Trader Psychology – The Discipline and Methods to Trading Success - TPS
CPE Credits Awarded:
Categories: Trading, Derivatives, Hedging and Risk Management, Business Analysis and Project Finance
This one day workshop covers psychological and technical aspects to trading in energy markets. The course will review key lessons from successful traders and a summary of findings from behavioral finance studies applied to trading decisions. We will introduce how to develop a disciplined trading approach incorporating fundamental and technical analysis, with emphasis on the main components of a formal trading plan, how to articulate decision drivers, and determining position sizes and quantify and control risk levels. We will also explore some of the main reasons why traders blow up, with examples from energy markets.
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Module I: A disciplined approach to trading
- Market Drivers and the ‘Financialization’ of Energy Markets
- Theories of market behavior: Efficient markets vs. Adaptive Market Hypothesis
- A Disciplined Approach to Trading (I): Edge, Process and Time
- How do Trading Rooms make money
- Hedging vs. Speculation. Drawing the line between them.
- Why Traders Blow Up?: Concentrated positions, markets freezing up, lack of risk control
Module II: The Psychology of Trading
- What makes a good trader?
- Cardinal sins of trading
- Overview of Behavioral Biases
- Framing and anchoring effects
- Persuasion and Hindsight effects
- When can we trust our intuition?
- Identifying and correcting biases: Trading logs
Module III: Trading Methods
- Trading styles: Fundamental & Technical Analysis
- Trading Methods and Market Types
- Technical Indicators
- When to use fundamentals vs. technicals
- Backtesting Trading Strategies
- Directional vs. Asset-based Traders
- Components of a trading plan
- How should I prepare to trade?
- The importance of entry and exit rules
- Why should I enter into a position?
- Position sizing and risk levels
- Hold times
- Liquidation strategies
- Andrew Hall, Phibro
- John Arnold, Centaurus Energy
- Brian Hunter, Amaranth
- Dwight Anderson, Ospraie
- Others: China Aviation Oil, Semgroup, JP Morgan, Cheasapeake
- Turtle trading strategy
Dr Carlos Blanco
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