Archive for the ‘Inbox Education’ Category

Triangles

Wednesday, November 10th, 2010
 
 
One of the most common patterns in technical analysis is the triangle. The triangle is classed as a continuation pattern as it is a pattern which generally signals a continuation of the preceding trend. All triangle patterns begin formation at their widest point and continually decrease in size. As the collective participants narrow their expectation of future market direction, the triangle forms a point before usually continuing in its original direction. There are three triangle patterns commonly seen in the market; all three of which are of significance to traders and should be studied individually: (more...)

Active Recovery

Friday, October 29th, 2010
   
 
  In trading, as in sport, injuries unfortunately occur! These injuries can be one-off severe blows or general wear and tear from multiple hours of intensive performance at an elite level. Either way, injuries are an inherent part of both pursuits. Performance management is an integral part of every elite sportspersons career and trading should be no different. The ability to perform at an optimum level is conditional upon your readiness to assess with objectivity how you are currently performing against your benchmark levels. This means analysing your trading performance regularly both in P&L terms and, more importantly, in terms of the effectiveness of your daily trading processes. Only by analysing performance in this manner will any trader be able to identify when performance is less than optimal and thus introduce performance management protocols to address it and turn it round. It is unfortunately an all too common occurrence for traders to push-on regardless of a lingering injury only to pay the price by way of an enforced absence when the injury becomes prohibitive to trading.

So, what can you do to manage your performance better and to recover from injury? (more...)

Trader Efficiency

Monday, October 25th, 2010
 
 
Dr K. Van Tharp, the world’s most famous trading psychologist, believes that one of the elephants in the room for traders is trading accuracy. Or, in other words, trading self-sabotage and mistakes. An issue many young traders fail to understand is that a trading mistake is not a losing trade and the right trades are not always winners.

So what does Van Tharp mean when he talks about trading mistakes? (more...)

Wait for your cue…!

Monday, October 18th, 2010
   
 
  In trading, as in many facets of life, timing can be everything. A common complaint from traders is that they were right, but got stopped-out before the market acted as they had anticipated! This is especially common when a trader establishes a view on a purely fundamental basis. While markets are very fast to adapt to breaking news, the large number of participants in a market at any one time, together with the large amount of information available to them, means that it can take a while for the collective view to manifest. Add to the mix the human emotions of fear and greed and it is also common to see markets over or undershoot. (more...)

From Inconsistent to Consistent – what does it take to be a successful trader?

Monday, October 18th, 2010
   
 
  Our current Trading Floor Training clients have this week enjoyed an audience with three of our seasoned professional traders and Futex Chairman Paolo Rossi. A series of questions were put to the pros in an effort to uncover what exactly they did to make it as a professional trader. (more...)

Volume – the quiet member of the family…

Monday, October 4th, 2010

Many technical indicators have been developed to clarify the relationship between supply and demand. Unfortunately for the new trader, there is an abundance of overcomplicated trading literature which covers the more “exciting” trend or momentum indicators as both traders and academics alike attempt to discover the holy grail of market mastery. However, in our experience, when asked what specific indicators they use, elite traders answer “the simplest ones”. One such group of simple yet highly effective indicators, the least talked about member of the indicator family, is volume. (more...)

The Psychology Behind Gut Feel

Friday, September 24th, 2010
 
 
Following our recent trading-tip entitled ‘Practice Makes Profitable’ we thought we would elaborate further on the psychology behind trading instincts and the concept of gut feel.

Paolo Rossi, the Futex Chairman and one of LIFFE’s leading participants in the bond futures market by the end of the 90s, is a firm believer that successful traders have highly tuned trading instincts. A frequent message he delivers to clients at the beginning of their Trading Floor Training is that instinct is not something you are born with, but the culmination of many hours of trading experience. (more...)

Practice Makes Profitable

Friday, September 17th, 2010
   
 
  In any performance discipline, especially something as complex as trading, a significant amount of time, effort and heartache is requried before being able to compete successfully. While the length of time it takes any trader to progress from beginner to consistently profitable can vary greatly, the truth is that many never actually achieve it. (more...)

Trading in the Zone

Friday, September 17th, 2010
 
 
That having the right psychology is vital to be successful and to achieve a high level of trading performance consistency. Trading in the Zone aims to take an in-depth look at the natural flaws in human behavior which prevent traders from reaching their full potential; a consistently profitable trading career. (more...)

Relative Strength Index (RSI)

Friday, September 3rd, 2010

While bonds have been trending aggressively over the last few months in a Bear Market (yield), equities seem to be very directionless or sitting in a deer market. A deer market is a term used to illustrate a market condition when investors are unable or unwilling to move due to uncertainty - like a deer who freezes when "caught in the headlights" of a vehicle. (more...)