Sunday, April 27, 2014

Richard D. Wyckoff Stock Market Techniques

This weekend I completed my first reading of 4 books Richard Wyckoff.
Richard seems to be the original trader behind the CANSLIM method described by William O'Neil and used as the basis for the investors business daily news paper.

2 of these books were put together from a weekly publication that he started in the early 1900. It is amazing how every word in these books continue to be the basis for taming the Wall street beast.

In summary, these books teach you how to combine technical and fundamental analysis to achieve success in trading.

This set of books in now on top of my must read list before you start your trading adventure.

Click on the icon for a direct link to Amazon

Tuesday, October 18, 2011

Radar Must Be Always On

Another key ingredient of successful trading is to keep a close tab on some key industries for trading ideas. Focus  on 2-3 industries where you have a good understanding of the key players. A lot of information is available on the web that allow you to do this efficiently.

As an example, this Internet Trends presentation was released today by Mary Meeker from Kleiner Perkins. If you are an Internet technology follower, this presentation is for you.

Sunday, October 16, 2011

Fundamental or Technical ?

Most investors think  that Technical Analysis is some form of voodoo. Others believe it is a self fulfilling prophecy.  For traders, it is an indispensable tool  in the search for an edge in the market. Technical Analysis combined with a basket of fundamentatlly strong stocks give you a clear edge.

In general, people want to have it black or white. In trading, it is mostly gray. Technical analysis is one of the available tools to allow you to determine the shade of gray you are dealing with.

If you are an investor, add this tool to your fundamental stocks selection criteria.
If you are a trader, quickly get your hands on the John Murphy's book to get a better understanding of the tug of war going on out there.

Emotions & Trading

This is a good illustration of the emotional roller coaster that you will be experiencing when you trade. To be successful, it is of the most importance to know where you are in these phases and act accordingly.

The trading rules / system that you use must be tailored to identify where you are and adjust accordingly.

For me, I track these phases for the $SPX and I try to use the result to adjust calibrate the control knobs of my system. More in future posts.

      From a presentation by Jeffery Gundlach. CEO of Double Line. 10/11/2011

Another view

Thursday, October 13, 2011

Jesse Livermore Was a Bad Trader

Many traders refer to Jesse Livermore as the best trader in history. The book "Reminiscences of a stock operator" is a mandatory reading for beginner and seasoned traders. Although Jesse made a lot of money, I believe he was a poor trader. He was a poor trader as he lacked money management skills. The lack of money management allowed him to make huge bets that paid off some of the time and caused him to go bankrupt more than once. At the end he checked out of this world as a poor & broke trader.

The best trader in the world is the one than can have a consistency in returns and very well managed draw downs. Like whom do you ask ?. Well that will be the subject of future posts.