thinkMoney - Spring 2017 - 35

May 2017

In this Issue:

  • Are You Trading Enough?
  • The Fad Is Not Your Friend
  • Markets Aren't Normal and Neither Are You
  • The Unbalanced Butterfly: Tilting the Odds

Spring is in the Air

ONCE AGAIN, it's that time of the year -- time to torture ourselves with fruit and nut diets, hit the gym every day, and use those half-off spray tan coupons -- all for the love of summer and its sunny glory. And that's a great distraction. These things might boost your self-esteem, give you a break from screen time, and clear your mind -- it's all good. We can all use a refresh from time to time.

Summer aside, does your trading need a refresh, too? Are you tired of seeing those winners turn to losers? Or crying the blues because you let a small loss turn into a bigger one? You're not alone. Most traders worth their salt go through this. Lucky for you, our cover story, "Are You Trading Enough?" on page 16, talks about the common mistakes traders make and offers action plans you can implement to overcome them. You're not going to nail every single trade, but to succeed, you need stay engaged with the market and trade consistently.

And keep learning, keep evolving. It's true that change can be good, but not all hot new trading concepts that come your way are going to work for you. Be wary of big promises and small rewards. In "The Fad Is Not Your Friend" on page 20, we'll dissect one of them. In theory, the Kelley Criterion makes big promises for card players, but it may not work so well in trading. We'll tear it apart and give you the 10,000-foot view.

But kurtosis -- that's geek-speak for something that observably deviates from what's "normal" in the market. And since the markets are rarely normal 100% of the time, understanding kurtosis could help keep you out of trouble. For more, read "Markets Aren't Normal and Neither Are You" on page 24.

So, take a break from your body-by-summer routine and eat some brain food. Sit back and absorb this issue. Learn a few new tricks and apply them where it feels right. At least if you show up to the beach with an orange glow, you'll still be the wiser.

Happy trading,

Kevin Lund

Editor-in-Chief, thinkMoney