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You Don’t Get a Profitable System by Flipping a Losing One

I came across this blog post (link here) yesterday, which reminded me of the same point made by Andrea Unger during one of his talks: you can’t just flip all the trading decisions of a losing system to make it a profitable one. The blog post noted that if a system has no edge, commissions … Continue reading

Pitfall in Reading Individual Bar Patterns on Intraday Bars

I came across an interesting video by Rob Mitchell (link here). He confirmed something that I have felt for a long time on reading too much into intraday bar patterns. You can find many resources or educators that tell you things such as Pay attention to what the individual bars tell you (e.g. where the … Continue reading

Using Moving Averages: Slope or Crossovers?

Another issue that I was thinking of recently was when using moving averages (MAs), which is more important? The slope? or the crossover condition (i.e. is price above or below the MA)? The recent book I reviewed from Anne-Marie Baiynd showed that she uses the slope. Barry Burns uses the slope (especially with his rubber … Continue reading

Anticipatory versus Confirmatory Entries: Which to Use?

As I was trading and thinking over my trading plan, one thing that cropped up was whether my entries should be anticipatory or confirmatory. Some of the considerations that I had were the following: The Benefits of Each ‘Style’ The benefit of anticipatory entries is that you enter earlier, your risk is tighter, but it … Continue reading

A Simple Trend Following System

I recently came across a simple trend following system. The rules for an uptrend goes like this (reverse it for a downtrend): When 20 SMA > 40 SMA, it is in an uptrend, only go long, not allowed to short. Enter on short-term weakness, when CCI(5) < -100 Sell everything when price crosses below 40 … Continue reading

Trading Discipline and Prada Knockoffs: The Slippery Slope of Bending Rules

Last week while I was trading, I hit my day stop during the morning because I neglected to put a stop and wanton selling spiked the market down. I knew that I should stop trading, but my limbic system took over the steering wheel and I did 4 more trades, losing more money, before I … Continue reading

Book Review of The Trading Book by Anne-Marie Baiynd

The full title of this book is The Trading Book: Complete Solution to Mastering Technical Systems and Trading Psychology by Anne-Marie Baiynd. This book has two main sections: one of using technical indicators / tools for the trading methodology, and another section focuses on softer aspects: trading psychology, discipline, etc. Baiynd walks through a long trade … Continue reading

Martin Seligman on Positive Psychology, Happiness, and Life Satisfaction

I was watching this TED talk by Martin Seligman on positive psychology (link here). Martin Seligman is a Professor of Psychology at University of Pennsylvania and has written several books on happiness, optimism, and other related topics. With my interest in trading psychology, I have also been going through various materials on positive psychology, how … Continue reading

Takeaways from the Best Trader at Citigroup

I stumbled upon a pretty good article at SMB U, written by Bruce Bower, an ex-FX trader at Citigroup (link here). It writes about lessons that he learnt from the top FX trader at Citigroup. Here’s a short summary, but I recommend to read the original article. If you don’t have a strong view on … Continue reading

Book Review of Investing and the Irrational Mind by Robert Koppel

The full title of this book is Investing and the Irrational Mind: Rethink Risk, Outwit Optimism, and Seize Opportunities Others Miss by Robert Koppel (2011). Robert Koppel was a floor trader, a hedge fund partner, and a president in Rand Financial. He also wrote another book, The Intuitive Trader: Developing Your Inner Trading Wisdom. The book covers … Continue reading

Gelling Situational Awareness and Price Action (a.k.a Don’t Fight the Price Action)

There are two main things I use in my intraday trading: Price action from reading the charts Situational analysis from reading the DOM Price action provides the structure, it determines the trend, key levels, the intermediate outcomes of the battle between bulls and bears. Reading the DOM provides the meat that allows you to build … Continue reading

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