“Jane, an experienced trader, has had a few good months trading Forex. Her strategy is returning a pretty good profit. Her confidence is high. She thinks of making the good run count and starts playing with twice her normal position size. Unfortunately she has a string of losing trades and in a matter of days […]
Category: Trading
January 15th 2015 will go down as another historical day in the financial markets. An event triggered by a national bank action caused a tsunami in the forex market. In a matter of seconds Swiss Franc soared as much as 41% against Euro; also impacting other correlated markets to varying degrees. Take a look at […]
If you have been trading for any length of time, you will have become aware of how important a right mindset is in order to achieve trading success. No trading book is complete without a chapter on psychology and how the emotions of ‘Fear’ and ’Greed’ influence trading. A lot of trading gurus and pundits […]
In the previous post I discussed the fractal nature of markets. In this article I would like to discuss another structural phenomenon which characterises price movement. This concept is called ‘Reversion to the Mean’. Price for any asset class never moves in a straight line, it always forms waves of movements, thrusting forward, then retracing […]
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Fractals in trading
Understanding the fractal nature of price movement is an important concept to help you analyse the markets and optimise your entry and exist. So what is a fractal? A fractal is a natural phenomenon, a mathematical set or a geometrical pattern that exhibits a repeating pattern that displays at every scale. The key words are ‘repeating’ and ‘every […]
One of my long time colleagues and a mentor recently shared something very personal. He had invested in a property in London paying a staggering £650,000 for the one-bedroom flat. A similar sized property in Bristol (where I live) would be around £150,000. Why such a huge difference? Almost everyone would answer that with ‘it’s […]
One of the most important aspects of successful trading is knowing that your trading method has an edge over the market. Theoretically speaking an edge is defined as a set of conditions which when present gives a higher probability of a trade working than not working. These conditions can be based on price, indicators, chart […]
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Trade Management
Have you ever strangled a trade by a few pips and then see it motor along in your direction by hundreds of pips? Or failed to book profit at an opportune time only to see those profits evaporate quickly? I know I have. And if you have been trading for any length of time then […]
Couple of days ago I was having a chat with one of my mentees. I asked him how his trading day was. ‘I started very well this morning’, he said. ‘I had two winners and was in profit by 40 pips (£200). Then I took another trade, which looked okay as per my trading method […]