TheRiskBlog

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.
One system may be technical, using a market scanner, the next might trade off the news

“The relation between the stock exchange and the economy is like a man walking his dog. The man walks slowly, the dog runs back and forth.”(Andre Kostolany)

This quotation from Andre Kostolany shows how markets work most of the time. For example, sometimes markets react to economic news in a way nobody would have thought off and sometimes it just seems to ignore the economic “reality” outside the market.

You can see this best by watching the movement of single stocks…

At the moment it is very difficult to stay with the markets at all times. We are seeing high volatility throughout the markets. This is very helpful if you can deal with it correctly, but it doesn´t help when you are beginning and don´t quite know how to cope with risk.

On the other hand there is always opportunity out there. We as traders need to be able to find it and we can, it is not all that difficult. To be able to spot a good trade we first need to make sure that we understand what´s going on in the markets. Are the market participients scared or are they euphoric? Is there optimism in the market or does everybody think the world will stop turning tomorrow?…