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Category: Basics of Trading

Month End Trading

Month End Trading

Month end trading is different to other trading days. All the big players are active on the last day of the month. Pension funds, commodity funds, hedge funds, mutual funds, you name it the big players are all there. They enter the market and buy and sell en masse. There are so many big players present at month end that their aggregated behaviour can distort the price of a market more than normal. Their trading size is so large that…

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Recommended Reading List

Recommended Reading List

Every trader should read widely, it is one of the best ways to improve your trading. The best traders are inquisitive by nature and constantly question what they believe to be true. No matter how much you know about trading there will always more to learn. It is one of the reasons we recommend traders become students of the markets. While we contribute a significant amount to the trading community we acknowledge that we are by no means the authority…

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Paul Tudor Jones on the Importance of Technical Analysis

Paul Tudor Jones on the Importance of Technical Analysis

Paul Tudor Jones highlighting the importance of trusting the price action despite having incomplete information: I see the younger generation hampered by the need to understand and rationalize why something should go up or down. Usually by the time that becomes self-evident, the move is already over. When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart. Why work…

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Betting Big – Know When to Go All In

Betting Big – Know When to Go All In

The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time they don’t. It’s just that simple. Charlie Munger The edge on a trade can vary significantly from trade to trade. As a trader you need to adjust your bet size to match your confidence in the outcome of the trade. From time to time the markets will offer up opportunities where the odds are…

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The Darker Side of Trading

The Darker Side of Trading

Too often the negative aspects of trading are shielded from those entering the industry. There’s a lot of disingenuous marketing going on from those selling the next hot trading course. People are getting lured into the industry under false pretenses of riches, glory and easy lifestyles. Hopefully this article will act as a counter balance to some of the false information out there. If you’re considering becoming a trader you should understand the true reality of trading. You should understand…

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Mastering One Good Setup Can Make You Rich

Mastering One Good Setup Can Make You Rich

Bare with me on this one because I’m aware that this can sound a bit clickbait-y. Some of the best traders I’ve known only know how to trade one setup. One. That’s it. They know that setup intimately, they know the nuances of that trade and when that trade really sets up they smack that trade with an ungodly amount of size. They epitomise Bruce Lee’s famous quote: I fear not the man who has practiced 10,000 kicks once, but…

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Decision Fatigue

Decision Fatigue

You are bombarded with information as a trader. Markets are constantly moving. You are always monitoring them for the best setups. You monitor your tweet deck, there’s a hell of a lot of good information from the good folk on twitter that you like to keep an eye on. Or perhaps you’re just waiting for the next Trump tirade. You’ve an inbox full of research reports, economic analysis reports and technical analysis reports. You’ve a squawk on in the background…

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You Can’t Outwork the Markets

You Can’t Outwork the Markets

Whenever I hit a rough patch my initial reaction has historically been to double down on my workload. Hard work has made me a profitable trader, so that clearly must be the solution to my rough patch, right? What I do is I hit the research hard. I look to develop new trade setups. I look into trading new markets. I buy the latest Artificial Intelligence course and get my nose to the grindstone. Every time I do this I…

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Don’t Misjudge Your Liquidity

Don’t Misjudge Your Liquidity

Lack of market liquidity keeps me up at night. I’ve got scars from underestimating the markets liquidity and the impact my trading size can have on market price. When you increase your trading size, you very quickly learn to appreciate the importance of liquidity in the markets. You learn things like you only get out when the market let’s you and not when you want to. Eventually you will reach a trading size where your positions start to move the…

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A Day in the Life of a Professional Trader

A Day in the Life of a Professional Trader

I’ve been asked a few times to give an overview of a typical day in the life as a trader. As you will see, the hours are long and there is a significant amount of work required to maintain a basic competency. Hopefully this will give you an idea of the level of hard work and the hours that must be put in to remain a consistently profitable trader.   The hours are not long just for the sake of…

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