Trading Quotes

Chasing a breakout is not a great idea. For every successful breakout, there’s a false breakout. Staying solvent means protecting yourself from false breakouts. The best way to do that is to buy at the breakout point and set a stop-loss to make sure if the price falls much below the breakout point, you get out with no more than a small loss. A good rule of thumb many professional traders use is to only buy within 5% of the breakout point. If the price has risen further than that by the time I’m at my trading screen, then I usually disregard the breakout and wait for the next opportunity. [2019] - Glen Goodman

In trading, a right-angled triangle is simply a triangle pattern with a horizontal top or bottom edge. Statistically, these horizontal edges tend to be more reliable as trading signals than triangles with diagonal support or resistance lines. This is probably due to human psychology. Traders’ eyes are drawn to horizontal lines that appear to contain the price movement, while diagonal lines don’t have such a definite solid quality about them. Horizontal lines feel like they have more meaning as support and resistance levels, therefore they do. [2019] - Glen Goodman

Head-and-shoulders (H&S) is just a nice shorthand way of describing a relatively complex pattern. Empirically, it’s one of the most reliable patterns with extensive academic evidence supporting its use to improve trading profitability. [2019] - Glen Goodman

Apart from price itself, the most useful indicator is volume. Volume tends to peak on days when there is a major price reversal, it tells you there is probably a major changing of the guard going on: if the bulls (the positive crowd) were dominant, then the bears (the negative people) are now in charge, and vice-versa. Volume can also be useful in other situations. For example, when a chart has been quietly trending sideways for some time, a sudden breakout is usually accompanied by a large increase in trading volume. But if the volume doesn’t increase, the breakout will often not follow through and will turn out to be a false breakout. [2019] - Glen Goodman

A trader who likes to follow long-term trends might use the 200-day moving average as a trailing stop, a stop-loss line that follows the price line at a distance. They might have a rule that they will not sell as long as the price remains above the 200-day moving average. If the price dips down below the 200-day MA, then the trailing stop has been triggered. [2019] - Glen Goodman

I’m using a 30-day ATR, and in order to keep the ATR trailing stop line comfortably far away from the price line, traders often subtract a multiple of the ATR from the highest price reached in recent days, so I’m subtracting five times the ATR. ATR trailing stop = Highest price in the last 30 days – (5 × ATR) [2019] - Glen Goodman

It’s much easier to view the long-term trends using a logarithmic chart. Log charts allow us to see percentage changes in price rather than absolute prices. For example, the vertical distance between $20 and $60 is the same as the distance between $200 and $600 and is the same as the distance between $2,000 and $6,000. [2019] - Glen Goodman

As a rough rule of thumb, many successful traders choose not to risk more than 0.5 to 1% of their trading capital on a single trade. This may seem pathetically low if you’re a big-betting novice trader, but keep betting big and some day soon you won’t be able to bet at all. [2019] - Glen Goodman

A strategy I often employ after a sharp rise is to take profits on part of my position and leave the rest open. It’s a particularly useful strategy after a really sharp rise, because quite often a sharp rise is followed by a sharp fall, so it can make sense to hedge your bets by taking profits on a portion of your trade. [2019] - Glen Goodman

Your profit is equivalent to the percentage change in price. When you go short, the maximum possible gain is only 100%, while the maximum possible loss is infinite. Now you can see why I’m not particularly keen on shorting! It is also much harder to stay in a short trade for weeks or months than in a long trade because the upward corrections during a downtrend can be breathtakingly sharp. [2019] - Glen Goodman

HODLing through bear markets is not a great idea. Well, HODLing through long sideways markets is also not a great idea, because of the opportunity cost involved. [2019] - Glen Goodman

I love using limit orders because they allow me to go about my life without worrying about prices too much while the markets do their usual movements. I’m not a big fan of stop-losses. Volatile markets such as cryptocurrencies normally bounce back up from the lows as rapidly as they fall. That’s why by using a stop-loss order, you may end up getting out of your position prematurely and miss out on potential gains. Short-term traders are more likely to use stop-losses. Long-term investors are supposed to have made the risk-management calculation ahead of time, making sure they have enough time to wait things out. [2019] - Kiana Danial

Always Tighten Stops, Never Loosen Stops. We never lower our stop when we’re holding a long position, and we never raise a stop when we’re in a short position. [2010] - Ed Ponsi

A weak currency is important to Japan because the Japanese economy is almost entirely driven by exports. [2010] - Ed Ponsi

Forex traders often use the U.S. Dollar Index to confirm USD trades vs. individual currencies, especially against the euro. The index basket consists of the euro (EUR, 57.6 percent), Japanese yen (JPY, 13.6 percent), British pound (GBP, 11.9 percent), Canadian dollar (CAD, 9.1 percent), Swedish krona (SEK, 4.2 percent), and Swiss franc (CHF, 3.6 percent). [2010] - Ed Ponsi

Small speculators are not the contrarian indicator of the COT report; in fact, they are not really a useful predictor of market direction one way or the other. The noncommercial traders are the contrarian indicators of the COT report. They tend to be wrong more often than the small speculators. [2010] - Ed Ponsi

U.S. Treasuries are especially attractive in times of turmoil, as they are considered among the safest investments in the world. Another reason for the strength of the greenback was the sudden loss of confidence in many of the currencies of developing nations. These currencies tend to outperform during good economic times and underperform during bad times. [2010] - Ed Ponsi

As an end-of-day trader, your risk-to-reward ratio is much more favorable than that of a day trader. [2010] - Jay Norris

We do not make an analytic, or trading, decision until the candle is closed. [2010] - Jay Norris

Professionals tend to use 50-day and 200-day SMAs when they are analyzing or trading securities. Moving averages and their crosses are lagging indicators, they are more suited for trading longer-term. It is at the beginning of trend changes that corrections and price swings tend to be at their biggest, making the longer-term averages and crosses more analytic tools than trading tools for more experienced traders. [2010] - Jay Norris