Trading

The Perils of Curve Fitting in Trading

Trading is a high-stakes game where discipline and objectivity are non-negotiable. Yet, one of the most insidious threats to a trader’s success is curve fitting - the...

Why Rolling Trading Profits into Investments is Key

It's easy to get caught up in the thrill of making profits and growing your account balance. However, there comes a point where trading a larger and larger account...

Reducing the Temptation to Overtrade

As traders, we've all been there - staring at our charts, watching as prices fluctuate, and feeling an overwhelming urge to jump into a trade. The temptation to...

How Iceberg Orders Work

We hear traders talking about icebergs a lot, but what do these orders do and how do they work? What are Iceberg Orders? An iceberg order is a type of trading strategy...

Dealing with Wash Sale Tax Restrictions

As traders, we're always on the lookout for ways to optimize our trading strategies and minimize taxes. One often-overlooked aspect of tax planning is avoiding wash...

The Power of Backtesting Your Trading Strategy

Most traders can appreciate that trading strategies are constantly evolving to keep pace with shifting market conditions. One crucial step in developing a robust and...

Trading Against Your Benchmark: Measuring Performance

It's important to track our performance, particularly against the benchmark for what we're trading. Doing so is an important exercise in assessing how well we're doing...

Realistic Expectations and Goals are Key to Trading Successfully

As a trader, it's essential to set realistic expectations and goals from the onset of your trading journey. Unfortunately, many traders enter the market with unrealistic...

Exploring the relationship between liquidity and volatility

It's important to appreciate that liquidity and volatility are two interconnected concepts that have a significant impact on market behavior as traders. While many focus...

Mind Your Expectations

When you glance around social media, almost everyone seems to be chasing after quick riches or instant gratification. It is no surprise that many traders fall into a...

The Importance of Journaling Your Trades

Trading in financial markets can be a challenging endeavor that requires discipline, focus, and a continuous pursuit of knowledge. One tool that many traders have found...

Liquidity and Volatility: A Trader's Guide

Liquidity and volatility are two critical factors that traders must understand to navigate financial markets successfully. While liquidity refers to the ease with which...

Bubbles Can Last Longer Than Anyone Expects

Stock market bubbles have puzzled economists, investors, and regulators alike. These events are characterized by a significant increase in asset prices that is...

The 1% Rule: How to Manage Risk in Swing Trades

The 1% rule is a key risk management strategy for swing traders, where a trader aims to limit each loss to 1% of their portfolio's value. This simple, but nevertheless...

How Market Makers Hedge SPX Options Exposure in Futures

SPX options trade about $1.2 trillion in notional daily, with about 75% of that expiring in a week or less. In comparison, US equity futures trade about $400 billion per...

Risk Management is the Key to Survival as a Trader

Traders live and die by their risk management strategy. Those who do not manage their risk, do not last very long in markets. Worse yet, those who get lucky may find...

Measuring Volatility in Trading: Why & How

One of the most important lessons I've learned as a trader is that understanding and measuring volatility is crucial to success. My own goal as a trader is to try to...

Trading Bollinger Band Squeeze and Breakout Setups

The Bollinger Band Squeeze and Breakout is a momentum-driven strategy that's worth studying, particularly for its ability to identify potential shifts in market...

The Psychology of Trading

Understanding Auction Market Theory in Trading

Auction Market Theory (AMT) is a vital concept that provides a comprehensive framework for understanding how financial markets function as continuous two-way auctions...

Trading the Options Wheel Strategy

The Options Wheel strategy, also known as the Triple Income Strategy or the Sell-Put-Sell-Call strategy, is an approach in options trading that aims to generate...

Trading Options Spreads: How and Why

One of the biggest mistakes I see newer options traders make is to run strategies that are long-only. A long call or a long put, rather than a spread. That's not to say...

The Basics of Backtesting

Backtesting is a critical process in the development and evaluation of trading strategies. It involves simulating a trading strategy using historical market data to...

Managing Risk through Intense Emotions

We've all been there before. A trade gets the best of our emotions. We make an impulsive decision, and then we come to almost instantly regret it. It's a lesson the...

How Trading Actually Works: Starting the Right Way

Trading is often romanticized as a quick pathway to financial freedom, yet the reality is far more sobering. Everyone ends up paying a tuition to the market, but not...

Trading with Bookmap: Coalescence as a Compass

I joined Bruce from Bookmap earlier today to discuss trading psychology, the importance of a systematic approach for consistency, and how I trade using the software and...

Blow Up Your Trading Account? Read This.

Step 1: Feel it AllThere’s a ton of emotions that result from a blown account or significant financial loss. Allow yourself to feel them…all of them. This step is more...

Mean Reversion Trading Strategies

Mean reversion is a trading strategy based on the assumption that asset prices tend to revert to their mean or average over time. It is used by traders and investors...

"Knife Catching" vs Buying a Dip: What's the Difference?

Ever heard the phrase "Don't try to catch a falling knife"? Catching a falling knife is a metaphor used in the stock market to describe the act of buying a stock that is...

How I trade using Bookmap and other market data

Hey friends, I thought that you might be interested in this presentation I give on how I trade using Bookmap, and what other data I use to shape my views intraday. If...

Position sizing based on volatility

Position sizing is an essential aspect of portfolio management that aims to optimize the allocation of capital among various investments while simultaneously minimizing...

Rolling your futures contracts

As we approach the next triple witching date, March 17th, not only is it an important options expiration. It's also when many futures contracts expire. Thus it is...

Bollinger Band Squeeze Breakouts

Bollinger Bands are a widely used technical analysis tool that was developed by John Bollinger in the 1980s. They are plotted two standard deviations away from a moving...

The benefits of long short portfolio strategies

A long short delta neutral portfolio strategy is a risk management technique used by traders and portfolio managers to reduce the overall risk of a portfolio during...

Managing risk with trailing stops

Trailing stops are a popular risk management tool used by traders to limit their potential loss. A trailing stop is a type of stop-loss order that is set at a certain...

Momentum trading with relative strength as a guide

Momentum trading strategies favor using the trajectory of prior price action to determine where prices may be heading next. Those same strategies can be potentially...

Don't take that trade!

All too often I see people taking trades they shouldn't. There's sometimes an impulsive desire to "be in the market" even if there is no reason to be. The adrenaline...

Why Eating Well Matters for Trading Success

Let's talk about something completely different. It may even sound a bit strange. But there's actually truth to it: eating a relatively balanced and healthy diet may...

Where's the liquidity?

Happy Friday, friends! Another wild week in the markets is coming to a close, but monthly options expiration is just starting. With that said, I think it's a great time...

Short squeezes and why they matter for the market

We've seen a lot of intense short squeezes over the last week, many of which seem to be coming to a rather unceremonious end. What is a short squeeze? When there's a...

Educational Video: TPO Chart Basics

In this video, I cover the basics of reading a TPO (Time Price Opportunity) Profile Chart, as well as how I use them in my trading. If you're a Sierra Chart user, I also...

"Where's the Bottom?" - My Favorite Day Trading Clue

I want to spend a few moments discussing an important topic for day traders: Identifying bottoms and/or points of relief during a selloff. This topic is especially...

How To Dupe Yourself Into Creating Better Trading Habits

by Aaron Rentfrew“Why the f*ck do I keep ______ when I know it’s a terrible trading habit?”I get this a lot. There’s nothing more frustrating than knowing your decision...