If you’re reading this blog post because you actually think there is some one thing that successful traders know that unsuccessful ones don’t, then let me first say: There is no single secret to successful trading! And by that I mean there is no secret wisdom passed down from master to pupil, or sacred texts sharing with readers the knowledge of the ancient masters. The idea that some traders are using secret techniques which ensure their trading success and that without those secrets one cannot possibly trade well...

My Trader’s Wish List of good books, audio and video content, and other resources comprises a dozen posts. Here’s how they break down: Entry #1: Books by Brett Steenbarger Entry #2: The Market Wizards Collection of Books, Audio, and Video Entry #3: Liar’s Poker – a view from the inside Entry #4: Paul Erdman Books – great financial fiction Entry #5: The Darker Side of the Markets – stories of the bad boys Entry #6: Trading and Markets Movies – drama to comedy Entry #7: Market Profile Entry...

This morning I came across a blog post talking about the bid/ask spread in the stock market. It talks about how the spread is a hidden cost in trading, which it is to be sure. A lot of folks don’t realize that to be the case in stocks since they primarily see just closing value. As with every market, though, there is a bid/ask spread. The post’s author made some good points in general, but had a few things incorrect. I figure that if he is off in his thinking on the subject, then it’s likely other stock...

A question recently came up in regards to the impact of news on trading performance. The questioner was feeling a bit overwhelmed with the idea of trying to deal with all of the different sources of potentially impactful news and information that hits the markets. Let me share some thoughts on the subject. Firstly, I can completely understand how mind-boggling it can be. There is seemingly a constant stream of data coming out. Forex traders in particular see loads of it each day as the various major industrialized countries...

Something recently came up on one of the discussion boards I visit. It’s hardly a new topic, but even still, I think it’s worth a few inches of screen space to discuss. It’s the difference between what it means to “trade for a living” as opposed to trading to grow your portfolio or account value, and by extension your general wealth. My definition of trading for a living is pretty simple. I think of it as using trading to generate the earnings you need to pay for daily life – housing, utilities,...

I’ve been involved in a discussion recently on the topic of leverage. The question that started it all basically was “What leverage ratio should I use?” This came from a forex trader, but could certainly just as easily have come from a futures trader as well (or even a stock trader in some cases). If you’ve ever wondered that same thing, you are asking the wrong question. Any position you take in the markets should start first with the question of how much risk you are going to take on that trade. There...

This article is a basic introduction to the fixed income market.  It covers the primary facets and features of fixed income as they relate to trading from the individual, as opposed to institutional, perspective. The term “fixed income” is used to describe a collection of securities which have predefined pay-out terms.  An example would be a certificate of deposit (CD) in which one deposits a set amount of money and in return receives a given amount of money, which includes both the original deposit plus interest...