(Some personal and random thoughts on day trading (from 2013) – by Oddmund Groette) I love day trading! I have day traded for over twelve years and I still like what I do. Actually, I love it! Day trading is some kind of addictive. I need my daily shot with research and trading. My day…
Trading bias, you better have an understanding of the most common ones. When your money is at risk, you easily get fooled by your behavioral biases. Trading is about decision-making, and you better understand your strengths, weaknesses, and what puts your emotions on fire. This article explains the most common trading biases, why it’s essential…
Because of drawdowns and trading biases you might not succeed even with the best trading strategies on the planet. Empirical evidence suggests that the main obstacle for most traders and investors is our in-grained biases (cognitive errors). If you want to read more about this subject, we recommend Rolf Dobelli’s The Art Of Thinking Clearly….
FOMO is the acronym for the “fear of missing out”, which refers to the feeling of anxiety or uneasiness you get when other people are sharing a positive or unique experience while you are missing out. The phenomenon has been magnified with the advent of social media which makes it easy for us to know…
Is focusing on psychology overrated in trading? The biggest obstacle for many struggling traders is the ability to pull the trigger, but more important is having a statistical trading edge and the correct position sizing. A mental trading edge can never replace a statistical trading edge. The most important thing in trading is to have…
This article presents a personality test for traders. Brett Steenbarger is a famous trading psychologist who has written the bestseller The Psychology Of Trading. In the book, Steenbarger referred to personality traits that tend to distinguish good from bad traders. Can you become a quant or trader? Below is a personality test for traders to…
How to overcome trading biases is one of the most important things in trading. Mankind has come a long way in problem solving and technical advancements, but most of us still suck when it comes to financial planning and managing our investments. We have created artificial intelligence and we send people to outer space, yet…
Traders might have different personality traits. What is the best personality type for trading? Most traders focus on finding a trading edge in the market by developing good and robust trading strategies. But many neglect one very important factor for good returns: understanding your personality type. We believe introverts are more likely to succeed as…
Fear In Trading. How to overcome trading fear? The markets are a battle and you need to have detachment to money to succeed. The balance between fear and greed is a thin one. We believe fear in trading in moderate doses is very healthy. How do you overcome excessive fear in trading? Trade smaller than…
No matter how good strategies you have, they are most likely worthless if you can’t execute them properly due to behavioral mistakes in trading. What looks like a piece of cake in a backtest, is completely different in the real world when you are risking your own hard-earned money. To avoid behavioral mistakes in trading…
The correct mindset in trading is often “the missing link” in order to perform well. To get steady returns you have to focus on the trading mindset just as much as the analysis and strategies. What is the correct mindset in trading? The correct mindset in trading is one that is dedicated, focused, disciplined, confident,…
The above title is a quote from George Soros. I got this quote in an e-mail from a reader of my blog, and it fits quite well for my swing trading performance in August. Trading is a lot about suffering. Those who tell you otherwise, I suspect have never really traded or only traded for…
Overconfidence in trading is the downfall of many successful traders. Too much confidence makes you do irrational decisions and take too much risk. Not only are you more likely to overtrade, but you are more likely to unconsciously increase your risk-taking. Risk-taking involves the thin line between success, fiasco, and luck/unluck. Is there a correlation…
I have day traded for about 12 years, doing swing trading some 5 years prior to that. And as the headline suggests my fear of losing increases as I get older. Why is that? I think it’s just natural. I know a lot more now than 12 years ago as my knowledge of the financial…
The risk is real, and trading is not easy. The above quote is from page 110 in Curtis Faith’s The Way of The Turtle. A great book! This sentence captures the essence of trading: a very difficult endeavor that ultimately leaves your inner strength exposed. It all looks so easy when looking at fictive equity…
One of your most precious assets is your time. You only live once. Make sure you make it worthwhile! Before Christmas, I received an e-mail from someone who has been trading for several years, but with little financial results to speak of. I could feel his frustration as he was writing this mail. Probably his…
What can we learn from the habits of rich and wealthy traders (rich people trading strategies)? In the March 2012 issue of Trader’s Magazine, there is an article on page 6 by Tim Bourquin. He has interviewed many profitable traders. He compiled a list of 20 “habits” that he thinks those traders have in common….
Once in a while, I grab one of my about 100 trading/investing books. This is mainly to get inspiration and perhaps one or two ideas to test. The best books for inspiration are the Market Wizards by Jack Schwager. Over the weekend I read the chapter about Ahmet Okumus from The Stock Market Wizards. He…
How to gain a trading edge by knowing yourself is crucial for success in trading. In previous articles, I have written about how to find trading edges in the markets, but in this article, I look at how you can gain a trading edge by knowing yourself. As a trader, you can gain a trading…
