Category: Trading Psychology

Keeping it simple should be simple, but its not.

A significant change to the portfolios this week.

Realization is the first step.

This important indicator is talking. Are you listening?

Per the usual, conventional wisdom regarding these two indicators is way off base here.

A different way to look at the put/call ratio yields interesting results.

Psychology works both ways.

Yes, it exists.

Through volatility the market is forcing bears to throw in the towel.

To anticipate and to react to the markets yields two different results.

A picture speaks a thousand words. The blind leading the blind:

Risk has been taken off completely and totally in the name of job security.

The only thing that changed with Friday’s smash reversal to the upside was the near term prospects for continued upside volatility. This market isn’t for the meek or emotionally fragile investor. I see a majority of financial bloggers out there who are so zoomed in short-term price movements I wonder how they make it past [...]

My observation of aspiring bears and fearful bulls is that a lot of investors seem to be waiting for the S&P to move to 1200 or possibly 1250 before initiating short positions or liquidating longs. There is this square minded, vanilla perception that since the markets have fallen at such a substantial pace that they [...]

The equity markets have a very simple and accurate means of judging panic and fear.

This is an angry market. It feels angry. It looks ugly. It wants heads. It wants hearts. It feels like a market that has trapped a lot of traders, fund managers and individual investors. The foot of the market has been implanted firmly on the neck of an entire group of bulls and it seems [...]

Learn to walk away. It’s such an important aspect of investing in the markets. And, unfortunately, few realize the importance enough to take this exercise in discipline seriously. The markets are one place where doing too much work can get you in trouble. “When you try hard then you die hard” to quote Kanye West. [...]

The list of stocks that aggressive traders or investors should get long must involve short sellers.

Companies like NFLX don’t top on bad earnings numbers.

The markets are always speaking to you. Every single day.

The financial markets are one of the few places where every aspect of behavior, valuation, and price movement is broken down into quantifiable terms. There are ratios to measure valuations. There are ratios to measure the ratios of valuation. There are a myriad of statistics to measure how investors are feeling on a particular day, [...]

Realize that your logical mind is being stalked by the financial market.

Netflix, Linkedin, government and the month of July

When I feel that level of confusion and am that far off my road map, I’d rather just step aside and regroup

It’s much the same in speculation. If you think too much, you die.

1994 I was fresh out of high school. I met with a friend who showed me option chains on different stocks. He showed me that if I put $500 into a call on a stock, it could potentially turn into $2000. He went on and on. I ate it all up. The next day I [...]

It has been a long time since I made a trading boo-boo. A boo-boo – for clarification – is not when you lose money on a trade like I did with NFLX on Tuesday morning. That’s just trading. A trading boo-boo is when you veer off of the road map for a particular trade. Case [...]

Be pro-active in all facets of your investment or trading life.

The sentiment geeks are always switching between different indicators of bullish and bearish sentiment in an effort to gauge whether the market is close to a top or a bottom. If it’s not the AAII survey, it’s Market Vane or Investor’s Intelligence. Maybe it’s the COT numbers that tickle the fancy of some traders? The [...]

There are a million different ways to lose money in the financial markets. What catches most market participant’s off-guard is the counter-intuitive nature of trading and investing. It’s an issue that is best summed up by Jefferson Airplane in the song White Rabbit: When logic and proportion Have fallen sloppy dead And the White Knight [...]

My car didn’t kill that bird, indecisiveness did.

Looks like we’re in the process of completing our first leg down of this correction phase. I’ll be going over a bunch of charts this coming weekend. For tonight, however, I want our focus to be on one. The chart we’re looking at tonight is the QQQQ. Correction phases are tricky affairs. It makes sense [...]

The markets are one of the few places where you are penalized for working hard.

This article also featured on TheStreet.com The battle with yourself is never-ending. The more you become involved in activities that tend to press your emotional weak spots, the more you will experience inner-turmoil as you are delving into an area of the psyche that is uncomfortable being in the spotlight. Activities that involve speculation of [...]