Stock market and everything: trader's blog » Trading strategy

Risk management is the key

mehanizator — Tue, 18 Nov 2008 08:01:45 +0000

The very common reason for destroying your deposit is taking risks too high. There is a limit of risks your strategy can afford, and it is usually way too lower that you’d like to think. So when you’re taking leverage just 2 times higher this limit, you’re turning profits into losses. Even if your strategy itself is good. It may work fine on lower risks.

So don’t be greedy. It’s too expensive.

One stock – one strategy

mehanizator — Tue, 11 Mar 2008 22:43:13 +0000

Some people believe that good trading strategy must show well on most of stocks. I disagree. Every stock has its own properties, unique combination of interacting groups of traders. So I can see nothing wrong if you have a strategy that works only on one selected stock and show bad results on others. It’s usual thing.

Markets and analysis

mehanizator — Tue, 23 Oct 2007 09:48:39 +0000

In ideal, effective market only fundamental information works. But in real market, where traders can be irrational with their decisions, things become more complicated. So when fundamental analysis deals with rational part of market, technical analysis deals with irrational part of market. Something like that.

FOREX trading

mehanizator — Sat, 22 Oct 2005 08:59:48 +0000

FOREX lots are actually a futures contracts. Forward contracts, at least. And the advantage of any futures contract is that you can go short the same way you go long. No additional costs for shorts. Moreover, currency trends don’t have primary direction. No uptrend, for example, as it is on index futures and stocks. That’s important difference.