Psychology of trading
One of the most common inquiries I receive from UVXY traders is asking for advice to help out with mounting losses stemming from a long entry. They typically go something like this: “My average price is $10 but it’s now trading at $6. What should I do?” Bagholding refers to a losing position that has […]
Gambler’s fallacy is the contention or belief that a string of results that are outside the expected will influence the next result. As a coin flip count increases, so do the results get closer to 50/50. After seeing ‘heads’ 5 times in a row, what are the chance that ‘tails’ will show up next? Sorry,
It is human nature equate a dollar figure with something relatable in your experience; my cable bill is $100, my rent is $1,500, and $30,000 is how much I make per year cooking fries at McDonald’s. So it is very easy to look at your profit and loss and say to yourself; “I just made
Moving the Decimal Point Read More »
Drawdowns are part of trading so it is critical to keep your emotions in check to avoid the common pitfalls that follow. Angry trades, hope and pray, throwing good money after bad are all mistakes we have to learn not to commit if we are to have any chance at long term success. I’d like
Drawdowns and Losing Trades Read More »