The idea of the seven deadly sins of trading was tossed my way last week. After giving it a bit of thought, I came up with what I think is a pretty good group. The list below is the seven which came to mind as the ones most likely to do real damage to a trader. 1) Thinking that trading is a path to quick, easy money One of the questions that’s part of the list answered in New Trader FAQs is “How much money can I make trading?” because it’s one that comes up frequently and it reflects the mindset of...

A question came up during the recent Swingers, Scalpers, Holders panel discussion I did for Currensee which we didn’t have time to address at that time. It is something a great many traders think about, though, so I decided to put something together here in response. The question was: I’m at the point I’ve exhausted books, etc. and have a good sense of what I need…what sources/people are available to find a 1:1 coach? I have written several previous blog posts on this subject in the past. Here are some of...

I want to share something with you that I recieved today in my email from one of my co-workers. He actually works on the rates side of things, focusing particularly on the US Treasury market. The content of the email, though, has clear forex market implications. I offer it up as an example of the sorts of things that market professionals look at and talk about that the vast majority of retail traders would never even think about. The ECB’s money market operations have effectively delivered a significant tightening of monetary...

My post from yesterday, Some of the worst market analysis ever!, generated a bit of a response (I’ve also noted that another blog picked up the post to which I was reacting). While my main focus was on showing readers of this blog the sort of analytic pitfalls one can fall into, I’ll admit that picking a bit of a fight with Zero Hedge was on my mind as well. I didn’t really expect a reaction, as I’ve written about the posts there before without any, but this time someone actually made note of what I said...

I came across an article the other day which got my blood boiling a bit. It basically talks about trading the “spread” between the S&P 500 and EUR/JPY forex cross rate. The author was quite happy with himself for calling the spread being exceedingly wide and recommending a spread narrowing trade. He went so far as to say “Selling ES and going long EURJPY is now pretty much risk free.” I don’t know what anyone else’s definition of “risk free” is, but this trade certainly isn’t...

There’s an article on the Time website titled Why Young People Should Buy Stocks on Margin that is worth reading. Mainly, it’s a Q&A with a pair of Yale professors who took a look at how the application of leverage in a person’s early years could positively impact their long-run retirement-building progress. The basic idea is that since young people, particularly those who are new working professionals, don’t have a great deal of investable capital they need to leverage up. Sounds like the thought...

Do you know the seasonal patterns which tend to play out in the forex markets? If so, then you were well positioned to take advantage of what we saw out of the likes of the dollar and the euro over the last couple of months. Both moved in accord with their historical tendencies during January and February. Take a look at as this chart of how EUR/USD tends to perform throughout the course of the calendar year. What the chart is telling you is that if you sell EUR/USD during the first 8 weeks or so of the calendar year, and hold...

A headline on the Business Insider blog caught my attention this morning: Once Again, Moody’s Is Behind The Curve, As The Debt Market Has Already “Downgraded” The US From AAA. The title of the story obviously served its purpose drawing me in, but after that it all fell apart as the author clearly demonstrated his personal bias in interpretting the information. The evidence provided to suggest the market has “downgraded” Treasury debt is that recently yields on Berkshire Hathaway, Proctor & Gamble,...

I’ve had a few questions come in over the last several days which don’t really require a full post to answer, so I’m going to hit them together. Here’s the first: If you love helping people get the most out of their trading, I would like to ask you where I can find good Elliot Waves handling materials or manual. I’m not an Elliott Wave practitioner, though I understand the concepts. At the top of the list of reference materials on the methodology has to be Elliott Wave Principle. A reader of the...

I’ve been reading Curtis Faith’s new book Trading From Your Gut, a review of which will follow shortly when I finish. The part I was going through this morning on my commute into work, though, inspired me to address the subject of win rate and good trading. Faith hits hard on the subject, which is one I’ve addressed on a few occasions myself. Here’s the deal. Traders, especially newer ones, get way too hung up on being right and having a high win %. This comes from two underlying causes. One is the fear...

A really interesting question came in overnight from a trader who is still relatively new to it all, but who has achieved a fair level of success. Hi John, I’m a long time listener, first time caller. I started reading your blog when I first learned how to trade. I’m now at a point where I’ve found a system that’s suitable for my personality and has a predictable success rate. Although I still make mistakes sometimes, I’ve been disciplined enough to be profitable for the past 3 months. My question...