Secret Trading Tips - page 4
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It was yet another week of off-kilter markets and unexplainable reactions to economic data and macro-events. It’s hard to tell if we are in a bad is good or good is good or everything is bad cycle?
The one thing we can be sure of is that while you have just read this sentence, the national debt has increased by some ridiculous sum. For all the numbers that I consider on a daily basis, this is the one that is tough for me to wrap my brain around. How can we casually be talking about $16 trillion?
No matter what your political leanings, Senator Alan Simpson from Wyoming put it in to perspective on CNBC last week when asked by Steve Liesman about the debt.
STEVE LIESMAN: Senator, if you were in a position now to be advising both candidates, what would you have them say now about the deficit, particularly in light there's a vice presidential debate this evening. What would you like to hear from them?
ALAN SIMPSON: Well, I think I'd want to tell them what a trillion bucks is. I know that's a silly exercise. Just say-- well, let me tell you something about us-- this country.
If you spend a-- if you spend a buck a second, you wouldn't hit a trillion for 32,500 years. And if you spend a million a day since the birth of Christ, you wouldn't be at a trillion. And the big bang theory of the universe happened 13 billion 600 million years ago, that ain't even close to a trillion. And we owe 16 of those babies!
So start thinking. And then you're going to borrow $3,600,000,000 a day, every day. You're going to do that today, tomorrow. Every buck you spend, you borrow 41 cents. And I would say, "Will one of you-- let a peep out of yourself of what you're going to do about that and to restore the solvency of Social Security without letting the A.A.R.P. tear your leg off or Grover Norquist on the other side rip the other let.
Really, what’s another couple of trillion dollars among friends?
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.
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[TD]Value Areas:
ES 1437.00 / 1429.50
POC... 1422.50
YM 13297 / 13241
NQ 2722.00 / 2711.00
Larry Levin
President & Founder- Trading Advantage
TradingAdvantageCom
The world of commerce has several elements that appear to a small degree foreign to new traders. There square measure many catch phrases, symbols, and different banter which will be daunting or perhaps confusing initially. one in every of the largest sources of confusion includes the shorthand that you simply see for several markets. Understanding what you're reading is very important, and learning the fundamental slang will are available handy.
Secret Trading Tip #14
Secret Trading Tip #14
________________________________________
Getting Technical
If you know your way around a price chart (Tip#5) then you are ready to learn a little more about technical analysis. This kind of analysis is defined as an attempt to try to forecast price movements based on patterns observed in price changes on charts, or other changes that are not rooted in fundamental observations.
For technical analysts the key to observing the market lies in signals and patterns
Technical analysts (or technicians as they are sometimes called) are looking for all kinds of things in the rates of price changes, the patterns that price changes might be making, shifts in volume and open interest, and more! They are trying to find anything that could be used to show a potential trading opportunity - something that could help them forecast possible future movements. It is important to add a disclaimer here – Past performance is not necessarily indicative of future results. There is no way that finding a pattern or indicator in a chart will be a guarantee of what will happen in the market. They are all subject to the same personal bias and are just as fallible as any other forecasting method.
Why would anyone use technical indicators?
Technical analysis is a means of trying to decipher the market trend or a possible reversal of that trend. Like any other kind of analysis, it is meant to be used in tandem with other observations, ideas, and fundamentals to give a bigger picture when planning possible trades. Even the most basic patterns in technical analysis can be used for trade entry and exit points. Here are some examples:
An uptrend may be present when there are a run of trading periods with higher high prices and higher low prices. Identify an uptrend, and you might get an idea for a long trade. A downtrend could be characterized by a period with lower highs and lower lows. At that time, you might want to find a place to play a short trade. If the market is seeing pretty equal highs and lows, it could be stuck in a sideways trend or channel. Even those have trading opportunities since the high spots could be identified as overhead resistance, where prices will go and then stop and retreat as selling enters the market. The low prices could be showing you key areas of support when the prices get to a point where buying occurs and the market doesn't seem to go any lower.
Past performance is not necessarily indicative of future results. Chart courtesy of Gecko Software.
Support and resistance offer interesting entry or exit opportunities. It would be a much more improbable trade if you decided to go long (buy a contract) right as the market was hitting an area of potential resistance. Likewise, it might be riskier to enter a sell order just as the market is getting to an area previously known as support. This isn't to say that your trade wouldn't work, it is just good to know these spots and understand what is behind them – it'll make designing your trade a little more effective. Perhaps you would want to play these areas in case support or resistance is forecast to be broken based on your fundamental analysis or a piece of news due out in the market; or, perhaps other technical signals are telling you that the trend is about to be broken. Here are some other basic signals technicians might look for:
Head and shoulders patterns are formed when the market prices make a peak (first shoulder) and then decline, subsequently rise above the former peak (the head) and decline again, and finally make another peak (shoulder) not higher than the head and decline once more. This pattern is seen as a possible trend reversal. It is a bearish pattern in an uptrend.
Inverse or reverse head and shoulders are also possible, marked by spikes downwards and then recovery resulting in the reverse should-head-shoulder pattern described above. This is seen as a bullish pattern if it occurs in a downtrend.
Triangles, pennants and flags are also key patterns technicians keep an eye on. They can be bullish or bearish depending on the prevailing trend and the way they are formed. Flags and pennants are seen as signals of a continuation where the market sees a kind of consolidation of action before making a move in another leg of the trend. Volume also comes into play with flags and pennants, usually lower or weakening volume.
Find patterns, find a trade
If you can back up your trading bias with actual technical observations or patterns that might indicate the market is trending or about to see a reversal, then you have a trading opportunity! Rather than boldly (and blindly) placing buy or sell orders and hoping the market moves in your favor, taking the time to learn and understand how the market behaves can make or break your trade design. Other people are looking at the same information and furthering your education can never really be a bad thing!
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Earnings Misses
Earnings Misses
Whether stocks have missed analyst expectations, missed on their respective top line growth estimates, or warned for future revenue misses, when they release their statements they are punished.
For several days it seemed like the overall market would focus on Bernanke’s QEternity buying spree and ignore high-profile disappointments, until Friday. Like all bad news on Fraud Street; it is ignored, until it can’t be ignored any longer and then the market comes unhinged. Friday’s drop was the worst sell-off in 4 months.
Until Friday, the market had been shrugging off (as a whole) losses or warnings from the following companies…
FedEx
UPS lowered expectations in Q2 due to slower global growth. Has it improved in three months? It reports again Tuesday.
Caterpillar (CAT)
Cummins (CMI)
McDonald’s (MCD)
General Electric (GE)
IBM
Chipotle Restaurants (CMG)
Marvell (MRVL)
Google (GOOG)
Microsoft (MSFT)
Advanced Micro Devices (AMD)
AAPL drops the most over 3-weeks since early 2009.
The companies listed above are very large and important to the economy. If they are warning of the future; what will NEXT quarter look like? According to the following chart (see above for chart) from Bloomberg, if the recent pattern holds it won’t be good.
Wait a second here – the banks had great earnings! Pfheeew, no worries then. Ben Bernanke has them cradled in his loving arms.
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Futures Data
Value Areas:
ES 1442.25 / 1426.25
POC... 1438.25
YM 13386 / 13272
NQ 2710.00 / 2671.50
Secrets of commodity trading broker
Very simple and interesting post! Thanks a lot!
I've just found the article about SECRETS OF COMMODITY TRADING BROKER...It may be interesting for you too. There are useful advices!
Secret Trading Tip #3
Secret Trading Tip #3
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A Little Lesson in Lingo
The world of trading has many parts that seem a little foreign to new traders. There are plenty of catch phrases, symbols, and other banter that can be intimidating or even confusing at first. One of the biggest sources of confusion includes the shorthand that you see for many markets. Understanding what you are reading is important, and learning the basic lingo can come in handy.
Everything has a specified time and place
All futures contracts (be it for commodities or financial instruments) have very specific parts, quantities, and dates associated with them – and that’s before you even worry about the price! Not all contracts are created equal. The value of the S&P 500 contract is five times the value of the e-mini S&P 500 contract. Those are two symbols you wouldn’t want to confuse! If there are markets you want to trade, visit the exchange’s website and learn about the key parts for each contract. These will include:
The contract size
The futures months for the contract
The format for the price quote
The smallest amount by which the price of the contract can move (whole points or fractions of a point, also known as minimum tick)
Any daily trading limits for price movements
Trading symbols for the contract
- And much more!
Gimme an H! Gimme a U!
Memorizing all of this might seem like a bit of overkill, but in modern electronic markets making a mistake can happen in seconds and cost an unlimited amount of loss and confusion. Just remember that “fat finger” trade and the trouble it caused!
Let’s take a look at a contract I trade, the e-mini S&P 500. This futures market trades electronically (hence the “e”) on the CME Group’s Globex platform. On their website, I can go to Contract Specifications and learn that:
The symbol for this market is ES. I can use this code to find price quotes on many tickers.
The contract size is $50 x the e-mini S&P 500 futures price. I can use this value to calculate the dollar risk/gain per point in the market. Basically, if each point is worth $50, a 3 point movement would be $150. If I want to calculate the total dollar value of a single contract, I just have to multiply the current price by $50. If the market is trading at 1,280.00 that means it is worth 1280 x $50 = $64,000.
The minimum price fluctuation is 0.25. That means that if I am making an offer or trying to quote a price, I know that there are quarter point increments so I can’t offer a price like 1265.30 in this market. It would have to be 1265.25 or 1265.50.
The contract details also list the trading times so I know when a session begins and ends, and also the trading contract months. This market has contracts for March, June, September and December (the quarterly cycle) – these months will be written with their own symbols as well – H, M, U, Z. The full list of monthly symbols is:
JAN F
FEB G
MAR H
APR J
MAY K
JUN M
JUL N
AUG Q
SEP U
OCT V
NOV X
DEC Z
Each contract will expire at some point, and that date is relative to the contract month.
If you can understand the lingo, you can avoid costly mistakes
Some of this might seem like a no-brainer; after all, a lot of trading programs will give you the info with a single keystroke so you don’t have to memorize all of it. The reason I think it is still relevant to know this is because taking the time to learn and understand how the markets work and what the lingo means can save you potential trouble. What happens if you are long ESU11 and you try to close the position by selling ESZ11? Can’t do it – you would know that the ES U11 is the e-mini S&P 500 for September (U) 2011 and the ES Z11 is the e-mini S&P 500 for December (Z) 2011.
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Land of Oz
Land of Oz
ruby-slippers-wand
Friday the preliminary look at Q3 GDP came out and "beat" expectations of a 1.8% print, with a 2.0% reading. That seemingly sounds positive, but since its “election season,” we need to delve deeper into the data to get the real story.
When you pull back the curtain, you of course see Mr. Wizzard manipulating the numbers. Because of the 2.02% annualized increase in GDP, over one third, or 0.71 %( compared to a deduction of -0.14% in Q2), was contributed by "Government Consumption." This was the biggest rise in government spending in 3 years, and only the first contribution by Uncle Sam to its own GDP print since Q2 2010.
So in much the same way as the September jobs print soared courtesy of government employee hiring, this same government is padding its own numbers to make itself look better. The real question is what the second and third Q3 GDP revisions will show, which both come, luckily, after the election. Recall that Q2 GDP initially came out at 1.5%, then was revised to 1.7%, until finally coming to rest at 1.25%.
It’s Oz economics. We put on the ruby slippers, click our heels three times and say, “There’s no place like home.” Of course, home is underwater from bad loans, but that’s another story for another day.
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.
Futures Data
Value Areas:
ES 1409.00 / 1402.00
POC... 1407.00
YM 13057 / 13005
NQ 2663.25 / 2641.75
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Secret Trading Tip #16
Secret Trading Tip #16
Buyers or Sellers
A question I often receive is, "How can there be more buyers or sellers at one price? Isn't there a buyer for every seller and a seller for every buyer?"
The answer is yes, but people are forgetting one important thing. There is a bid and an ask (or offer), and only one of them can be traded at a time.
A bid is an expression of willingness to buy at a price; an ask (or offer) is an expression to sell.
If the ES is trading at 1200.50, the bid is either 1200.25 or 1200.50. The answer depends on which way the market has just traded. Let's make it easy and simply say the ES is between 1200.25 & 1200.50, making the bid 1200.25. In order for the market to move from 1200.25 to 1200.50, someone must pay up to get filled.
You may not be in a hurry and attempt to wait to buy 1200.25, but that will usually only happen when the bid/ask drops to 1200.00 & 1200.25 and you are actually filled on the ask.
If you are trying to buy and really want to get filled, you must pay up at the offer or risk missing the trade. Conversely, if you really want to get filled on a sale, you must hit the bid, or reach down to get filled.
Sure, there is someone on the other side of the trade, but without you choosing to reach up and pay the offer the market stands still. Therefore when trades are executed at the offer it is said to be done by the buyers even though there are sellers at that price taking the other side.
Every buy will be filled on the offer and every sell will be filled on the bid, period.
Let's say we once more have a number of 1200.50 and we see that over time (sometimes just a few seconds) the fills were 100 x 1300. We can say that there were 1200 more buyers than sellers at 1200.50 because of how traders reacted to the bid/ask spread when it was at 1200.25 x 1200.50 and higher at 1200.50 x 1200.75 (called the spread.)
When the market was at the lower spread, 1300 buyers reached UP to pay the 1200.50 offer.
When the market was at the higher spread, 100 sellers reach DOWN to sell the 1200.50 bid.
When the spread traded around this price range there truly were more buyers than sellers at 1200.50.
Understanding bid and ask can open up other realms of technical analysis.
There are some traders who will look at the bid and ask order flows to try to get clues to potential movement in the market based on what buyers and sellers are doing. This is often referred to as reading order book flow or depth-of-market.
If you look at the number of orders for each bid and ask around the current market price you can see the probable number of transactions available at those levels. Reading this information is the key to certain kinds of volume based trading systems and other trading methods that follow the book order flow.
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Jobs Part 2
Jobs Part 2
Help-Wanted
Friday’s NFP number (non-Farm Payroll) report was better than expected. At 171,000, it was better than even the highest estimate by economists…by a wide margin.
Some economists thought that hurricane Sandy would negatively impact the NFP results, but they were wrong. The Bureau of Labor Statistics (BLS) had finished gathering its data before the storm struck. It will surely, however, impact the next reading on employment.
From the BLS we read, September 2012 Employment Report.
Total nonfarm payroll employment increased by 171,000 in October, and the unemployment rate was essentially unchanged at 7.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, health care, and retail trade.
Since it takes about 130,000 new jobs per month to keep up with population growth, this was a good data point. But you may be wondering how the unemployment rate went up if the amount of jobs created were better than 130k? That would be because the amount of workers actively seeking a job increased last month.
One may also be wondering: If the jobs data were much better than expected, why was the stock market crushed Friday? Nobody can know the exact reason but I believe it was because the market exploded before the data were known, Thursday. A came, but it was a day early.
So the market’s reaction the day before the NFP and the day of the NFP report was interesting, but should be nothing compared to the reaction of the market from the election. Tuesday and Wednesday should be interesting.
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Forex Trading tips:
Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling.
Never invest money into a real Forex account until you practice on a Forex Demo account!
Go with the trend!
Always take a look at the time frame larger than the one you've chosen to trade with.
Never risk more than 2-3% of the total trading account.
Put emotions down. Trade calm.
Choose the time frame that is right for you.