It seems so right – but it goes so wrong!

By: Chris Irvin, Veteran Instructor & Trader at The Wizard

It is the most frustrating thing in the world!  You sift through, what seems like a million different stocks to find the perfect trade.  You time your entry perfectly, and at the moment you enter the trade the chart rolls over on you.  It is like the trading floor has a camera focused on you and everyone is told to do exactly the opposite of what you are doing.  You can almost hear the snickering.

Okay, we all know that doesn’t really happen, but there are times when it sure feels like it.  When we enter or exit a trade, it is as a result of something that convinces you that your stock is going to move in a particular direction for a period of time or the mover has ended.  Continue reading "It seems so right – but it goes so wrong!"

Me Centered or Stock Centered?

By: Chris Irvin, Veteran Instructor & Trader at The Wizard

My last blog (May 9, 2012) spent some time dealing with the logical and emotional sides of the brain and how the flow of information from side to side differs between men and women.  Among other things I suggested that in order for a male trader to be successful they have to have an exit strategy before entering a position because our egos can often get in the way of solid decision making while in the middle of the trade.  I am a firm believer that traders need to define exits prior to entering a position because this is the only time when ego is not an issue in the process.  This idea brought up a valid comment from one reader.  “Wouldn’t it be easier to just put a trailing stop on your position rather than defining a solid stop loss level?”  It probably would be easier, but is it the best?  In this blog I would like to explain why I believe repositioning stop losses manually is a better idea than using trailing stops, if you have the option of course.  If you are a trader that does not have the ability to adjust stop losses manually due to schedule, or circumstance, the trailing stop is a great tool.  If you do have the ability to babysit your trades then I believe it is better to reposition the stops on your own.

Before debating whether manually repositioning stop losses is better than setting an automated trailing stop, I need to point out that even a manual stop loss is really automating your trading process.    The question is “can you be more successful if you use a little of your own elbow grease rather than setting an automated trailing stop?” Continue reading "Me Centered or Stock Centered?"

Are Women Better Traders than Men?

By: Chris Irvin, Veteran Instructor & Trader at The Wizard

The answer may be yes.  How do I know? My wife told me… that’s how.  Actually there is some scientific evidence that may back up this idea.  Now keep in mind that I am about to explain something that is way above my pay grade, but I will do my best.  The brain, in both men and women, is divided up in hemispheres typically known as the left brain and the right brain.  The left brain is the side responsible for logical, sequential and rational thought.  The right brain deals with random, intuitive and creative processes.  There is no difference between the sexes in this regard.  The difference between men and women comes in the link between the two sides.  It is called the Corpus Collosum.   The Corpus Collosum is a thick band of nerves that connects the left and right brain. According to a number of studies, including one by L.S. Allen, MF Richey, YM Chai and RA Gorski, which was published in the December 14th 2011 issue of the Journal of Neurosciences, there are differences in this connection between the sexes.  The study was called “Sex differences in the corpus callosum of the living human being.”  The researchers concluded this: Continue reading "Are Women Better Traders than Men?"

Trends, Retracements and Reversals

By: Chris Irvin, Veteran Instructor & Trader at The Wizard

When we are looking a social media and pop culture it seems that trends change by the minute.  I read recently that the seniors leaving collage this year believe that email is dead.  It is essentially the snail mail of the 21st century and has been replaced by texting.  Waiting for an email response just takes too long.   As I get older, it takes me longer to identify trends, and I often miss the signals that they are coming to an end.  Just ask my kids – they will agree with me.

When it comes to the stock market some people suffer from the same difficulties.  They cannot see the market trends and have a tough time seeing the signals that those trends are coming to an end.  This is a critical skill in the trading world.  The truth is that everything is trending.  It does not matter if you trade stocks, currencies or futures, in some timeframe there will be an observable trend.

In this blog we are going to discuss the definition of a trend, and more importantly how to recognize the difference between “Retracements” and  ”Reversals.” Continue reading "Trends, Retracements and Reversals"