The Fallacy of Backtesting and Adapting to Current Market Conditions

I recently engaged in an interesting chat with a novice trader this weekend. It got me thinking about the fallacy of backtesting and why I don't rely on past statistics.¬†You heard me correctly. My take on backtesting is controversial and puts me in the minority. Some have called me an idiot for this view and... Continue Reading →

21 profitable stock trading setups and the optimal conditions to trade them

Most full-time traders have a basket of "goto" setups that they trade repeatedly. Some do so mindlessly, irrespective of market conditions. You can make money this way, but you will not become wealthy. The best traders optimize their trading by deploying the right setup for the right market. For instance, a "trading range" setup is... Continue Reading →

Apple is a Tough Read

If it were any other stock, I'd take a stab at shorting AAPL right here, right now. Technically, it shows signs of losing steam and is a good "pioneer short trade."We see negative divergences in both RSI and Stochastics. Price is making new highs while the two indicators are not. On top of that, volume... Continue Reading →

Pair Trade: RIMM and AMZN

On Friday I went short AMZN and long RIMM. This is a "pair trade" trade using the folling strategy:1- enter one stock long and one stock short from similar fields.2- the short stock should exhibit a very bearish pattern, while the long stock a very bullish pattern.The idea behind this trade is that if the... Continue Reading →

On Time Frames and Over-Trading

Since joining Twitter, I've had a number of conversations with Trade Report members who also use twitter. I've found a common mistake between twitter users, and that is over-trading and not understanding time frames.Yesterday, a member told me he had entered one of my focus list stocks. I asked him why, since it was not... Continue Reading →

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