There are millions of News sites on the web but a lot of them just repeat content from other sites, so which one is original and comes up with ideas that can really be traded? Here are a few we like a lot since these websites all have something we need for our trading style.
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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. When people start out as traders they always have one goal. And that is to make money - preferably lots of it. People have different ideas but most often we hear something along the line: “..i want to be able to make a living trading…”, and “…i have this amount x right now but at the end of the year i would like to have doubled it…”. Now this is all fine but how do you reach such a lofty goal? Let´s have a look at a few ways: 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” 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. Equity markets have come a long way in 2009. And now everybody wants in on the move and everybody wants to own stocks since they are moving up. That describes the same situation we faced at the start of the century after Dotcom stocks moved over the edge. Sure this time the situation is different, we are in the middle of one of the worst crisis we have seen so far and it is an event felt worldwide. But that doesn´t mean stocks can go up forever. The economy is not following nearly as quickly as markets suggest. The stock market has outperformed the real economy by far. So what do we need to do In books about trading, at seminars, at lectures or in magazines – everywhere you look, you get introduced to trading systems and strategies. It seems like everybody has his own idea of how to make money in the markets. And you will discover that most contents are quite different. I read an interesting post by David Merkel this morning over at TheAlephBlog I have been to the USA recently on a business trip, i visited New York and then the Tampa Bay Area in Florida. By not living in the USA permanantly i got the same view David describes in his article. The last time i visited the USA was in 2006 and compared to back then shops these days are empty, car seller lots are crowded (with cars that is, not with people) and Home Depot seems to sell nothing at all if you look at the numbers of customers shopping there at any given time in moment. But on another note, returning to germany i do not get the same picture. Yes we are waiting on the situation developing at GM, so that we get a decision on what happens to one ouf our own bigger carmakers - the GM daughter Opel - but other than that our shopping malls are still crowded, people are still buying at the local homeowners shop and we still buy ipods and iphones (well, i guess looking at AAPL´s numbers everybody does it around the world, no matter how hard hit by the crisis). So i think, for germany the crisis has not fully developed, which is a bad thing because as long as people still think, everything is fine, it only gets worse. We will probably see more stock prices going down in germany and we still have to wait until we finally hit the bottom. As far as trading and investing in this environment is concerned, stops need to stay tight and we can expect more volatility in the markets. So i still have open positions but instead of having 12 open positions in an account i might have 6-8 open right now, and i do tend to get stopped out more often these days. |
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