One of the first lessons that new traders are taught is that one of the keys to success is to cut losses and let winners run. This almost always leads traders to believe stop loss orders should be used to cut losses and are a valuable part of any trading strategy. Individual traders also seem to place stops under the market and forget about them, knowing their losses are limited.
Legendary trader Dan Zanger and host of ChartPattern.com, who holds the stock-trading record with an annualized return of more than 29,000%, makes no bones about which type of market he prefers.
Stocks are a wonderful investment but they will not be the right choice for small investors looking at trading for a living. A widely cited figure is that stocks return about 10 percent a year in the long run.
When just starting out, some beginning traders will want to use all of their available funds to trade rather than buying software and data feeds. In this article, we’ll look at how that can be done, using free end of day data and indicators.
In a previous article, I offered details on one way to quantify a bubble, at least for defining a market opinion. In this article, we will test the idea and assess the probability of successfully trading bubbles.