Nov 192012

My friend Bill (name changed to protect the innocent) is  a great trader. He has even been named the money manager of the year in various years and by various rating services.  I have never seen him have a draw down of more than about 5%.   I have watched him over the years make […continue here]

Oct 232012

One of the concepts we deal with as traders that can make trading very difficult is what I call the Trade of the Century Concept.  We are wishful thinkers when we get into a trade, and the thought that our greedy little rational minds is having that the trade I just got in is going […continue here]

Sep 122012

Statistics are based on the rule of large numbers. We often use statistics when we are trading but might do well to be aware that trading is very often not based on or even similar to the binomial kind of theory that statistics are based on. In fact they can be very serially correlated. By […continue here]

Aug 242012

The market alternates in waves of price action. Either cycling with higher highs and lows (an uptrend) or lower lows and highs (a downtrend) or, clustering / consolidating.  Everyone knows this and this is likely the first thing you see when you look at a chart.  But, there is another form of cycling most traders […continue here]

Jun 082012
The Nature of Support and Resistance and its Impact on Money Management

One thing that has always driven me crazy about trading is that past support becomes future resistance and past resistance becomes future support. This is not a law, but a tendency. A tendency that makes trading and risk management difficult.  Let’s take a closer look: If my trading plan on this chart had been to […continue here]

May 302012
What Makes a Trading System Good?

When comparing different trading methods and/or systems, it is important to know what the stats mean in terms of long term performance and how those system profiles interact with your trading style or personality. There are two basic types of systems you can trade-  Trending and countertrending systems.  Systems also vary by the frequency with […continue here]

May 222012

The most important thing about successful trading essentially reduces to discipline.  You need to be ready to work hard to manage yourself in order to achieve this because successful trading often involves a heightened sense of rationality while, at the same time, maintaining the capacity to do the opposite of what you are feeling.  This […continue here]

May 112012

One of the very worst things that can happen when you begin to trade a new trading system or method is to start losing right out of the gate.  Just about anyone experienced with trading will tell you this occurs to them, “every time” (let me hear a big Amen).  This tendency of human behavior […continue here]

Commodity Futures Trading and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.