Trading Strategy

Utility Calculations in Your Trading

I suffered a major trading loss recently and I was pondering about my profit and loss calculations. For example, a trading account can start at $500 and be traded up to something like $2000. So that’s a 300% profit on your initial investment. However, what if you have traded your account all the way up to $4000 (or have started your account at that figure) and found you’ve literally burned that trading account down to zero – in your books that would account for a 100% loss.

High Frequency Trading

For Wall Street Traders, high frequency trading is a Godsend. For "mum and dad" investors - sharemarket participants who hold for the long term, this market activity won't disadvantage them as much. However for retail day traders, this type of trading would disturb you. High frequency trading has been credited as being the method big banks and hedge funds such as Goldman Sachs has made a profit in the last year, even with the Global Financial Crisis (GFC) happening.

Make Money in a Falling Market Using Short Selling

Professional share traders and investors who trade and invest money for a living use sophisticated methods in their line of work one of which is short selling. You may or may not know that you can actually make money in the sharemarket (stockmarket for our American counterparts) anytime - it doesn't matter if the market is trending up and very bullish, stagnant and going sideways or falling in a bearish market situation.

Quality versus Quantity Forex Trading

Yet another perspective on "risking a little or risking a lot": Quantity vs Quality trading...

Just a similar thought to last week's post with the forex trading case study discussing the issues of risking a little or risking the lot. Similar concept, just a different perspective or twist.

Trading Risk and Leverage Case Study

A short case study on trading risk and leverage using forex trading as an example:

How's your trading? FINE?

Is your trading FINE? (Are you Freaked out, Insecure, Neurotic and Emotional when you trade?) Then read more...

Here's the intro:

In the movie "Italian Job," one of the characters responded that they were "FINE". But in their world of underworld dealings FINE is an abbreviation of Freaked out, Insecure, Neurotic and Emotional. So is your trading fine? If it is, then you've got a problem.

Why do You Trade?

Traders simply trade to make money... I discuss the real reasons why you trade.

Everybody is in the market to make money. Simple. Nothing more nothing less. You aren't in the market to play, to have fun, to get excited or to get an adrenalin rush.

Getting From Analysis To Executing The Trade - Part Three

This is the third part of a three part series about getting from analysis to trade execution. The first step in my trading is to decide whether or not the trade is worthwhile. This step was outlined in part one. The second step of trade analysis was examined in part two. In this part we shall look at trade execution. I will also underline the importance of being 100 per cent confident when you execute your trading plan. These are basically the three steps that I undertake to enter in a trade no matter which market I trade, be it the forex market or the stock market.

Getting From Analysis To Executing The Trade - Part Two

In the previous post we had a look at the first step in how traders get from analysis to finally executing and committing your capital to the trade, be it forex, stocks or futures. The first step was to have yourself a test to determine if the trade is worthwhile for you. You may have your own methods (send me some ideas!), but I suggested one of my qualifiers as the momentum of the trend line of the particular equity you are looking at.

Getting From Analysis To Executing The Trade - Part One

Unless you’re gambling away your capital at the markets, I expect you as a share trader to be doing some due diligence before each trade - analysing the stock or currency pair before making your mind up whether to enter the trade at all then if the price is trading up, down or sideways. It's all the same deal, the same process whether you trade the US stockmarket, the Australian sharemarket or the forex markets.

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