemachandra / Martin Tillier / mytradingbuddy.com / Pingala / Pullback / Tradezero / Virahanka /

Reblog: Ten Signs You Are Probably A Terrible Trader

Over 90% over traders will end up losing money in the stock market. Chances are if you are reading this you are probably loser in the Market. In order to encourage you to quit before you lose all your money, I created a list below to make you realize you are terrible at trading and should probably find another dream to pursue.

You follow “professional” traders on twitter. The truth is many on twitter are complete phonies and have built a fake trading persona to end up selling you something in the end. More on this can be found on my guide on how to identify fraud traders.
You look at inspirational quotes or quotes given by “famous” traders as part of your trading regimen. This is non-sense, this won’t help you.
You assume psychology is a major part of trading, much more than an actual system. As such, you constantly remind yourself that you lost money in your last trade because of psychological mistakes and thus you refer to #2 on the list to regain focus (stupid trading quotes). If psychology was such a big part the simple solution would be to write programs that would trade for you (this isn’t a money maker). The truth is, many “professional” traders instill that psychology is big so that they can sell you their products for improving your “weak” psychology. Just to be clear I am sure most of you lack discipline, but even with discipline you still would lose money.
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stockarchitect April 11, 2018

CNBC / Options / Psychology / trader / Trading / Trading Psychology / twitter /

Reblog: Thinking two steps ahead

It’s easy to understand how there might be a pattern in the market that shows we have an edge or a reason to put on a trade. Maybe some combination of factors or patterns shows us that a market is more likely to go up over a certain time period, so we buy it. That’s pretty easy to understand, and it’s how most people think about trading.

There is another way to think about patterns, and I think this is more powerful. We can take a pattern, and then think several steps ahead. Through much the same process a beginning chess player might go through, in which he thinks “ok I move here and then maybe he moves here… and when he moves there I’ll do this… but wait… if he does this instead, then I would do this…” We can play a similar game with the market, looking at how prices and patterns are developing, and thinking a few steps ahead. Take a look at the chart below, which shows the S&P 500 futures a few days after a sharp selloff. I’ve also highlighted two possible scenarios, in light orange and blue, that might have played out. Here’s the chart:

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stockarchitect April 9, 2018

Nasdaq / Pattern / S&P 500 / Trade /

Reblog: Step By Step Guide For Trading Momentum Stocks for Beginners

Momentum stocks can grow your trading account exponentially if you know how to manage risk, find good entries, and stick to your trading plan. New and inexperienced traders have to be especially careful because they can destroy there account as quickly as it can grow. Here are some of the best strategies and tips you can use to maximize your profits on these stocks.

Daily Chart Breakouts

Daily chart breakouts are a great daily context to play for momentum plays. The bias is obvious, it is easy to define your risk, and there is usually great risk versus reward. For newer traders, it is easier for most to play setups that are joining an existing trend. You want to look for long periods of consolidation before playing a breakout, like we see with SHOP above. The longer a stock is trading within a range, the more powerful the move will be when it breaks major resistance or support.

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stockarchitect April 4, 2018

Breakout / Bullsonwallstreet.com / Day trading / how to trade momentum stocks / Kunal Desai / momentum stocks / Pull back / trading momentum stocks /

Reblog: 5 Ways To Identify The Direction Of The Trend

Trading with the trend is trading with the flow. When the prevailing trend is up, why would you want to look for short entries when buying might result in much smoother trades? Many amateur traders, even when facing a long lasting trend that has been going on for months, can’t stop trying to predict reversals, whereas they could have made so much more money by simply joining the trend.

But even if you are not a trend-following trader, you can combine the concept of trading with the higher timeframe trend with your regular trading approach: you start on the Daily timeframe and see if the trend its up, down or sideways and you use that information on your lower, execution timeframe to time your trades (read here: how to perform a multi-timeframe analysis). To be able to correctly read price action, trends and trend direction, we will now introduce the most effective ways to analyze a chart.

Intro: The different market phases

Before we start going over how to identify the trend, we should be first clear what we are looking for. Markets can do one of three things: go up, go down, or move sideways.

start_here

The picture above shows you the three possible scenarios and how markets keep alternating between the phases. But knowing what has happened after the fact is always the easy part. The hard part is finding out what is currently happening when markets are moving in real time and the space on the right is empty – that’s where this article comes in. To be clear, the article is not meant to show you how to identify trading entries, but to understand price and trends in a more efficient way.

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stockarchitect April 2, 2018

ADX / channels / direction / Indicators / Moving Averages / Price Action / Rolf / Technical Analysis / tradeciety / Trend / trend lines /