Sunday, January 31, 2010

Weekend News and Market Views

* When traders lose confidence: Part One and Part Two;

* Profiting from inertia in markets;

* Making good trading decisions when under stress;

* Paul Volker on reforming the financial system;

* Thanks to a sharp reader for this article on how more wins leads to more losing;

* The case for taking a trading sabbatical;

* Interesting take on traders and entrepreneurs;

* Views on market weakness and other good reading;

* Recovery may be long in coming and challenges faced by Greece;

* China in the lead for clean energy;

* Concern over China ETFs;

* The foreclosure market and fake home ownership;

* What could drive foreclosures higher and weigh on housing market.


Sam said...

More Wins Leads To More Losses...

The same is true for so called high probability vertical option spreads. These are far out of the money vertical spreads. They have small reward but high probability of success. For instance you might win 3 out of 4 times but you only win a dollar when you win. That one time you lose you lose 4 dollars which wipes out the previous 3 dollars you won. If you just let the math govern you will lose money in so called "high probability" options vertical spreads. To make money you cannot experience that occassional max loss.

Sam said...

How More Wins Leads To More Losses...

If you are winning in poker many more times than you are losing yet you are losing money overall that seems to indicate that you are betting more on the hands you lose. If you find yourself betting more than the average on a particular hand that could be an indicator that you are going to lose!

Ahsan Haque said...

I always read your blog. Thanks to share with us your thought.

Support for the SPX remains at 1061 and then 1041,with resistance at 1090 and 1107.Short term momentum continues to vacillate between neutral and slightly oversold. May be bounch in next week but may be more down side coming next few weeks.
Ahsan Haque