Behavioral psychologists have pointed out that people do not act like rational actors when it comes to investing and trading in the stock market. In addition to fundamental factors like the business cycle, there appear to be psychological motivations at play that help to explain market performance and price fluctuation. A short term or intermediate-term […]
Tag: coaching
Profitable ETF Trading Strategies: understanding Max pain
Trading psychologists generally agree that there are two dominant emotions in the area of behavioral psychology that influence market price and performance. These two emotions are fear and greed. It is also generally agreed in the scholarly literature that fear is about three times more powerful than greed. It distorts our normal rational analytical mind […]
Profitable ETF Trading Strategies: understanding the Japanese market ETF
The Japanese stock market, the Nissei, is the world’s second-largest equity market in terms of daily dollars traded. Because it is open when the US market is closed it does offer an opportunity to put your dollars to work at different times of the day. One of the ways that the short-term trader and they […]
Profitable ETF Trading Strategies: understanding ETF volatility
There are many different useful definitions of the concept of volatility. For the purposes of this essay I just want to consider volatility in a non-technical way, and that is as the amount of variation in returns around the mean, or the average. In any bundle of returns from a trading system, you will always […]
Profitable ETF Trading Strategies: Appreciating the art and science of trading
In any profession that features a strong human performance factor, there will surely be a mix of both art and science that contributes to the final product and performance level. Since the trading profession incorporates such a large amounts of human psychology at both the individual and organizational level, it’s worth considering how both art […]
Profitable ETF Trading Strategies: understand your trader quality number
The system quality number that is taught by the International Institute of Trading Mastery is a very powerful way of calculating a single number that describes the relative quality of a particular system, given a set of trading results that are typical for that system. It is a methodology that allows you to compare average […]
Profitable ETF Trading Strategies: understanding the limits of back testing
One of the downsides of back testing is that it can lure the trader into overconfidence about systems and the way they have performed in the past. There is always a real danger of curve fitting and data mining to find a perfect system that would have worked with an exact set of market conditions […]
Profitable ETF Trading Strategies: the power of back testing
The purpose of this article is to make the strongest case possible for back testing as a crucially important way of understanding your system. In other articles I will suggest that too much back testing is bad and that you can learn too many wrong lessons if you’re not careful. That said however, back testing […]
Profitable ETF Trading Strategies: feed the bulldog every day
In order to build up your emotional and financial bank accounts during the day, short-term traders should consider the technique of “feeding the bulldog” and making this a primary objective of each trading day. There is an old saying to the effect that “talking doesn’t feed the bulldog”. This is a colorful way of saying […]
Profitable ETF Trading Strategies: managing your emotional bank account
Managing your intraday trades when the market is open can be a very nerve-racking experience. Sometimes there’s so much going on that it’s hard to keep track of what’s important. Other times it seems like you’re watching paint dry and nothing is going on in, and you can feel your nervous energy building up in […]