In his chapter on luck, Bob Rice says: “The expression ‘the harder I work, the luckier I get,” is not just cute; it is mathematically correct.” In short, if we follow a plan, and execute it consistently, then we’ll place ourselves in a position to ‘get lucky’. While Bob is speaking about chess and business, […]

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We are talking about the impact of time on trading. In my last blog I spoke about using time to manage our trades. In this blog, I want to consider the impact time has on risk.
I use the 18-day swing as my trader’s timeframe i.e. the monthly trend defines my strategy: ‘long’, or ’short’, or […]

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In Chapter Four of Three Moves Ahead, Bob Rice deals with the issue of time. He starts with the sentence: “Run out of time, and you lose. It’s the same in business and chess”. He could have added “and in trading”.
Pete Steidlmayer taught me that the greatest enemy to keeping losses small is […]

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Last night the S&P moved in the target area where I would institute fresh shorts: above 1396 but below 1406. Remember that a close above 1406 triggers a buy signal for a target to 1576 to 1557 - all figures basis cash.
Figure 1 shows the 2 Congestion markets in play.

FIGURE 1 Market Profile
The sideways […]

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I have to give a presentation tonight so I am posting early.
Yesterday I suggested certain questions we ought to ask ourselves before we take a trade. Today I’d like to take the preparation, ‘the opening move’, one step further.
The questions help the analysis for the trading plan and for the risk management plan. They don’t […]

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Before I start today’s blog, I’d like to turn to a question Manish Shah, <manish.shah@centrum.co.in>, asked. By the way, I’d be grateful if questions are posted to the blog - that way, all benefit. Here’s the question:
I want to ask you a small question. I am not an out an out mechanical trader. But I […]

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I like to think that I love to try new experiences, especially if it comes to trading. Hence my willingness to try the course by Pride Educators (http://www.tradewithpride.com/) and my testing of Dynamic Trading Bars (http://www.trade2win.com/store/dynamic-trading-bars-p141.html). Sometimes I read a book/books for the sheer joy of viewing an event from a different perspective.
I have to […]

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Over the years, I have been studying the influence of volume on price action. In teaching it, the problem has been for futures on how to deal with roll-over volume - especially for those contracts that roll monthly. To deal with this problem, I devised a manual method to calculate normalization of volume.
I did not […]

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One of the critical mental states for Scenario Planning is the ability to hold competing ideas at the same time without having to resolve the discordance. Among my mentor students, this lesson is one of the hardest to learn. I believe this is because humans are wired with two traits:

Hindsight bias and
The need to resolve […]

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Last night’s price action provides some great lessons:

On a trade-by-trade basis, the market can and will do anything.
Our plan provides high probability, low risk trades over a large sample size.
The better plans provide roadmaps of what should happen if the trades are working out. By the same token, they tell us when the trades will […]

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