Trading the Day After: A Road to Nowhere

The day after a big move can be difficult to trade because we get accustomed to the increased volatility… and then it disappears. The trend following methods useful on a big trend day are largely useless the day after, when volatility subsides. That’s when...

Trading Big Trend Days

Strong trend days are relatively rare, so it is easy to forget how to trade them. Psychologically, trend following is much harder than it seems, especially on big days. Mega-trend days show us our weaknesses. Many conservative traders find that they underperform on...

Cutting Winners and Letting Losers Run

The two hardest things to do in trading are cutting losses and letting winners run. Humans (especially men) are programmed to do the opposite. We hold on to losers because we don’t want to admit we are wrong. We deal with losers the same way we deal with the...

Timing is Everything

Your trading results are largely dependent on your sense of timing. The better your timing, the less ‘heat’ you take on a trade after you enter. The less stressfull the trade, the more likely you are to manage it well. Like CPUs, we all have different...

Psychological Whipsaw

This morning (October, 2012) U.S. index futures are soaring simply because Europe shrugged off all the bad news. If you got bearish last week, you are probably feeling whipsawed. You may be tempted to abandon your Trading Plan today. When markets make a U-Turn and...