Markets Are Always Changing

“Markets are always changing and even the most talented participants have to evolve with the markets and that need to evolve itself brings its own psychological challenges. The need to be creative, the need to be resilient in the face of frustrations and also the need to identify and build upon strengths.” 
– Brett Steenbarger in Chat with Traders podcast


As an old adage says, “There’s no such thing as the goose that lays the golden egg forever.” Market conditions do change. One of the real skills for a systematic trader is to understand when he or she needs to change a trading system or its parameters, adapting it—or even when to abandon it altogether and develop a new one. Traders work very hard to find a trading edge that works, and they’ll play it out until it stops working. 

But they must be prepared for, and even expect, the market to change, and they must know that this unavoidable change may reduce or eliminate their trading edge. That is why it’s so important to look for new ideas all the time and to always be testing new systems and patterns—doing so means you’ll have a backlog of trading edges to work with if or when your current one loses efficiency or stops working.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Finding Your Trading Niche (Linda Raschke, Assad Tannous, Steve Burns)

A trader must make the effort to master a very specific type of trading method or trading vehicle. Specialize—do not be a jack-of-all-trades, master of none:


"All you need is one pattern to make a living."
- Linda Raschke, futures trader, LBR Group


"You want to get in the habit of making the same trades over and over again."
- Tracy, independent crude oil futures trader


"Successful traders focus on what they are doing with an unconditional belief. Everything outside of that is just noise."
- Assad Tannous, Head Trader and founder of Asenna Capital


"A trader that chooses to be master a specific type of trading method or trading vehicles has a much better chance of success than the traders that just dabble in many different things and never make much progress."
– Steve Burns, swing trader and author


PS: Trading Course is now available both in Paperback and Kindle eBook. Buy it now on Amazon!



You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

How To Think About Trading Losses

"Even the most successful traders encounter their periods of loss. How they manage the losses — and how they manage themselves during the periods of loss - makes a huge difference in terms of their ability to come back."
—Brett Steenbarger, author of Trading Psychology 2.0


"Most studies suggest that losses are twice as powerful, psychologically, as gains."
—Daniel Kahneman, author of Thinking, Fast and Slow


"What winning traders share: they all understand that losing is part of the game, and they have all learned to lose."
—Jack D. Schwager, author of Market Wizards


When traders are in a trade, they tend to narrow their focus. The only thing a trader tends to think about is the outcome of the trade he or she is in right now. This is especially true if the trade is losing money. The trader’s instincts will try everything to keep that trade from being a loser. The trader may add up, average down the trade, temporarily remove the stop, widen the stop, or just stay away from the price action for a couple of days to give the trade some room to breathe. I have seen all these tricks among traders, both novice and experienced. But traders should not be worried about losing money. You win some; you lose some. It’s the bottom line that counts. 

Traders may lose money, but what they cannot lose is their trading discipline, as it is one of the fundamental assets of any trader. All traders must have confidence in themselves. All traders must believe in the deepest sense that they will do what is best for their own interest all the time, and that is to play according to the predefined plan.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

Always Respect The Market (Tony Saliba, Linda Raschke and Mark Minervini)

Three super traders share a very similar market belief - you have to respect the market or face the consequences (a severe drawdown, emotional trauma and a depletion of your trading confidence):

“Always respect the market place. Never take anything for granted. Do your homewaork. Recap the day. Figure out what you did right and what you did wrong.” 
– Tony Saliba, options trader 

"The market is seductive and brutal to those who are weak and undisciplined. There is no alternative to patience and discipline."
– Mark Minervini, momentum stocks trader

"Don`t be overly aggressive with the market. Treat it gently by allowing your equity to grow steadily rahter than in bursts.” 
– Linda Bradford Raschke, independent trader

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Doing a Daily Debriefing of the Trading Session

Successful traders know that a consistent and systematic review of their daily trading activities is the direct path to growing and improving. After the market closes, I like to take half an hour to debrief my trading session.

These are the questions I ask myself and answer in my trading journal:

➢ How many trades did I take?
➢ Did I make any trading mistakes?
➢ How many points or ticks did I take out of the market?
➢ Did I spot any new trading pattern interesting enough to study further?
➢ How was my energy level?
➢ Did I drink enough water during the day?
➢ Did I exercise today?
➢ Did I learn anything new?
➢ Did I find some interesting articles to read later?
➢ Did I come across an interesting trading podcast or book?

The best way to improve your trading is to build on what you have already. An incremental improvement each day will make the difference in the medium and long run.

Besides doing a daily debrief of your trading, you must do a more in-depth review of your trading at the end of the month. What is working well in your trading? What adjustments do you need to make going forward?

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

BlackRock Goes "All-In" On Systematic Trading

"After years of deliberations, Mr. Fink (CEO of BlackRock) has opted for the promise of the machine. On Tuesday, BlackRock laid out an ambitious plan to consolidate a large number of actively managed mutual funds with peers that rely more on algorithms and models to pick stocks." (in New York Times, March 28th 2017)


Most People Make a Big Deal out of Market Prediction 

The most successful traders do not predict markets—they leave that for financial commentators, economists, and analysts. Consistently winning traders follow the signals generated by their systems, strategies, or methodologies. They get out when their stops are hit or their trading edge is no longer present or active. They do not take profits before their methods tell them to. Successful traders also look for many opportunities to exploit their trading edge; this makes them less likely to experience losing months in their accounts. Most traders do not understand this line of thought. As a result, they try to predict the market direction and fail to achieve the desired trading consistency.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões


Momentum Day Traders

"The more momentum type traders are going way. The guys buying and selling very quickly, the black boxes have taken over that area. If you are a trader trying that, start changing your style into a little bit of a longer term outlook. It could even be a 2-hour outlook versus buying and selling quickly in 3 minutes."

Sean Hendelman, CEO of T3 Companies


Changing Market Conditions 

As an old adage says, “There’s no such thing as the goose that lays the golden egg forever.” Market conditions do change. One of the real skills for a systematic trader is to understand when he or she needs to change a trading system or its parameters, adapting it—or even when to abandon it altogether and develop a new one. 

Traders work very hard to find a trading edge that works, and they’ll play it out until it stops working. But they must be prepared for, and even expect, the market to change, and they must know that this unavoidable change may reduce or eliminate their trading edge. That is why it’s so important to look for new ideas all the time and to always be testing new systems and patterns—doing so means you’ll have a backlog of trading edges to work with if or when your current one loses efficiency or stops working. 

One strategy I find useful is to compare the short-run metrics to the long-run metrics to measure a system’s health in terms of profitability. This is one of my favorite trading practices. I am always comparing the short-term performance, distribution of trades, and risk metrics of my trading systems to their long-term metrics. I want them to be as constant as possible, because in trading, you do not need a large edge to run a successful trading business—you need, instead, to have a consistent edge. 

I like to compare the year-to-date metrics (average tick per trade, total dollar win) with the metrics over the last three months and over the last month. What I do is look for evidence of significant deterioration in a particular system. If a system deteriorates too much, I will stop using it until its performance is back in line with its historical data—that is, if it ever recovers those metrics, because often a system’s deterioration is not temporary. 

Be aware that the market may change from time to time and that you may need to adjust your trading edge accordingly or even develop a new one. Charles Darwin said it’s not the strongest or the most intelligent who survive; it’s those who can best manage change. This is very relevant for trading, as the need to always be in sync with what the market is doing implies an openness to change.


You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Using Volatility as a Trend Filter

What can volatility per se tell you about the current state of the market? When markets start to have big down days, big up days, and a lot of dramatic intraday reversals, it is likely we are in a down trend. A bull market tends to be smooth, slow-paced, and even boring, while bear markets or corrections are emotional and volatile.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Real Trading Example (British Pound Futures)

I recently tested a system on the British pound futures, and while it had a winning rate of 57 percent and an average win similar to the average loss, it gained on average only 2.8 ticks per trade. Considering the commission on that contract, the real edge was just 2.1 ticks per trade. With such a narrow edge, good execution is the key to winning money; a sloppy trader may even lose money using this strategy, due to its razor-thin edge.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Discretionary Traders (How to Know If There Is an Edge Present)

How do you know if you really have a trading edge if you are a discretionary trader? You can see it in the shape of your equity curve. If it shows some consistency of making money without large drawdowns, then over time you can begin to conclude that you have an edge. People who are very good at trading the markets have a high level of confidence, which is impossible to gain unless you have an edge. 

It’s something you have to feel and believe on your own. Unlike in systematic trading, where the metrics of a system prove the system’s edge, it is not something that is definitively provable. 

If you are able to make money with some consistency, with a good control of your losses, you get to the point where you feel you have an edge, and your equity curve confirms that. You cannot think you have an edge if you lose money for a long time—that is insane! 

Even discretionary traders need to have an edge, which does not exist without a methodology. In fact, I have never met anybody with an edge who does not have a very specific methodology.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões





Trading: Always Be Looking For New Ideas

Traders work very hard to find a trading edge that works, and they’ll play it out until it stops working. But they must be prepared for, and even expect, the market to change, and they must know that this unavoidable change may reduce or eliminate their trading edge. That is why it’s so important to look for new ideas all the time and to always be testing new systems and patterns—doing so means you’ll have a backlog of trading edges to work with if or when your current one loses efficiency or stops working.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões


Self-Coaching

Learn to be your own trading coach. Take notes on Post-its and attach them to your trading screen or leave them on your trading desk. Consider what messages are the most important for you at your current stage as a trader. What do you think you need to be focusing on? Here are a few practical examples: 

1. One trader might be focused on expanding his trading size without losing its efficiency. His note could say, “Focus on playing the setups as efficiently as you can. Money will follow.” 

2. Another trader may be fighting overtrading. Her note could read, “Play only your best setups. Don’t be easily distracted; it does not pay.” 

Be creative—do not be afraid of creating a true piece of art with your Post-its! Eventually, if the messages are repeated enough times in enough ways, they will become part of a trader’s self-talk and a natural part of performance.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Trading Size Matters; Size Kills

A very experienced S&P futures floor trader once said, “You can be a very good one-to-five contract trader, but you will be an average ten-contract trader and a terrible twenty-contract trader.” 

In trading, size really does matter, which means it’s crucial to know your size. Your efficiency will decrease dramatically the bigger you play. Why? Because you’ll be thinking about money all the time. You must trade at a size that’s within your present emotional capacity. Expanding trading size is a difficult task, even for the most seasoned traders. The key is to expand size slowly. For instance, if you usually trade 500 shares of a specific stock, you can increase your size to 550, then to 600, and then to 650 shares. Expanding your trading size gradually means giving yourself time to adapt to the new threshold. It’s a bit like lifting weights in the gym—you add them slowly, so your body gets used to the additional burden without experiencing any discomfort. 

Bear in mind that your bet size controls your emotions. There is a correct trading size for every trader, and finding that size is absolutely essential to success.
You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Learn to Think in Profit-Factor Terms

If there is one trait winning traders share, it is that they all understand losing is part of the game, and they have all learned to lose. Traders must learn to evaluate their trading and methodologies through the lenses of the profit factor: 

PF = (dollar amount of winning trades) / (dollar amount of losing trades) 

In every system and trading methodology, there are always winners and losers. The important thing is that the sum of the winners is bigger than the sum of the losing trades, but as you trade, you will be adding dollars to both the numerator and the denominator of that ratio. Learn to think in these terms, and a loss will mean only that you will add that particular dollar amount to the denominator.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

The Equity Curve is the Perfect Reflection of Your Actual Trading Strengths and Weaknesses

In trading, the equity curve is the perfect reflection of your actual trading strengths and weaknesses, which means you are only as good as the shape of your equity curve. That is your starting point. All the improvements you make going forward should be reflected in the future shape of your equity curve. Ideally, your equity curve should stretch from the lower left to the upper right and should be as steep and as smooth as possible.


This also means you need to acknowledge and accept that you—and not the market—are completely responsible for your success or failure as a trader. 

Homework: Plot your equity curve for the last year or two. Make a critical assessment of your current stage of development as a trader.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

How To Be More Effective Doing Market Research

Here’s what I have found to be the most productive for doing market research: Crunch numbers for forty to fifty minutes and then take a ten-minute break. This way, when you come back for more research and analysis, your brain has had the time to synthesize the market data, focus on what should be emphasized, and be clear on what should be tossed away. So many times I’ve spent hours and hours doing research, only to get lost in the data.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Review Your Trading Performance and Make Small Improvements Daily

Professional traders and athletes develop good practices as they perfect their craft. I have gathered a few quotes on best practices, including one from a basketball coach. There are interesting similarities between how to achieve a very high level of performance in sports and in trading. One is the ability to review our performance and make small improvements daily. 

“The best trading book you can ever read is your own trading journal.” 
—Anonymous trader 

“Excellence is the gradual result of always striving to do better.” 
—Pat Riley, basketball coach 

“Nothing like a closed market to see the charts clearly. Use this quiet time to review without bias or emotions.” 
—Dan Zanger, momentum stocks trader 

“I focus on three things: price, moving averages, and one momentum oscillator. That’s it. My trading process takes less than fifteen minutes a day, and most days I do nothing.” 
—Larry Tentarelli, intermediate-term technical trader 

“There are some things that winners do that losing traders often ignore. Keeping a trading journal, of some kind, is one of those practices.” 
—Adam Grimes, systematic trader
You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Basic Trading Personality

There is one important question you must answer about yourself that will guide you through the process of choosing a trading strategy that’s right for you and your trading personality: Are you an innie (a trader who likes constant action, who loves being involved in the markets constantly) or an outie (a trader who likes to wait for a perfect setup to come by)? 

Personally, I am definitely an outie—I do not have the fear of missing moves and being left out of the market, as most innie traders do, but I hate being in a trade that’s losing money. I stay out of the market for most of the trading session and strike only when I have what I consider to be a perfect setup. 

The important point here is that if you are an innie, you may want to try something such as trading Bollinger Bands; selling strength and buying weakness; or being almost always in the market, either on the long side or the short side. If you are an outie and planning to day-trade the markets, you may want to focus on capturing a move per day. This basic personality trait is an important factor in determining what type of trading strategy you should develop.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

The Best Strategy for Independent Traders

If it works, it works. Different types of trading strategies or styles have their followers. In fact, some traders believe in their particular style with such fervor that they consider all others inferior. I disagree. For example, I am a systematic futures day trader. I obviously consider systematic day trading to be the best strategy for independent traders who trade for a living. But I also know people who are very good swing traders of both stocks and indexes or who are excellent option traders. So again, anything that makes money consistently works. 

Each trader must develop his or her own trading methodology. This requires hard work. Attempting to use other traders’ ideas instead of developing your own methodologies will not make you successful. 

Every great trader who has ever lived has developed his or her own approach by adequately using certain market techniques that apply to a particular market at a particular time. One commonality among all successful traders is that they are in sync with the markets.
You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

"It took me five years to become a profitable trader and almost another five years to become extremely consistent. If I had come across the right trading material and concepts earlier, I’m sure the learning curve would have been far shorter. This practical book will give you the materials and concepts I wish I’d had early in my career." - Henrique M. Simões

Fill Out a Log Sheet for Every Trade Entry or Exit

The best way to prevent spontaneous trades is to force yourself to fill out a log sheet for every trade entry or exit. Using a spreadsheet to register all your trades is very useful, and you should register all your trades, the entry price, exit price, trade size, and reason to enter and exit the trade. This way it will be harder for traders to insert spontaneous trades that do not fit their trading plan. 

Every trader feels an impulse to trade from time to time. The most consistent, seasoned traders have learned to deny those impulses and stick to what is time tested and really works. (excerpt from section 5.1 Trading Routines)

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!



Your Job as a Trader

A very successful trader once said there is always a way to make money, regardless of market or time frame. As a trader, your job is to find it. This structured course has that end in mind and will help you become a consistent, winning trader with a distinctive trading signature. These are your final goals for this course. (excerpt from section 1.1)

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!


Momentum Stocks: What Time Frame Should You Use?

I just listened to Jack Vogel's (author of the Quantitative Momentum book) interview on the Better System Trader podcast and I want to share with you some of the material that I found to be the most interesting:
  • He defines momentum investing as a strategy that involves investing in stocks that have had the best performance over the last 12 months;
  • Value investing tends to work well at one time and momentum tends to work well at another time;
  • Short-term momentum defined by just looking at the performance over the last week or month has mean reverting characteristics - the strongest performers tend to perform worse than average;
  • Intermediate-term momentum, anything between 3 months and 15 months is the time frame where momentum seems to work the best - in this time frame the top performing stocks continue to outperform;
  • Long-term momentum, defined as a look back period of 5 years is also mean reverting;
My take on the study is that if you are trading momentum, you should look for the best performing stocks over the last 3 to 15 months. This is the sweet spot for momentum to perform well.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!

The Great Advantage of the Individual Trader

“Every stock market system with an edge is necessarily limited in the amount of money it can use and still produce extra returns.” – Ed Thorp 

This is where the individual trader has an edge over hedge funds, asset managers or investment banks. Individual traders can find a little niche with a trading edge and exploit it over and over, accumulating vast profits in the process. Being relatively small (accounts under a few million dollars) enables the trader to exploit trading edges that are impossible to consider for the bigger players. In trading, small is beautiful. Small is the land of opportunities.

PS: Trading Course is now available both in Paperback and Kindle eBook. Buy it now on Amazon!



You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!

The Best of Finance Twitter (February 9th)

I found a few interesting tweets on different topics today. These were my favorites:

"38 straight sessions in which S&P fails to move 1%+ INTRADAY."
- Carl Quintanilla (@carlquintanilla), CNBC anchor

For how long can this go on? There is a sense among pros that volatility will pick up soon but so far all we have is chop-chop. Very small ranges to trade intraday.

"Workers spend a quarter of our day reading e-mails. We check them 36 times a day." 
- Mark C. Crowley (@MarkCCrowley) author, keynote speaker, Fast Company columnist

Time is scarce. We must learn to use it wisely. Spending less time on email will surely make you more productive.

"Twitter is down 60% since its IPO. And this chart basically says it all."
- StockTwits(@StockTwits) Social network


This chart shows how the growth has vanished from Twitter. 


The Best of Finance Twitter (February 8th)

Another very long day on Finance Twitter with thousands of tweets. Here are the highlights of what I enjoyed reading today:

"That's some serious overboughtness on $AAPL. Not necessarily a short but further gains from here are going to be tough."
- Gavin McMaster (@OptiontradinIQ)

Gavin shared this chart of a very overbought Apple (AAPL) where new buyers should probably wait for a better entry setup and option players may be tempted to come in and sell some calls.




"Now 85 days without a 1% or greater drop from the $SPX. Still 9 days shy of the record in 2006." 
- John Kicklighter (@JohnKicklighter)

Another stat that shows the lack of day-to-day volatility in the U.S. indexes. John usually tweets about currencies but this anomaly in stocks caught his attention too.

“39 Book Recommendations From Billionaire Charlie Munger that Will Make you Smarter” 
- JB Marwood (@MarwoodJB)

Joe tweeted an excellent link with 39 book recommendations from Charlie Munger.

I bought Joe's book "How to Beat Wall Street" earlier this week on a recommendation from Steve Burns. I haven't read it yet but I will give my thoughts on it soon.

"S&P 500 hasn't had a 1% intraday move since December 14, longest period of intraday tranquility in history."
- Charlie Bilello (@charliebilello)

Charlie tweets again about how quiet the market has been in regular trading hours. There is basically no intraday volatility for any kind of swings. Three eMini S&P 500 Index Futures points is the big swing these days for index day traders!

My book is for sale on amazon since January 9th on Paperback and for a few weeks on Kindle eBook format. The feedback from readers is finally starting to come in and I am very pleased with the reactions. This is the latest review on Amazon:

"This is a fantastic trading book for traders in all stages of development. It teaches you what to look for when developing a trading methodology, what techniques and technical indicators work best in different markets and environments and finally how to develop the mental skills to make it all work. This book was just released but will probably turn into a classic. I wish it had even more trading setups but there are more than enough to make you profitable. Buy it, read it, highlight it and work on it! (there are suggested tasks, homework, practical trading tips through the book which makes the book even more unique)" - (5 stars rating)

PS: Trading Course is now available both in Paperback and Kindle eBook. Buy it now on Amazon!

Bristol-Myers Squibb (BMY): Short-Term Bearish Bias

Bristol-Myers Squibb (BMY) is up 9 sessions in a row. 




  • there is a statistical bearish bias for the next one (0.25%) to three days (0.55%); 
  • the stock is below both the 50-day simple moving average and the 200-day simple moving average; 
  • note that "on average" does not mean "every single time";
  • you can check prior signals on $MPC, $PBR, $IP and $XLY on my Twitter;
If you are interested in developing a quantified trading approach you might be interested in reading my book.

PS: Trading Course is now available both in Paperback and Kindle eBook. Buy it now on Amazon!



Nine Problems That Most Traders Face

"Much of trading psychology, like much of traditional applied psychology, is problem-focused. We start with a problem and we look to identify and remove or minimize the cause of the problem. This is similar to the framework in medicine. We start with symptoms, diagnose an illness, and seek a treatment that will cure the disease." 
—Brett Steenbarger 


What do you consider to be the problem that is inhibiting you to trade profitably most of the time? 

In my book I described the most common issues that traders face that are an impediment to consistent profitability: 

(1) The first one is trading without confidence. The lack of trading confidence is the source of many trading related mistakes; 
(2) Experience fear, hesitation or anxiety while trading; 
(3) Burnout; 
(4) The inability to admit trading mistakes; 
(5) Not knowing how to think about individual trades in the context of a methodology or trading strategy; 
(6) Self-sabotage 
(7) Overtrading 
(8) The inability to flawlessly execute a trading strategy; 
(9) Getting upset in the face of a drawdown and starting to make recurring trading mistakes; 

Do not worry if you are facing more than one of these problems. Most traders are. In my book I dig deep into all of these problems and what traders must do to be able to overcome them.

PS: Trading Course is now available both in Paperback and Kindle eBook. Buy it now on Amazon!



You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn: 

- how to develop a trading system 
- how to utilize the best trading techniques within a trading methodology 
- how to think about the psychological aspects of trading and the markets 
- how vital it is to treat trading like a business 

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!

The Best of Finance Twitter (February 7th)

One day is a very long time on Twitter. Here are the highlights of what I enjoyed reading today:

"30+ years of investing. 1 million followers. It's still only the beginning." 
- Jim Cramer (@jimcramer)  

Jim Cramer tweeted today that he has passed the 1,000,000 followers mark. Quite impressive. Congratulations, Jim. 

"Crude completes 10-wk H&S top against backdrop of all-time record spec longs and commercial shorts." 
- Peter Brandt (@PeterLBrandt) 

 Peter Brandt shared a Crude Oil chart with a completion of a Head and Shoulders patterns and its bearish implications: 




"Make or break time for $CHK down near the 200d" 
- Larry Tentarelli (@LMT978) 

Larry tweeted about how Chesapeake Energy (CHK) is approaching its 200-day simple moving average. Will it hold? As Larry says, it’s make it or break it time for this stock. Larry shows a remarkable consistency in his approach and in the charts he shares on Twitter. 



"$XLY is down 8 days in a row. There is a bullish bias for tomorrow. Over the last 7 years when this happened it rallied on average +0.94%."
- Henrique M. Simões (@TraderHMS)

I highlighted the 8-day selling streak on Consumer Discretionary SPDR ETF (XLY). I have been sharing some of these setups on Twitter. This is the fourth setup I shared as I started with Marathon Petroleum (MPC) last week, then Petroleo Brasileiro (PBR), International Paper (IP) and now Consumer Discretionary SPDR (ETF)(NYSEARCA:XLY): 



"The S&P 500 hasn't made a 1% intraday move in 35 DAYS. That's a record." 
- StockTwits (@StockTwits) 

If you are a S&P Futures day trader you are probably missing a little of action. This is the dullest market ever. 

"You can’t make more time, but you can learn to use it better." 
- Tony Robbins (@TonyRobbins)

Traders need to find time to trade, time to research the markets and time to analyze their trading performance. Tony Robbins shared an infogram where one could read, "Did you know the average person spends approx. 1,011 hours per year watching television?"

"Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work." 
- Stephen King 

This quote was tweeted by Jon Winokur (@AdviceToWriters). While it is obviously in the context of writing literature I find it to be true in trading as well.

PS: Trading Course is now available both in Paperback and Kindle eBook. Buy it now on Amazon!

How To Achieve A Very High Level Of Performance



"There are interesting similarities between how to achieve a very high level of performance in sports and in trading. One is the ability to review our performance and make small improvements daily." 
(excerpt from Trading Course: How to Become a Consistently Winning Trader)

Ayrton Senna on how the combination of mind power, determination, instinct and experience make you go forward by testing your own limits and expanding your current racing (trading) capabilities.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!

Trading: Warning Signs of Failure

Dr. Brett Steenbarger recently wrote a fantastic article about warning signs of failure among traders. There is one that I would like to write further about as I have seen it in many traders. Often the bias is not completely evident but it is hidden below the surface and causing the trader to constantly misjudge the message of the market:

"Becoming Fixed in a Bullish or Bearish Stance: There are reasons to take a directional view at various times, but chronically taking one stance or another is a sign of imposing one's views on markets, rather than following the flows of supply and demand. they suggest that the trader is not truly evidence-based."
- Dr. Brett Steenbarger,  performance coach 


You cannot be a perma-bear, or a perma-bull. The trader must observe the markets with neutrality, with an open mind. The trader must analyze the data and make a decision based on what the data is telling him. Like Brett says, you must become an evidence-based trader.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!

Which Of These 2 Strategies You Would Choose?

Your task is to decide which of these two strategies you would choose for your trading and why. For each strategy, I have included the trading results (wins and losses) from a one-week period trading the SPDR S&P 500 ETF Trust (SPY) from two different trading systems that I am testing right now: 

Strategy 1: +35, +60, −25, +120, −75, −60, +35, +22, +120, +85, −60, −55, −20, +75 

Strategy 2: +30, −10, +50, −25, −18, +45, +45, +20, +50 

What strategy would best suit you and why? Study the results and pick your answer (on the related Twitter Poll).

I will share my answer and my thoughts later. Stay tuned!

Here is my solution,

Strategy 1: 

Total gain = 257 (sum of all trades)
Total sum of winning trades = 552
Total Sum of losing trades = 295
Profit Factor = (total wins/ abs(total losses)) = 1.57
% of winning trades = 57%
% of losing trades = 43%
Average trade = 18.35 ticks

Strategy 2: 

Total gain = 187 (sum of all trades)
Total sum of winning trades = 240
Total Sum of losing trades = 53
Profit Factor = (total wins/ abs(total losses)) = 4.53
% of winning trades = 66.67%
% of losing trades = 33.33%
Average trade = 20.78

So, while strategy 1 showed a larger total gain (257 against 187), the Profit Factor is much larger on Strategy 2 (4.53 against 1.57). This means that Strategy 2 is a lot easier to trade than Strategy 1, as you earn 4.53 dollars for every dollar that you lose trading that strategy.

Note that the average per trade on Strategy 2 is also a little bit higher.

While both strategies are very good, I would choose Strategy 2 and I would leverage it a little bit to obtain or surpass the total gain of Strategy 1. Strategy 2 is smooth, robust so it can be leveraged to bigger gains. My next step would be to draw a equity curve of both trading strategies to analyze the size and duration of the drawdowns (the sample is too small for this).

(Note: this is a simplification of a decision making process. The samples on both trades are very small to make a real trading decision. What I am trying to explain here is how to decide between two or more good performing systems)

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature, hitting win after win, and you'll be well on your way to financial independence!