Slump Busting There are two kinds of traders…those who have had a slump and those who will! Think about this…the most successful traders are the ones who have lost the most money. The majority of great traders have gone through long, flat periods at some point in their career. Winning and losing periods can seem […]

Trading Psychology The Composite Operator Over sixty years ago, Richard Wyckoff gave us this insight: “The market is made by the mind of man, and all the fluctuations of the market and all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite […]

Selling Short 2 In the following examples, identify each of the four key features of good short candidates. Distribution over an extended time period. A pattern of lower tops and lower bottoms. A clear sign of weakness. A weak rally to overhead resistance. Below: Is the clearest opportunity to short at the high in this […]

Selling Short 1 For traders who exercise good risk management, selling short is no more risky than taking a long position. On the other hand, since stocks and commodities tend to fall faster during bear markets than they rise during more bullish market phases, properly executed shorts can be very profitable. During bull markets, there […]

How to Trade Contrarian Markets This lesson focuses on trading techniques during periods when 1) the Spread is falling, and 2) both relative strength leaders and relative strength laggards are rising. Rising contrarian markets are nearly as prevalent as rising strength–following markets, but not, on average, as profitable. These markets are, in the main, more […]

How to Trade Strength-Following Markets This lesson focuses on trading techniques during periods when 1) the Spread is rising, and 2) both Relative Strength leaders and Relative Strength laggards are rising. These strength-following markets have not only been the most profitable, but have also been the most prevalent over the last fourteen years. During that […]

Playing the Odds: Follow the Trend The trend is your friend. Market Saying The trend is an expression of probabilities. The most closely followed trend is the trend of prices. But, as we shall see, the trend of the Spread has an important bearing on trading success. Defining the Trend First, a few simple definitions: […]

How to Win Trading the Markets When I first started speculating in organized markets, I quickly ran a $40,000 initial stake into $22 million. My technique was simple: I bought gold at $290. Each time it went up $10, I pyramided and added to my holdings with my profits. Victor NiederhofferThe Education of a Speculator

Learn How to Lose to Win Over Time ‘If you’re in a hole, stop digging.’ Traders do not begin trading because they expect to lose. Nevertheless, losses are the rule rather than the exception for new traders. Every successful spread trader first had to learn how to lose before he learned how to win. Traders […]

Module 7 – Execution Character Herodotus In previous chapters we examined tools and techniques of analysis, the business of selecting good trades. In this chapter we take up execution, the business of trading well. As important as analysis is to profitable trading, many fine analysts are poor traders. The ability to make good decisions under […]