Tuesday, November 18
More gems from Linda Bradford Raschke. She's honest, down-to-earth, and knows what she's talking about... read closely.
"I [let] the market tip its hand first, and then [try] to follow in its footsteps, instead of trying to anticipate what it is
going to do next."
"The most important thing in my trading style is to find trades where there is a well-defined risk point.
A trader can find these spots when working on a smaller time frame, as long as they do not get caught up in the noise.
A trader can get the initial direction right on a trade, but ultimately, it will be far more important as to how he manages
that trade ... Trade management issues ultimately will determine a trader's profitability to a much greater degree than his
ability to forecast the price direction."
"When a market makes new highs, I look to buy the first pullback. When a market makes new lows, I look to sell the first reaction."
"If you are trading with the trend, the market is more forgiving if your trade location is not so great on your initial entry."
"... all my trades are triggered off price. I would rather look at plain bar charts on multiple times frames than look at canned
"If the trade does not do what you think it should do within a certain amount of time, then close the trade out and cancel the stop.
In other words, time can function as a stop parameter as well as price levels."
"Trading is about managing risk. If you do not see a spot where you can define your risk before you go in, then you can't make a trade."
LBR also shares seven ShowMe and PaintBar study formulas for TradeStation.
Posted at 6:30 PM, GMT
There's a wrongheaded article in Fast Company called The Wal-Mart You Don't Know. After reading it I thought
that the author described the Wal-Mart I not only Know, but Love.
Posted at 4:33 PM, GMT
The Chairman is training himself to trade with the broad market wind at his back as you can see in today's Trading
for Dummies Lesson.
Posted at 12:17 PM, GMT
Silver reversed rather wickedly yesterday. Just when the breakout players were thinking the $5.35 level had been decisively vanquished,
they got jammed out to the tune of as much as 30 cents. Naively "buying the breakout" will get you killed when you play with the big boys.
Silver futures (SI), Daily Chart
Posted at 12:02 PM, GMT
"Jesus Saves Souls" is scribbled on the wall of the men's toilet in Foyles bookstore. Some wag later added: "and cashes
them in for valuable cash prizes."
Posted at 10:45 AM, GMT
John Dorfman shares his notes from the Seventh Congress on Psychology and Investing that was held last week in Boston.
"... the way an individual reacts to investment losses is tied to the way he or she has reacted to other losses in life --
the death of a loved one, a divorce, and so on ... the existence of bubbles is proof that investors have irrational
expectations, not rational ones ... an investor who likes a certain type of stock may be 'insensitive to probabilities' of
gain or loss ... Money managers and other investors often worry about buying [out of favor stocks], fearing ridicule by peers,
criticism by the press, or firing by clients."
Posted at 10:15 AM, GMT
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