Jan 26

How Brain-Lag Can Wreck Your Trading

I find brains fascinating. Gross, when you think about them in a human biology way, and grosser still when you consider them in a culinary context, but infinitely interesting when it comes to the way they work and what they actually do when they aren’t being eaten.

Traders have to be interested in their brains. They have to be intimately aware of their natural processes and responses so they can train their brain to work for them rather than against them.

I read an article this morning (hat-tip to @attitrade) about temptation and the mixed signals our brain sends off to utterly undermine our own ideas about the correct choice and propel us toward the fun choice – something we can witness pretty much every time we sit down to trade.

Chips, or a Carrot?

The article uses diet as an obvious example of temptation.

We know we should eat a nutrient-rich, low-calorie carrot because we’re big fatties – but we’re starving, and hot chips are so damn comforting! Added to that, everyone knows you have to eat approximately 372 carrots to actually feel full; not to mention the real concern you might die of culinary boredom before you’re even done.

Carrots are the right choice, but chips are far and away the fun choice.

It’s the same in trading. We know a small position size is the right choice, but loading up and winning big is the fun choice. We know following our plan is the right choice, but trading a rogue set-up and being proven right is the fun choice.

And here’s the conflict. When you’re standing there faced with a signal that’s so perfect it wouldn’t dare fail, and you have the choice to either play it the same as always with boring old 1% risk, or are tempted to whack on some extra size for good measure, there are actually two different parts of your brain vying for attention.

Which goes a long way toward explaining why I can often hear myself arguing with…myself.

One specific part of the brain is responsible for the “Trade me, I’m the perfect trade and I’m gonna make you rich!” voice (which left unchecked is definitely the more persuasive of the two), and then there’s the part that generates the Miss Goody Two Shoes voice, primly reminding you about your trading rules and that your position sizing algorithm is there for a reason. She’s no fun at all, really.

What the study in the article found out about these two warring parts of our brain was interesting and very relevant for traders.

Apparently we have one section of our brain – the ventromedial prefrontal cortex (vmPFC) – that lets us know we want something, and this is the more instant area to kick in. See temptation – want it.

The other area – the dorsolateral prefrontal cortex (dlPFC) – is responsible for our “I don’t want it” thoughts. See temptation – don’t want it.

The problem is that these brain signals are super-fast, so the one pertaining to our basic instinct – want the temptation – will always trigger first. There’s a lag when our instinct kicks in and runs rampant, before our better judgement pipes up and starts coaxing us away from the negative behaviour, or temptation.

So how can we manage this lag in our trading?

There are two main things that can help neutralise our conflicting brain signals – recognition, and practice.

Once you can recognise the impulses you have and have an awareness of what’s happening you can catch yourself before you leap into a trading temptation. The recognition of your unique temptations allows the other part of your brain to kick in more quickly, and over time with practice it will eventually be able to trigger itself before your natural instinct does.

In the study, the researchers found that dieters don’t have the same neural struggle, which shows that with practice people can improve their self-control.

In effect, over time and with increased awareness and practice,the good, correct trading decision becomes your natural instinct, and your brain won’t struggle against itself.

This is where real flow in trading comes – trading with quiet, and internal peace.
***

Related posts you might be interested in:

My Top 10 Destructive Trading Thoughts

Struggling As a Trader? Part 1, Part 2 and Part 3
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Jan 25

Why My Forex Trade Ideas Suck. In a Good Way.

I get asked every now and then to share my trade ideas with the new currency traders out there, and while it’s really flattering and makes me feel special, I’m hesitant to do it.

Why? Quite simply, because everyone will hate it.

My Forex trades will lose everyone money because my win/loss ratio sucks. In a profitable way.

The problem is that if you follow my trades it’s highly likely you’ll hit the 3/5 that lose, and if you miss either of the winners you won’t make a dime because my system works like this:

Trade 1 – Lose

Trade 2 – Lose

Trade 3 – Lose

Trade 4 – Win enough to pay for 3 losses.

Trade 5 – Win profit.

Obviously, these trades are in no particular order and there is no guarantee of a winner after 3 losses – which is a shame, because if it worked that way I’d be famous, we’d all be rich and could live happily ever after on our own sunny island.

Another issue that contributes to my silence mystery is that my entries won’t really make sense to anyone who doesn’t understand my method.

Everyone loves “Buy $EURUSD, because it’s sitting on support after completing 3 waves down, Europe is about to open, the 61% Fib is doing its thing and 68 stars have aligned in Botswana”. All the reasons why you should take action are right there, clearly laid out.

But I trade a system that doesn’t care about much at all – except price.

So it’s much more likely that I’ll say, “Buy $EURUSD – because I am!”.

I’d be about as educational as a black box.

Because I trade a whole system, the entry is a very minor part of the equation. My profitability doesn’t depend so much on my entry as the management of the whole trade.

If I’m calling entries, I’d also need to call out initial stops, every trailing stop movement and the exit too – and quite frankly I’m not going to do that because I’d rather go do something that’s actually fun.

But in the interests of being kind, sharing my ideas and participating in community, here’s a question for you all – if you aren’t looking for opportunities to buy the Nasdaq in some way, shape or form, why the heck not?
Click to Enlarge

What more do you want to see?

$NQ_F $COMPQ
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Jan 24

Trading Hurdles

You’ve heard it said before that “Trading is not a sprint, it’s a marathon”. Since it seems to be the done thing to compare trading to a running race, I’m going to jump on the bandwagon. And mess it up a little.

While trading certainly isn’t a sprint, it’s not really a marathon either. Marathons are long – for most people trading is rather short if the numbers are to be believed.

Trading is really more like stunt car racing if you ask me, but that doesn’t work for the analogy so I’ll have to go with hurdles.

A lot – most – traders start off believing their trading adventure is like a 100m sprint, only to find out 5 metres in that there are massive road-blocks that they had no idea existed.

And just when you think you’ve cleared one major hurdle, another one is right there in front of you.

To be honest, that’s part of what I love about trading. There is always a new challenge, something to over come, and something to grow you in some way.

The thing that most people aren’t ready for is the fact that growing hurts. It hurts your bank balance, it hurts your emotions and it can hurt you mentally, too.

So if you’ve started trading in the hope it’s going to be fast, heart-pumping action with thousands of people cheering for you as you haul in the gold, you might want to hold up a little.

An Index of Trading Hurdles

Hurdle – Your First Big Loss.

The first hurdle is a stealth hurdle. No-one ever sees it coming because the trader thinks he’s running a sprint, and since it’s completely invisible they can’t help but run into it at full tilt. Invariably, the traders are left shocked, gasping for breath and quite often shaking and sobbing on the track. Although it’s possible that was just me.

After this nasty encounter most traders start to realise that they are not running the race they signed up for, and will probably quit.

Hurdle – The Next 10 Losses

The traders who don’t quit here tend to proceed a bit more carefully. They’re aware that the race is booby-trapped and are on the lookout for the unexpected. The problem is, often they don’t realise just how badly hurt they are. Because they smacked right into Hurdle 1, every subsequent step they take puts pressure on the wounds and knocks against the bruises. At times, the old wounds can totally re-open and once again the trader can find themselves in a whole world of hurt. (More sobbing, more shaking, and add some nausea for good luck.)

Hurdle – Learning How To Trade

After the initial hurdles are smashed through (rather than leaped over) the trader starts to realise that they have no idea what they’re doing and need to learn some stuff. For most traders, this is when they sit on the sidelines for a bit. Books get read, blogs get followed and real trading knowledge starts to osmosis its way into the trader. This stretch of the race isn’t particularly taxing but it’s loooong.

Hurdle – Finding Out That Knowing How is Different than Actually Doing.

This is hurdle is a nasty one that tends to catch you right on the shinbone. Now that traders know about risking no more than 2% and all the other trading wisdom you read about everywhere, naturally they expect to win.

But they don’t, and it’s a shock.

What’s happening is that they are losing less quickly but still not really getting anywhere. They understand that they have to jump to clear the hurdles, but lack any kind of technique so mostly are still knocking them down.

Hurdle – Working Out a Method

The thing about refining technique is that there is no real short cut. You can try to trim off some of the time by learning someone elses profitable system, but when push comes to shove most times you need something of your own or you’ll struggle to trade it because of internal conflict.

For example, I learned a brilliant long-term system of trading that made sense and was profitable – except I love short-term trading and it’s all I’ve ever really wanted to do. Longer timeframes drive me nuts with impatience so there is no way in heck I can spend my career looking at my charts once a week. I would bite my fingers off trying not to fiddle with the system.

The problem with designing your own systems is that just when you think you’ve got it – thwack! There’s a hurdle with the drawdown. And another, with the position sizing. And, oh look! Another hurdle, because you’ve become addicted to whisky and Tim Tams.

Hurdle – Trading Your Method

Finally, you have a profitable, tested method or system to guide your trading. You’ve been practicing on the sidelines, paper trading and back-testing, and you’re ready to go live with your precious little money machine.

Right now is when all the hurdles you’ve previously knocked down or just barely passed decide to gang up on you, just so you don’t get complacent. But this time, the hurdles aren’t external anymore, stemming from a lack of knowledge. Now, they’re internal.

They’re YOU. And you have to fix it.

Hurdle – Trusting Your Method

This is where the hurdles are becoming a bit easier to navigate. There are still a lot of them, but when you can see improvement in both your bank balance and your actual trading it’s the first real moment of encouragement you get. Your dedication to training (and trading) is starting to show, and you have the first glimmer of proof that it has all been worthwhile. Phew.

But – this hurdle is a big one. You know you have to trust your system, follow the rules and the profits will come. But how do you do that, when it’s new? When you haven’t got the runs on the board yet?

When you are just starting with a new method, you are constantly doubting yourself. During a run of losses, you wonder if the market has changed and you’re doomed to lose forever. When you’re winning, you wonder – just a little bit – if you’ve actually just been lucky.

This hurdle is the hardest because you just have to do it. You have to bite the bullet, trade your method and just suck it all up so your method has a hope of showing you it can achieve the results you think it can. The key here is just putting one foot ahead of the other, until all of a sudden you’ve been trading your method for a year and can see real, physical results in your bank account. Suddenly, you have no reason to doubt your method anymore.

Hurdle – Dealing With Profits

This is a lovely, gem-encrusted, $GLD plated hurdle. They get prettier as you go along, it seems :)

But dealing with large profits is a real hurdle, despite it’s gleaming good looks. Big wins are known to cause sloppy trading because arrogance and ego tend to take over, and suddenly what was a huge profit has dwindled to a pittance.

Ego is not the only factor here, either – sometimes having a large (or even a not-so-large) amount of wealth rubs the wrong way with our psyche. I have a friend/acquaintance who could never seem to grow his account higher than $20k. As soon as he reached that point, he’s start losing. I know, it’s weird. He ended up taking away half his account to trick himself into believing he only had $10k, and sure enough he had no trouble building his account right back up again.

(He has since gotten over this and is earning well over that amount.)

The point is, that sometimes dealing with profits can be just a troubling as dealing with losses, and keeping our hard-earned wins is just as much a hurdle on the road to success as is our very first face-ripping loss.

The market has new and unusual ways of keeping you on your toes, no matter how successful you are. Don’t get too comfortable because you can be sure the next hurdle is just around the corner.
***

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Jan 24

Coming Soon – To An Exchange Near You!

I’m excited.

Today, I’m spreading my wings, and I’m taking off. I’ve told you before that I want to be American, and after a lot of faffing about and general procrastination the day has finally come. I’m saying goodbye to the stale, stagnant waters of home, packing my charts and leaving. Because really, after 4 years Australia has had its chance and it’s failed.

Bad luck, ASX. Goodbye, has-been resources. Goodbye, strongest banks in the world with 2 years of sidewaysness. Goodbye, limited opportunites….and hello, US markets!

From here on in, my day will start in my favourite $LULU ‘s, followed by an $AAPL and $SBUX for breakfast. My life is looking more appealing already, where before it just felt kind of like…dirt.

So why the big change? Why am I discarding everything I’ve known and loved to abscond to the far reaches of the universe?

Here’s why.

The Aussie 200

The NASDAQ

I’m kind of embarrassed I didn’t make the move ages ago – this is not a new state of affairs. And it could all change tomorrow, who knows?

But what I do know right now, today, is that our market is languishing. It’s tired, lethargic and the opportunities for my style of equity trading are few and far between.

What I also know that the US markets are making new highs, breaking resistance and basically flexing their muscles in a way that makes a trader girl sit up and pay attention.
You Trade Forex! Why Bother With Equities?

Equites are a unique beast. I love them. They complement my Forex strategy beautifully and because I trade them off a daily chart they provide diversification in both instrument and timeframe.

But the thing I like the most is that you just can’t beat them for trend-following. In a raging market they can just go nuts – and not only one or two of them, they all join in the party. Except for the odd party-pooper of course, but we’ll just ignore them as they don’t suit my purposes.

The thing is, if you want to follow trends you need a strong market, because a flat market for the most part equals flat trends and lots of party poopers.

Of course, that’s not to say there are no opportunities in the Aussie market, because there are. It’s just more likely that the few real go-ers will get dragged down by the weight of the overall market. It’s hard to be happy when everyone around you is depressed.

Trading is about probability and likelihood, and the fact is that there are more winners in a strong market – as the old adage goes, a rising tide lifts all boats.

Time for me to get aboard.
***

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Jan 24

How Do I Loathe Thy Career? Let Me Count The Ways…

Some days it feels like you have a sign pinned to your back that says “Kick Me!”

And then under that, another sign that says “I Ran Over Your Puppy (and it was fun!)”

I had that yesterday.

Clean out of nowhere, I was happily chatting to this cunning chap who ended up subjecting me to quite the Number 12 – style ambush.
Get Used to Random Acts Of Kickedness.

If you want to trade, you need to be prepared for people – even people very close to you – to a) not understand what you do or why you do it, b) have zero desire to find out, and c) despise it anyway.

Peoples ideas and feelings about money run deep.

Often, their feelings are the product of not having enough when they were growing up, thinking money is the root of all evil (to be accurate, the love of money is the root of all evil, but somehow that seems to be conveniently left out), having seen money be the cause of family arguments, having been envious of other people’s wealth, and hearing people being referred to as ‘filthy rich’.

There’s also the ethical story. Money evokes greed which in turn gives birth to squirming brokers selling CDO’s.

If you work with your money, other people’s default perception is that you’re greedy. You must be – if you use money to make more money, to make more money until you can bathe in its glorious crispness…well that’s just pure greed. Actually, in reality it’s pure paper-cut. Don’t ask me how I know, I just do.

You can’t really blame people for their misconceptions, because the industry does have a lot to answer for. Greed is prevalent; and let’s be honest – greed is probably what initially got us to the markets in the first place.

But whether greed is still an accurate representation of your motivation for trading is not a given by any means.

In my experience the lure of fast and easy money does not take long to dissipate and for the hard reality of trading the markets to set in. But onlookers rarely see that side of things.

All they see is a shrivelled little person hunched in front of their computer, rubbing their hands together gleefully as they stealthily glean their profits from the pockets of poor, unsuspecting market participants.

Or maybe this is more accurate.
Common Perceptions of The Pre-Kick Variety

If you are a trader, you are undoubtably –

Unethical
Morally bankrupt
Exploitative
Materialistic
A gambler
Irresponsible
Lazy
Not ‘earning’ your money through real work
And not adding value to society

Unfortunately, that’s just the way it is for us and possibly with good reason. There are people who trade or are involved in the markets that do embody those traits.

If being called any of those things is offensive to you – and they should be, it’s a bit of a worry if they aren’t – you need to make sure that you’re confident you don’t have those attributes, and more than that, that your trading and life practices don’t reflect those things either.

Sometimes those things can sneak into our trading very quietly, and before we know it, we’ve stopped volunteering for things and we’ve stopped giving to charity like we used to.

Sometimes an ambush can be a timely reminder to actually re-assess and find out if you are, in fact showing the signs of everything that’s grimy about our industry.
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Jan 24

My Number #1 Tip To Instant Wealth – Guaranteed.

I was in the library this morning when a book caught my eye – “Cakes to Die For!”

My first thought was how ridiculous, there isn’t a cake in this world that I would die for. World peace, perhaps; or my kids on a good day, but cakes?

Then I realised you probably will die for those cakes if you eat them, so the title did in fact make quite good sense – credit to the author for sneakily titling their book with their disclaimer.

It’s actually very clever thinking in our litigious society, where a cake-related death would not be unheard of, or even surprising – and sadly nor would a recipe author getting sued for providing the said fat person with heart-attack inducing recipe-ammo. Nothing is anyone’s own fault anymore.

The thing is, we deserve to eat cake. Marie Antoinette said so.

We also deserve to walk down the footpath without kicking our toe on any kind of not-perfectly-smooth obstruction. So when we do walk straight into a lamp-post, it makes perfect sense to sue the local council who put it there, right?

Naturally.

We deserve. We exist, so we deserve.

I deserve food. I deserve free medicine, and a roof over my head, and an iPhone, and someone – not me, someone else – to care for me and make sure everything is alright. And to clean up my crap when I screw up.

Whether you love him or hate him, Mitt Romney has a point. People have a misguided sense of entitlement. In fact there is very little we deserve purely through the happy fact of our existence. General respect and kindness, perhaps. And that’s about it.

Everything else is a blessing. Not an entitlement. People need to start looking at what they have with a sense of gratefulness, instead of focussing on what they don’t have with a sense of injustice.

If you feel like having a whinge about your two bedroom shack, spare a thought for the kids living on rubbish dumps – try that for a couple of nights and see how luxurious your run-down hovel suddenly becomes.

Be grateful for the light post that cut your face up because you were too busy admiring a $200 top in a shop window to pay attention to the path. If the light wasn’t there, you’d have been murdered instead.

Nothing is amazing for us anymore, because we’re so used to having so much. We get so absorbed in the inadequacies of life that we forget to enjoy the abundance that we do have – if only we look for it.

Check out this video – it’s relevant, and very funny

Jan 24

What I’m Looking at This Week

As you know if you’ve read my blog recently, I’m not a big idea-sharer when it comes to FX for a variety of reasons that you can read here if you’re interested.

Equites are different.  I trade them much more discretionary-ily (!) and am quite happy to share the charts that I believe have money in them.

Before I start there are a couple of things you should know before you take my pretties as the answer to all your trading prayers.

My Trading Style, and Other Stuff You Need To Know

  • I trade these charts while I’m asleep, so needless to say these ideas are not day-trading ideas.  They are longer term, with a view from a day if it goes instantly pear-shaped, to infinity and beyond!  These trades are not food-on-the-table trades, but have the objective of becoming more like medium term investments.
  • I’m looking to ride trends.  Most often I won’t set a profit target, but use a trailing stop instead.
  • I’m purely technical – and even that is debatable since I don’t use indicators – and most often I won’t know or care what the company in question does.
  • I’m happy to use both daily and weekly charts to trade off, depending on the personality of the stock.  Charts will mostly be weekly.
  • I usually start with quite a small position, then pyramid in quite aggressively once the price moves in my favour.
  • Any stops ideas mentioned are for my own benefit, as I would feel negligent if I didn’t mention some kind of risk management.  They may or may not suit your style of trading.

Alright!  My favourites for this week…Drum roll, please!

$BECN

 

What I Love About It – BECN had its previous high way back in 2006 and has been choppily trending up since 2008.  It has just smashed through its previous high, has tested below and been bought up above that 28 level again.  Depending on your outlook, you could put your stop below that spike, or around the $22 mark if you were looking for a longer hold.  This stock seems to swing around a bit, so the wider stop could prevent you getting shaken out by normal price movement in the short-term.

$DRI

 

 What I love – DRI has been having this weird upwards consolidation period and has now broken out to an all time high.  The “slow-burn” quality of the consolidation leads me to think there is some energy in this and could see some good movement to the upside now that the congestion is broken.

On the daily chart you can see the last daily candle is a gap-up shooting star-slash-inverse hammer, which could be hinting at a short-term reversal so you could either wait for a retest of 55 before buying and risk missing out, or you could place an order above the current price to ensure you only enter in the event the strength continues.  Stops at 51 for the aggressive, or 48 for those who prefer a bit of wiggle room.

$ISBC

 

What I love – Another all time high. This stock previously had a strong resistance level around $16, but has rocketed through with a gap and no looking back.  The daily shows a gap-up doji at the previous high which may signify a reversal, once again I’d put in an order a little higher than the previous high to ensure you’re buying into ongoing strength.  Stops around $15.50.

$NSR

 

What I love – It’s just a really gorgeous chart!  Lots of respected levels make for easy trading and stop placement.  But the thing I really like is that it’s showing some out of character strength.  There was no mucking around in the middle range, and its last test didn’t make the lower boundary at 27. There is some nice higher-low action and the combo of that with the all time high makes it a very interesting chart.

The obvious stop placement is around 30, but that’s quite wide and won’t allow for a big position.  There is also a minor level around 34, which would allow a more meaningful position.

$SPF

 

What I Love – This is one of my favourite equity patterns to trade.  You can see this stock has had 5 years of Stage One (ala Stan Weinstein) basing pattern and has just broken out of it to reach a new high and start a new journey into Stage 2, which is the growth stage.  Once again, the closing candle on the daily chart is bearish, so you could either trade a break through the current high, or wait for a potential re-test of about $6.90 – which may or may not happen.  Stops around $5.50.

One last thought, before you go….

Please, please don’t be like this guy.

[email protected] Thanks. Bought $SPF with my entire life savings around a year ago because of your advice. Today it DOUBLED! Thx!”

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Jan 24

A Quick Trip To Sooksville.

I think I’m burnt out.

I’m not quite sure though, I’ve never really ever felt like kicking trading to the wall and walking away before – not even that first time when I lost a heap of money. But I do today.

I’m frustrated. Things are taking forever to fall into place, and I’m sick of it. I’m tired of thinking I’ve got it, only to find that I don’t.

I’m tired of congratulating myself on a new achievement, a new level of accomplishment only to find a whole new area that I’m just so sadly lacking in that I’m almost back to square one. If it’s not square one, it looks suspiciously like square two.

I’m tired of snails pace.

I couldn’t sleep last night. I lay awake wondering if I’m delusional – that I think far too highly of myself and that perhaps I don’t actually have what it takes to grasp real success at trading. Perhaps it’s just a massively inflated ego that lets me believe I can do anything, when in reality I’m just average, and no-one special at all.

Maybe.

But I can’t quit.

I can’t quit because if I do, I’m normal. I’m like every other mum in the world who sits around at home and watches Ellen on TV while eating 3 packets of Tim Tams. And that, to me is intolerable. I’ll never be that person. I know with my whole soul that I’m not destined for that kind of average.

So I have to trade. Right or wrong, trading defines me, and makes me who I am. 99 days out of 100, trading makes me a better person – a more thoughtful, creative, passionate, fulfilled, loving and purposeful person. It inspires me to become better in all areas of my life, not just a better trader.

And that’s why after a short break I’ll be back – reworking my method, filling the holes and growing. Because there is no other option for me.

I am a Trader.

Jan 24

Why Trading is Like The World of Warcraft.

In which Rogue Traderette lines up to see Santa.

When people first sign up for the whole trading gig, they usually front up with a wish list.   Like a kid coming to Santa, it is dotted with our most far-fetched, wildest dreams,  then padded out with a few smaller (but still important) stocking fillers.

Things on the list tend to be”goal items”, like a new Ferrari and a yacht moored in Mauritius.  And alongside those things you’ll find things like working boss-less, more free time, flexibility, luxurious holidays – and although we won’t say it out loud, there’s always the hope for a bit of  the “I’m so cool ‘cos I’m a trader” factor.  We want freedom, with attitude.

So we present our list, (after checking it twice) and get down to business.  We do our home work.  We socialise with other traders via various forums, read trading books, plough through 500 charts every night, watch 17 different business channels, and subscribe to 137 trading blogs that are religiously read before breakfast.

We work hard to make our list become a reality.

The funny thing is, we work so hard that we actually end up destroying many of the valuable things on our list.  We work so hard, and commit so much time that the very thing we want most disappears.  Freedom, and its mate flexibility.

I’ve spoken about my biggest wish list item previously – it’s holidays.  I want lots and lots and lots of them.  But I work so hard that I don’t take them.  I go away and take my laptop with me.  I travel to see friends and find myself squeezing in some charts before breakfast.

I’ve designed my trading life to be flexible, and it is.  But trading in a different location is not a holiday.  Trading, sitting under a palm tree with a cocktail next to you is not a holiday.  Yes, it’s nice – but it’s not a holiday.

This year, I’m taking a holiday.

Well, I Think I Am.

I’m actually finding it incredibly difficult to commit to No Trading over the Christmas holiday.  Why is it so damn hard to physically remove ourselves from the market?  Why do we find ourselves so ensconced in our work that the very reasons we chose this career come a poor second to the work itself?

It’s stupid. And when I say “stupid”, I mean it.  Not taking holidays is dumb.

The market isn’t going away.  There will be new opportunities there the minute we turn our attention back to the market.  Don’t we deserve to have a break?

The trouble is, most traders love what they do.  They wouldn’t do it otherwise – it’s a self-selected, self-directed career.  It may be that we don’t feel like we need a break, and we enjoy our work so much that we don’t want to stop.

Seriously, we need to get a life.  Trading is not real.  Yes – it’s challenge.  Yes – it’s fun.  Yes, it’s stimulating.

But so is the World of Warcraft*.  Don’t be fooled – everyone knows that staying home playing computer games all day every day is a sad, sad thing to do, and trading is not that much different.

Real life happens outside, away from our screens.  We need to make the effort to have a life – to have real holidays, having fun with real people.  And who knows?  We might have such a lark that we come back complete with plans for the next one.

*I have never actually played the World of Warcraft.  I googled it – I promise.

Jan 24

It’s Really Not That Hard.

With the $DJIA hitting a brand new high last night, things are looking more bearish than ever out there.

Yes, you heard right – bearish.  Apparently, according to various bloggers everything is over-bought.  Nothing can go up anymore, because there’s no-one left to buy.   Copper isn’t going up.  It’s obvious to everyone, this thing is sunk.

Huh?!  What?

Let’s take a look at the facts, here.  Real quick – it won’t take long, I promise; in fact, the quicker you look the better.   You don’t even need to look at the names on the charts, I’ll tell you later.

Alright? On your marks!  Get set!  GO!!

 222nikkeidaxSP500-dlyASX200-dlyEURUSD-oct

So?  What Do You See?

What do you notice when you flick through those charts?  How many are going down?  Any?  Oh, really – none?

Wow.  So, the $DJIA, the $SPX, the $NKY (Nikkei), the $DAX and the $EWA (Australia) are all going up!

The whole world is going up right now, folks – you might just want to think about buying something.

It’s a bull market, you know.

Mr Partridge, Reminiscences of a Stock Operator.

***

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