Key Takeaways A “bull trap” tricks investors into thinking a stock price decline is finished and that it’s a good time to buy Bear markets and steep selloffs have often been followed by temporary rallies that turned out to be bull traps Investors can monitor trading volume and other indicators to help avoid getting caught […]

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Key Takeaways Many markets are open for trading between the close and the next day’s opening bell At-the-money options reach their height of uncertainty just before expiration Stubbornness and other mental mistakes can sometimes lead to stress If you’re like most people, you have a bedtime routine—lock the doors, brush your teeth, find your spiritual […]

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Key Takeaways Nearly two-thirds of actively managed, large-cap funds failed to beat the S&P 500 index in 2018 Luck and timing may factor into individual investor’s results, but research, diversification and other practices can be key components Whether it’s blind luck, dumb luck or some other variety, it’s human nature to attribute successes or failures […]

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Are certain personality types a better fit for navigating markets? You may be surprised. Everyone knows at least one “Type-A” personality, the hard-driven workaholic, perhaps a doctor, lawyer, or small-business owner. Then there are the logical, analytical left-brainers—engineers or computer programmers. And don’t forget the artists and creative types among us, folks driven by subjective […]

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“My wife was afraid of the dark…then she saw me naked and now she’s afraid of the light.”—Rodney Dangerfield The first step to overcoming any fear is understanding what you’re dealing with. With short-naked puts, that means understanding the strategy as well as its risks. To enter a short-naked put, you sell to open a […]

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A plan (and sticking to it) is the backbone of a solid trading approach. But what happens when your plan shows cracks? Consider 5 occasions that may demand course correction. Trading on a gut feeling can leave you with a stomachache. That’s right. Your wisest decisions should be devoid of fear and greed, sometimes to […]

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From tulip bulbs to dot-coms, history is littered with the wreckage of market bubbles. Current conditions aren’t raising red flags among most market experts. Nonetheless, investors should always be on the watch for irrational exuberance and look for ways to protect themselves if things turn sour. How do you know when a high-altitude market is […]

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Bring on the blindfolded monkeys. Daniel Kahneman, a Nobel Prize-winning Princeton University psychologist who is widely credited with creating the field of behavioral economics, has some advice for stockpickers: It’s all luck. What? That’s blasphemy to investment professionals who turn to all sorts of tricks and scientific methods to make decisions affecting millions, if not […]

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Editor’s note: This is the second of a two-part Perspectives series on the principles of “mindful” trading. Read the first. Professional athletes often expound during post-game media sessions about being “in the zone.” It’s a parallel universe where all goes quiet, time seems to stand still, and their ultimate triumphs are almost effortless. A similar […]

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