Good Investing Lessons

Here are some trading systems that can be used for trend following trading: ATR Channel Breakout : A volatility channel system that uses ATR as the volatility measure. Bollinger Breakout : A volatility channel system that uses the standard deviation as the volatility measure. Donchian Trend : A breakout system with a trend filter. Donchian Trend with Time Exit : A breakout system with a trend filter and a time-based exit. Dual Moving Average : A system that buys and sells when a faster moving average crosses over a slower moving average. Unlike the other systems, this system is always in the market, either long or short. Triple Moving Average : A system that buys and sells when a faster moving average crosses over a slower moving average but only in the direction of the major trend defined by a very slow-moving average.

One of the key factor in successful trade is the set the stop loss at the right place. Selling off too early is often the cause of my losing trade and at the end I sit and wait to see the stock move up much higher that it was and could has resulted in reasonable profit. I sold off Ascendas India Trust at 0.68. I was getting impatient over this counter. Within the next 3 trading sessions, it went up to 0.71. Healthway was sold at 0.10 and it closed at 0.105 on 17th July. Parkway was sold off at 1.69 on 17th July during intra-day and it turn out that it was closed at 1.71. Now the counter looks a little bullish. Again, the same mistake as the above 2 counters. Looking back at my records, I could have made a lot more money if not for selling off too early. I was able to pick the right stock but often too early in the stage. But if I has set my stop loss a little lower, those trades would not have been prematurely sold off. Another issue is the trading horizon. I seems to be very impatient...

Dos and Don’ts for Thinking Like a Turtle 1. Trade in the present : Do not dwell on the past or try to predict the future.The former is counterproductive, and the latter is impossible. 2. Think in terms of probabilities, not prediction : Instead of trying to be right by predicting the market, focus on methods in which the probabilities are in your favor for a successful outcome over the long run. 3. Take responsibility for your own trades : Don’t blame your mistakes and failures on others, the markets, your broker, and so forth.Take responsibility for your mistakes and learn from them.

JACK SCHWAGER TRADING GUIDE The following notes have been taken when I read Jack D Schwager’s book: Getting started in Technical Analysis. Apart from the technical knowledge of identifying opportunities, Jack emphasized much on trading discipline so that even when your ability to spot a good trade is only 50% accurate, you can still turn up a winning position overall by using proper risk control. The idea is to be able to cut losses short and let the winner run. To start trading full-time, you must treat is like normal working so that you will cover all the activities need to ensure sustainable earning. PREPARATION TO TRADE FULL-TIME Step One: Define Trading Philosophy / Strategy How do you plan to make trading decisions? (a) TA (b) FA (c) Both Step Two: Choose Market / Product You can trade in multiple markets. For a start, focus on one. Note the diversification and volatility. Step Three: Establish Risk Control Plan 1. Maximum risk per trade (example $200 or $500) 2. Stop Lost ...

Day Traders typically uses technical analysis to identify their entry and exit points. This is applicable for trading of stocks, commodities, indices and other financial instruments. Below is a great video about a simple 2-bar setup for day trading to identify entry point. Enjoy.

Here is the truth about stock price trends: it tends to follow something called continuation pattern. Price trends once established, will tend to continue in it direction. This is similar to the law of physics. Taking at look at the current market, you will notice that indexes like the S&P 500, Dow Jone or Nasdaq Composite are in down trends. Depending on the type of investor or trader you are, you many want to remember this law by heart and constantly reminding yourself about this law. Some people don't like to use the terms bull market or bear market because they think that they are versatile traders and they can make money in either up trend or down trend. For, me, there is no harm in using any terms you want to describe the market as long as you have great discipline in your investing or trading strategies. I tend to use the words investing and trading interchangeably because in both cases, they are all about speculation. The difference is probably in the time horizon that ...