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    Essence of Trading Volume 1
    Essence of Trading Volume 1
    Essence of Trading Volume 1
    Ebook79 pages1 hour

    Essence of Trading Volume 1

    By Lawrence Chan

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    About this ebook

    Essence of trading refers to the roots, the key ingredients, and the spirit that one needs to be successful with trading. I started writing the Essence series from the inception of my website / blog DaytradingBias.com. It is a collection of my thoughts on the important aspects of trading.
    Trading is not just the means to make a profit. As a trader risking your own money also means a unique perspective in things all around us. That makes us somewhat different from the rest of the crowd.
    Volume 1 is the collection of articles in the series since the beginning until the end of year 2013.

    LanguageEnglish
    PublisherLawrence Chan
    Release dateDec 5, 2013
    ISBN9780988039971
    Essence of Trading Volume 1
    Author

    Lawrence Chan

    I am a trader and researcher in financial technologies for well over 20 years.My research in market breadth analysis is incorporated into the trading platform NeoTicker from TickQuest Inc. I currently hold the position of chief software designer of NeoTicker at TickQuest.I have numerous articles and trading models published in trading related magazines like Futures, Technical Analysis of Stocks and Commodities, etc.I have started a long term project to summarize my research results and have them organized and published.

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      Book preview

      Essence of Trading Volume 1 - Lawrence Chan

      Essence of Trading Volume 1

      By Lawrence Chan

      First Edition, December 2013

      Copyright © 2013 by Lawrence Chan

      All rights reserved.

      Smashwords Edition License:

      No part of this book may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior written permission of the copyright owner, except in the case of brief quotations embodied in critical articles or reviews.

      Please purchase only authorized electronic editions, and do not participate in or encourage electronic piracy of copyrighted materials.

      Also by Lawrence Chan, available now at DaytradingBias.com and soon at eBook retailers everywhere:

      5 Minute a Week Winning Strategies

      5 Things You Must Know To Beat The Stock Market

      Special Theory of Price Discovery

      Market Bias Detective: S&P 500 Daytrading Time Map Vols. 1 & 2

      Market Bias Detective: Forex Daytrading Time Map Vol. 1

      Know Your Odds Before You Trade

      ~~~~

      Disclaimer

      Limit of Liability / Disclaimer of Warranty: While the author and the publisher have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

      CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

      ~~~~

      Table of Contents

      Introduction

      Identity

      Modern Financial Economics Is Just Alchemy In Disguise

      Day Trading (or Trading) May Not Be Your Best Career Choice

      What You Want Isn’t What You Need

      Psychology

      Trading Is Easier Than Most People Think

      Only Man-made Roads are Straight and Smooth

      Don’t Blame The Politicians

      How I Kicked A Bad Habit

      Emotional Imbalance Can Impact Your Trading Decisions (and Profitability)

      Hunt As A Human

      Cognition

      Importance of Critical Thinking And Why It Is Not Enough (Part 1)

      Importance of Critical Thinking And Why It Is Not Enough (Part 2)

      The Three Pillars of Critical Thinking (Part 1)

      The Three Pillars of Critical Thinking (Part 2)

      The Three Pillars of Critical Thinking (Part 3)

      The Three Pillars of Critical Thinking (Part 4)

      Price

      Why We Love Picking Tops and Bottoms (Part 1)

      Why We Love Picking Tops and Bottoms (Part 2)

      Price Goes Up And Down

      Time

      Value Of Time

      Don’t Forget Your Trading Goals

      Make Trading Worth Your Time

      Applying The Concept of Refactoring To Trading

      About Lawrence Chan

      ~~~~

      Introduction

      Essence of trading refers to the roots, the key ingredients, and the spirit that one needs to be successful with trading. I started writing the Essence series from the inception of my website / blog DaytradingBias.com. It is a collection of my thoughts on the important aspects of trading.

      Trading is not just the means to make a profit. As a trader risking your own money also means a unique perspective in things all around us. That makes us somewhat different from the rest of the crowd.

      Volume 1 is the collection of articles in the series since the beginning until the end of year 2013. Since I am not someone who can focus on a single subject for prolonged period of time, the articles are scattered across many topics. I have organized them into several topics to make it easier to follow my train of thoughts.

      ~~~~

      Modern Financial Economics Is Just Alchemy In Disguise

      Economics Is Social Science

      Many people confuse economics as a science like physics or medical science. Economics is part of social science. It is not the kind of science that can produce precise projection or accurate forecast . In this sense, most of the theories you have come to hear about in economics have no practical value in trading. If cars are made by economists with their economic theories, the cars will explode and burn the moment you drive them, even though the car never moved.

      Financial Economics takes the nonsense one step further. As all human with any common sense know, the price of anything that is determined through market mechanism is controlled by the buyers and sellers. They can do whatever they want but their actions are mainly goal driven. The goal for any normal participant in a market is to make money. Yet economists assume price movement in our markets to be random without even checking if reality matches their assumption at all. When the most fundamental component in the study of financial economics, price movement, is not even properly examined at all, how can anyone

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