Back testing software is an integral cog in the process of analysing trading systems. Back testing is the process of testing a trading strategy using historical data rather than testing it in real time with real money. The metrics obtained from testing via back testing software can be used as an indication of how well [...]

Underestimate the importance of trading money management at your peril. Building a trading business you can be proud of without trading money management systems and rules in place is doomed to fail from the outset. Achieving financial success in the markets is not easy. It takes discipline, determination and a well-tested (and well-followed) plan. Despite [...]

A well-known statistic, one that’s held true for many years, is that 90% of the people who come into the markets lose their money in the first six months. The primary reason is that the markets welcome everyone. Anyone with some money can start trading as quickly as they can get that money into an [...]

Every investor needs a trade entry system. The first fundamental step of trading is to choose the market in which you want to trade. But, within each market, there is a plethora of trading opportunities to chose from – I call this the universe of securities. So how do you choose from this vast universe? [...]

There is no ideal quantity of trading capital to begin trading with, it’s no secret that the higher the trading capital you start with, the easier trading becomes because of the fixed costs associated with trading. The major one to be aware of is brokerage. Depending on which broker you go for, many brokers charge [...]

After the carnage that has gripped the markets over the last 6 months, it’s difficult at present to approach potential investments with confidence. Naturally, because very few people vocally predicted our current financial and economic crisis ahead of time, taking any investment authority as such these days is not exactly a conservative or rational call. [...]

Master the counter intuitive notion of the trading stop and you’ll do what so many novice traders fail to do – turn a profit. How many times have you held a position too long? Everyone has at some point in their trading career. Over the years I have learned that it’s much easier to take [...]

The ‘where to trade’ conundrum is a very hard one, especially in the current volatile climate. Broadly speaking there are five main areas where you can trade – stocks, options, futures, CFDs and Forex. Viewed all together can be a very daunting task and where to start is a hard conundrum for a novice trader. [...]

The idea of trading expectancy can be the difference between winning and profiting. Master trading expectancy and you don’t even need to have more wins than losses to prosper. Let me explain. Despite the importance of risk management, I believe traders still under appreciate it. You see most people look at trading as a game [...]

After defining your trading float, your maximum trade loss needs to be defined. This is a core principle of excellent money management. The maximum trade loss is quite simply the maximum amount of capital that you’re willing to lose on any one trade. The reason for defining this upfront (before we even open a trading [...]

Essentially good traders make huge profits from bad traders. When they win someone else loses. The makings of a good trader can be explained using a simple analogy. Imagine there is a set of twins, both of whom are traders and are identical in almost every way. They both have the same trading system, same [...]

“The Big Takeover” by Matt Taibbi is probably the best article written to date explaining the financial crisis and how we got to where we are now. Taibbi’s necessarily lengthy article explains the problems, names the “poipetrators”, and exposes all of the conflicts of interest— absolutely a must read. AIG, Goldman Sachs, and J. P. [...]

So many people make the cardinal trading mistakes and lose everything – wife, girlfriend, kids, house, the lot. Don’t fall into the trap and make the same trading mistakes. One of the biggest aspects of becoming a successful trader – and most things in life – is that of learning from your trading mistakes. I [...]

The Commitment of Traders report, for those who don’t know, is a report detailing the positions of the three different trader groups in commodity trading. Those groups are made up of small independent traders like me, large institutional traders and hedge funds, and commercial traders who are not speculating but are actually using the futures [...]

A BPO (Broker’s Price Opinion) is the ultimate key to a favorable short sale which is a discounted mortgage payoff. The main reason why anyone would ask for a short sale from a mortgage lender in the first place is because of a questionable fair market value. It is of utmost importance, 9 out of [...]