Category: Blog

Introduction:

Silicon Valley Bank has long been the go-to financial institution for tech startups and investors in the Bay Area.

However, SVB now faces its own struggles that mirror the broader challenges confronting Silicon Valley.

SVB Stock Crash:

SVB’s stock plunged over 75% in 2022 amidst the tech downturn.

Originations slowed as funding dried up for unprofitable startups. Higher loan losses are expected in a recession.

Exposure to Volatility:

SVB’s heavy concentration on the volatile startup sector backfired as rising rates and plunging valuations slammed tech. Diversification could have reduced risks.

Leadership Uncertainty:

Long-time CEO Greg Becker announced his departure in January 2023 without a permanent successor lined up, creating uncertainty atop management.

Stiffening Competition:

As tech hubs spread globally, SVB faces more competition both from major banks and smaller regional rivals focused on startups.

Missed Opportunity in Crypto:

Unlike some competitors, SVB failed to capitalize much on the cryptocurrency boom to expand its client base before the 2022 crash.

SVB now confronts the downsides of its strategic dependence on Silicon Valley startups. With the region itself struggling, SVB appears vulnerable going into an economic slowdown. Defending its market position will prove challenging.

Conclusion:

SVB’s fortunes remain tied to those of Silicon Valley.

As the tech center faces threats to its elite status, SVB must similarly adapt to preserve its long-held position as the startup bank of choice.

Expanding beyond its geographic and sector focus could foster stability when Silicon Valley falters.

Introduction:

2023 began with a massive wave of layoffs across major technology companies like Google, Amazon, Microsoft and others.

In this article we’ll examine the key factors causing this unprecedented downsizing even among profitable giants.

Pandemic Over-Hiring

Many tech firms went on huge pandemic hiring sprees expecting growth to continue. But post-Covid demand failed to persist.

For example, Amazon nearly doubled its headcount to 1.5 million but now has too many workers.

Economic Slowdown 

Rising inflation, interest rates, and the prospect of recession made big tech companies slam on the brakes and downsize to cut costs.

Advertising spending has also declined.

Misjudging Growth Potential 

Some layoffs resulted from tech firms misjudging demand staying high for new initiatives and over-investing, like Meta’s bet on the metaverse.

Strategy Shifts 

New strategies obviated some roles. Microsoft and Salesforce both made cuts as part of restructuring around AI focus.

Overcompliance Risks 

Companies like Google and Amazon also cited potential regulatory compliance risks in business areas like crypto as a factor in winding down related projects and staff.

While job cuts create challenges for displaced staffers, investors cheered the restructurings, sending many tech stock prices higher.

Tighter focus on efficiency may ultimately strengthen big tech against economic troubles in 2023.

Still, the tech landscape faces uncertainty and possible talent shortages from the dramatic personnel reductions.

Conclusion: 

Big tech companies often over-hired during the pandemic and are now correcting with mass layoffs in the face of recession worries and shifting business priorities.

While painful, a leaner Silicon Valley could mean resilience in turbulent times ahead.

Introduction:

Trading strategy is only half the equation – you must also develop the proper trading psychology and mindset to execute your system effectively.

Trading requires immense mental strength.

Here’s why every trader needs to focus on their psychology:

Overcome Emotions 

Emotions like fear, greed and impatience will sabotage your results.

Developing emotional control and discipline is critical.

Build Confidence

Success breeds confidence.

Work on your mindset to trade without self-doubt or hesitation when opportunities arise.

Strengthen Discipline 

Sticking firmly to your trading plan requires immense discipline. Psychology work enhances willpower.

Adapt During Drawdowns 

Drawdowns test your resolve.

Maintaining perspective minimizes panic selling and revenge trading.

Manage Risk 

Having the right risk mentality ensures you size trades appropriately and follow stop losses.

Avoid Tilt 

Making reckless trades trying to recover losses is known as tilt.

Managing psychology prevents tilt episodes.

Trade in The Zone 

Getting in the zone leads to peak performance.

You tap intuition, flow, clarity and optimal arousal.

Focus on Process Over Results 

Outcomes are out of your control.

Make sound decisions aligned with your process.

Cultivate Patience Patience 

Patience comes from a mindset of trusting your edge to play out over time.

Avoid forcing trades.

By strengthening trading psychology, you gain the strategic edge to stick to your system, manage risks, and ultimately outperform the market.

Master your mindset along with your methods.

Conclusion: 

Skilled trading requires just as much psychological mastery as market knowledge. The best traders work relentlessly on their mindset discipline to execute flawlessly. Make psychology a priority in your journey to trade at peak performance.

Introduction: 

With so many markets to trade, how do you know what strategies work best for each?

In this guide, we’ll break down suitable strategies for forex, crypto, stocks, and other major markets.

Forex Strategies 

For currencies, leverage means high volatility. This favors strategies like:

• Breakout – Trade accelerations in volatility after ranges or consolidation.

• Momentum – Follow trends amplified by interest rate differentials.

• News-based – Macro moves based on GDP, NFP reports, etc.

Crypto Strategies

Crypto’s extreme volatility suits strategies like:

• Momentum – Ride the waves of speculation and hype/panic cycles.

• Swing – Catch major swing highs and lows in a range-bound market.

• Arbitrage – Exploit pricing inefficiencies across exchanges.

Stock Strategies 

For stocks, broader economic shifts dictate trends, favoring strategies like:

• Fundamental – Analyze financials like P/E ratios and growth.

• Chart patterns – Trade tactical formations like wedges, channels.

• Quantitative – Data-driven approaches based on factors like valuation.

Commodities Strategies 

For commodities, seasonal supply/demand and roll yields influence prices. Useful strategies are:

• Curve trading – Profit from rolls and contango/backwardation.

• Mean reversion – Trade reversals to the mean.

• Seasonal patterns – Take positions ahead of known periods of strength/weakness.

Conclusion: 

Match strategies to each market’s unique attributes.

A momentum system in crypto may fail in stocks.

Stay flexible and realize strengths and weaknesses vary.

Combining complementary strategies expands opportunities.

 

 

 

Introduction:

Robust risk management is the key to long-term trading success and protecting your hard-earned capital.

Without prudent risk controls, it’s easy to get wiped out during inevitable drawdowns.

In this post we’ll explore pro tips to upgrade your risk management approach:

Use Stop Losses on Every Trade 

Stop losses minimize damage when you’re wrong.

Place them at technical levels where your trade thesis would be invalidated if hit.

Exit trades quickly when things don’t go as expected.

Size Positions Appropriately 

Position sizing is critical. Risk no more than 1-2% of capital per trade.

Size down when on a losing streak. Take smaller positions in volatile markets.

Manage Your Overall Risk 

Consider risk across your entire portfolio. Diversify across assets and strategies.

Limit your total simultaneous open risk. Avoid overexposure.

Have a Drawdown Limit 

Define the maximum peak-to-valley drawdown you can stomach, like 10-20% of capital.

If hit, reevaluate your approach before continuing trading.

Don’t Average Down 

Throwing good money after bad by averaging losing positions rarely ends well.

Stick to your stop loss rules and maximum loss per trade.

Follow Broader Risk Management Guidelines 

Stick to trading only liquid markets you understand, and avoid excess leverage.

Going broke slowly is still going broke.

Track Your Risk Metrics 

Analyze metrics like your risk/reward ratios, win rates, Sharpe ratio and beta to optimize your risk efficiency.

Learn to Be Wrong Small and Right Big 

Master cutting losses quickly while allowing winners to run.

The key is asymmetry between your average winner and average loser.

By making ongoing improvements to your risk management process, you protect profits while weathering markets’ inevitable ups and downs.

Defense wins championships in trading.

Conclusion: 

With robust risk controls, you can trade confidently knowing one blow up won’t wipe you out.

Allow your edge to play out over the long run. Keep fine tuning your risk management as the markets evolve.

Introduction:

Cultivating an unshakable sense of discipline and consistency is essential for trading success.

Without it, most traders fall victim to reckless decisions, overtrading, and blowing up accounts.

Here we outline the key steps to transform into a disciplined trader able to thrive in all market environments:

Follow Your Trading Plan 

Having and rigorously following a strategic trading plan is the cornerstone of discipline.

Never deviate or make excuses. Execute your tested strategy like a machine.

Manage Risks

Staying disciplined means always managing trades sensibly.

Use proper stop losses, limit position size, and never risk more than 1-2% per trade.

Take what the market gives you.

Control Your Emotions 

Discipline requires separating emotions from trading by sticking to rational, rules-based decisions.

Don’t get euphoric or desperate.

Stay calm.

Review Your Trades 

Analyze both wins and losses in your trading journal to make continuous incremental improvements in real time.

This builds lasting discipline.

Focus on Your Process 

Judge your trading based on how well you follow your process, not necessarily short-term P&L.

Outcomes will follow.

Trade Small When In Doubt 

When in any doubt, err on the side of trading smaller. Patience and selectivity breed discipline.

Wait for your highest conviction setups.

Learn From Mistakes

Make mistakes into your lessons, not your identity. Losses happen but don’t repeat errors.

Stay flexible and keep improving.

Accept What You Can’t Control 

Stay focused only on taking the best trades according to your plan.

Accept that the markets are ultimately out of your hands.

Surround Yourself with Disciplined Traders

Their mindset and commitment will rub off on you. Seek mentorship and guidance from seasoned professionals.

With consistent rigor, reflection, and resilience, you can transform into the disciplined trader you aspire to be. Trading success begins and ends with your daily habits, behaviors, and mentality.

Introduction:

Starting out in trading can feel overwhelming looking at the array of technical indicators available.

However, not all indicators are created equal.

Here are 7 of the most useful indicators that every beginner trader should know, along with tips on how to best apply them.

#1: Moving Averages (MA) 

Moving averages smooth out price action and help identify bias and potential support/resistance levels.

Use the 50 & 200 MA to determine overall trends on higher time frames.

On lower time frames, shorter MAs (5 & 20) provide dynamic levels.

#2: Relative Strength Index (RSI) 

RSI measures the speed and magnitude of recent price movements to identify oversold and overbought conditions.

An RSI below 30 signals an oversold bounce is likely, while over 70 indicates a market topping.

#3: MACD (Moving Average Convergence Divergence) 

The MACD crossover system reveals shifting momentum through the interaction of its two moving averages.

Trade signals occur when the shorter MA crosses above or below the longer MA.

#4: Bollinger Bands 

Bollinger Bands plot volatility-based envelopes above and below a simple moving average.

Applying Bollinger Bands shows whether prices are relatively high or low on a normalized basis.

#5: Stochastic Oscillator 

This momentum indicator identifies oversold and overbought levels via a scale from 0 to 100. S

ignal line crossovers and extremes can reveal entry and exit points.

#6: Volume

Analyzing volume provides confirmation of major price moves and breakouts.

Increasing volume points to a high conviction move, while decreasing volume suggests fading momentum.

#7: Support and Resistance 

Horizontal support and resistance levels form important potential reaction points where orders cluster.

These derive from previous peaks and lows and signal areas for entries or stop losses.

Conclusion: 

Mastering these seven foundational technical indicators will provide beginner traders with a versatile toolkit to find high-probability setups across various markets and timeframes.

Start applying these to develop your analytical skills.

Introduction:

Having a customized trading plan is essential for every trader, whether you’re just starting out or have been trading for years.

Your trading plan acts as your roadmap, guiding your decisions and keeping you disciplined.

In this post, we’ll explore key steps for designing a trading plan that aligns with your financial goals and risk tolerance.

Know Your Goals 

First, reflect on why you are trading.

Set specific financial goals like generating supplementary income or building long-term wealth.

Your goals will impact what markets you trade, timeframes, and acceptable risk levels.

Trading just for fun is also an acceptable goal if you trade small.

Understand Your Risk Tolerance 

Next, analyze your risk tolerance honestly.

How much potential loss per trade or overall drawdown can you stomach? Remember, even profitable trading strategies will have strings of losing trades.

It’s essential to size positions to stay within your risk tolerance limits.

Pick Strategies That Fit You 

Choose strategies that fit your personality and lifestyle.

For example, day trading requires full-time commitment, while swing trading is better for those with a day job.

Trend following suits patient traders, while mean reversion pairs well with analytical traders.

Define Your Setup Criteria 

Outline specific setup criteria that must be met before entering trades.

This includes chart patterns, technical indicators, fundamentals, and any other rules.

Strict criteria reduce overtrading and enforce discipline.

Manage Risks and Rewards 

Incorporate prudent risk management into your plan.

This includes steps like limiting position size to 1-2% of capital and placing stop losses. Also set profit taking rules to lock in returns.

Follow Your Plan 

Finally, stick to the plan!

Execute trades aligned with your goals, risk tolerance, and criteria without deviating based on emotions.

A trading plan you actually follow is the key to long-term success.

By tailoring a trading plan to your unique preferences and style, you put yourself in the best position to trade calmly and profitably over the long haul.

Your plan gives you an edge, turning trading into a job you can perform consistently.