It’s commonly assumed that prices have a Gaussian, or normal, Probability Density Function (PDF). A Gaussian PDF is the familiar bell-shaped curve where 68% of all samples fall within one standard deviation about the mean. This is a really bad…
The put-call ratio is simply an indication of the number of puts being traded versus the number of calls being traded. There are several put-call ratios that may be watched or used by investors including the total number of puts…
Trading is more art than exact science. If a trading technique could beat the market consistently, the value would be immeasurable. Honestly, there is no one right way to trade…successful tactics may only work under certain market conditions. Discipline is…
In my almost 60 years of trading, I’ve learned a few things that most every short-term trader needs to know. The biggest error short-term traders make is thinking they can trade every day the same way; essentially, that all trading…
The predictive power of technical indicators is sometimes questioned, especially considering the potential for fakeouts in leading indicators and the delayed power of lagging indicators. Whether technicals work for forecasting can be debated, but the market reaction to widely held…
Trading should be boring… patiently waiting for only the best opportunities to profit using a disciplined methodology. A simple process to limit emotion can be applied to all transactions, long or short, holding for minutes or even for months. Employ…
Emotionally driven decisions almost always result in the wrong action at the wrong time. However, traders who understand the underlying “why” causing the crowd to become emotional (and are on alert for the regular movements that “herding” causes) can optimize their…
Initiating a position and then watching the market immediately move in your favor can be very exhilarating. Just because the market is going your way, however, doesn’t mean there isn’t work to be done. Quite the contrary. Once you are…
