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Practical Teaching Derived from over 60 Years of Trading Experience and over 30 Years of Mentoring .  Click here to learn about private mentoring with Master Trader Joe Ross.

Dec
01

Should You Trade Only One Market?

Restricting your trading exclusively to one market may not be your best choice. Here are some reasons why: You must not trade under pressure. Trading involves being eclectic and choosing only the best, most clear-cut trades in liquid, not overly volatile markets. It is sheer folly to trade feeling that you have to make a certain amount of money each day, or that you have to make up for a previous ...
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184 Hits
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Nov
18

Approaching the Markets

I recently received this letter, and thought you might like to see how another currency trader approaches the markets. "I approach the markets as a game of probabilities. As far as I'm concerned, that's the only way to navigate the currency markets. "What I mean by a game of probabilities is this: I do as much as I can when figuring my fundamental and technical analysis. I read and study all I can...
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201 Hits
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Nov
11

The Lottery Mindset

Do you ever dream about winning the lottery? There are actually people who have such good luck that they repeatedly enter contests and win. They win so often that if they wanted, they could count on winning, even though they are essentially trying to capitalize on chance. They develop a "lottery mindset" in that they approach life by counting on rare chance events. The rest of us aren't so lucky, ...
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242 Hits
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Nov
04

Mechanical Trading Systems

From time to time, questions come up about magic indicators, and mechanical trading systems based on such indicators. People really believe in them, are thoroughly confused by them, or hate them because they cost so much money and very often return so little. Is there a right way to trade mechanically? I believe there is. There are two approaches. One is to mechanize yourself, literally become a h...
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302 Hits
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Oct
27

What is Containment?

Containment is something akin to support and resistance. It is there but it isn't there. All of us have seen prices fall through so-called support like a hot knife passing through butter. We have all seen prices soar through resistance like a run-away balloon. Actually, support is a place at which a lot of people are willing to buy, therefore, buy orders tend to group at support. This temporarily ...
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Recent Comments
Dale Burreson
Nicely Said.
Friday, 29 October 2021 06:56
Martha Ross-Edmunds
Thank you, Dale. : )
Friday, 29 October 2021 23:01
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Oct
21

Middling the Market

Do you ever wonder why there has to be a spread between what you can buy an option for and what you can sell it for? The simple answer is someone needs to make money and that someone is usually the market maker. Many option traders don't even think about the bid-ask spread. They don't even try "middling." Middling the market means you try to get close to the middle of the bid price and ask price. ...
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312 Hits
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Oct
13

Risk On, Risk Off

There was a time when investors could diversify their risk by owning several different asset classes, like stocks, bonds and commodities. They could rest assured that if one asset class went down, other asset classes would go up to compensate. This strategy worked well for decades. But over the past few years, things have changed, and I think they've changed for good. So, who's to blame for this s...
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296 Hits
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Oct
07

What a Price Chart Really Represents

Have you ever thought about what a price chart really represents? Is it just the movement of price that is seen there? For every price to actually post, there must be a buyer and a seller. Price charts are actually psychographs that measure traders' beliefs of present and future values. Traders are emotional and the market price is not always right – especially at extreme tops and bottoms, where e...
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332 Hits
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Sep
30

Reverse your Position

Did you know that there are professional day traders who reverse their positions about 60% of the time when they take losses? Why do they do this?? The market should not have technically reached the exit price, which is placed where the intraday market trend may have reversed the short-term trend. Consider a market that moves a three-day average range above the opening price, then breaks sharply t...
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306 Hits
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Sep
23

Trading in a Trading Range

When prices are in a trading range, count the number of closes above or below a specific price near the vertical mid-level of the trading range. If 70% of the closes are above the mid-level price and the market cannot rally and close above reaction highs, a severe correction may be imminent. If a market breaks and cannot close below reaction lows, then expect a rally to carry prices above the reac...
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505 Hits
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Sep
16

Getting Credit

Thanks for your prompt reply and explanation Joe. I was thinking to do straight call/put to pre-define my risk. Follow up question please. If I buy a call for 30 days and close out the option in 15 days, Do I get credit for 15 days that I did not use? The answer to your question is no! You do not get credit for the days you did not use. In fact, you penalize yourself. You paid for 30 days, not 15....
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348 Hits
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Sep
01

Procrastination

Many of us procrastinate over making decisions in our daily lives, whether the choices are trivial or highly important. When we postpone the decision-making process, we essentially move back our mental deadline. This bad habit often begins during childhood (I'll get to my homework or chores later), extends into career (there's a better opportunity out there, but I'm comfortable where I'm at), and ...
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492 Hits
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Aug
26

The Myth of Making the "Right" Decision

We all face big choices throughout the course of our lives. Whether the decision involves career, business, investing, or family, I find that many people place too much emphasis on that one specific choice as the be-all, end-all. In reality, following through on our decisions is the most important step in the equation. It's not so much about making the "right" choice, but instead about choosing th...
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485 Hits
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Aug
19

Trading and Truth

One of the clear, clean things about trading is that truth is immediately and finally manifested. The price goes up or down or nowhere. Your trade or position is profitable or not. You can't spin it any other way. You're right when you make money. You're wrong when you lose money. That's just the way it is. There are also other truths involved. You just got lucky. You have a robust and proven meth...
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452 Hits
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Aug
13

What Holds You Back from Becoming Financially Independent?

Let's look at some key factors that stand in the way of many people seeking financial independence. 1. The "Dilly Dally" effect - Too many of us are always putting off the necessary changes that need to be made regarding how we manage our money. I often talk about automating money from your paycheck into a brokerage account each week so you are positioned to get money to work for you in income-pro...
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456 Hits
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Aug
05

Forcing Things to Work

We've all faced situations in our lives where things just weren't working out. Instead of walking away from the situation, we sometimes choose to try and force a fit. Whether we're talking business, career, or investing, it's often more prudent to cut losses early on -- or to avoid a situation altogether. Imagine you've been watching a certain stock fall in price over a long period of time. You ma...
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365 Hits
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Jul
29

Day Trading is Like Guerrilla Warfare

There are only two kinds of day traders, the quick and the dead. Day trading is like guerrilla warfare. The quick, seize opportunities immediately, move their stops to break even as soon as possible and capture as much money as is possible in the shortest amount of time. The dead are never quite sure when and how to enter a market or where to get out. These dead turn into "Three Month Wonders," be...
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449 Hits
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Jul
23

Trading is NOT Investing

I'm writing this from the perspective of a trader. Traders encounter problems and situations quite different from those of an investor. Traders generally do not hold positions for many weeks, months, or years. Many traders do things that aren't in their own best interests—even though common sense warns of the consequences. Why do smart people make such mistakes? And how can they reverse the patter...
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Recent comment in this post
Mark Perreault
Great article Joe! Biggest take away for the was the perspective on procrastination. Loneliness not laziness.. I've wouldn't have ... Read More
Friday, 23 July 2021 10:39
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Jul
15

Understanding

I trade without indicators almost all of the time. If, when, I choose to use an indicator, it is done so with complete understanding of what the indicator is showing me and what it is good for. There are countless times when I've seen traders looking for confirmation by using multiple indicators that measure the same thing. Can you get true confirmation by using RSI to confirm what Stochastics, %R...
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437 Hits
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Jul
08

Accumulation / Distribution

What exactly is accumulation and distribution? It sounds simple, but I've never been able to figure out what they are talking about! There are four market phases containing all price action. The accumulation phase has low range and volume and occurs at the bottoms of a prolonged bear market. We saw such a situation in the past in gold, which made a long-term bottom after a 21-22 year secular bear ...
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Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.