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It's all about money management Firstly, sorry for my recent inactivity. Have spent some time to work on my web projects, thecheers.org will be getting a total makeover within the next couple of days and I have also been playing poker.And from poker there are also my newly found obvious observations. It's all about money management. During the past month I have probably deposited ca $700 to poker. $50 at a time. At some point I got worried - maybe I have an addiction. But then to think about it - I don't believe in addictions,... Continue reading Comments (1) / Link to this topic - http://www.learning-to-invest.com/ Its-all-about-money-management--76.html Testing time, Day 3
I checked what
had happend during my sleeping time and I noticed the similar chart on both
EUR/USD and GBP/USD. See this –
See the beginning
of the chart, Aroon gives heads up for BUY, %R gives heads up for BUY, RSI
doesn’t show anything. On another chart, chart 3 the EMA’s give heads up for
BUY. This was followed by a sideways movement for 4 hours. Then Aroon was still
in the positive side while RSI and %R would have given a sell signal. However,
when you look at the candlesticks... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Testing-time-Day-3--72.html Testing time, Day 2 Didn’t have time
to update yesterday’s post so I’ll continue with this new one. I haven’t placed
any trades yet but I have worked out 4 different chart templates with
indicators on them to see if any of them work or could work after some changes.
Template 1
This chart
template uses 50-period and 14-period EMA’s for trends. Due to my observations
yesterday I will use Aroon to set my entry points. I am not sure about stop
loss and exit yet, but I hope to get them in place soon as... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Testing-time-Day-2--70.html My own trading plan
In my previous post I talked about the general way the trading plan should be created for yourself. If you have read it, then you have seen that in order to create a good trading plan you do need to be pretty much 100% honest with yourself an usually you wouldn’t really like to share it with anyone else. But in my case I will have to humiliate myself a bit and say it all out loud, right here. Don’t laugh! Or if you do, be sure to post your constructive criticism to the comments section. This t... Continue reading Comments (2) / Link to this topic - http://www.learning-to-invest.com/ My-own-trading-plan--68.html Technical indicators - Aroon, ATR, CMO, ADX
AroonThis is a technical indicator developed 10 years ago and can be used to find out if a stock is trending and how strong the trend is. It has also been designed to show the beginning of a new trend. It consists of two lines, upper aroon and lower aroon. It uses mainly just one parameter – time periods. Upper Aroon line is the amount percentage of time between the start of a time period and the point at which the highest price during that period occured. If a stock make a new low of the give... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Technical-indicators---Aroon-ATR-CMO-ADX--67.html Creating a trading plan
Creating your own trading plan is one of the most important things you will do before starting to trade. The second one would be following your plan at all times. First thing to do is to learn to know yourself, as this makes it easier to create a trading plan that actually would fit YOU. You need to understand your own emotions, why you do things and what affects you. You need to understand your own psyche. You need to know about yourself to keep the emotions (fear & greed) as far from you... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Creating-a-trading-plan--66.html Results of the trading competitions and next week
Simply put, the trading competition went straight to hell. Ok, it wasn't that bad, but during the 4 weeks the competition lasted I only traded on two days, altogether made 12 trades. Out of which 7 were winning trades and 5 were losing trades. Overally I produced no profit, but rather a small minus. Why? Two main reasons. When doing those trades I did them for the simple reason of doing trades not based on some great analysis. I just didn't feel I'm capable of doing the trades just not yet, bu... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Results-of-the-trading-competitions-and-next-week--65.html Trading rules - something new to think about
I have talked about money management and trading rules before. Now, instead of repeating the old things, here are some new things to consider. Making trades vs taking profitWhen making trades don't think about profit. Only think whether the certain trade would be a successful one. If you make the trade because you have a desire to make profit then it tends to become an emotional trade and that's not good. Rather, make the trade because your analysis show it would be a successful one, not becau... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Trading-rules---something-new-to-think-about--64.html What can you learn from poker?
Poker and trading do have certain things in common and thus each of them can be studied or practiced in order to be better in the other one. You might not agree with it yet, but keep reading.DiversifiactionIn poker, your your capital you're using to play is called bankroll. Successful players never bring to the table more than 10th of their bankroll, sometimes even less than 1/100th. During one session, when you can play on more than one table at the time, you should still not risk more than 1... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ What-can-you-learn-from-poker--61.html Elliot wave - guidelines for wave framework
Lets go on with Elliot wave theory and talk about the guidlines of the wave framework. Guidelines for the wave frameworkWhile there’s just 3 rules in the wave theory, there are a number of guidelines than in theory should make our lives a lot more easier, but in practice make it all more confusing. But in order to work with wave theory right, we also need to be aware of those. Relationships between waves that reflect the aspect of Fibonacci ratios are just tendencies, not permanent relationshi... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Elliot-wave---guidelines-for-wave-framework--60.html Introduction Elliot Wave Principle & Fibonacci ratios
Now it’s time to cover Elliot Wave principle basics. Firstly, if you make your trading decisions based on chart patterns then these decisions should be supported by some form of probability analysis – how potential such a move is and when is it likely to happen. Elliot Wave theory all by itself is unable to predict specific price movements but it does help us recognize the state of the market and probable price actions. By using Wave theory, it does help us find the most profitable wave format... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Introduction-Elliot-Wave-Principle-Fibonacci-ratios--59.html What does Straddle mean?
If you’ve been learning about investing/trading but still without enough knowledge about it all, you probably have seen this term (straddle) mentioned in various places without actually knowing what it’s all about. Same here. But I think it’s good time to change that.Straddle is a strategy of options trading. It means that the investor holds a position in both – call and put option with the same strike price and expiration date.This strategy is used when an investor thinks that the price of a ... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ What-does-Straddle-mean--58.html Different look into trading and life in general
I’m a keen supporter of the idea that one should not depend on emotions when making business, poker or investing decisions. I’m also a firm believer that life doesn’t neccessarily need to be difficult nor bad. It’s the way you want it to be. Life’s the way you make it to be. I’m gonna talk about a book I read recently – „The Zurich Axioms” by Max Gunther. Many of the spoken about there might contradict my current thoughts and views on life, trading and everything related, but we need to keep o... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Different-look-into-trading-and-life-in-general--55.html Introduction to Swing Trading
Swing trading is a style of trading that tries to capture gains within 2 day to few weeks. So this is a short-term trading style where traders must act rather quickly in order to find potentialy big moves in stocks. This style is mainly used by individuals as large institutions can often not act that fast. Swing trading is trading in the direction of a trend – before entering a trade you wait for a pullback and you enter the trade only if you see signs that the price will continue in the direc... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Introduction-to-Swing-Trading--54.html More trading rules
Remember that keeping the big picture in mind is important. Big picture shows you that that there are times when you make small profit, times when you take small losses and also times when you take big profits. Keeping the big picture in mind helps you to remember that one losing trade is just one losing trade and with a good system in place you will still be winning on the big picture over time. One trade is one of many trades you make and while you should make every trade like it was your mo... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ More-trading-rules--52.html Candlesticks – the importance of Gaps
Gaps can be very good trading signals OR they can be very powerful in making you lose. When reading this post keep in mind that I still don’t trade for real money myself and all this information is theoretical, but I will at some put all these knowledge’s to test. I do hope however that this post will give you something to think about. If there’s a gap then this means that there’s opening price higher (in a rising market) or lower (in a falling market) than the previous day’s trading range (ca... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Candlesticks-the-importance-of-Gaps--51.html Sakata’s Method / method of Munehisa Honma
One of Sakata’s method baselines is that if you feel you could benefit from a certain formation, wait 3 days and if it still looks promising, enter the trade and you can most likely make profits. This method was developed by Munehisa Honma back in 1755 and has formed the bases of Japanese market philosophy.Sakata’s method has its own set of candlestick patterns and they have been developed based on Honma’s 160 rules. The number 3 is important in case of his patterns – eg. Three rivers, three m... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Sakatas-Method--method-of-Munehisa-Honma--50.html Money Management
I’m very aware I have talked about this topic before as well. But I feel this is something that really needs to be talked about more than once, from different angles and then peferrably repeated every once in a while. I believe this is both neccessary to you as it is to me in order to become a successful trader. There are certain points which you and me both should follow at all times.Limit your losses!!! This is possibly the most important thing to remember EVER. Before entering the trade, ma... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Money-Management--49.html Candlestick Continuation Patterns
To continue the candlesticks topic, lets now talk about candlestick continuation patterns. Upide & Downside Tasuki GapThere’s a gap between two candlestick with the same color (in the direction of the trend). The third candlestick opens within the second body and closes WITHIN the gap.Side by side white linesBullish Side by Side white lines continuation pattern consists of 3 white candlesticks and doesn’t require any confirmation. The second and third candlestick should have about equal op... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Candlestick-Continuation-Patterns--48.html Candlestick Reversal Patterns III
Lets go on with candlestick reversal patterns. Three inside up pattern (and three inside down pattern)This pattern is the confirmation for the Harami pattern. Here the first two candlesticks form the Harami and the third candlestick confirms Harami. The third candlestick should be closing higher than the first body. Three inside down pattern is exactly the opposite.Three outside up pattern (and three outside down pattern)This is the confirmation for the Engulfing pattern. Three outside down pa... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Candlestick-Reversal-Patterns-III--46.html Candlestick Reversal Patterns II
Lets go on with candlestick reversal patterns. To see the previously discussed patterns, check this. Abandoned babyGosh, people have really put great names to the patterns, haven’t they? Okay, going on now. This pattern looks pretty much the same as Morning and Evening Doji Stars, but the Doji here must also have a gap from the shadows of the first and third body. So that the Doji sort of looks like .... an abandoned baby, what else can I say :DUpside Gap Two CrowsThis is only a bearish patter... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Candlestick-Reversal-Patterns-II--42.html Candlestick Reversal Patterns I
Candlestick patterns can consist of just one candlestick or couple of them, usually not more than six. Hammer and Hanging Man patternsThis is a one candlestick pattern with small body and long lower shadow (and no upper shadow). The hammer occurs in a downtrend and hanging man in the uptrend. The smaller the body is and the longer the long lower shadow is, the better is the actual signal. Also, hanging man with a black body is more bearish and hammer with white body more bullish.Engulfing patt... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Candlestick-Reversal-Patterns-I--41.html Introduction to Japanese Candlestick Charting
Japanese Candlestick charting has really been with us for a while and that’s part of the technical analysis that, even if it’s some professional don’t use it, so far I have only heard and read good things about it. And I suppose this is due to the fact that it really is a really useful tool in technical analysis. In order to give you a more detailed analysis of Japanese Candlestick charting, how to use it and how to identify patterns on the charts, etc, I will be making my next few posts... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Introduction-to-Japanese-Candlestick-Charting--40.html MACD histogram
Previously I have mentioned MACD indicator, now lets familiarize ourselves with MACD histogram. But before going there, remind yourself what MACD indicator was - „MACD is a variation of the price oscillator, it is calculated by taking the difference between two exponentially smoothed moving averages of 12 and 26 days. The MACD line is the differences between the two averages – longer one is subtracted from the shorter one. Then a moving average of 9 periods is calculated of this different... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ MACD-histogram--38.html The Three Moving Average system
This system is mainly used to find markets which should be avoided when trading with technical indicators because they are often unprofitable. Three oving average system helps to find entry and exit points which could be profitable.This system consists of 3 moving averages with different time periods. The averages could be called as fast, middle and low. The length of the averages could be 5, 21 and 63 for example. Entry is signaled when he middle moving average crosses the long moving average... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ The-Three-Moving-Average-system--37.html Common sense trading rules (Michael Jenkins)
In my previous post about Michael Jenkins and his theories I talked about his general theories (as much as I understood them). Here I would like to bring in some of his thoughts on common sense trading. While I do not neccessarily agree with all his weird theories, he does tell about different nuances of trading that actually are rather useful. Two of his main trading rulesDivision of capital. This is is one of the most crucial ones. Like couple of days ago I was touring around investing forum... Continue reading Comments (3) / Link to this topic - http://www.learning-to-invest.com/ Common-sense-trading-rules-Michael-Jenkins--34.html Competition: First Day’s thoughts
Even though the competition started yesterday, I didn’t do any trades. Today I thought I’d try it out a bit. Firstly, I have another site where I have generated some industry stock lists and such...and while, let me be honest, the lists don’t really give too accurate information (in addition to the 15 minute delay there are often also update problems) I found the sector/industry Metal Fabrication/Industrial Goods was up 4.2% today and from there I found the stock MINI. Now I checked the stock ... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Competition-First-Days-thoughts--31.html Trading competition, 4 weeks
Even though I'm not really trading yet, there's a local trading competition I have registered to take part from. It lasts 4 weeks, the start-up capital is EUR 10 000 and every trading day (20 days) EUR 1000 is added. The entrance to the competition costs around EUR 6 and there are prizes for the best ones. It's not available in English, thus there's no point in giving you the url. However, in this channel of the site I will be talking about my trades that I do there, why I do them and when I d... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Trading-competition-4-weeks--30.html Introduction to Intermaket analysis III - global markets
US stocks market vs international marketsWhen looking at trends in stock markets we need to realize that the stock market consists of thousands and thousands of different stocks and this means that even though the stock index is going in one direction, there’s always a great number of stocks that don’t move at the same time or at the same speed as the average trend. However, all stocks are somewhat influenced by the main trend. And this goes also not only when talking about the stocks in US or... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Introduction-to-Intermaket-analysis-III---global-markets--27.html Learn to do your maths
Before you get into actual investing, be sure to put down your expectations about possible ROI ( return of investment ). And most importantly, learn to do it right. I was just asking about the possibility of making 3% of your capital per day in one forum. The answer was that it’s not really possible with stocks. I claimed that 2%...how is it not possible – lets say you have $100k to play with, you make 10 trades per day, you manage to make 7 trades out of 10 winning ones. Each trade ... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Learn-to-do-your-maths--25.html Recognizing chart patterns II
In my previous post I started talking about chart patterns , so...lets continue a bit. Head & Shoulders PatternNot to confuse with the shampoo – we are still talking about investing, trading, technical analysis which exists a lot due to human nature and psychology. So the next pattern we are looking at is Head & Shoulders pattern.H & S pattern is similar to the tripple top pattern as it also contains 3 tops followed by a downside trend reversal. Only with the difference that the mi... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Recognizing-chart-patterns-II--21.html Recognizing chart patterns I
Chart patterns can help you predict price movements because there are different cycles of buying and selling action in the market. In this post I will try to explane how to notice different patterns, how they look, what they are and how to recognize the main patterns on charts. Note that nothing in technical analysis nor in recognizing patterns is 100% objective as there is always a number of different interpretations possible. However, some patterns still have proven themselves rather valuabl... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Recognizing-chart-patterns-I--20.html Introduction to charts
Charts are a very important part of technical analysis as a whole. There are different kinds of charts available – bar charts, line charts, candlestick charts, point and figure charts.Bar Chart is a vertical line on a graph where the bottom end of the line is the low price and top part is the high price for the period (independent of the length of the period). This kind of chart usually shows time in the bottom horizontal line and price in right vertical line. If you can see hyphens (-) on the... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Introduction-to-charts--18.html Learning from winnings AND losses
Before going back to technical analysis I think we need to talk about dealing with losses (and winnings). I believe I will come back to this topis over and over again. Investing, trading and even gambling is in big part a psychological game. Can you stay focused if you are losing money? Can you learn from losing money? Can you take it as a positive thing? Many expert advise you to take your winnings and losses not as % or dollar amounts, but rather as points. You are collecting points in order... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Learning-from-winnings-AND-losses--17.html Stock background search
Over the next couple of posts I will be writing introductions about different technical analysis methods and charts, but for now some general information about stock background research.Start up by creating a list of potential stocks you’d like to trade ( whether buy or sell short ). Check if they are not on their way to going bankrupt, check their annual reports, etc. Make sure that when you’re finished you won’t have too many stocks to go deeper with. Now Check the general economi... Continue reading Comments (0) / Link to this topic - http://www.learning-to-invest.com/ Stock-background-search--11.html Which online trading platform to choose?
I apologise to those are now more interested in long-term investements and starting with sums $10k+ as when writing this I mainly consider my own possible portfolio size which will be anywhere between $1000 - $5000. But many things I mentioned here can be applied to bigger accounts as well. There are couple of things you need to consider when choosing your trading platform, whether we’re talking about forex or stocks:- How reliable a company is. The easiest way to go here would just... Continue reading Comments (2) / Link to this topic - http://www.learning-to-invest.com/ Which-online-trading-platform-to-choose--4.html |
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latest submissions » 5 Traits of Highly Effective Financiers » Great forex product reviews » It's all about money management » What is going to happen next? » Brutally honest analysis of yesterday » USD at its lowest levels of 2 years » Testing time, Day 3 » Testing time, Day 2 UPDATE » Testing time, Day 2 » Testing time, Day 1 » My own trading plan » Technical indicators - Aroon, ATR, CMO, ADX » Creating a trading plan » Results of the trading competitions and next week » Trading rules - something new to think about » Forex strategies: Short term strategy » The game of probabilities » What can you learn from poker? » Elliot wave - guidelines for wave framework » Introduction Elliot Wave Principle & Fibonacci ratios » What does Straddle mean? » Forex platform review: Easy Forex » How to find and confirm a trend? » Different look into trading and life in general » Introduction to Swing Trading » Introduction to 1-2-3 Trading Method » More trading rules » Candlesticks – the importance of Gaps » Sakata’s Method / method of Munehisa Honma » Money Management » Candlestick Continuation Patterns » Forex and intermarket analysis » Candlestick Reversal Patterns III » Forex strategies: The Sidus Method (EUR/GBP and EUR/USD) » Forex strategies: Big Ben Strategy (GBP/USD) » Foreign Exchange: Carry Trades » Candlestick Reversal Patterns II » Candlestick Reversal Patterns I » Introduction to Japanese Candlestick Charting » MACD histogram » The Three Moving Average system » Technical indicators: Williams %R indicator » Technical indicators: Parabolic SAR (Stop & Reverse) » Common sense trading rules (Michael Jenkins) » Geometry for predicting market behaviour (Michael Jenkins) » Emotional vs rational trading » Competition: First Day’s thoughts » Trading competition, 4 weeks » Bollinger bands » Relative strengh indicator - RSI » Introduction to Intermaket analysis III - global markets » Introduction to Intermaket analysis II – related markets » Learn to do your maths » Introduction to intermarket analysis » Introduction to technical indicators II » Introduction to Technical indicators I » Recognizing chart patterns II » Recognizing chart patterns I » More on volume & OBV » Introduction to charts » Learning from winnings AND losses » What are sideways movements? » Importance of volume » Introduction to Dow’s Market trends » Bull Market and bear market » Who is Charles Dow and why should you know him? » Stock background search » Introduction to stock options » Forex - pips, spread, margin, leverage » Basic introduction to Forex trading » What is Pattern Day Trading » Signs a company is going bankrupt » How to analyse stocks and forex? » Which online trading platform to choose? » How do I set my financial goals » Investing basics - think before you act » Learning to invest |
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