Category Archives: Trade Videos

What To Trade?

There are all sorts of things out there to trade – futures, forex, options and stocks being the most common. In this weeks video I discuss the relative merits of each, and why I choose stocks (and recommend them to others) above all else.

Get the Flash Player to see this player.

Keeping Day Trading Simple

I see lots of traders overcomplicate their trading. I prefer to keep things simple. It leads to less stress, and more profit. Todays video looks at how to simplify your trading.

Get the Flash Player to see this player.

Short Selling Stocks

It struck me that I happily short sell in my trade videos, without necessarily explaining how that works. Several people have asked me about it, so here’s an explanation on shorting stocks.

Get the Flash Player to see this player.

Is Paper Trading Pointless?

Paper trading comes in for a lot of stick, with many saying it’s a pointless exercise. In this weeks video, I take a look at why I think it’s an essential tool for all traders, whatever their level of experience.

Get the Flash Player to see this player.

The Trading Daily Grind

Todays video answers a couple of questions about daily business of trading. How to avoid the potential boredom, and what is the best way for traders to handle their tax affairs.

Get the Flash Player to see this player.

Trading Penny Stocks

After the last video I got plenty of questions (keep them coming, always happy to answer more!) One of these asked if I traded penny stocks. Here’s my answer, in video form.

Get the Flash Player to see this player.

Your Trading Questions Answered

As I reply to emails each day, I notice some questions pop up time and again. In todays video, I take a stab at answering the most common.

Get the Flash Player to see this player.

Live Trading Tesla

Here’s a live trading video, as it’s been a while since I posted one. Biggest trade of the day was Tesla Motors, which only floated yesterday – so nice and volatile.

Apologies for the sound quality, this was recorded outside directly into the laptops internal microphone.

Trading over, now I’m back off to watch Wimbledon – we have a tradition where a bunch of us get together somewhere in Europe for the Wimbledon fortnight, and trading takes a bit of a back seat!

Get the Flash Player to see this player.

Don’t forget, you can get my videos delivered automatically through iTunes – see the link on the right.

Choosing A Market on A Budget

Jose asks:

“I was wondering what do you recommend I do with a minimum capital of about 1600 dollars? What should I trade?”

Lots of people have this kind of question, so perhaps my reply will be of use to others:

A budget of $1,600 is quite low, but certainly not uncommon. Given that amount, I suspect most people would suggest forex, because it’s easy to open an account with a deposit of that size.

Forex is also easy to trade on massive margin, giving you lots of leverage. If you’re a beginner, that’s a very dangerous thing indeed. Leverage makes it very easy to lose a lot of money very quickly. As traders, our first priority is to preserve capital.

As you probably know, personally I prefer trading US stocks, because I believe they are one of the easiest markets to make consistent profits in.

The sheer number of stocks available, and their predictable nature, means that you can find good high-probability simple trades every single day of the week.

So my recommendation would be to find a way to trade stocks with your budget. A regular account will let you day trade a couple of times a week. If you hold overnight, you can trade as often as you want.

If you can get a CFD account (which depends on where you live), then you can day trade as often as you like. If not, there are other options such as umbrella accounts, which can overcome the 2 day trades per week limit for accounts under $25k.

Having said all that though, your priority should be to learn to trade without risking any real money at all. Make sure you’ve learned the basics, and have a solid strategy ready to trade. Practice that strategy inside out on a simulator, or on paper, and *only* risk real money once you’re consistently profitable.

A lot of traders dismiss paper trading saying it doesn’t accurately represent the emotional and psychological challenges of live trading. That’s true, but that also means if you aren’t profitable paper trading, you have very little chance of being profitable in live trading.

In summary then: Learn the basics, then pick a strategy and practice it on paper until consistently profitable. Then open an account and start trading with that real budget. If you follow those steps in that order, the choice of market will already have been made by the time you get to the opening an account bit.

Hope that helps.

Tick Charts or Regular Charts?

Someone emailed me today to ask if I thought tick charts offered any advantages over regular charts. Here’s my reply:

In this context a tick is a trade execution. So instead of dividing your chart based on time periods, you’re dividing on number of trades.

A possible advantage of this method is that you will see a more regular representation of activity during slow and fast periods.

To take an extreme example, in a slow moving market with very few trades occurring, you could potentially have five minute bar representing just a couple of trades. Using a tick chart, the bar would not complete until the required number of trades had passed.

In other words, in a tick chart, all bars are equal. Tick charts smooth out fast and slow periods of trading to give a kind of ‘quantized’ view.

Whether that’s *actually* an advantage or not depends entirely on your trading method though…

Trying to figure out if a tick chart is “better” is a bit like trying to figure out if a 10 minute chart is “better” than a 5 minute chart. They both show the same data, just formatted differently (although you could argue a 5 minute chart shows more data points than a 10 minute chart, but for the sake of illustration, they essentially show the same thing). It’s not the chart itself that matters, it’s how you interpret it and act on that interpretation that counts.