New Trader,Rich Trader 2: Good Trades, Bad Trades pdfdrive com

Chart courtesy of StockCharts.com
“I really need to narrow my watch list and master a few trading vehicles,”
New Trader muttered, thinking aloud.
“If you find the rhythm of a few things and understand their tendencies and
price history, you can do very well. My money came from focusing on a few, not
struggling with many.”
“What do I need to be focusing on to learn about them?” New Trader asked.
“Well, let’s see…” Rich Trader said as he started naming them off.
Typical patterns they trade in
Current trading range
Key moving averages that act as support and resistance
Longer-term support and resistance
How it acts historically after different types of news events
Time of the month behavior
Seasonality
First day of the month behavior
Does it tend to trend or revert to the mean?
How does it usually act in relation to key technical indicators?
What is its current daily average trading range?
What is its current weekly average trading range?

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What is its current monthly average trading range?
How liquid are the options?
What is its history for volatility?
“And of course, the most important question: How will you use this
information to create a profitable system?”
“Well, now that I know what work needs to be done, it’s simply a matter of
doing it. It’s time to get out the old spreadsheets and get to work.”

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PART III
MANAGING RISK TO STAY IN THE GAME
“The key to long-term survival and prosperity has a lot to do with the
money management techniques incorporated into the technical
system”
–Ed Seykota

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CHAPTER 13