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Creating advanced orders step-by-step in Trader Workstation (TWS by Interactive Brokers)

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Category: Blog
Last Updated: September 07, 2023
  • trading
  • TWS
  • advanced
  • interactive brokers

Creating advanced orders step-by-step in Trader Workstation (TWS by Interactive Brokers)

Interactive Brokers (IB) is a popular broker, operating in several counties around the world, usually under local national names. Their trading platform is the same everywhere, it's the Trader Workstation or TWS. For novice users, it may be somewhat intimidating at first glance, but once you get a good understanding, you'll see it has a lot of powerful features to offer.

We have learned that disciplined trading is the only way to survive in this business. The best way to adhere to your own strict trading rules is to automate things. Let your orders take care of your trading, not your brain because the human brain usually fails in (short-term) trading. In order to achieve this, we need an extensive set of order types. TWS has just that, so let's get into it.

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Probability thinking

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Category: Blog
Last Updated: September 07, 2023
  • market psychology
  • randomness
  • probability thinking

Probability thinking

It has been mentioned in many posts here and elsewhere: to be successful in trading, you need a completely different mindset than the average person.

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What do you think is your neighbor thinking that you think that he is thinking

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Category: Blog
Last Updated: September 07, 2023
  • market psychology
  • market
  • Nash equilibrium

neighbor thinking

.... that you are thinking that he is thinking? This is the funny paradox that is a big factor in the financial markets. In 'A mathematician plays the stock market' by John Allen Paulos, the author analyzes where this is going and what it means.

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Never complain, never explain. You are a trader.

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Category: Blog
Last Updated: July 29, 2023
  • market psychology
  • mentality
  • emotions
  • ego
  • market
  • trading

Never complain, never explain. You are a trader.

"Never complain, never explain" - it's a well-known quote. Famous people have used it, management gurus have used it, and too many to accurately determine who initially came up with it. Let's apply this to trading because trading is probably the ultimate activity where this quote fits extremely well.

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Changing traffic lanes is a lot like trading

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Category: Blog
Last Updated: July 13, 2023
  • market psychology

Changing traffic lanes is a lot like trading

Every now and then, you run into a situation in real life that triggers the trading mind and makes you look at the situation from a trader's viewpoint.

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Texas sharpshooter fallacy

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Category: Blog
Last Updated: July 12, 2023
  • pattern recognition
  • market
  • fallacy
  • irrationality

Texas sharpshooter fallacy

Every now and then when I'm reading an article from the world of behavioral economics discussing a particular phenomenon, it makes you realize once again how much trading and investing is about human behavior.

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The fallacy of becoming a successful short term trader

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Category: Blog
Last Updated: July 12, 2023
  • market psychology
  • mentality
  • ego
  • trading
  • fallacy

The fallacy of becoming a successful short term trader

If you use any search engine and type in the phrase "How to become a successful short-term trader" or anything similar, you will find roughly 70 million(!) websites that will help you in achieving that goal, or so it seems. While in reality, there's only one right and honest answer which is more like this: "There is an extremely low probability you will ever be successful in short-term trading, and you will most likely lose all funds in your account".

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What did you see?

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Category: Blog
Last Updated: July 12, 2023
  • pattern recognition
  • randomness

What did you see?

Humans are very good at recognizing patterns in everyday life, and mostly patterns that we are familiar with. For instance, it doesn't take us a whole lot of effort to recognize a face, even if that face is showing a different expression than the first time we saw it. Recognizing a road crossing but from a different angle than the first time is equally easy.

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Destructive trading

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Category: Blog
Last Updated: July 12, 2023
  • market psychology
  • trading

Destructive trading

As some of the regular visitors probably know, I am a great fan of Dr. Brett N. Steenbarger. I remember reading one of his articles where he discussed the problem of being addicted to trading. To illustrate this, he showed a list of questions that was normally used to determine whether someone was addicted to alcohol.

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Market gurus and their predictions - Part 2

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Category: Blog
Last Updated: July 12, 2023
  • market guru
  • prediction
  • economist
  • market

Market gurus and their predictions - Part 2

The first part of 'Market gurus and their predictions' has really caught some attention. Let's now move on to the next part about this subject.

Again, as mentioned in part 1, these pages are mostly meant as an eye-opener that almost all of the 'mainstream' analysts have no added value in trading or investing. In fact, flipping a coin has a higher probability of making a correct call about the expected market direction than those analysts. 

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One-Trade-Per-Day rule

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Category: Blog
Last Updated: July 12, 2023
  • rule
  • trading

One-Trade-Per-Day rule

Sometimes, the most simple and basic ideas can lead to better performance in trading. As we know, trading is a lot about having rules and obeying them. Maybe, when those rules are complex or can be bent, it's more likely that they will be broken. A simple rule has, therefore a good chance of being applied in a very rigid and disciplined way. In this article, I will share a very basic and easy rule that I use and have used for quite some time now. I call it the One-Trade-Per-Day rule. As you can guess from the name, that doesn't sound like a very ingenious idea. And it isn't, but it works.

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Get with the trend, but how?

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Category: Blog
Last Updated: July 12, 2023
  • statistics
  • market

Get with the trend, but how?

The trading world is known for its beautiful one-liners that are all so true, but at the same time so extremely difficult to practice. Some of the most well known around are: "Cut your losses and let your profits run." or "The trend is your friend." (until it isn't), just to mention a few. Collecting more of those one-liners would be a great subject for another article. This post deals with getting with the trend.

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Mind the gap: opening gap

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Category: Blog
Last Updated: July 12, 2023
  • statistics
  • market

Mind the gap: opening gap

There's a lot of talk about so-called gaps. General wisdom says they will be closed. But is that true? Is there a statistical edge about gaps that we can use in our trading? Let's find out.

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Mind the gap: on the daily chart

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Category: Blog
Last Updated: July 12, 2023
  • statistics
  • market

Mind the gap: on the daily chart

In our previous post about gaps, we looked at market behavior around opening-gaps and would generally happen during that same trading session. But nothing spectacular came out, an opening-gap basically meant nothing for further price action that day. Also, the average size of an opening-gap turned out to be a few factors smaller than average daily volatility, so those margins were easily absorbed regardless of whether there was an opening gap or not.

Now suppose the opening-gap does not get closed during the same trading day. How does affect the market in the next couple of days? Does price gravitate back towards such a gap, as if it wants to pull in price or doesn't it have any significant meaning as we saw in the opening-gaps analysis? Let's dive in.

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