Saturday, January 07, 2017

Focus on what you can control

One thing that has always confused me is where people say you can always learn something from a losing trade.

The fact is that, once you are in a position, it is the buying and selling decisions of other market participants which will determine how price moves, and whether you make a profit or a loss. Nothing else. And how many of those other traders can you control or influence???

I talked about this in more detail referring to trading's equivalent of the 'butterfly effect'.

Sometimes you can do everything right in a trade, and lose. That's because no-one has the ability to predict what will happen in the future.

Monday, January 02, 2017

Some thoughts on differing trend following performance

Even if you adopt a trend following method, the nature of the price action in the markets traded will affect the performance that different trend following methods can achieve.

Thanks to Michael Covel's excellent book on the Turtles, we can review the performance achieved by those traders*. And we can see that, even though they were all looking at the same basket of instruments, the traders achieved wildly differing results.

Saturday, December 31, 2016

2016 - a losing year

So that's 2016 in the book, and a losing year at that. This is my first losing year since 2011. The fact that I have lost less than five years ago shows to me that the changes I put in place in the early part of 2012 helped to limit those losses - together with the additional experience and education dished out by the market!

As I talked about here, even the most successful trend followers suffer the occasional losing year, so I am totally relaxed about it. It is what it is. I can't change what has happened, or the decisions I made - I can only go forward.

Sunday, December 04, 2016

Jack Nicklaus and trading - part 2

One of the most popular posts on this blog is 'Jack Nicklaus and trading', where I listed a number of quotes the Golden Bear made over the years. These should have a particular resonance when placed in a trading context, be it your own approach to the market, or the psychology involved.
Below I've pulled out a few more of Jack's quotes, which again may require some thought on your part, but the underlying message can easily be applied to trading.