≈ The Darwin Way ≈

“Trading with an edge is what separates the professionals from the amateurs.“, stated Curtis Faith in his Way of the Turtle.

Trading per se doesn’t have any built-in edge. Buying an asset at a certain price and then selling it back at a higher one is not an edge; it’s just trading itself. Without an edge, your trading business will have no better chance than that of throwing darts on a wall.

An edge is a systematic exploitable advantage over an opponent. Edge in trading is based on market behavior. Market players are not rational in their decision-making process and this is where the golden opportunity lies.

Warren Buffett knew this when he began to buy wonderful businesses at a discount way back in the late 50s/early 60s. However, technology has leveled the playing field between professionals and identifying both good and undervalued businesses has become harder over the years. This makes us immediately recollect Buffett’s edge. Is it becoming blunt over the years? Has he lost the Midas Touch? What is wrong with his playbook?

A system can lose its edge over time due to changes in market dynamics. Not if you rely on a solid mission, the source of your edge, like Buffett’s. Because intense mood fluctuations, herding effect, short-sightedness and cognitive biases will always plague the markets, no matter what, the only thing that Buffett—and you—have to do is develop ways to fulfill your system’s mission in any market conditions.

Keep your edges sharp. Adapt to survive, the Darwin way.

Chart of the Day

The Herd Mentality

Short-term moving averages continue to hold on the markets in a rally that is now approaching one-month! Not a single close below the 5-ema on the daily chart is a telling sign of how strong this rally has been. Market players are not rational in their decision-making process and this is where the edge lies. (source: greekshares.com)

Video of the day

How To Place a Trailing Stop Loss on a Breakout

In this video, Coach Noah Davidson will show you exactly how to place a Trailing Stop Loss on a breakout pattern.

Today’s line up

Options Theory

The Game of Risk Management

Let’s play a game. A risk management game. We’re going to take a random person off the street and give them a $25k account to trade. Then we’ll train them on the basics. In fact, since we’re kind chaps in search of good karma, we’ll give them unfettered access to every training offered here at Tackle Trading.

Traders Lounge 11PM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

The Coaches Show 8:30PM EST

This is our weekly MasterMind group. Join the coaches tonight, 8:30pm EST to discuss the markets and help you prepare for the week.

Halftime Report 12:30PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.

Market Recap

The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.

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