TheRiskBlog

Overtrading is one of the most overlooked mistakes you can make while trading. As a trader you want to make money any minute the market is open, this is understandable, but it doesn`t mean that you need to trade every opportunity that comes across your screen. Trade the most profitable ones and forget the rest. Here are 5 tips on how to spot and avoid overtrading.

A While ago Brett Steenbarger posted a quite interesting questionaire at his Blog that helps you to define your curent attitude.

There is always a tendency to make mistakes, especially while trading or investing. They are just not avoidable. We need to learn that we make them and we need to learn how to minimize negative outcome from those mistakes. You can start by

It needs time, till you can make proper market decisions. You need a good portion of experience for this and you have to know what is going on in the markets. But the problem is, that even if you are theoretically right with your interpretation of market events, you still have to remain flexible.

Every trader who wants to be successful needs a set of rules he acts on – a system. Most build their system over years with growing experience, others buy one. To discover what works and what doesn’t most traders test different systems during their trading career, till they find or develop one that fits them and brings the consistent success they searched for. But it is not easy to test a system, because there is one problematic factor involved in it – the trader himself.

There is quite a bit math involved with risk management. To be on the safe side we have to cope with ratios, P&L equations, risk engines, no trade zones, beta, volatility and so on. Most of this stuff is straight forward though and can be done with only a little knowledge of the formulas behind it. But here is an article about something that has not yet found its way into risk management.

Maybe you know those days, when you start with positive expectations and a big portion of optimism into the trading day. The news are good, the futures pre-market are in the green and some of your favourite stocks gained some points overnight. And you can’t wait to hear the opening bell.

Blogger and Author Stanley Bing said in his recent video at Fortune, that a crisis like this teaches us many lesssons, but the problem with it is that “everyone of these lessons will be forgotten the minute this crisis is over”
Is that really so?

Believe it or not: You don’t have to trade!

In the end it is your choice to trade or not to trade. It is not a decision made by the market, it is one that you control. But most traders feel the need to trade every day. And it is not hard to imagine why.

If you tend to react like the trader in this video, you should seriously think about your tradingstyle. Trading shouldn’t be so stressful that you react like this when someone disturbs you.

When It All Goes Horribly Wrong