Short Review of Trading Ideas from Andrew Cramer’s Article
This article confronts very familiar trading problems.
Written by a real trader, of course.
What Learned About Trading from Article
Algorithmic trading is very difficult to apply to real trading.
Testing trading strategies on historical data does not guarantee profitable trading in the future.
The risk of losing money in trading is very high, it all depends on understanding the win/loss probabilities.
In times of crisis, it is better to be with cash and gold.
A simple trading system based on statistics and probabilities will work in trading.
Trading changes a person’s psychology, making them more aggressive.
Tools used in trading: stock options, watch lists, fundamental analysis.
The largest losing trades were with low liquidity stocks and bad fundamentals.
Trading was realized with IB broker (Interactive Brokers) — lowest commissions and the robust TWS platform.
Broker commissions will easily wipe out trading with a small deposit.
Over-trading is the number 1 problem for a day trader. The main thing in the market is the ability to WAIT.
Trade liquid stocks and you will always have the best middle price of the asset.
Trading is an art. Here the main role is played by talent backed by hard daily work.
A decent trading experience is the main advantage of professionals. It is a matter of survival in the market in the long term.
It is possible to learn options trading from online free sources:
- Books about option trading
- Trader’s articles on the forums
- YouTube video channels of traders and brokers
A market-maker makes money when you use market orders, overpricing when you buy and underpricing when you sell. Use limit orders or mid-price in your trading.
Master trading software to the point of mastery so that your market analysis and trading will be error-free.
Over-trading and constant balance control distracts you from the main thing — consistency (execution of the trading plan).
With less than $25K to trade, it is possible to make only 3 trades per week (Pattern Day Trader rule).
But…
“PDT rule can be bypassed by trading 0DTE options. Open a position Debit or Credit Spread and expires at the end of the trading session. Easy.”
Use a few instruments in your trading — SPX index, Tesla & Apple stocks, and more than 1 to 2 return to risk.
A trading journal is disciplining and can show the weaknesses of your trading.
It is useless to fight the market maker (fight for the best price), it is more reasonable to adapt to the rules of the game.
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>> Have a Profitable Trade!
