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December 3, 2014

Zero Divergences

With all that’s going on I often forget that not all of my loyal Zero subs have been around for years. But recently a few noobs have signed up and thus it’s important to share the occasional titbit:

Here’s a great example of a bearish divergence which occurred about an hour into the open. Now, I concede that it didn’t produce a big move but it’s the kind of stuff we look out for. In simple terms: if the signal is congruent with price direction then the market appears to be truthful – if you see divergences like these then pay attention as short term tops and bottoms often happen shortly after. Of course in such a compressed VWAP [...]

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September 3, 2012

How To Develop A Trading System – Part 1

In recent weeks I have been quite prolific regarding the current state of affairs on the equity front. There really is not much to add and if you have been following my work then you should be well prepared and ready to pull the trigger with confidence once equities decide to pick a direction later this week. Thus instead of regurgitating my long term charts I have decided to use this Labor Day as an opportunity to indulge your recent requests for some perspectives on basic trading related concepts.

As I am a big fan of the ‘jumping in feet first’ method this series will cover how one may develop a complete automated trading system. This will not only allow me to [...]

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May 20, 2012

Scalping With The Mole

And now for something completely different – but I have a hunch you’re going to like it. If you’re a Zero sub then you are probably familiar with the Mole indicator which is located right above the Zero Lite on the 5-min panel. The basic tutorial refers to it as a different way of visualizing the Zero – as a matter of fact it represents an early version of the Zero indicator. As it shows a bit more context the Mole indicator often offers valuable clues as to impending swings in momentum or a shift in participation. For example: Be on alert when you see the Mole’s bubble expand or contract – the former indicating strengthening and the latter a weakening of the [...]

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April 13, 2012

Convexity – It’s Evil Too

So I (volar) do not have much to say for a market outlook- though the VIX 8 day stat worked out well (with hindsight and inductive reasoning bias).

Banking coin is never easy- but avoiding stupid decisions really makes the difference. Convict keeps it simple- and frankly that is why he is solvent.  Solvent traders have a better probability to make coin than the insolvent ones (law of large numbers- just saying). This post is not simple- and will be difficult for a non-options skooled persons, but it should at least give one reason to not stick one’s private parts in a blender (e.g. trading options without the proper tools/knowledge).

I figured this would be one of [...]

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2309Riders participate in the 74th "That Famous Preston Night" Rodeo in Preston Idaho, August 1, 2009. The annual event is billed as one of the region's biggest rodeos, bringing top riders and thousands of fans to the small southern Idaho town. Photo by Colin E. Braley
 
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Cognitive Bias Carousel
  • Loss AversionLoss Aversion
    The tendency to treat money that has already been committed or spent as more valuable than money that may be spent or acquired. Imagine two … more
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