Category: risk
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It’s the small wins that hurt
This is what holds many traders back. The small wins. Yet we love to take those small wins, and avoid small meaningless losses like the plague. We are afraid of losses. It doesn’t matter it it is big or small, that L is scary. It’s all about the fear of…
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Prepare for the worst and the worst Martin Shkeli joke you ever heard
Martin: I have a horrible migraine. Prison guard: A bottle of Advil is $750,000 It’s easy to lose sight of the dangers of trading when things are going well. A few good trades and you are invincible. But it only takes one bad trade to wipe all the profit away.…
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Trading secret for those unwilling to understand that they can not predict the future
Traders know less about the future than they think they do. And if the trader knows she does not know, she thinks someone else does. It’s why you hang onto every word of woefully inaccurate CNBC pundits. It’s why you love and hate Cramer. It’s why you follow 3654 members…
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Chart of the Day: How to Trade VIX
At the first sign of a market sell off or correction, my eyes leave my well developed focus list and turn to the CBOE Volatility Index, otherwise known as VIX. During market selloffs, it is crucial that you learn how to trade VIX. Why do I love trading the VIX…
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Example of a Winning Trade and Smart Risk Management: SHAK
We have been talking a lot about risk management and how it relates to being a successful trader. In fact, three of the first five trading quotes in the 100 trading quotes series related to risk management. This should clue you in on how important I believe risk management is…
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100 Trading Quotes To Put Into Action And Change Your Life: Caution Is A Risk
The first quote in the “100 trading quotes to put into action and change your life series” speaks to a specific trader type. When thinking about risk, we often think of the trader who is impulsive, trigger happy and position sizes much too aggressively. However, there is another type of…
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APOL Offers a Low Risk Setup
APOL has a weird, volatile pattern, but still offers a low risk setup off a breakout-pullback. An entry here at $71, with a stop under the moving average at $69.60 and a target at $74, offers a 2:1 reward to risk ratio. CPLA, another education stock, has a similar setup.
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Is DE (John Deere) a Short Setup?
A Trade Report member sent me an email about DE. Here is the e-mail and my response I think it is great time to short “DE”? RSI, OBV and MACD are all bearish…plus, the Durable good is bad.. While the price pattern is not bearish, I agree in that RSI…
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Is This Breakout Sustainable?
The market and leading stocks are breaking out after a short consolidation period and overbought readings that are still extreme. Due to the extreme overbought readings, I’m taking a few “speculative” shorts. However, they are done with caution and small positions size. The idea behind these trades is to expect…
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Too Extended to Enter Longs
While them market is too extended for my to add to my long positions (report members know that I was long before the move using the oversold bounce strategy), there are some low risk short setups among inverse ETFs.
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Today’s Trades: FCX and MON
I made two speculative trades today, short FCX and long MON. MON is oversold, but still a few points from support. The higher probability setup is to enter long at $70, which I will do if I get stopped out of this trade. FCX shows a bearish pattern, but has…
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The "Experts" Get it Wrong – Example 1
Complex systems are rarely predictable. For this reason, I focus as much on risk in my trading systems as I do stock picking and setups. In most disciplines that try to predict the future, the so-called experts aren’t much better than a novice. This series highlights this point. Example 1:…
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Short Setup: AMZN
AMZN has broke down below the 50 day moving average and shows a negative volume pattern. RSI has also broke down. Looking for entry on bounce, which would provide a low risk setup.
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Against the Apple Trend
AAPL is on my bullish watchlish. Why wouldn’t it be? It has a great price and volume pattern, and has shows relative strength versus the S&P 500. However, the stock is very overbought. Every one of the measures I use to find “rubber band” setups is off the charts. I…
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One That Got Away: IBN
A useful tool for improving trading is to analyze trades that you did not take. IBN has been on my radar for since the April breakout. I did not trade it because the volume pattern was not to my liking. However, the risk ratios have been good through out that…
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Today’s Trades: CBI and PNRA
CBI: 200 shares at $11.00 This stock, as with most of my trades, was mentioned in the Trade Report last night. It’s holding above both the well formed trading range and the 50 day moving average, providing a low risk, easily managed traded. Stochastics are oversold and turning up. Risk:…
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Friday Game Plan
I’d like to pick up a few long positions in anticipation of an inauguration rally. The fact that we are very oversold increases the chances of a rally. I will still use tight stops with the strategy of taking a small loss with the possibility of a big gain.
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Trade: FAS
I went long 200 shares of FAS at $17.63. This is an “oversold bounce setup. This is a low risk trade with a stop just under the support line on the chart. My target is in the $23-25 range. This provides a 3:1 reward to risk ratio.
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Breakout-Pullback Setup: HPQ
The market is still overbought, so I am not looking to enter any long positions just yet. However, HPQ has formed a nice pattern and is nearing an ideal entry. Setup: Breakout pullback. Yesterday the stock broke out over price resistance on strong volume. Today’s pullback was on lower volume…
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Trade: DXO (Leveraged Oil ETF)
I entered 600 shares of DXO at $2.65. This is a new, leveraged oil ETF. Price is near lows (support), stochastic is oversold and RSI shows a positive divergence. I consider this somewhat of a speculative trade with limited risk.
Paul J Singh 