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Archive for the ‘Overview’ Category

911

Hi All.

Please be patient as our new site is being built.

More challenging than I thought; but we are making progress.

You can continue to view our posts here until the new site is up and functional.

E.

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Rollover

Today was rollover in the futures market, and June contracts flipped over to September. Looked like about 2 points or so premium built in; surprisingly light considering it is normally about 10 points.

After the first few hours bounce into resistance from oversold, prices rolled over and closed the gap, then rallied into the close after the spike low.

Ho Hum, can’t they think of anything original?

While rollover can be a source of confusion to many traders, we have a simple system that allows us to easily make adjustments no matter what the premium spread from the expiring conract.

Although our tick charts need a day or two to get back in synch, another chart clearly shows us the relationships to which we are accustomed.

Up, down, or sideways, there is always an opportunity to generate income playing the futures. Not as easy to do that with real estate when it is rolling over.

“When in doubt, stay out” is an age old maxim; if that’s your posture, why not learn a few tecniques from us that will clarify things?

 

 

 

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Gap up, trap early shorts, consolidate, squeeze them. Consolidate, pull back as profit taking, keep pulling back squeezing the longs.

The numbers change, but the patterns are familiar. A news report like the CPI is an excuse to move the market, and hapless traders get stopped out several times on the short side. Finally giving in and chasing it looking for the trend day, they get their clocks cleaned in the other direction.

Double trouble.

Keeping track of gaps and knowing your potential targets helps to guess what they have in mind. No guarantee, of course, but an edge.

By carefully studying ballistic theory we can look for clues that suggests the likelihood of reversals or continuation at these important areas. Chart patterns like doji bars, evening stars, and tails are all confirmation that the current trend is about to end.

Experience is really the best teacher in spotting reality at these often confusing market support and resistance levels.

 

 

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The vix has collapsed, and the market is getting ready to catapult to new heights.

Or so it would seem.

But you and I know better, since we both have been around the block (a few times).

Here is a question for you to ponder:

What is the shortest distance between two points?

If you answered “A straight line”, then you have a major part of the information you need to understand how the market moves.

Another question:

What is the longest distance between two points?

Can I assume you answered “A choppy, zig zag pattern”.

The market continues to ebb and flow on a daily basis. Understanding the type of day we are likely to be encountering is perhaps one of the more significant levels of awareness we can possess.

Trading according to that insight is another matter altogether.

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Paper trading is a great way to learn how we will adapt to market movements in real time. It allows us to “practice” without losing real money.

The trick is to ask ourselves, “If this was real money, would I make this trade?” If no, then we are just playing a video game.

In this article, the last paragraph discussing the stem of a wine glass is all important. It correctly illustrates the fatal flaw of simulators; namely our emotional control under fire cannot be evaluated with play money.

By all means a trader new to futures should be using a simulator; but after some experience, showing positive results, entering into the live trading arena is the only way to test what Jesse Livermore’s calls the three big keys: Timing, Money management, and Emotional Control.

Self deception and denial is a well-developed skill for many of us, and we need to remove this type of thinking from our psyche if we are to become successful traders.

 

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Gold rush

“In a gold rush, get rich by selling ’em picks and shovels.”

So it has been said about market guru’s dispensing their sage advice.

The real truth for me is actually quite simple. Organizing my thoughts about trading into this journal, crystalizes my thinking and allows me to prioritize the critical aspects of my trading mehodology.

Pattern recognition, along with the overwhelming evidence of the truth found in my proprietary model, are my pick’s and shovels.

Identifying and isolating our golden rules, and then having the discipline to trade them, is where the rubber meets the road.  

 

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Win Today

As in all of life’s endeavors, successful trading begins in the mind.

It is not about any one trade of course, but rather the accumulation of profits through some winning trades that are greater than the result of scratched trades and small losses taken when the market fails to do what you thought it would.

Summed up by one of baseball’s greatest coaches, Joe Torre, the philosophy is simple: Win today.

Trading successfully one day at a time is the goal of the professional trader.

It should be your approach too if you want to join the ranks of that elite 10% that survive those critical first three months or so and make it as a trader without losing all of your capital.

 

 

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