Catching up on guidance from a master trader in four quick minutes.  Click the links to watch the one-minute videos and get grounded with a solid approach to trading.

Lesson 5 encourages focus.

Lesson 6 is my favorite. Click here to follow up with more information on how to get this step done right!

Lesson 7 is a simple technique to keep the “odds in your favor”.

Lesson 8 is arguably the most necessary ingredient to good trading.

Previously posted Market Minute lessons and commentary:

Lesson 4: Psyched up for the big trade? Don’t be!

Lesson 3: How About Doing What Works?

Lesson 2: What Time is Good for You?

Lesson 1: One Minute Towards Successful Trading

(BackTesting Blog is an INO.com affiliate)

Tags: INO, trading

My charts are plotted as candlesticks because they highlight detailed movements around the open and close.   Candlesticks also present recurring patterns which aim to portend the price action and which I haven’t (yet) backtested.    However, since candlesticks are on the charts in my BackTesting Reports, videos, and software, I want to give everyone an opportunity to how they are interpreted by experts.

If you’re interested in learning more about candlesticks, check out this complimentary video from my affiliate partner INO.com:  Click Here to Watch Now

The video is titled “Advanced Applications of Candlestick Charting”.  When you watch, authors, software programmers, and co-founders of the International Pacific Trading Company, Gary Wagner & Brad Matheny will walk you through:

-History of candlestick charting

-How to interpret candlesticks

-How to merge techniques of Eastern & Western technical analysis together

-How to merge candlestick techniques with your current trading plan

-And more…

You’ll watch and listen as Wagner explains the importance of using this strategy. He says, in part, “Candlestick patterns are a mathematical formula which illustrate the psychological market sentiment. In other words, as a market reverses, or a market is moving in an up-trend, there are certain traits that can be distilled in terms of mathematical formulas that will reveal some very important information.”

This 100 minute complimentary video can be found on Trend TV. You don’t have to worry about watching the whole video at once. After you have a password, you can revisit anytime to watch the rest of a video, review a video, or watch other videos on Trend TV.

Click Here to Watch Now

Tags: candlestick, INO, strategy

Watching the football teams psych up for the playoffs today, I’m reminded how big a factor emotion can be! In sports and many other competitve endeavors we strive to pump ourselves up emotionally to win. Check out this video by Adam Hewison to see how dangerous those same emotions can be to your trading.

Adam Hewison’s  Minute 3 video (click here to watch) suggests traders choose between technical and fundamental information for their trading decisions.

I have to ask:  How about using what works?

We have the technology now to check out how well each of the different types of data performed in the past.  You can look at the track record of experts writing newsletters, back test technical indicators, back test fundamental numbers like Earnings Per Share (EPS), Price/Earnings, and most of the key statistics of a company.   Services tell how well seasonal predictions correlated with actuals, and even programs to data-mine for dates a market “always” moves.

With all that at our fingertips, we’re in a great position to estimate the quality of data source, and cherry-pick the data sources that demonstrated their effectiveness — or at least avoid the ones that are complete hooey.

However, our human brains are wired for stories.   Both fundamental analysists and technical analysists can weave compelling stories.  Unfortunately, at times the juiciest stories are not based on the strongest data.

Perhaps the key question is:  Do you want to make your decisions based on objective data with a known track record, or do you want to remain a sucker for a good story?  Adam Hewison is right in that you need to decide what type of information you will use to trade.

Tags: behavior finance, fundamental, INO, technical

 In the 2nd Market Club Minute, Adam Hewison talks about a key decision you need to make as a trader - choosing a time frame.   Click here to watch his 1-minute video. 

One way to facilitate that decision is to list the types of traders and their time frames:

• Buy and Hold Investor - forever
• Active Investor - longer term of a year or more but has a plan to sell eventually
• Position Trader - catch one leg of a trend, hold trades for weeks or months
• Swing Trader - get in for a quick pop and out within days
• Day Trader - doesn’t hold overnight
• Market Maker - constantly offers a bid and ask price

Understanding yourself is essential.    Understanding the different risks and rewards of trading in each of these timeframes gives you a framework to find the optimal spot for you.  A good place to find out more is the BackTesting Report Baseline - click here to download it directly (no registration required).

(BackTesting Blog is an INO.com affiliate.)

Tags: INO, timeframe

Professional trader Adam Hewison is distilling his decades of experience into one-minute videos.

Click here to watch the first one directly

The key word in the video is clearly “Confidence”

What do you need to do to gain the confidence you need to trade successfully?  Your answer might include items like these:

• Build knowledge of markets, charts, and indicators
• Follow strategies of experts such as Adam Hewison
• Back test strategies and indicators
• Trade small and then scale up once successful
• All of the above

Your answer is unique to you but whatever it is, I encourage you to take time early in the year to plan for your success throughout 2010 and beyond!

(BackTesting Blog is an INO.com affiliate)

Tags: INO

 I just watched a video lecture by Jack Swager, author of trading classics Market Wizards and The New Market Wizards.   If you haven’t heard of them, in each book Schwager interviews top traders and picks their brains about trading, the markets, and what made them successful.

The reasons these works are revered as classics is not because he gets the Market Wizards to reveal their ”magic” strategies.  In fact not one says explicitly how to profit trading and they all have different methods.   What we do get is insight into what makes them tick.  See below for a partial list of traders mentioned in the video.  Its a very accomplished group.

In the lecture, Schwager pulls together the common traits of these elite traders and distills them into critical success factors.  All are important ingredients for success.  The one I want to highlight as critical is Schwager saying that none of the wizards would do something like “la-de-da today looks good to buy bonds”.   They all had some sort of pre-planned strategy, that strategy gave them an edge in the market, and they knew what to do with it.  Schwager also pointed out that by entering the market without a plan, the amateur trader can do worse than chance.

Schwager touches upon the paradox that trading seems easy yet requires a tremendous amount of work to master - I can definitely relate!

 The video (and the books) are somewhat dated.  I doubt the traders Schwager mentions are today getting chart books delivered to their homes on the weekends.   These days, the web and services like Market Club offer charts on about every market that moves so we can all pour over thousands of charts like the masters.   Or, we can program our computers to scan for us.   Schwager’s comments on computerized trading is another area that is outdated.

Even so, many of the traits and behavioral patterns that made these traders great can offer us timeless lessons towards success.    Here’s who I heard Schwager cite as Market Wizards: Jim Rogers, William O’Neil, Ed Seykota, Michael Marcus, Marty Schwatrz, Paul Tudor Jones, Monroe Trout, Linda Raschke, Van Tharp, William Eckhardt, Stanley Druckenmiller (worked with George Soros).

Click here to watch this complimentary video  

(Disclosure: BackTesting Blog is an INO.com affiliate and an Amazon Associate.)

Tags: Ed Seykota, INO, Jim Rogers, Paul Tudor Jones, strategy, trading, Van Tharp

At the Trader’s Expo I watched portions of presentations on two different back test tools: TradeStation and Wealth Lab.   The most striking differences between them were not in functionality but in following.   The TradeStation talk in the exhibition theater area was packed, with people standing to watch.   Wealth Lab was discussed in a private room with very light attendance.

The difference in venue is not the root cause.  The (new) owners of Wealth Lab, Fidelity, restrict access to only customers trading in excess of 130 times per year with Fidelity.  If this limited access is a marketing ploy to get more active traders for Fidelity, I’d hazard a guess that its not working.

Too bad Wealth Lab is kept locked away because it sounds like it has features which are lacking in TradeStation.  Portfolio simulation, for example, is a capability often requested by TradeStation customers which is already available in Wealth Lab.

TradeStation, on the other hand, offers futures and forex which Wealth Lab does not support.  It also appeared as though Wealth Lab required more effort than TradeStation to set up the data for even basic back tests.

 As it stands, I’ve put TradeStation to work for a lot of back tests and didn’t see enough compelling capabilities in Wealth Lab to go through the pain of both switching software and lining up 130 trades per year at Fidelity.

What about you?  Which tools are you using?

Tags: back test, backtesting, TradeStation, Wealth Lab

I promised the nice lady in the ICE booth at Trader’s Expo that I would look into futures and currencies.  Along came this video about finding the trend in forex markets which seems a fine place to start.

Tags: currencies, forex, INO

With many Traders Expo talks webcast and (in two weeks) available on-demand from the web, its fair to wonder why attend in person.  I won’t presume to say for everyone but I do want to comment that not everything gets recorded in the presentations.

Of course, in person you get to ask questions live, see the products live and meet other traders.   What’s not always apparent is WHO you get to ask.  With the StockFinder guys appearing incognito as FreeStockCharts.com and INO TV quietly taking  meetings, its clear that some of the big names at the show chose not to be listed in the program.

Be open to learning from everyone you see at an event like Traders Expo because you never know if that guy you pass in the hall is a Today Trader headed for a tweet up or the manager of a hedge fund.  And you just might run into a private trader or two who knows the ropes and  is willing to “talk shop”.

In the next couple blog posts, I’ll highlight sessions and lessons not covered in the Traders Expo webcast.

Tags: Traders Expo