PowerZone Trading Blog

6 Things You Think You Undertand About Investing - But Really Don't

Jean Folger - Thursday, August 05, 2010
Profitable investing seems as straightforward as buy low and sell high, but the reality is that investing is a bit more complicated than that. Even if an investor relinquishes all control to a broker or fund manager, it is important that he or she still appreciates the basic principles of investing. While the average investor has at least a fundamental understanding of the principles, here are six investing considerations that for most investors warrant further study. more

How to Deal with Trading Malfunctions

Jean Folger - Thursday, July 15, 2010
Just like good boy scouts, traders need to be prepared for the unexpected. It is virtually inevitable that part of a trader's workstation will melt down at some point, and this can lead to a financial loss. Platforms can experience problems, including surprises in strategy automation, for which traders need to plan. And, although it (thankfully) doesn't happen very often, entire exchanges can even shut down. All traders need a well thought out plan - in writing - to deal with these types of eventualities. If traders are ready to deal with problems as they arise, they'll be back to trading sooner - and hopefully with a minimum of stress and financial loss. Think of this preparation as a form of risk control. more

Tips for Creating Profitable Stock Charts

Jean Folger - Thursday, July 08, 2010
Charts are a technical trader's portal to the markets. With so many advances in analysis platforms, traders are able to view a tremendous assortment of market information. But with so much data available, it is important to create well-designed charts that will enhance, not hinder, a trader's market analysis. The faster a trader can interpret market information, the faster he or she can react to the changing conditions. Spending time to develop clean, easy-to-read charts and workspaces can improve a trader's situational awareness and ability to decipher market activity. Read on for some tips on how to make the best possible stock charts. more

Gifts for Young Investors

Jean Folger - Tuesday, July 06, 2010

With the number of holidays, birthdays, graduations and weddings to shop for, many people find themselves drawing a blank when it comes to finding the perfect gift. Nobody wants to spend hard-earned cash buying an unwanted present or something that will get buried in the back of a closet. One of the more everlasting gifts that family and friends can bestow is one that will teach young people about personal finances and encourage them to save. Want to give a gift that keeps on giving? Try one of these distinctive gifts for young investors. more

Interpreting a Strategy Performance Report

Jean Folger - Thursday, July 01, 2010

Today's market analysis platforms allow traders to quickly review a trading system's performance and evaluate its efficiency and potential profitability. These performance metrics are typically displayed in a strategy performance report, a compilation of data based on different mathematical aspects of a system's performance. Whether looking at hypothetical results or actual trading data, there are hundreds of performance metrics that can be used to evaluate a trading system. more

Top 10 Rules For Successful Trading

Jean Folger - Monday, June 14, 2010

Most people who are interested in learning how to become profitable traders need only spend a few minutes online before reading such phrases as "plan your trade; trade your plan" and "keep your losses to a minimum." For new traders, these tidbits of information can seem more like a distraction than any actionable advice. New traders often just want to know how to set up their charts so they can hurry up and make money. To be successful in trading, however, one needs to understand the importance of and adhere to a set of rules that have guided all types of traders, with a variety of trading account sizes. more

Investing in Artist Futures

Jean Folger - Friday, June 04, 2010
For years, investors and traders have hedged and speculated on the future prices of a surprisingly varied array of financial products. One can place bets on the future prices of corn and cattle, hogs and hurricanes, coffee and currency, to name a few, by trading futures and options contracts. more

Backtesting and Forward Testing: The Importance of Correlation

Jean Folger - Monday, April 12, 2010
Traders who are eager to try a trading idea in a live market often make the mistake of relying entirely on backtesting results to determine whether the system will be profitable. While backtesting can provide traders with valuable information, it is often misleading and it is only one part of the evaluation process. Out-of-sample testing and forward performance testing provide further confirmation regarding a system's effectiveness, and can show a system's true colors, before real cash is on the line. Good correlation between backtesting, out-of-sample and forward performance testing results is vital for determining the viability of a trading system. more

Pinpoint Winning Trade Entries with Filters and Triggers

Jean Folger - Monday, March 15, 2010
A consistent and decisive method for entering the market can be achieved by defining precise trade entry rules. Many traders may find themselves naturally too conservative or aggressive when it comes to entering a trade. Those who are too conservative may end up sitting on the sidelines while waiting for multiple levels of confirmation, a practice which commonly leads to missing trades altogether. Conversely, aggressive traders may jump at any chance to get in the market, sometimes with no valid reason other than the desire to trade. This, of course, frequently leads to losing trades. All traders, whether conservative, aggressive or somewhere in the middle, can benefit from using trade triggers and trade filters to establish decisive trade entries. more

Advantages of Data-Based Intraday Charts

Jean Folger - Monday, February 15, 2010

Traders are used to seeing intraday price charts based on time intervals, such as five-minute or 60-minute charts. This means that one bar (be it a candlestick or OHLC bar) will print at the end of each specified time interval. On a 60-minute chart, for example, a bar will print at 9:30, 10:30, 11:30 and so on until the end of the trading session. Time is the only consideration; volume and trading activity have no bearing. Thus, there will always be the same number of bars per trading day when using the same time interval. Data-based chart intervals allow traders to view price action from various data intervals instead of just time. more