I’ll be taking a breather from the blog until next week. Over the next few days, I’ll be in Shenzen, China speaking at the conference there - see http://www.theatic.net/2007/index.php?city=sz&lang=en
Catch you all next Monday!
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Today I am going to consider my approach to exits and to do that, I need to explain my approach to setups and entries.
Whenever I think I found a robust setup (i.e. a setup that is likely to produce predictable results in the future), I ask myself two questions:

Under what circumstances did the setup make […]

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Last Thursday a student said to me: “It’s (the ES) in the zone! Why have a setup? If it goes up buy it!”
She makes sense, doesn’t she? Yet setups are an important part of my approach; and, unless I have one, I’ll bypass the trade. In this post, I’ll look at why I use setups […]

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I have just completed reading a good book by James Montier, “Behavioural Investing, a practitioner’s guide to applying behavioural finance”
One of the more interest chapters was ‘The Anatomy of a Bubble’. James postulates that bubbles tend to move through 5 stages:

displacement
credit creation
euphoria
financial distress
revulsion

The author suggests that displacement is usually an external event that creates opportunities in […]

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It’s Thanksgiving in the US. This means I have a holiday and time to reflect. As a trader, I get caught up with the markets (especially with the volatility of late) as well as the other hurley burley events in my life. It’s good to take time out to smell the flowers; to take time […]

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Success in the markets requires a plan with an edge. But no matter how profitable our plan, we need to consistently execute it. And, we are more likely to consistently execute our plan if it fits our personality. Accordingly, because I am predominantly visual, my plan tends to focus on the visual aspects of trading. […]

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In ‘Think Better’, author Tim Hurson suggests a business decision-making model that evolves my process. Firstly he suggests that we alternate between right-brain and left-brain activity; secondly within his seven step model, he has some very useful tools. Whenever I brainstorm I use Mind Mapping software called Mind Manager. A free version of a […]

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As traders, we spend much time in seeking more knowledge on the markets, knowledge that will provide us a distinction, a distinction that will lead to a greater edge.
But there is an area that most of us tend to overlook when looking for that edge; indeed usually when I introduce it in my public […]

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The courses taught today on the traditional Market Profile focus on the bell curve, ‘the Profile’, with little comment on the other aspects.
Peter Steidlmayer taught that there were 5 elements to his traditional approach:

Long-term Perspective,
Long Term Activity Charts (LTAC),
Market Structure,
Market Timing and
Trade Location.

Each element played its part bringing a trade to a successful conclusion. And […]

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I am going to depart from planned content. I was going to comment on ‘Context and the Market Profile’. Instead I’ll continue with the current thread and write on managing the ES trade.
In The Expectancy of a Trade and Your Trading PIan I argued that the we had total control only over our entries and […]

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