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…
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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.”
On Thursday I discovered an interesting Article in the Wall Street Journal: “Transport Stocks Blaze a Path” Suppose you would know a stock price is heading up. In that case it would be easy to allocate the bigger portion of your portfolio to that stock alone and ride the wave. Unfortunately knowing where a stock is heading is everybody´s guess. Nobody really knows but there is This book from Van K. Tharp is another must-read for us. In „Trade your way to financial freedom“ you won’t find a certain trading system you can copy and trade - by the way, something you should never do, because it doesn’t work – but you find something really helpful: He shows how individual trading actually works. Today we start a series about risk management procedures for the active trader. We will work our way through a normal trading day and for the first step in our series we look at position size and how to come up with the correct one. Very often traders look at a chart, find a pattern that they like and put in all they have. This is fine if the stock does what it is supposed to do but |
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