Trading room – Tue 11 Dec 2018
Every trader wants to buy a stock that is going to go higher
and obviously, for those who sell or short, the same trader wants to enter into
a trade that is going to go lower.
Now, we all know that stock price movement is at its base merely a function of the supply and demand for the stock.
For a stock that is going to move higher, it’s just simple
more buyers who want to own a particular stock versus the number of sellers who
are willing to sell their shares to those buyers. But here is the key consideration.
Elite traders want a stock that is always going to move in a significant way. Of course, they’ll always be small, thinly traded stocks that will pop up for a day or two but there won’t be any liquidity in these stocks for a trader to make a sizable profit sum.
Continue reading Trading – How to trade and win in the market (without being overworked and burnt-out)?
Trading room – Mon 3 Dec 2018
It’s possible for traders to tap into one of three general attitudes when they approach the market. The first attitude is one of pessimism and ignorance, the second is one of randomness and/or neutrality, and the third is one of empowerment.
The first attitude never works, the second attitude seldom brings much success, but the third attitude, when properly done, guarantees success and brings the trading edge over others you will never ever thought possible.
It is common knowledge in the market that only 5%-10% of traders (we call them elite traders) make money in the market while the balance 90% of traders (we call them common traders) lose their money trading the market every time, year-in and year-out.
Continue reading Trading – Invest and empower in yourself to get your trading edge over others in the market
Trading room – Mon 26 Nov 2018
In our prior series on how algorithm trading can supercharge your trading profit, we looked at the introduction to the world of algorithm trading and how it is a force that has changed and continued to disrupt the global investment and trading world.
You can read Part 1 here on Introduction: When humans and machines collide.
You can read Part 2 here on Man vs. Machine: Kasparov vs. Deep Blue
In Part 3 of these series, we continue off from Part 2 where the astounding chess event in 1996/1997 saw World Chess Champion Garry Kasparov then took on IBM and its super-computer Deep Blue in the ultimate battle of man versus machine and his loss for humanity.
We mentioned that in reality, there was much to learn from this historic game of man vs. machine and its relation to many technology-based applications that govern our world today including automated trading systems in trading that is mushrooming today.
Continue reading Trading – Man vs. Machines: Part 3 of a Continuing Series on “How Algorithm Trading Can Supercharge Your Trading Profit”
Trading room – Monday 19 Nov 2018
Most traders are always looking for the trading system that can give them the best trade signals to act and make money in the market. Let’s define a trade signal first.
A trading signal is a trigger for action, either to buy or sell a security or other asset in the market and generated by an analysis. This analysis can be generated by using fundamental analysis, technical indicators (which can be quantitative or qualitative) or it can be generated using simple or complex mathematical algorithms.
The signals can be based on direct market conditions (for example the price or volume movement of a stock) or non-direct market factors such as the company or economic indicators.
Continue reading Trading – What is the best trading signal to use in the market?
Trading room – Friday 16 Nov 2018
Part 2 – Man vs. Machine: Kasparov vs. Deep Blue
In the first part of this series on how algorithm trading can supercharge your trading profit, we look at an introduction to the world of algorithm trading and how it is a force that has changed and continued to disrupt the global investment and trading world.
You can read Part 1 here on Introduction: When humans and machines collide.
Obviously, before we look further at the power of big data analytics and algorithm trading, we would like to look at how it all started with an astounding event in 1996/1997 that captivated the entire world attention.
Continue reading Trading – Man vs. Machines: Part 2 of a Continuing Series on “How Algorithm Trading Can Supercharge Your Trading Profit”
Trading Room – Tue 13 Nov 2018
Part 1 – Introduction: When humans and machines collide
Algorithm trading has taken the world by storm and it is time traders and traditional fund managers start to take notice. Disruptive technologies are reshaping traditional business models and in the field of investment, algorithm trading is a potent force that is changing the dynamics of the industry and how it operates.
Institutional Investor’s (an international finance publisher) 17th-annual Hedge Fund 100 ranking of the 100 largest hedge fund firms in the world as of year-end 2017 finds that the four biggest hedge fund firms — and five of the six biggest — on its ranking rely largely or fully on quantitative strategies using computers to make their investment decisions and have continued to attract assets.
Continue reading Trading – Man vs. Machines: Part 1 of a Continuing Series “How Algorithm Trading can supercharge your Trading Profit”
Trading Room – Mon 12 Nov 2018
Can you be serious? How could doing nothing be the greatest skill of a master trader? How can a trader make any return let alone supernormal profit if he does nothing?
The distinction to understand between doing nothing at certain times and doing nothing all the time is the hallmark of an elite trader. Most common trader always hunger for some kind of actions, believing that the market somehow owes them a profit which had to be made daily if not weekly.
As such, these traders find that they have to enter a trade most of the time, even when the market is moving against their trading plan. They set a planned profit target every day or week/month which had to be met irrespective of the market condition or the stock position. Continue reading Trading – The greatest skill of a master trader: The art of doing nothing?
Trading Room – Fri 9 Nov 2018
Most common traders and investors are always searching for the holy grail in trading. Past success is no guarantee of future performance yet they mistakenly believe that there is some single solution to defining market behavior and are looking for the magical bullet and formula to define all market actions.
However, not only is there no single solution to the markets, but those solutions that do exist are continually changing. The range of the methods used by the top traders in the world, some of which are even polar opposites, is a testament to the diversity of possible approaches.
There is a multitude of ways to be successful in the markets, albeit they are all hard to find and achieve. However, this does not mean that all methods are born equal or are applicable to all market conditions.
Continue reading Trading – The mistake of relying on past successes
What do common traders do when faced with a conflicting news that sends the market and share prices rocking back and forth?
Just like the roller coaster seen in the market and the stocks they are trading in, their emotions go on a roller coaster as well.
And that’s when they start to make bad decisions or overrate their trading ability and skills against the market.
Continue reading Trading – Beware of trades of emotion and euphoria
Many a times common traders find that the trading assumption or trades they make do not work out. For instance, they could be buying a stock which reverse gear and went into a steep decline. Or they were shorting the market which made a quick turnaround and sprint upwards. Continue reading Trading – When trades go wrong