Recently, I had a discussion with a trader who expressed a belief that it was not possible to test for an edge when using asymmetrical risk to reward. The idea he expressed was that the skew would make it impossible to know whether or not one had an edge. And, it is more generally the … Continue reading Is there an edge? Skewed risk to reward
John writes, I saw the emphasis on this site and was a bit intrigued. As of late, I have been thinking of writing off back testing as something that is not required for my method of trading as I am about as a discretionary trader as one can get - I use support and … Continue reading A Reader’s Question on Backtesting and Discretionary Trading
I think there is value in seeing each trading endeavor as a project. In this way, we can get rid of baggage that might be hamstringing our progress. The "baggage" can be both negative or positive. But, if it is not helping our trading today then we need to focus elsewhere. Stock taking. Take stock … Continue reading Focus and Execute
Early in my trading career, I had I think above average success developing profitable systems. But, I didn't have enough capital to deploy them all. As such, my interest in developing new systems waned and growth stalled. This was combined, also, with a strong discretionary capability to call markets and a strong desire to use … Continue reading Too many systems, too little capital?
A question I have wondered about, and I'm sure others have too, is if we have some bigger edge such as say a system that has multi-point profit target, could we simply capture that edge using a 1 tick profit? In other words, the question we want to think about is whether or not the … Continue reading First tick profit?
Some traders question whether one can predict direction. I think this is the wrong question. The right question to ask is can one ever know with precision their edge? The answer to that question often determines the actual results that traders experience because most traders end up over leveraging and having poor results. The chart … Continue reading Can one predict direction?
I have started to think the market is a competition among not just traders but different leverage capacities. A group of traders attempt to detect a signal or edge in the market. The most professional, fastest, and largest among them rapidly arbitrage that edge away. Slower less nimble traders attempt to take advantage of the … Continue reading A Competition Of Leverage
Novice traders often confuse the differentiating factors that can make the difference in success or failure. These traders often spend too much time focusing on skills, finding the perfect system or edge, and psychology. Yes, skill is important but it is only part of what I call the triangle of trading success. The triangle consist … Continue reading The Triangle of Trading Success
My vision for my trading is to become more like a cyborg trader otherwise known as the quantamental approach. I am very good at predicting the market and reading the tape. But, I am not as good at trading when I am down and self doubt causes me to make certain types of mistakes. While … Continue reading Becoming A Cyborg Trader
I use a visioning exercise where I imagine how my trading at my best might be different then it is today. I find this technique to be an extremely powerful technique. The fact is that most traders who pursue their craft with dedication and seriousness know the steps they need to take to become more … Continue reading You Already Know What To Do