Wednesday, December 28, 2011
Saturday, December 24, 2011
Is Emotion important in Trading -Sean Seshadri
At our firm we are big proponents of that a trader must eliminate emotion and fear of their trading regimen. It is very difficult to do and does take time to master. That is why we encourage a trader who just starts to learn how to trade no matter what market one chooses to start with a small position size. A trader must be comfortable what we call your threshold of pain. This means whatever loss parameter you give yourself you should stick to it. For some traders 5 dollars may be all they can risk on a trade an others it may be considerably higher. The other thing is that if a position hits your stop loss you must get out and move on. If the loss is under your pain threshold you will be calm and rational. If not well you know what will be your mindset in your next trade.
Oracle missing Earnings - Sean seshadri
For December 21, tech giant Oracle missed some pivotal earnings numbers which caused worry in the tech sector. These worries hurt the tech sector as a whole which put a further drag on the market. RIMM did very well today despite the negative tech sentiment on buyout rumors as it soared over 10%.. The Dow during the the day was down by as much as a hundred points but recovered to close in the green. GE and other strong Dow components countered the move on tech which allowed for a midday rally. Spotting reversals is key to understand how to get long at the right time which can occur if one understands key technical analysis principles.
Monday, December 19, 2011
Balance of Short and Long Positions
A trader's worst fear is to secure employment as most traders who trade for a living will focus on managing risk first before ever thinking of garnering a profit. The financial markets represent great financial rewards but also have real risk. However, if a trader understands this and trades according to their account size while maximizing profitable trades and cutting losing trades which can occur about 20% of the time. A trader's main problem to achieve consistent gains is fear which can be overcome with experience, trading with discipline, and developing a sound trading plan.
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