I have been thinking a lot about my purpose in trading and investing lately. I started trading a small account on the JSE in 2003. In 2011 I opened an offshore account. I have always had an absolute fascination with markets and a desire to try and work them out. This of course will never …
You are not your score board. As traders our scoreboard is the balance and equity are our scoreboard, and it doesn’t lie. It’s either going up, down or staying the same. While profit and losses are a great measure of profitability. They are a terrible measure of progress or lack thereof. If you measure your …
Discipline is one of the most important skills one needs on their journey to being a successful trader in the long run. However, to maintain success and peak performance discipline fades away. Discipline is important in the beginning because it’s where we’re transitioning from one state to the other. Meaning in the beginning we’re faced …
As traders we tend to easily remember all the giant profits trades, everytime our stop was hit and the market turned and ran in our favour without us. We rarely ever remember or talk about the times our stop was hit and the market fell some more. Trading and investing is really a game of …
You don’t have to do anything in the market. Remember nothing will start till you decide it should, and it goes on for as long as you allow it Trading from the state of “I have to make money” or worse “I have to make X amount” on a particular trade or over a series …
The most important thing in a bet is it’s R-multiple over a series of similar bets. Your R-multiple determines your margin of error. Margin of error is an amount of errors you can afford, a better way of putting it. It’s the number of losing bets you can afford to take on a series of …
A friend of mine asked me if I was an aggressive or a conservative trader. I think it’s because I’m actually quite an aggressive trader. I have 35 positions on. There has been more. The portfolio is geared 12 times. However there’s a catch. My edge is risk and money management. Even though there’s a …
Trading is one of those industries with tons of sporting analogies. Perhaps it’s because elite trading is a lot like playing sports at an elite level. One of my favourite analogies I resonate with a lot, is the cricket analogy. Trading is like batting in Cricket test match. The game goes on for a while, …
Risk If we start from the premise that risk is the difference between expectation and reality. A trade’s risk depends on your expectations for the trade. If you expect to make money on the trade. Your risk is that you don’t. I don’t know of many people that take a trade for the purposes of …
Understanding your edge It’s no secret that in order to be sustainably and consistently profitable. You need a mathematical edge in the market. At the core of your edge 1 important rule should never be broken. If it is, it essentially means you don’t have an edge. The sum total of your winning trades, needs …