Trading and Tennis

I play competitive tennis and I have a coach. I had a lesson today and it reminded me of a parallel between tennis and trading. In tennis one has several shot types, which are equivalent to setups in trading. We have the forehand, the backhand, the volley, the...

More on Stalkers vs Trappers

I recently discussed a distinction between the stalking mentality and the trapping mentality. Stalkers often lack a plan and tend to make up tactics on the fly. This approach is all about relying on one’s gut reactions. If your gut is ‘smart’, then...

Mass Psychology

In the same way people project unconscious biases or preoccupations on a Rorschach ink blot test, I believe traders unavoidably project our biases on ‘The Market.’ These biases can simply be categorized as bullish or bearish, optimistic or pessimistic....

Stalker vs Trapper

In trading, there are two distinct mindsets: the Stalker who actively tracks his prey and the Trapper who sits quietly waiting for the animal to step into the trap. Most traders are men and testosterone biases us toward the primal Stalker mentality. Stalkers...

Ambush!

When the market gaps DOWN after closing UP on a final rally the day before, traders who held positions overnight are caught wrong footed. An end of day rally may seduce you toward a bullish mindset the following day but that would be a mistake. Don’t over-commit...