Amateur vs Pro

Research shows that the more often individual equity investors buy and sell, the worse they do. The rate of capital destruction is about 4% per trade, annualized. Over time, male traders fare far worse than women because they trade more often. So what’s the...

What’s Your Sport?

Watching the procession of athletes from 204 countries during the opening ceremonies of the Summer Olympics I was struck by one thing: each athlete has a specialty. Even within specific sports, various ecological niches were quite differentiated. In daytrading, we...

Chasing the Melt-up?

Today the market is in melt-up mode on hopes that the world’s central banks are on the verge of another rescue package. On “irrationally exuberant” up-days, it can be difficult to enter the market rationally. How susceptible are you to chasing...

The Paradox of Success

It can be difficult to include taking losses as part of one’s success plan, but it is essential. For some traders, the desire to succeed may function as a psychological imperative that keeps them from taking losses when they are small. Achievement-oriented...

The Mistaken Power of Convictions

From a Skype chat with a client…. [10:25:49 AM] Rick W. I have a lunch appointment … going to let it ride on my conviction. [10:27:24 AM] Kenneth Reid, Ph.D.: Hummmm….try not to have any convictions, just tentative theories. Why? Convictions are...