TheRiskBlog

The SEC said last Friday that it wants to charge Goldman with fraud. This has caused quite some turbulence in the markets. But what is the SEC’s charge against Goldman Sachs actually telling us?

For most investors and traders risk is something they need to accept in order to come up with decent returns. Most of the times risk is measured in your account by how much you are losing when trading different positions. But sometimes risk shifts and it is not measured in the account any longer. When this occurs some positions can be made bigger without risking more but you need to know how to find out when this happens.

Very often a customer wants to learn all there is about the futures markets. He is not interested in the opportunity to make money in equities, all he wants is to trade futures. Now, there are a few things to know about these markets and how to deal with risk when trading futures. Here are things you really need to know…

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.

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.

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.

Today I want to show you how I create overnight positions in trending stocks. Like in every investment you first have to choose an initial risk stop that doesn’t threaten your account, but unlike intraday trades it is important for overnight positions to stretch the trading range.

Phil Town reminded us in his last post about an important market fact:

“The price of a business is all about the buyer and seller’s joint agreement on the near term future. If it looks rosy to both, the price will be high. If not, not so much.”