Posts Tagged ‘Trends & Fads’

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13 Trader Resolutions for 2010

Friday, December 18th, 2009

(Watch the Video Online: Market coach Doug Hirschhorn, PhD, discusses 13 rules for traders to follow in 2010.)

As 2010 approaches, we have time to reflect on what we’ve done this year and what we intend to do next. Because I’m a trading coach, I have access to some of the greatest minds on Wall Street. Here’s a list of best practices I’ve gathered from them this past year.

  1. I will create game plans for all of my trades.
  2. I will trade only when I have edge.
  3. If I have 3 losing trades in a row, I will take a break, walk away and clear my head.
  4. I will never trade for revenge.
  5. Anytime I’m hoping, wishing or praying, I will exit the trade immediately.
  6. I will never give back more than half of my profit on any trade.
  7. I will keep a daily trading journal and email it to who will hold me accountable.
  8. I will think in terms of probabilities and risk/reward.
  9. I will remain objective in my trades by asking, “If I had no trade on, what would I do?”
  10. I will never put more than 20% of my capital at risk in any single position.
  11. I will not make trades just because I’m afraid to “miss out.”
  12. I will quickly recognize my emotions and compartmentalize them rather than waste time trying to get rid of them.
  13. And finally, I will trade to make money, not to be right.

I’m confident that if you commit to following these 13 rules, you’ll be more profitable in 2010.

Think better, invest smarter.

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Position Yourself for 2010

Friday, December 11th, 2009
(Watch the video online: Market coach Doug Hirschhorn, PhD, discusses how investors can position themselves for a strong 2010.)

Traders at banks and hedge funds get paid once a year, at the very end. Since most traders on Wall Street did not get paid much, if anything, last year, this years’ profits are even more valuable to them.

So what does that mean for the risk takers out there? It means the closer we get to the end of the year, the less interested traders are in putting on big risk. At this late stage of the game, the risk/reward for them is just not good enough.

What does that mean for the markets?

It means less competition from the big players and lower volume across the board. As a result, there are more quick rallies and dips along the way.

Here’s the good news: If you’re a smaller, short-term trader, there are fantastic opportunities to make some quick profits.

On the other hand, if you’re a medium or longer-term investor, you have a great chance to find excellent entry levels into positions for next year.

The take-away for this week is you should stick around and seek out opportunities in the markets, while the big players sit on the sidelines.

Think better, invest smarter.

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Hirschhorn: Fear…or Greed

Monday, November 30th, 2009

Watch the video online. Market coach Doug Hirschhorn, PhD, tells viewers what really drives the markets.

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Hirschhorn: Risk-Averse Traders

Monday, November 30th, 2009
(Watch The Video Online: Market coach Doug Hirschhorn, PhD, discusses why he believes traders are risk averse right now.)

Here are 3 reasons I believe this week’s trader temperature is risk averse:

The data is already baked in the markets Despite a bullish outlook based on recent Fed statements, the feeling is that most of upside move is already baked into the markets. That means a slow and steady climb until the year’s end. While that may be good for long-term investors, it’s not so good for shorter-term traders.

Pay day preoccuption Traders have families and need to lock in paychecks (they get paid at year end).

Lack of New Catalysts A lot of the uncertainty we had before isn’t so uncertain anymore. As a result, the risk/reward profile is not nearly as compelling.

In short, staying patient right now is the best trade.

Think better, invest smarter.

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Dr. Doug Hirschhorn: Steroids & Hedge Funds

Thursday, November 5th, 2009

(Watch The Video Online: Market coach Doug Hirschhorn, PhD, discusses athletes, hedge fund traders and gaining an edge.)


There are two things I love most in life: trading and baseball. Historically, peak performance in baseball involved finding something that gave players an edge over their opponent. Some used amphetamines. Others thought steroids gave them the edge.

Maybe that’s what gave some players the ability to hit monster home runs. And while there may be a lot of gray areas and there haven’t been any firm convictions that have come down, there is suspicion about what goes on.

Now look insider trading. Insider trading is kind of the trading world’s version of steroids. Look at some of these hedge funds, these banks. What gives them an edge? How are they outperforming the markets?

At the end of the day, I think it’s somewhat naive of us to believe steroids haven’t been in sports for a long time. It’s also naive to think information that wasn’t publicly available didn’t exist in the trading world.

That doesn’t mean the world’s corrupt. It doesn’t mean Wall Street’s going to fall apart. What it does mean is that you have to look at things objectively, analyze the situation, and find your own edge. To draw conclusions the whole system is awful and bankrupt and there’s no way to fix it misses the point.

Think better, invest smarter.

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