Welcome to another issue of Traderwave Weekly, a trading newsletter where I curate the most useful trading articles on the internet to share with you.
Hope you will enjoy all these fabulous reads and apply those knowledge along your journey to become a proficient and profitable trader!
In the world of technical analysis, there are generally two types of technical traders: a trend following trader or a counter-trend trader.
Both type of trading strategies can be profitable, however, they are not equal all the time. Once such instance is when the market or the instrument that you trade is in a very strong trend.
New and inexperienced traders usually like to do counter trend trade because it is psychologically easier to sell into strength or to buy into weakness.
However, this could be detrimental to your trading account.
In this article, the author argues for the case of making trading decisions in line with the major trend.
Read on to understand why trading with the trend is a more sound strategy during strong trending market and how you should go about doing it.
We have seen significant sell-off in most stock markets over the past week or so.
Some traders have their views why the sell-off happened and some are still baffled as to why there was a significant pull-back.
In reality, there are many reasons to why a market experience a sell-off but when we look down to the most fundamental reason, the single most persistent reason is due to a lack of liquidity.
Stanley Druckenmiller, one of the greatest investor of our time once said that “Earnings don’t move the overall market; It’s liquidity that moves markets.”
Read on to understand how liquidity plays a crucial role in helping you identify key turning points of the markets and how you can use that to your advantage.
WORDS OF WISDOM
Ed Seykota is one of the best hedge fund manager of our time.
Over a 16 year period, he was able to generate in excess of 250,000% returns.
During one of his interview 20 years ago in “Market Wizard”, one of the best trading books of all time, he shared many wonderful trading tips that remains the most fundamental truth about profitable trading even in today’s context.
In this article, the author compiled a list of key learnings that Ed Seykota has shared throughout the years in an easy to read format.
Regardless how proficient you are now as a trader, it is never too much to reread this words of wisdom again to remind ourselves what’s truly important in the world of trading.
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