Trading / Investing

Back to School

2 Min Read

Well, the summer is over.I hope you enjoyed your break, but now it's time to refocus our attention to continue learning how to become profitable traders.Having said that... It wasn't really much of a break, was it? Usually with the summer months, the markets are a lot less volatile, and there's a lot less volume.However, this year obviously we've had a lot of events that have caused the markets to be a little bit more erratic than usual.[caption id="attachment_5069" align="aligncenter" width="300"]

broken hand

My break... (I'll explain later!)[/caption]We've had talks of US interest rate changes; which some analysts are predicting may cause a global debt crisis! And of course, we've had the Chinese issues and subsequent market crash.What a testing time for us traders, hey?!These sort of uncertain, volatile times can either bring you riches that allow you to set sail on that once-in-a-lifetime yacht trip around the Mediterranean - or they can send you straight to the poorhouse, where you'll be budgeting your weekly allowance on bulk bags of rice and pasta!Believe me, I've experienced both sides of the coin. Which is why I always take time to answer your emails, to set you on the right track and remind you of the principles that make The Duomo Method so consistently effective. But really, we don't want these huge ups and downs during uncertain times. We want a smooth, upwards moving P&L, don't we?

This is why I want to revisit the subject of risk and reward, and in particular to discuss the topic of finding your downside and upside "tipping points".Which is ironic really, coming from the man sitting here with a fractured right hand from training (yes, that is my 'trading' hand too!)... I didn't really assess the risk so well on that one did I?!