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Found 115 results

  1. Jasonc

    NSFX

    NSFX has been a great broker, providing great trading conditions, personalized to my needs, with the help of their account manager. The service is very good, close attention to detail and to the client needs. Easy withdrawals as well.
  2. TRADING GOLD “ The desire for gold is the most universal and deeply rooted commercial instinct of the human race.” Gerald M. Loeb, EVERYONE’S TALKING ABOUT GOLD – WHAT IS IT ALL ABOUT? Human beings have long valued and treasured gold for its inherent lustre and malleability. In fact, gold has been used in human commerce since the societies of the ancient Middle East over 2,500 years ago, making it the oldest form of money still recognized today.Gold’s long track record as a store of value despite wars, natural disasters, and the rise and fall of great empires means that it is generally seen as the ultimate “safe haven” asset. Therefore, it’s not surprising that interest in owning and trading in gold has skyrocketed in recent years with the onset of the Great Financial Crisis in 2008. Gold prices have risen in sympathy, hitting an all-time high above $1900 in late 2011. In this brief guide we will discuss the major forces that drive gold prices, along with some of the common methods for trading gold and a brief overview of possible trading techniques. THE MECHANICS OF GOLD TRADING Physical gold is valuable because it represents many of the qualities of ideal money. It is scarce, durable, portable, uniform across the world, and widely accepted—in part due to its long history of being widely accepted. However, in the current digital world, few traders actually take physical possession of gold bullion. Instead, most traders focus on trading the current “spot” gold price, which is based on the price of the most active futures contract on the COMEX (Commodity Exchange) in New York. For all intents and purposes, you can trade gold as you would any other trading instrument at GFT Markets. Two of the most common ways to trade the price of gold are through CFDs or spread betting. Both of these products offer leverage, meaning that traders can control £1,000 of gold with less than £1,000 of margin. Leverage can offer great potential for profit if the market moves in your favor, but it can also lead to a large, rapid loss if the market moves against you. Therefore, it is essential to practice good risk management and place a stop loss with every trade. FACTORS THAT INFLUENCE ITS PRICE Gold is one of the most difficult financial assets to value. As we alluded to above, gold is similar to a currency, such as the U.S. dollar or the euro, in many ways; unlike these more commonly traded currencies, though, gold is not supported by an underlying economy of workers, companies, and infrastructure. In other ways, gold is more similar to a commodity like oil or corn because it comes from the ground and has standardized physical characteristics. Unlike other commodities, however, gold often fluctuates independent of its industrial supply and demand. One of the most reliable historical determinants of gold’s price is the level of real interest rates, or the interest rate less inflation. If you think about it, this relationship is relatively straightforward. When real interest rates are low, investment alternatives like cash and bonds tend to provide a low or negative return, pushing investors to seek alternative ways to protect the value of their wealth. On the other hand, when real interest rates are high, strong returns are possible in cash and bonds and the appeal of holding a yellow metal with few industrial uses diminishes. One easy way to see a proxy for real interest rates in the United States, the world’s largest economy, is to look at the yield on Treasury Inflation Protected Securities (TIPS). GOLD TRADING STRATEGIES As with any trading instrument, there is no one “best” way to trade gold. Many traders from other markets have found that the technical trading strategies they employ on other instruments can easily be adapted to the gold market, especially given gold’s tendency to form durable trends. That said, longer-term traders could go a step further by using a filter based on the level of real interest rates discussed above. The below chart shows the relationship between gold prices and the yield on TIPS, a proxy for real interest rates in the United States. The inverse correlation is obvious, but it looks like the recent gold rally accelerated further as real yields dropped below 1% in early 2009. A longer-term look at the relationship would reveal that gold prices generally fell in the late 1990s, for instance, which were characterized by real yields above the 1% threshold. Therefore, longer-term traders may want to consider only buy trade opportunities if real yields are below 1%, a level which has historically been supportive of gold prices. Conversely, if real yields rise above 2%, traders may want to focus only on sell trades. The ability to use a filter based on real interest rates is one of the unique features that long-term traders can use to gain an edge when trading gold, but the trading strategies and opportunities in trading the world’s oldest “currency” are truly limitless.
  3. The big focus for the forex markets in 2013 was on whether or not the US Federal Reserve was going to start tapering its $85 billion a month bond purchases. It hinted at its meeting in May that it wanted to start reining in its quantitative easing programme unleashing considerable volatility. After some poor communications, volatility and speculation the Fed finally announced in December that it would start tapering at a rate of $10 billion a month. In retrospect it communicated the event well as the markets took it as good news – a sign that conditions are returning to normal. Nonetheless, the run up to the taper saw many emerging market currencies take a hit particularly in countries with large current account deficits, which had become dependent on the Fed's largess. The Euro – a surprise winner Surprisingly, the EUR turned out to be one of the best performing currencies in 2013. On Dec 23 the EUR was 103.79 versus a basket of 21 currencies, compared with 99.22 the same time a year ago. And 2013 didn't start particularly well for the single currency. Amid the usual concerns over the state of the peripheral Eurozone economies one them, Cyprus, had to be bailed out to the tune of EUR 10 billion in March. The political furore which accompanied the whole episode reignited concerns over contagion and even a break-up of the EUR. The Eurozone pulled through and as the year wore on it appeared that the leading peripheral Eurozone economies were beginning to stabilise and even show signs of growth. Meanwhile, German chancellor Angela Merkel, considered by many to be the Eurozone's real leader, won a decisive election victory. Also, the Eurozone managed to make some slow progress on a bail-out mechanism for failing banks. USD shrugs of political paralysis USD was also a star performing currency despite a show of very divided politics in the US, which led to a government shut-down in October 1-16. Democrats and Republicans were eventually able to come to a longer-term agreement over the US budget heading off another damaging shut down in the new year. Against a basket of the major currencies USD was 76.33 versus 73.12 the same time a year ago. But while the politicians were busy arguing the US economy was recovering as was the key real estate market. This enabled the Fed to announce the start of its tapering – a very bullish event for the USD. Also, Janet Yellen was nominated to takeover at the Fed from Ben Bernanke on January 31, 2014. It will be her job to see through the end of quantitative easing, which is unlikely to be a smooth process. Abenomics hammers JPY Whilst the Fed was shifting to taper mode the Bank of Japan was just getting started in a bid to banish deflation and restore growth to Japan. The policy became known as Abenomics with the BoJ aiming to double the country's money supply. JPY was also a target for Japanese officials who desired a rate of UJSD/JPY 100. They got their wish. By late December it was flirting with levels of 104 and looks set for further weakness. UK recovery gather pace The UK economy in 2013 looked its best in five years. With an eye on elections in May 2015 the UK government initiated a series policies to stimulate the all important real estate market and eased up a bit on its austerity measures. Towards the end of 2013 the economy was growing at an annualised rate of 1.9% and real estate prices were rising strongly. This led to the Bank of England deciding not to extend its quantitative easing programme beyond GBP 375 billion. In June, former Canadian central bank governor Mark Carney took over at the Bank of England – the first foreigner to do so. Cable is looking to finish slightly higher than this time last year following a rocky performance between March and August.
  4. There are different interpretations of success, reaching form “participation is everything” to attainment of wealth and fame. Let us take the same range of interpretation for trading/investing then it would read as follows: “Success is making money” to “success is attaining wealth”. Trading is a professional business and professional attainment is measured on score cards. Fund managers performance for example is measured in how close the fund performs to the referring index. For funds, which relate to large caps or the overall stock market, the S&P 500 index is generally used as the base line. If you want to do the same as a private investor, take SPY: The ETF of the S&P 500, which has a year-to-date-November-2013 performance of 27% growth. If your trading/investing account grew with the same rate of return, you met the index. In case you run on a lower return rate, you are in good company, because most of the fund managers: Mutual Funds, Exchange Traded Funds, Hedge Funds are not achieving the average fund performance either; only a small number of funds is beating the S&P 500, where the best in class run at double the return rate of the S&P 500 (We will report separately in giving you a detailed overview on Hedge- and Investment Fund performance). Let us take a look at the top 10 stocks of the S&P 500 and their year-to-date-November performance: 1 Exxon Mobil Corporation Common (XOM): 8.0% 2 Apple Inc. (AAPL): -1.1% 3 Microsoft Corporation (MSFT): 42.6% 4 Johnson & Johnson Common Stock (JNJ): 32.2% 5 General Electric Company Common (GE): 25.8% 6 Google Inc. (GOOG): 43.7% 7 Chevron Corporation Common Stock (CVX): 10.8% 8 Procter & Gamble Company (PG): 21.6% 9 Berkshire Hathaway Inc. Class B (BRK.B): 24.2% 10 Wells Fargo & Company Common Stock (WFC): 26.0% The results show that we have a wide spread of developments, reaching from -1.1% (AAPL) to +43.7% (GOOG), with an average performance of the top 10 stock at a return rate of 23.4%. Take a look at the Berkshire Hathaway Fund performance in relation to the S&P 500: -2.8%, which would be seen as an average good performance for fund managers. However, had you bought SPY-shares, you would have been better on. How can you do better than average and most important, how will you be able to produce wealth, when the markets might not give such a positive development in 2014? You need a trading or investing system, which shall give you the following: Seven Critical Elements of a Trading Flexibility to trade/invest in various assets. Why various assets? In case stocks halter, institutional money might flow into assets like commodities, currencies, treasuries and you should be prepared to participate in institutional money moves when they happen. A system, which lets you produce income if the markets move up, down or sideways. In average, markets drop with three to five times the speed they grow. Hence, you should be ready for applying short trading strategies applicable to all kind of account holdings: IRA, 401(k), Cash, Custodian, and Margin. Clearly defined entries and exits: Institutional money is moving the markets and institutions leave their trace of directional intends. With the right trading system on hand, you can spot and trade along with those actions. Focus on spotting and trading along with institutional money moves, produce constant income and reinvestment. Such method makes you independent from picking the right stocks with long term growth. Imagine, you were able to win two out of three trades, with an average trade duration of four days, aiming for a 1.5% return/trade, making income to the up- or downside; then you are striving for an annual return of 62%, regardless of the directions the market take. If you can apply this method successfully, you will beat the best hedge fund managers of the world by far. Risk management: Professional traders have clear guidelines of how they act. As a private investor/trader, you need the same: Define the odds ratio for every trade and adjust the lot size of your investments to hedge and leverage your positions accordingly. Have trade repair strategies in place, helping you to turn potential losers into winners for all account types. Have a method to spot key assets on the move. Never fall in love with a stock or asset. No stock has to grow. The performance of an asset is the result of supply and demand. Apply a system which helps you to visualize when changes in supply and demand occur in an asset and be part of the directional move. [*]Journal your performance to see where you do well and where you have needs for improvement. Pros of every genre: Sports, theater, movies, trading, do this and you need to do the same to strive for constant improvement and long-term trading success. Clear cut documentation for every trade situation and asset, so you can always go back to the drawing board for revisions. Hence, please consider: Those who fail to prepare, prepare to fail. Good trading. Thomas
  5. MrFunke

    Types of Traders

    .. Apparently I'm a shark. (I would have liked to think I was a bull!) What are your thoughts on this quiz? Would you say you could relate yourself to any of these animals?
  6. How Can the Chaos Theory be Applied to Forex? Chaos Theory is a mathematical theory that studies systems, and how small differences in their initial conditions can have majorly differing outcomes. This is often explained and related to as the butterfly effect. This theory is that a small initial condition such as a butterfly flapping its wings could cause a large difference such as a change of weather on the other side of the world. Famous forex trader Bill Williams was one of the first to suggest that Chaos Theory could be applied to the markets, and devised a strategy behind it. The principle behind his ideas is that psychology plays a large part in success, and that the key is to find determinism within events in the market. Traditionally, traders will use technical and/or fundamental analysis to work out which way they think prices are going to move, but Bill Williams believes that this is an inferior way of trading, because neither method works for the dynamical system that is the real markets. There are two critical aspects that must be understood for Williams’ theory to work. The first is having confidence in your own judgement, and the second is proper understanding of the structure or dimensions of the market. According to Williams, there are five dimensions to the market, and analysing each one will reveal further information, building a bigger picture each time. These sections are the following: • Fractal – Trades should not be made before the first fractal appears; indeed, any signals from other dimensions can be disregarded initially. A buy fractal is five consecutive bars, in which the middle bar is the highest. The opposite configuration would be a sell fractal. • Momentum – The Awesome Oscillator illustrates the current market momentum of the last five bars. They are compared with the previous 34. • Acceleration / Deceleration – This dimension measures the acceleration and deceleration of the market momentum, by looking at the momentum and the five bar moving average. • Zone – The fourth dimension is known as the zone, and appears when the momentum and acceleration (or deceleration) are of the same direction. • Balance Line – The last dimension of the market is the balance line, which is the level at which the price would be if chaos was not having an effect on the market. This ‘chaos’ is any kind of information that might be hitting the markets. It is also described with the Awesome Oscillator. The idea is that it requires less energy for the price to move away from this line.
  7. After seeing the popular thread that's updated regularly with open source trading platforms, I've decided to create a thread that I'm going to regularly update with free trading webinars that look to be interesting. I attend a lot of free webinars to try and catch any new trends/indicators that people are using. It's been one of the easier ways to find and/or try new techniques. Feel free to use the comments as reviews. I'll be monitoring this to try and keep it from becoming spam filled. Ongoing List of FREE Education Webinars on Trading Why Value? A Value Investing Legend Reveals His Strategy - I've been following this guy for a while and enjoy his articles on InvestorPlace, Benzinga, and TheStreet. Looks interesting Time to Buy Detroit? - I've been fascinated by this whole event. It will be interesting to hear several experts discuss how to take advantage of a bankruptcy like this
  8. Social trading platforms are possibly one of the most exciting developments in recent years; in short, they mean that we’ve now got unprecedented access to the actions carried out by a huge number of other traders, and the result is that we can improve on our own successes like never before. Social media means that many people can work together on finding signals and working out a strategy, rather than doing everything yourself. As the saying goes; two heads are better than one. Part of the reason large investment companies can be so successful is that they have a lot of people working on positions and monitoring price actions and events. The more people you’ve got looking out for patterns and opportunities, the more chance you’ve got at making a successful trade. One of the major benefits of social platforms is that they are more trustworthy than a lot of advice that you’ll find on the internet; you can see exactly how people are trading themselves, and how successful they are. You don’t need to take someone’s word for something; you can see what they’re doing. When discussing the next big opportunity on a forum, you’ll be able to find out how well it turns out for other people. Many social outlets display top performing users, and you can actually copy their trades yourself. There are numerous social applications available, some of which will work with certain brokers and platforms, and some of which won’t. It’s important to do your research first, as there can be certain exclusions. If you want to use expert advisors for instance, you’re likely to need to choose a MetaTrader compatible one such as TraderConnect. eToro is the largest outlet, but it is not free, and only higher level subscriptions are compatible with MT4. Of course, it’s very important that social media is treated as a tool just like any other. Relying on others for all your signals and strategy is not a good idea, because what’s right for one person might not be right for another. Instead, you should incorporate social media into your own strategy, and use it as a method of finding more information than you’d normally be able to. It’s also a great way of learning new things, and is a place where you can ask questions too. If you’re looking for a way to increase productivity, this could be it.
  9. AlgoTrader is based on Complex Event Processing (CEP) using Esper and therefore accommodates strategies that cannot be programed with procedural programming languages. CEP is a very good technique to get started with algorithmic trading. With this technology time-based Market Data Analysis and Signal Generation are coded in EPL (similar to SQL) statements, whereas procedural actions like placing an order are coded in plain Java Code. The combination of the two provides a best-of-both-worlds approach and accommodates strategies that are predominantly time-based and therefore cannot be programed with traditional procedural programming languages. Also, the total amount of code is usually much smaller, even for complex strategies. AlgoTrader is not a Chart based Trading Platform (like Tradestation, MetaTrader or NinjaTrader). It does not have drag-and-drop functionality and hundreds of indicators. It is our belief, that successful strategies are based on economic facts and not on extensive back-testing or chart pattern analysis based on many different technical indicators. Features: Automate Trading Strategies based on Complex Trading Rules Develop, Simulate and Trade multiple Strategies in parallel Multiple Broker Interfaces and Market Data Providers Support for Forex, Options, Futures, Stocks, Commodities & more Support for Synthetic Instruments & Custom Derivative Spreads Several build-in Execution Algorithms Multi-Account Functionality Automated Forex Hedging & Options Pricing Engine Based on Open Source Technology like Esper, Spring & Hibernate Scalable / Low Latency / High Throughput Architecture and much more… There are two versions available of AlgoTrader: An Open Source Version that you can download for free from http://code.google.com/p/algo-trader/ A Commercial Version (with Support and Professional Services) is available from http://www.algotrader.ch
  10. When everything comes together, the best technique to make money in the stock market. If you don't have a watch list, you are losing money.
  11. Reviewing what we need to trade and showing this weeks past trades broken down into a basic easy to understand chart and discussion on limiting risk by staying out of risky events.
  12. An S&P outlook for next week and should you sell in May and go away? Some great charts accompany this video which outlines what I see happening in the next 2 weeks. Basically the big question is will the market start to retreat soon? I myself can't help but look at recent historical charts (Back to 2010) and not get swayed to that side of the fence. The other side is just more upside. We see in the video and on the charts we have all the makings of a classic flag or continuation pattern. Even the stochastics have set up in a very nice level that could shift the momentum back to the buyers. We might have already seen this Friday. I think we have a nice 2 day rally early this week, then I want to watch to see if we fail at making new highs. That could happen after a nice bounce out of a flag. I see it a lot and would not bet against it. Better yet I don't want to take this bet and rather take shorter trades and try not to get into a position that I am dependent on the market but to trade the smaller intraday patterns with maybe a couple overnight holds.
  13. This thread is for those who like to discuss about the Fundamental Valuation (Relative valuation / Discounted Cash Flow valuation) of stocks listed on NYSE. I am waiting for your thoughts in this thread and their usefulness in trading. We all know valuation is done by Research analyst and if the current market price is below (above) than the Intrinsic value of the stock, then the stock is Undervalued (overvalued) and we do the trading accordingly. Awaiting more inputs to this thread so that it helps in trading decision making. Happy Learning
  14. This thread is for those who like to discuss about the Money Management in Forex Trading . I am waiting for your thoughts in the most important ingredient to successful trading. Risk reward is the most important aspect to managing your money in the markets. Every trader in the market wants to maximize their rewards and minimize their risks. A risk-reward ratio of 1:2 means your profit target is twice your stop loss. If your trade has a Risk - Reward ratio of 1:3, it means that for every winner, you will need to lose an equivalent trade three times to lose all your profits. If you gain 900 pips in a trade (with a 300 pip stop loss) you would need to lose three trades using the same Risk-Reward ratio to cancel the profitable trade. This is why a forex trader can have two winners and three losers in a month and still make money.
  15. This thread is for those wishing to discuss the advantages and disadvantages of stock options trading. I am waiting your thoughts.. One positive for stock options trading I believe is leverage, with options you can achieve a greater amount of leverage than when purchasing the underlying stock.
  16. Trading Indicators are used in technical analysis to help confirm chart patterns or specific support and resistance levels. Common examples include the RSI or MACD indicators, which allow traders to see when a currency is overbought or oversold.
  17. With the rise inpopularity of margin and leverage accounts, many traders will look to maximize their exposure levels in the hopes of maximizing gains. Experienced traders tend to advise against this, however, as this will also increase your Transaction Risk.
  18. Looking at a chart, you always know in retrospect that prices moved sideways, but how to know in advance? In the NeverLossTrading concept, we integrated a study, which measures changes in implied volatility and informs the trader by painting a "Purple Zone" on the chart, indicating, that the price/volume development of a share has reached this critical stage of consolidation. Then, we either apply short term sideways strategies, or wait for the breakout signal, to trade along with the direction after the breakout. In the “Purple Zone”, we find little directional movement with various counter price trend activities until a breakout to the up- or downside occurs. To support the visibility of such price development, we shade the price chart for the time-period purple and produce a very powerful indicator, signifying: Apply short term sideways strategies, with limited risk or do not to initiate trades when the Purple Zone continues, by not knowing when it ends and in which direction prices might breakout. rend-trade when the Purple Zone is over, if the first candle outside the Purple Zone shows an arrow pointing to the trade direction: o Purple Arrow: To the upside o Purple Arrow: To the downside. GE Breakout After a Purple Zone At times we get asked why the zone is purple? The answer is: It marks a time-zone of indecision where the market forces negotiate until an upside or downside price-move concludes the decision making process. The color purple is achieved by mixing red (down-color) and blue (up-color). For the beginning financial market investor, the best is not to trade in the “Purple Zone”, but right after, when a trend is established. More advanced traders gauge the price range in the zone and take trades already at the first break out. By being aware that even light-tower-candles that occur can quickly be reverted while the “Purple Zone Indicator” is present. If we are in a trade that enters a “Direction Change Zone”, we either exit the trade or adjust the range for the stop not to be taken out by radical price movements. If we are unwilling to accept additional risk and still want to stay in the trade, the stop line (red line) of the Double-Decker at entry into the “Purple Zone” builds the point where we put our stop. A directional arrow after the Purple Zone identifies a high probable trade entry. If there is no arrow on the first candle after the Purple Zone, the study recommends not to enter into a directional trade. The best trade entry for a trend trade is two ticks above/below the trade proposal painted on the chart. The same functionality applies for Intra-Day- and Swing-Trading Charts. After our new software update, we are now allowing in the NLT-Purple-Zone-Indicator to put a computer generated price proposal at the end of the Purple Zone arrow: SPY, ETF of S&P 500 Index Signifying the Overall Market Move The trade direction-pointing arrow after the Purple Zone now resides on the price level of the cloud and identifies the new price direction to trade. The width of the cloud can be adjusted from the factory setting of 2 to a higher or lower level: If the level is set to zero, the Purple Zone Cloud disappears. If it is set to 1, it narrows the width of the cloud. A setting above 2 widens the cloud setting. Further: The alert sound and the end of Purple Zone alert can be set to individual preferences. Additional Switch Functions: - If you want the computer generated trade proposal, set the switch on “Yes”. - To receive a sound alert, when the End-of-Purple-Zone -Indicator is triggered, put the switch on “Yes”. The “Purple Zone Indicator” is an integral part of our software package. See, how you can integrate it in your trading. We offer four mentorship programs, geared to the need of the individual Investor: NLT Top-Line, for the Independent investor, where we install real-time analysis software. NLT HF-Stock-Trading: For frequent traders, able to trade the markets every day. NLT Wealth Building: If you are trading two times a week/month. NLT Income Generating: For day-trading futures and options.
  19. Still looking at some 15M down side w/ hidden divergence; not exp. lower than 61.8 fib retrace into congestion before 5th wave up.
  20. Are you one of the many swing traders that takes the same level of risk notwithstanding the market conditions? Do you always trade "a thousand" shares just because that's an easy number to remember? I will discuss some finer points that might help you to become better at managing risk. First and foremost, the Pristine Trained Trader (PTT) should have a Trading Plan outlining his money management rules. Here you should establish parameters such as a "maximum loss per week-month". When establishing a maximum loss per trade (because no one can know which trade is going to work out), the PTT has to decide whether he wants to follow a more "static" approach where all his potential losses will be similar, or whether to adopt a more "dynamic" set of guidelines created with the purpose of governing when to be more aggressive, less aggressive, or not active at all. First and foremost, you have to understand the fact that not all market conditions present the same odds for a particular trade. Let's say for example that market "x" is in an up-trend, and has pulled back to support for several days. Today we get a reversal bar, and tomorrow the reversal is complete. Thus, the swing trader will likely find several high odds entries both today and tomorrow (depending on the tactics used, many of which are taught in our Trading The Pristine Method seminars. Then the third day comes along, the market continues to climb, and some more entries might be executed. As the market continues to rally, the odds of every new entry will diminish, as the probability of a reversal to the downside in market "x" is greater. Based on this scenario, a swing trader might enter into larger positions on days one and two, and might reduce his share lots as the market continues to climb. There will be a time when the market has climbed for 5 or 6 days in a row, and so the Pristine Swing Trader will devote more and more of his time to manage already open positions, by selling partial lots and raising his stops, instead of being too active in entering new swing positions. (He might be more active in micro trading activities though) Trade Well! Kurt Capra Contributing Editor Instructor and Traders Coach
  21. Good Morning All: Over the years, I have written many articles. Hundreds, maybe even thousands if you include partial repeats and every short lesson. Sometimes the lesson is a partial re-write, or a new take, or a new way to explain or organize the information. So, while there are many summaries out there on various topics, and while the topics on this lesson may be found somewhere else, I thought I would take today to start answering a very direct question. What causes failure in trading? This will be a no-nonsense, nuts and bolts look at the question, not a philosophical dissertation. I will discuss the top three over three letters. What Causes Failure? Part One of Three After many years of seeing many issues in trading through the eyes of many traders, I have come to one inescapable conclusion. Something I now consider a fact. Everyone who enters trading is exactly the same, and stay the same for a long time. It is not until later in development, that some break out into 'unique' ground. So relax, everyone has gone through what you are, or have gone through. You may not like the answers. However, you need to hear them. While education in technical analysis is absolutely needed, most who really try, receive that education. In addition, they receive enough to make them potentially successful. For those who do not get an education, it may be the biggest cause of failure. However, anyone can understand the education material once presented, and many who receive the education still fail, so lack of education, while critically important, is NOT making my top three list. Number one quite simply is the ability to do what need to be done, and do it now. The word for that is 'discipline'. This is the number one reason for failure amongst traders. Initially it may be the lack of discipline to take a stop. Later it may be the lack of discipline to reach a target. Note that the trader knows what the stop is, and what the target is. This is why the 'education' doesn't make the list. The problem is, even those that know what to do and when to do it, do NOT do it. Lack of discipline. It shows up in many other places. The lack of discipline to review material learned. The lack of discipline to review trades and make changes. The lack of discipline to create and use a trading plan. The lack of discipline to honestly analyze your trades and determine you need an education. All of the key things in trading are easily learned by someone who wants to learn them. However, they are not easily done. Lack of discipline is a number one reason traders fail. Do you suffer from a lack of discipline in your trading? Is it holding you back from your goals? Closing Comments: This is the first of three things we will look at. After seeing them all, you may disagree about the order. Do not. They will not be in any particular order. They are all important and it is like the 'chicken and the egg' argument. All three of them are critical, and the lack of any of them will cause failure, just like removing one leg of a three-legged stool. Pristine Capital Holdings, Inc. 1-800-340-6477 Counselor@Pristine.com
  22. n a previous article, I wrote about the true value of paper trading and having a plan of how to move from successful paper trading into real money smoothly. The issue is; now that you are successful on paper, what next? First, as described previously, you must make sure you are successful at paper trading by some objective measure. Set up a test that you must pass. Four winning trades in a row, three out of four winning paper days, or any measure as long as you enforce it. I rarely hear of anyone who is not making a killing on paper. If you cannot do it on paper, do not proceed assuming it will 'all work out'. The next step then is to put a very small amount of money on the line. I mean small. The objective here is to start an 'official' record. Even the most honest people will be 'cheating' while paper trading. Also, you will now be subject to 'real' fills (or lack thereof) rather than your 'pretend' fills. Even real software paper trading systems are very gracious on fills. Also, all those order entry 'mistakes', and trades that you swept under the table will be real now. You will now have to deal with the psychological issues. Putting money on the line, even fifty dollars, will evoke egos that will step in and start changing everything you do. That is why I emphasize, even if you have a million dollar account, the fifty-dollar risk will be enough to make you change what you do. Again, if you do well, you can move your risk amount up. You will be surprised how your paper trading results change when you have a real trade on the table. If you can pass the same 'success' test that you first set up to get you beyond paper trading, then you start moving up the risk amount. One hundred, two hundred, until you get to the objective risk amounts that you have set out in your trading plan. Along the way, if you begin losing you need to go back to the prior risk amount. If you feel you are handling trades different due to the increased risk amount, then go back to the prior level as well. You see, if you follow this plan, it is very hard to lose a significant amount of money while you are learning. That folks is the whole objective. KURT CAPRA Contributing Editor Interactive Trading Room Moderator Instructor and Traders Coach
  23. What I am sharing is my interpretation of Open Interest in futures. What is “Open Interest” in futures? For every single futures contract of open interest there is a buyer who is “long” and a seller who is “short”. There are never more longs than shorts and vice versa. At the end of the day each contract that has not been closed out between the “long” and the “short” equals one digit of “open interest”. If open interest is increasing it means that there is an increase of both buyers and sellers that are building a position or putting one on. This has nothing to do with volume increasing. Volume can decrease on a trading day and open interest can increase. Likewise, volume can increase on a trading day while open interest can decrease for that day. A single digit of “volume” is a transaction between a buyer and a seller but not necessarily between a long and a short. Now how does that make sense? There are two types of buyers, those who are buying to initiate a “long” position, and those who previously sold “short”, and are now buying to close out a position. If you are the buyer of a contract and you are going “long”, what affect will that have on open interest? It all depends on whether or not the seller who is selling it to you is liquidating an existing “long” position or if they are initiating a “short” position? Next… If you are looking to buy because you are closing out an existing “short” position, what effect will that have on open interest? Again it would depend on whether or not the seller who is selling the contract to you, is closing out an existing “long” position or if they are initiating a “short” position. The two types of sellers are those who want to sell and initiate a “short” position, and those who were previously “long” and are selling to close out their position. This is why volume or transactions don’t have to be between a “short” and a “long”, just a buyer and a seller. The topic of open interest and volume along with their implications can be as confusing as it gets in this business.If you are confused or having difficulty understanding this so far I would suggest coming back again and re-reading before moving on. Let’s look again at the scenario where you are buying to initiate a “long” position. If the seller who sells you the contract was already “long” and closing out their position, then open interest will stay the same. There is still someone short on the other side of that contract out there.So you have volume for this transaction but open interest does not change. In this same scenario, let’s say the seller of that contract to you was instead actually someone initiating a “short” trade, than the open interest will increase. Volume can be down from a previous day and open interest can still increase and vice versa. In summary, if the NET buyers of the total contracts traded on a given day want to initiate “long” positions and so do the NET sellers want to initiate “short” positions, we will see open interest increase. If the NET sellers of the total contracts traded are liquidating their “long” positions and the NET buyers are also closing out their “short” positions on a given day, then open interest will decrease. If “longs” are buying or selling to other “longs”, and if the “shorts” are buying or selling to other “shorts”, open interest will not change. What is also important to add to this conversation is that money is never made or lost in the open interest as a whole. This is what it means when futures are stated to be a “zero sum” game. If you make $1,000 in profits trading futures today, you can be sure there are positions that have an equal $1,000 in losses today somewhere else as well. Profits and Losses are debited and credited in equal amounts at the end of each day from those who traded or have positions on. In order for you to make $100,000 trading futures, other traders or investors will lose $100,000. One should know their competition AND know themselves before considering whether or not they can thrive or even survive in this business. Lastly, the greater the open interest the greater the speculation and/or hedging and vice versa in the futures markets. I believe this is extremely important in determining the probabilities for supply and demand within the profile of the auction market in the weekly time frame. Questions for the readers: If open interest is increasing or decreasing is that bullish or bearish? What if volume is decreasing or increasing in either scenario? Are you bullish, bearish or neutral? What if the commercial traders are going NET long or NET short in each scenario? What if price is increasing or decreasing with each one of these different scenarios? Do you know which one of these scenarios gives you the greatest “edge” with your system? Ignore the changes to open interest and you may be wrong on what the changes to price, volume, and the COT report mean. Yours truly, Scott Pluschau This piece was written by one of TopstepTrader's Funded Traders Scott Pluschau TopstepTrader http://www.topsteptrader.com seeks to find and develop undiscovered trading talent from around the world. While in our program, those who display a strong trading skill and aptitude will be backed as a fully-funded trader.
  24. Electronic Currency Trading is characterized by fast execution speeds on downloaded or web based platforms. Where in the past, investors would need to be present on trading floors to complete similar transactions, Electronic Currency Tradinghas enabled individual traders to do this from any location with a web connection.
  25. A Dirty Float is generally implemented by a central bank. In most instances, the intervention is meant to act as a buffer against an external economic shock before its effects become truly disruptive to the economy.
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