“There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time.” Jesse Livermore
Watch SMB Trade of the Week, an Intraday Reversal in BP.
Basic Principle: If a stock moves quickly in either direction accompanied by a huge surge in volume then all trades placed in that stock should be made on the side of the initial move. Examples: MON (11/9/09) TIVO (3/4/10) (5/14/10) V (6/21/10) GS (4/16/10) (7/15/10) BP (6/9/10)
“The markets are not random. I don’t care if the number of academicians who have argued the efficient market hypothesis would stretch to the moon and back if laid end to end; they are simply wrong. The markets are not random, because they are based on human behavior, and human behavior, especially mass behavior, is not random. It never has … Read More
“Speculation, in its truest sense, calls for anticipation.” Richard D. Wyckoff
“When you are in a losing streak, your ability to properly assimilate and analyze information starts to become distorted because of the impairment of the confidence factor, which is a by-product of a losing streak. You have to work very hard to restore that confidence, and cutting back trading helps achieve that goal.” Bill Lipschutz
Watch SMB Trade of the Week, a Trend Trade in SPY.
“The more you understand the concept you are trading, how it might behave under all sorts of market conditions, the less historical testing you need to do.” Tom Basso