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One of the best uses of the laconic management technique I have used in my own trading is simplifying my ruleset. I have often had a struggle of values with trading rulesets where one part of me wants to have complex rules with a contingency for every plan. And the other part wants to have simplified rules that might not have every scenario mapped out, but because of the simplicity of them my effectiveness in execution can be almost flawless. The psychological benefit of being able to execute a ruleset perfectly really can’t be overstated. And this has allowed me increase span of control very easily when I take the approach of an ‘easy peasy’ rule set.
Using data in trading is a fascinating experience for me. Like many things in life, I believe it’s the art of striking a balance. I need data in order to trade and in order to analyze my trading results. You could say the whole process of trading and financial instruments can be reduced to data points. It is just price, after all. But what’s so interesting to me is that I know from experience it’s not always about more data.
In the past three weeks, our focus has been on studying the Thinkscript language and this article is an update on the new applications we have developed for "finding the movers." To provide some background, the Thinkscript language offers customization options in five different areas of the Thinkorswim platform: 1) Filters for the watchlist columns, 2) Indicator studies, 3) Backtesting strategies, 4) Scans and Alerts, and 5) Conditional orders based on technical studies. In this blog article, we will highlight a few examples to illustrate these applications.
Dr. Ken Long, a renowned trading expert, adopts a unique approach to teach traders how to effectively analyze reward and risk when trading in the financial markets. He developed his own trading framework known as the RLCO (Regression Line Cross Over) which is applicable to multiple markets, including equities, currencies, and commodities. This framework allows traders to make more informed decisions by evaluating market conditions comprehensively. By understanding the different regimes, identifying key market locations, considering various conditions, and selectively acting upon potential opportunities, traders can effectively assess the rewards and risks associated with each trade.
I have found the diligent use of finding estimated reward targets to be one of the most overlooked aspects of trading. Most traders will know when they plan to enter. And most will know when they want to get out with an initial stop point if the trade doesn’t work. But finding the estimate target area is just as important because that is what creates the low-risk idea, the possibility of the asymmetrical return.
As a trader, staying ahead of the game and continuously honing your skills is essential for success in the fast-paced world of finacial markets. The Owl Bundlie User Group Meetings on Thinkorswim provide an invaluable opportunity for traders to gather, share knowledge, and enhance their trading strategies. With a growing community of members and a series of recorded sessions, this user group offers valuable insights and practical lessons. Whether you're a seasoned trader or just starting out, these meetings can signficantly impact your trading journey.
As traders, we are always looking for ways to improve our trading strategies and achieve greater profitability. In this blog article, we will share the insights obtained from a quantitative analysis conducted in our Owl Group user meetings. We focused on studying six different strategies using the Owl Bundle on Thinkorswim and the Thinkorswim strategy backtest capabilities.
Fear and greed are two powerful emotions that can significantly impact traders' decision-making process. These emotions can lead to impulsive decisions, deviating from a well-thought-out trading plan, and ultimately result in financial losses. Recognizing and managing these emotions is crucial for long-term success in trading. Fear can manifest in various ways, such as the fear of missing out (FOMO) on a profitable trade or the fear of losing capital. This emotion might cause traders to exit their positions too quickly, not give their strategies enough time to work, or enter trades they would not typically consider.Greed, on the other hand, might compel traders to chase after unrealistic profits, hold on to a position for too long, or over-leverage their accounts. This can lead to significant losses and ultimately damage their confidence in their trading abilities.
LESSONS LEARNED
0. Forgiveness for the trading I am about to do, gratitude for the trading I have done.
1. Know the market condition. Have a market condition framework that is useful in your time frame for typical holding periods: stable enough, but sensitive enough
2. Have a stable herd of standard targets that have behavioral characteristics that are linked to your typical holding periods
3. Use performance stats as a market condition
The Kata Challenge System is a trading system developed by Dr. Ken Long with traders at Ablewaytech.com that helps traders become more successful. The system is based on the concept of "katas," which are pre-defined trading patterns that capture all the major price moves in the market. The system uses a combination of technical analysis and risk management to identify profitable trades and minimize losses. It emphasizes the principles of commitment, discipline, study and simplicity to teach how to trade professionally.
By applying narrow stops you may experience a lower win rate, but if your system and skills are in tune with the market you can expect an increased number of opportunities and the size of your average winners to increase. This will more than offset the slightly lower winning percentage and will add directly to your bottom line.
The valuable feedback from our students is a testament to the effectiveness of our trading course and the dedication of our instructors. We are delighted to have received such positive responses regarding our teaching style, course content, and interactive sessions. Remember, successful trading requires continuous learning and adaptation to the ever-changing markets.
Our Thinkorswim user group for the Owl Bundle has been meeting weekly and it has been a great platform for us to exchange ideas, information, insights, and strategies with one another. The members are sharing helpful tips and tricks while also assisting each other with common problems. Through this user group, a sense of community and belonging is being fostered, allowing traders to connect with like-minded individuals who share a passion for trading.
One of the regular traders in our trading mastermind has made a successful practice of focusing on just a few stocks and ETF's in his short-term trading strategy. The rest of us have seen him develop an almost uncanny ability to anticipate his targets reactions to news, behavior at certain important price levels and generally stay in tune with the changing price action a day-to-day basis.
A short term trader could reasonably conclude that market mispricing occurs more likely in moments of great fear than great greed. A short term outlook is much more likely to be influenced by emotion than the longer-term rational approach to the markets. For these reasons, a short-term trader could consider the idea of "Max Pain" in the search for tradable short-term opportunities.
In this article I’d like to talk about the process of finding symbols to trade each day. This can be applied to any timeframe really, because whether I’m conscious of it or not I have some reason for selecting a symbol to trade. Whether I plan to hold it for ten years or ten minutes, there was some thought process I went through to decide on that symbol.
