Posts Tagged ‘Sports’

Crafting Your Very Own High Probability Trading Strategy

November 23rd, 2022

The following is a book review of Robert Miner’s High Probability Trading Strategies: Entry to Exit Tactics for the Forex, Futures, and Stock Markets (Wiley Trading). The market is a dynamic place where emotions change in an instant and to have one trading strategy isn’t enough anymore given how quickly information reaches investors via streaming news, real-time reporting, and social media. You must constantly be learning new skills and honing your craft, and I’m always looking to add another strategy to my trading arsenal.

All too often I speak with traders who want me to analyze a stock chart for them to see if I can tell them what went wrong with their trade and one of my first questions is, “Why exactly did you buy this stock”. Many times the reply is that they felt it was going to go up, but they didn’t really have an exit plan if the trade went against them, or taking should it move in their direction. They’re sort of along for the ride to see what happens. If you want to learn how to recognize optimal trade conditions, identify crystal clear entry and exit strategies, all while learning the skills of trade management, then this is the book you’ve been looking for.

Miner’s book is essentially broken up into 4 different sections and it even comes with a CD that you are to use only after reading the entire book. The examples used throughout the CD will not make any sense to you unless you understand his system from A to Z. Given that a chart reader needs to look at a lot of charts to begin to trust a system, the CD is a complimentary tool in the book.

How to Design a Share Trading Strategy

April 13th, 2022

Before we start:

All Traders should have a mantra, as follows:

I will educate myself on how the market works.

I will learn how to find and place a trade.

I will create a trading plan and trade my plan.

I will not chase the market with emotions.

I will decide to be a day trader or an overnight trader (or longer) before I enter the market to help to control my emotions.

I will be patient and wait for a market set up.

I will never trade without a protective stop loss order.

The market will meet my criteria or I will not trade.

have refined a standard procedure that I use for the process of creating a trading strategy. I always start with the big picture and make increasingly more detailed decisions about the strategy.

I begin with the assessment of what type market action I want to trade and what kind of trader I am. Then I end up with making decisions on exits, and how far away to put my money management stops.

How can you adapt my strategy making to your personal psychology?

You Must Pick the Market

The first decision you must make is what type of market you want to trade. Although this may look like an easy decision, in fact, it is a difficult judgment, because most new traders only consider the profit aspect. They simply try to pick the strategy that they think will make the most money. Focusing on money will probably lead you to make the wrong decision. It is the psychological aspect of trading each of the markets that is the most important consideration. It does not make sense to create a very profitable strategy if you are unable to trade psychologically.

What is Your Trading Time Frame?

You need to decide whether you will day trade or trade on daily or weekly charts. It is very difficult to have a job and trade intra-day. It is not totally impossible, just very difficult.

Most people want to trade part time and still hold down a day job. If you want to do this, it is better to trade daily or weekly charts. You will only be able to look at the market outside of your working hours and your strategy design will have to take this into account.

The strategy should not require you to check the market during the day. I think that there is only a certain amount of money that you can get from the markets and that depends on the time frame you choose to trade.

Time frame choice is a personal decision, and of course there are no right or wrong answers. The ultimate decision is personal preference influenced by financial your considerations. But you have to make this decision before you start looking for indicators, as the choice of indicators is influenced by the time frame selection.

However remember the old saying: “if you ‘buy and hold’ then eventually everything will be fine. Remember the expression touted – “It’s time in the market, not timing the market.”

My guess is that more active investment management will be the key for anyone wanting to make a better-than-inflation return from shares over the next five years.