Trader's Thread 05 (Jan 20 - Dec 26)

[behappyalways]

Lost $30,000 on a $1-Wide Credit Spread (Options Traders MUST Watch This)
https://m.youtube.com/watch?v=rtVFj9nRRDo

[winston]

Can You Spot When a Trend Has Stalled Out?

Experienced traders know when it's time to move on from failed momentum trends -- just like mechanics can tell when a car is ready for the junkyard.

By TIMOTHY COLLINS

You won't know it until after that first failure, that first key turn that produced nothing.

Once does not make a trend, however, which is why we try again.

The same is true of traders. They are prone to giving that trend another try after a short pause.

If that fails, the more experienced folks know to move on.

They may try a third time, but it won't be with the same effort or expectations. They will be quick to cut it off if it doesn't work.

Source: The Street

https://realmoney.thestreet.com/investi ... led+Out%3F

[behappyalways]

Speculator Comeuppance Is Fast and Harsh in Tech’s Waterloo Week
https://finance.yahoo.com/news/speculat ... 20209.html

[behappyalways]

曾炒燶期指發奮學睇圖 工程師轉全職炒股 圖太郎悟出至勝秘笈：最多唔贏但唔使輸 #財經 －壹週刊 Next 原刊日期：20201012
https://m.youtube.com/watch?v=W5VgAXzjKeQ

[winston]

Are You Emotionally Invested in Bad Trades?

Learn to sell without regret and you will be a better trader.

By JAMES "REV SHARK" DEPORRE

Selling a poor acting stock forces us to admit our mistake.

One of the best things traders can do periodically is to simply sell everything.

Start thinking of stocks as trading vehicles rather than emotional investments.

Source: The Street

https://realmoney.thestreet.com/investi ... _ven=YAHOO

[winston]

JPMorgan Warns of Crowded Trades Amid Markets’ ‘Clear Consensus’

By Joanna Ossinger

History shows consensus rarely plays out entirely: strategists

Crowded trades include short dollar, long copper, long Bitcoin

Source: Bloomberg

https://www.bloomberg.com/news/articles ... -consensus

[winston]

The Profit Boost Your Portfolio Has Been Missing

by Marc Lichtenfeld

Below are a few potential catalysts that you can look for to get your stock moving quickly.

1. Earnings. Most companies announce earnings dates in a press release a few weeks before the report comes out.

If the company you're interested in has not yet announced its earnings report date, simply add three months to the last quarter's report date and you'll likely be pretty close.

2. Analyst upgrades. When a new "Buy" or "Sell" recommendation is issued, stocks can move significantly. So I want to give my trades the best opportunity to be upgraded. To do that, I find stocks that analysts hate.

If most analysts already have "Buy" ratings on a stock, the chances of an upgrade are slim. The bandwagon is full.

But if most analysts rate the stock a "Hold" or "Sell," you can sometimes get a nice move higher when they upgrade it. Look for stocks that don't have many existing "Buy" recommendations.

3. Short squeeze. If a stock is heavily shorted (traders bet the stock will fall so they sell it first and buy back later), every tick higher in the price of the shares is causing pain for the shorts.

Eventually, when the losses get to be too much, the shorts exit their position by purchasing the stock.

That creates more demand and pushes the price even higher. As the price climbs, more shorts buy the stock and you can get a powerful move from all the extra demand for the shares.

Look for stocks with more than 10% of the float (the number of shares available for trading) sold short.

Stocks typically don't make big moves for no reason. You need a catalyst that will push your stock higher in the near term.

If you can't find one, you may want to find a different stock.


Source: The Oxford Club

[winston]

Here’s Some Investment Advice From Psychologist and Poker Star Maria Konnikova: Focus on Your Decision-Making Process

By Sarah Max

Source: Barron's

https://www.barrons.com/articles/heres- ... zine_Dec12

[winston]

Pick the Trading Style That's Right for You

by Marc Lichtenfeld

Intermediate-term traders typically own stocks for a few weeks or longer. They're waiting for a story to play out, such as an earnings report, a drug approval or a completed chart pattern.

They'll usually set stops that give the position some room to move. That way, they won't get shaken out by market noise, but they also won't suffer too large of a loss if the trade goes against them.

Shorter-term traders will hold a stock for a few days or less. They're usually exploiting strong moves in the market or stock.

They'll typically take smaller (but perhaps more frequent) losses in exchange for more frequent trading opportunities and wins.

How much time do I want to commit?

What's my tolerance for risk?

While it's more speculative, some risks are eliminated. For example, you can't get attached to a stock because you've held it for a long time or because you believe in the story.

Intermediate-term traders typically own stocks for a few weeks or longer. They're waiting for a story to play out, such as an earnings report, a drug approval or a completed chart pattern.

They'll usually set stops that give the position some room to move. That way, they won't get shaken out by market noise, but they also won't suffer too large of a loss if the trade goes against them.

Shorter-term traders will hold a stock for a few days or less. They're usually exploiting strong moves in the market or stock.

They'll typically take smaller (but perhaps more frequent) losses in exchange for more frequent trading opportunities and wins.

When deciding what type of trading style is best for you, ask yourself the following questions...

How much time do I want to commit?

Shorter-term trading - and particularly day trading, when you're in and out of a position within the same day - usually requires you to stay in front of your computer (or at least on your phone) during the trading day so you can make moves all day long.

Traders who expect to be in trades for a few weeks don't have to spend as much time tied to their computers.

What's my tolerance for risk?

Traders who stay in positions for several weeks usually give their positions more room to travel so that they don't get shaken out by market noise.

That means they have to be able to tolerate some moves to the downside.

Shorter-term traders take smaller losses, but they need to be able to pull the trigger and take them quickly.

What strategy makes the most sense for me?

Do you like to trade based on earnings reports, volatility, charts, valuation, or Food and Drug Administration approvals? Certain catalysts will lend themselves to shorter- or longer-term trading styles.

Source: The Oxford Club

[winston]

The Next Stock Market Crash Is Rooted In This Cognitive Misconception

Summary

Cheap money and ever-rising stock markets naturally lead to a correction or even a crash because until now, every party has ended at some point.

The frivolity and emotions of many investors could accelerate the fall in prices. Much of this might be avoidable.

In my view, the problem is a widespread and increasingly spreading cognitive distortion.

With a change of perspective among many investors, the focus has shifted significantly from investing in speculation.

Source: Seeking Alpha

https://seekingalpha.com/article/439538 ... ent=link-0