How Simple Trading Works
In this video I walk through how simple trading works using just 1 of the multitude of simple trading approaches. Referred to as multi timeframe analysis, it essentially forces you to adopt a methodology that “puts the wind at your back” while simultaneously requiring an exit discipline that minimizes your losses and thus your risk.
If there is such a thing as perfect trading, you’re likely to find it thru the door marked “Process.” In other words, a simple process employed repeatedly and prudently has no choice but to deliver profits into your pockets… where they belong.
The Most Important Aspect Of Simple Trading
Trading risk management is the single most important component of trading securities and is a big determinant of whether your trading strategy makes money.
According to Investopedia and other traditional definitions, Risk includes the possibility of losing some or all of an original investment. If loss is certain, that is not risk… That’s inevitability. Risk involves probability and as such can be managed.
Profitable traders spend the vast majority of their time focused on risk and the management thereof.
Whether you focus on holding long term position trades or you’re a hyperactive market maker style trader, risk management of each individual trade as well as your overall risk profile is the single largest determinant of your level of success… Also known as your profitability.
In this video, we walk through a single potential trade scenario and how consistently profitable traders would view it. We look at things such as:
– what traders think about most
– determining the path of least resistance
– where we would consider placing stops if a trade were taken here
– what to do when the market “speaks”
– how important stop losses really are
– how you can control your risk no matter where you place your stop (position size)
A Good Rule For All Investors
Market timing is impossible according to the vast majority of personal finance gurus. The price action we traders follow so closely on our screens is random at best and misleading at worst.
Watch this video to see just how wrong that nonsense really is.
Whether you’re looking to do something to salvage your underperforming retirement accounts or you’re looking to begin the journey to financial and time independence through the great art of simple day trading, the first step is to recognize and appreciate the fact that market timing is not only possible… it’s a critical component of a healthy, growing asset mix.
In this video we take a look at AAPL and a bunch of should haves…
Here’s a little of what we look at:
– How using a moving average could have provided useful guidance in the stock
– Why the particular parameters used on an indicator aren’t super important… and what IS important
– The REAL point of technical analysis… or in our case (and more accurately), reading charts
– How the “Line in the Sand” strategy works
– The chances of “selling highs” and “buying lows”
Market Timing By Another Name
So called fundamental trading is just market timing by another name.
Don’t believe it? Why then do fundamental “investors” wait for certain fundamental parameters to be met before putting money to work? A certain book to sales or p/e ratio to be met… A certain level of sales or cashflow to be reported… A certain industry catalyst to be announced which will expand the pie for all players and thus drive profits higher?
The truth is waiting for a fundamental metric is no different from waiting for a price pivot or a moving average cross. Both require patience and decisiveness… However, simple trading through price action is much more easily verified and immediate.
In this video we take a look at the premise of market timing from the perspective when the National Bureau of Economic Research declares expansions and contractions in the economy as a proxy for the lag in information.
We also talk about the real path to profit, managing your risk.
How Market Liquidity Works
It’s important for traders to understand how market liquidity works.
Investopedia defines liquidity as “(t)he degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.”
As such, liquidity helps determine which securities trade actively and which “trade by appointment.” [A stock trades by appointment when it trades sporadically and usually very little at most price levels].
Why Traders Need Liquidity
In this video I walk through a brief explanation of why traders need liquidity.
Why Markets Move
Why markets move…
In this video, we discuss the principle “markets don’t move because they want to… they move because they must.”
What’s A Chart?
First things first… What is a stock chart?
A brief explanation of a stock chart.
The Dot On Close Chart
A brief look at the Dot on Close Chart.
The Dot on Close chart is built with a dot at each period’s closing value.
The Line On Close Chart
A brief explanation of the simple Line on Close Chart.
How To Control Your Emotions When Trading
How to control your emotions when trading discusses the perils and difficulty of both containing and utilizing your emotions when trading.
The Sit On Your Hands Strategy
The Sit On Your Hands Strategy is fundamental to simple trading psychology… which is at the core of ALL profitable. It’s especially important in short-term, directional trading.
In this short video we show the the basics of how and when traders should do nothing. We use a day trading example, but the principle is the same no matter what timeframe is under consideration.
We touch on:
* one of the the hardest parts of trading
* the inversion that kills most traders
* death by a thousand cuts
* a core TAOST (and all directional trading) principle – cut your losses and let your winners run
* positive distraction – how writing a love letter can improve your trading
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