Better Trading Series Archives

Keeping It Simple

For some reason, when people think of building a trading strategy they do not consider keeping it simple. I commonly see very complex trading plans and strategies. This one came across my desk recently: Share prices are predominantly above 30 week EMA A golden cross with two moving averages of different time durations; for example, […]

Trading During Holidays; How to Manage Your Trades

I’m often asked what people should do with trading positions when on holidays. Unfortunately there is no simple answer. For example, are you away for 2‐days, 2‐weeks or 2‐months? Will there be reliable and secure internet access at your destination? (TIP: Do not login to a trading account using free Wi‐Fi). Do you have a […]

Leverage and Position Sizing

In recent articles we’ve been discussing risk management, so today I’d like to extend the conversation and introduce leverage. If you’ve not read the first two articles HERE and HERE, then it’s probably worthwhile before starting on this one. We all know about the “2% Rule”, technically known as Fixed Fractional Position Sizing and how […]

Outsourcing the Decisions with Scott Barlow

The following is an excerpt from Every-day Traders and even though this interview took place back in 2001, the lessons still strongly resonate today. Indeed, this interview still makes an appearance on many FX blogs and forums around the world. This is a long article, but well worth the read. Grab a cup of coffee […]

Don’t Believe The Rumours – Size Does Matter

When it comes to risk management there are two rules: The Timid Trader Rule – “If you don’t risk very much, you don’t make very much.” and The Bold Trader Rule – “If you risk too much, you go broke“. There are a few other guidelines which we’ll discuss below, but the question for now […]

Risk Management Is A Cop Out…

“Risk management is a cop out…” That’s a quote from a value investor aimed at technical traders, specifically trend followers. His logic goes something like this: If you can’t pick good stocks then you’re basically an incompetent investor, or, if you can pick good stocks then you don’t need risk management. True? False? Or, who […]

20/20 Hindsight Trading System

I have been mentoring a trader in India – lets call him MJ. He’s inquisitive and doesn’t mind being prompted to search for the answers himself rather than having them served up on a plate. An individual coming to the right conclusions themselves will always have the lessons cemented firmly in their minds. After a […]

A Powerful Entry Technique

I first started using this entry method back in the early 90’s when I was testing the PPS Trading Strategy by Curtis Arnold. This entry is not part of that book, nor do I know its exact history. Testing the PPS patterns by hand for over 1800 hours showed me that this technique was a […]

Trading With Divergence

The world of technical analysis is saturated with indicators, oscillators, lines and other weird and wonderful esoteric attempts at finding the Holy Grail. However there are really only three absolutes; price, volume and time. These items, coupled with patience and a level head for creating positive expectancy, enable us to be successful trading the market. […]

Trade Management With An Index Filter

Last article we discussed the importance of aligning oneself with the short term trend when swing trading. This time we’re going to look at how that same short term trend filter can improve trade management. Before we jump in it’s imperative to mention the importance of exits and why they tend to be the determinant […]