A question came in this morning from a “fan” of The Essentials of Trading Facebook page. It speaks to a combination of topics, some of which I’ve seen a few places recently and all of which come up frequently in new trader circles. Here’s the edited question: My question is simple… if your teaching of trading is successful, why tell other people ? I think a successfull trade will not open his secret… and the rule of forex trading is if someone gains others lose. Sorry I just think that people...

I finally got around to creating a “fan page” on Facebook for The Essentials of Trading. Given how many copies of the book have been sold I figure there must be at least a few fans out there. This is something that’s been on my To-Do list for months, and a number of folks have encouraged me to do it. It was just one of those things I never got around to doing, though, partly because I wasn’t sure how much work was going to be involved in putting up something respectable. Well, yesterday I found out...

A reader of my book sent me a question that combines system design and testing issues with risk management considerations. Hi John, I backtested a strategy on all S&P 500 plus Nasdaq 100 stocks. After checking for outliers, I selected the 10 best symbols in terms of risk adjusted returns and statistical significance. My idea is to trade 10 stocks to increase the number of trading opportunities in a trend following system. Following your book’s approach, I checked fixed vs variable vs stepped sizing methods and determined...

I was asked a question by someone on my mailing list yesterday about the relationship between the forex and stock markets. Normally I include the text of the person’s question, but in this case English is not the person’s first language and the inquiry is fairly lengthy, so I’ll skip that in this particular instance. The bottom line is that like many folks this individual is wondering about why the dollar falls when stocks rally, and vice versa. Following the Patterns and Relationships As a professional forex...

I was asked the question “What criteria is important with position trading?” by a recent site visitor. To my mind most of the same criteria applicable to shorter-term trading applies to the longer-term variety (I generally define position trading as holding positions for weeks to months and longer). One needs to have a well conceived trading plan that includes a trading strategy (system/method/etc.) which has been tested out sufficiently for the trader to be comfortable with its operation and expected performance....

I got a question about my book recently. It speaks to me offering the book for sale at a discounted price myself. John, Tomorrow I plan on reading The Essentials of Trading that you wrote, I am sure it has much that can help me, as I have traded for 3.5 yrs, with only decent results, I look to your information as a godsend that can hopefully turn my trading around, I am self taught because mentors are just to expensive for my pocket these past few years, although I reckon maybe a few bucks spent, I might be making more pips...

There’s a great deal of talk in the markets these days about seasonal patterns, particularly in the stock market. Everywhere you turn the media is talking about how September is the worst month for stock market performance. I don’t have specific figures on that, but I’ll trust that it’s true given the sources who have stated it (like CNBC) are generally reliable. I can confirm that things get much more interesting in the fall once folks get back into full gear after the dog days of summer. And it’s...