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Pete is kicking himself right now. He just made an unexpected losing trade and he feels especially down. He expected to make a killing, and he was looking forward to winning and celebrating big. He thought he had done everything to prepare for the trade. He had looked at the moving average to...

There are times when our judgment is cloudy. Perhaps we want so much to win that we optimistically see trading opportunities that aren't there. At other times we may be so stressed out, busy, and tired that we can't concentrate, and end up making an impulsive decision or a trading error out of a...

What are the latest headlines? Do they impact the markets? Well, it depends. On Monday, October 17, 2005, there were some headlines that may have impacted you. GM reached a tentative agreement with the union. What's the impact? It seemed to satisfy long term investors. Company profits are bound...

Why do so many traders abandon their trading plan? Is it their personality, an inherent pitfall of the trading profession, or temporary insanity? A host of factors may contribute to a lack of discipline. Depending on your personality, background, training, and experience with the markets, you...

When your money is on the line, it's difficult to remain calm, rational, and in complete control. What happens if you lose? How will you recover? It's natural to become consumed with self-doubt and abandon your trading plan, or act irrationally in the midst of the chaotic market action. But...

Traders have a tendency to forget the obvious. We often think that life is more complex than the issues right in front of us, and that obvious solutions offer little comfort when trying to find solutions to seemingly insurmountable problems. The markets are complex at times, but the...

Sometimes a market just seems to become untradable. You start having more losing trades than you would like to have. You find that what you have been doing just doesn't seem to work any longer. You are bored and frustrated with that market. Although you wait patiently for things to get better...

Do you suffer a lot when you trade? Are you under constant stress from trading? What are your thoughts about stress, and is it a major factor in your trading? Stress in trading is not always harmful, probably depending on the source of the stress. For some traders it is imperative that they...

Do you think trading is an addiction? Can a person actually become addicted to trading? Wow! That seems like a loaded question. My answer is "yes." Trading can be addictive, much as gambling can be addictive. One trader wrote a book about what he learned by losing $1 million. Recently I...

Is there any time when there is a valid use for oscillators and/or divergence? Yes, there is a time when such things may prove to be of value. The opposite of trend-following trading methods involves trading techniques that enter on the tops and bottoms of movements, or counter-trend...

After a breakout, look for a return (retracement). Successful returns can beget generous returns. When a market does finally overcome resistance, penetrate a psychological barrier, or break out of a formation or consolidation, it tends to do so boldly at first. But after its initial thrust...

Try to develop an inter-market view of how commodity markets correlate with one another. Cows eat grain, so when grain prices rise, expect higher meat prices. If meat prices go up, then so should other food prices like cocoa and sugar for candy bars. Orange juice, coffee, and pork belly bacon...

Discipline in executing each and every trade according to your trading methodology is the secret to your success. If you want to improve your trading, what you need to do is very simple. Before you enter any trade, imagine that you will have to explain this trade to a panel of your peers, by...

If there is one factor that drives the inflation-deflation cycle, it is the effect and trend of interest rates. The bond/note market is the foundation of the stock market, and makes its existence possible. Interest rates compete with all other forms of investment for capital. When rates are...

Stock book values, Price-Earnings Ratios, and stock dividends are not the fundamentals that determine a stock's price trend. Strong increased earnings, preferably over the last five years, are the most bullish fundamental statistic related to the price trend of a stock. The best P-E ratio...

I believe trading is far more an art than a science. For one thing, if trading were a science, then we should all be able to enter the same trade at the same time, and exit at the same time, getting identical results. We all know that just isn't so. Yet if trading were scientific, we should...

I was watching the movie "Coach Carter," starring Samuel L. Jackson. I couldn't help thinking about the many similarities between what a coach must do to prepare his players and what a trader must do to prepare to trade. Since trading is largely a self-directed business venture, embarking on...

I get some unusual questions from time to time, and this is one of them. Certainly, the TICK can be used with Stochastics, as I explain below. The TICK expresses the net total of NYSE stocks that have down-ticked or up-ticked on the last trade. When e-mini S&Ps are making new intra day...

Absolutely YES! It has already happened in my own lifetime as a trader. The markets today are no longer as they were when I began trading. They are hardly recognizable today compared with what they were then. It is as though trading, as I knew it originally, has disappeared. But there's more, as...

Do you have a problem with not taking money out of the market when it is there for the taking? Do you seem to think that somehow it is not yours -- that it doesn't really belong to you? What should you do if you have that problem? Losers think the open equity they take home on overnight...