Thursday, January 19, 2006

Interesting links and some market commentary

Some stuff I've been reading lately:


  • LINK
    Michael Taylor, a fellow systems trader shares some hard earned knowledge about creating a system's exit strategy. Whether you are a discretionary trader, a systems trader, or both, Michael's post is an informative read about an absolutely crucial subject.


  • LINK
    The new URL for my mentor's market blog. We have just entered into the most favorable kind of environment for both of our trading styles, and he has increased his posting frequency accordingly. One basic criteria we use for identifying a bull market to ride trends in is daily new 52 week highs consistently greater than 500.


  • LINK
    "Charter 2", free charting software from technicator.net. This is the sequel to Frank's "Taxi" software, and contains many great new features including several watch list capabilities.


  • LINK
    Jim, from my hometown Columbia, shares his watch list this week.


  • LINK
    Ugly posts about speculations that GOOGLE may play a role in the singularity. The singularity is an ongoing interest for me, and its pursuit is one of the motivations behind my trading campaigns. The singularity means many things to many people. For me, its realization is the ultimate milestone of progress.


  • LINK
    Brett Steenbarger's ongoing historical market research blog. There are tons of ideas for building a trading edge to be found on his blog.


  • LINK
    More good trend following philosophy at the Trenders blog.


  • LINK
    TraderMike's daily market recap. This is the link to today's.


  • LINK
    Daily dope and coverage of explosive stocks from The Knight Trader


  • LINK
    Blog by a trader who has a trading style shockingly similar to my own. The charts he posts are all near low-risk buy zones, which is where I prefer to begin my buying. It doesn't usually cost you very much to find out if you are right to be long or not when you start buying this way.


  • LINK
    Ron Sen's daily market analysis and helpful commentary.


  • LINK
    My girlfriend's latest adventures at Mizzou's vet school.



There is tons of other great stuff being published on the web every day by the maintainers of the blogs from my blog roll. I use Bloglines to easily monitor them for new content, and to maintain the blogroll you see on the right of this window. If you're not hip to bloglines or any of the other newsreaders yet, check it out.


And of course I'm still having a good laugh at all the non-trend-following traders who are starting to sound desperate under the mounting pressure of performance anxiety. Lots of people in cash positions are saying to themselves:


  • Surely we will pull back, won't we?

  • Maybe this is just exuberance?

  • Can't find anything to buy. (do they not visit this blog?)

  • Things are too high, maybe instead of buying we should start shorting...

  • Well it looked too high before, but now it's even higher! It can't come down, so we may as well buy!

  • No way! We bought the top! Now is when we should have shorted!

  • Repeat cycle



It is easy to get stuck in this destructive psychological pattern. I think trending environments are harder for most traders to deal with than choppy ones. Thought patterns like the one above only get worse as the market carries higher because, after missing the first boat, the perceived risk/reward of each successive boat is progressively worse. Flat markets give non-trend-followers plenty of opportunities to grab quick profits and take second-chance entries, but trending markets are a lot less forgiving in that regard. The beauty of it all is that money can be made in both environments, no one approach works all the time. Remember your edge, and stick to it!

3 Comments:

At 7:35 AM, Blogger Dave Johnson said...

I appreciate your comments over at my site. This site is really informative and helps me have that "heads up" when trading. Keep up the great work.

 
At 8:25 AM, Blogger Mike said...

Thanks for the nice "plug". My traffic has really expanded since you mentioned the site. I make sure to visit and learn from yours each day.

Thanks again.

 
At 12:10 AM, Blogger jontait said...

Guys thanks for the positive feedback. I find the trading blogger community to be tremendously helpful, and a much better thing to check neurotically than the price quotes of my positions for obvious psychological reasons :D Thanks for contributing via your blogs.

 

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