Posts Tagged ‘Keys’

Market Technical Analysis – Keys On Oil, Markets Revealed. Markets Float Higher

InTheMoneyStocks.com breaks out the key technical analysis techniques they have become famous for. They analyze the charts on the market to showcase their technical trend line analysis, price, pattern and time values. By utilizing these methods and not using the common technical tools which almost never work anymore, they are able to call every major and minor market move avoiding Wall Street hype. InTheMoneyStocks.com looks at major support and resistance levels on the charts telling their viewers where the market will rise and fall. They talk about major rules that must be learned. Enjoy and come get their premium daily, month, weekly and intra day expert guidance on the markets, gold, oil, us$ and stocks in their premium nightly videos, daily market reports, pro trader watch list, hidden gems and technical tactics. All included in the Research Center for just $49.99/month. Best value and guidance on Wall Street by those that avoid the Wall Street hype! RealTick graphics used with permission of Townsend Analytics, Ltd. ©1986-2009 Townsend Analytics, Ltd. All Rights Reserved. RealTick is a registered trademark of Townsend Analytics, Ltd.

Market Technical Analysis – Markets Slammed – Find Out The Keys, Levels, Pivots And Profits!

InTheMoneyStocks.com breaks out the key technical analysis techniques they have become famous for. They analyze the charts on the market to showcase their technical trend line analysis, price, pattern and time values. By utilizing these methods and not using the common technical tools which almost never work anymore, they are able to call every major and minor market move avoiding Wall Street hype. InTheMoneyStocks.com looks at major support and resistance levels on the charts telling their viewers where the market will rise and fall. They talk about major rules that must be learned. Enjoy and come get their premium daily, month, weekly and intra day expert guidance on the markets, gold, oil, us$ and stocks in their premium nightly videos, daily market reports, pro trader watch list, hidden gems and technical tactics. All included in the Research Center for just $49.99/month. Best value and guidance on Wall Street by those that avoid the Wall Street hype!

The Keys To Developing A Winning Forex Strategy

Developing a winning forex investment plan is not unlike piecing together winning strategies for other asset classes. First and foremost, you must assess what kind of investor you are. Are you hoping to catch big profits from day-trading? If day-trading isn’t your cup of tea, perhaps you’re a swing trader that wants to be in a trade for a few days or few weeks. Or maybe you’re a longer-term forex investor, in which case currency Exchange Traded Funds (ETFs) or a managed futures account may work best to help you accomplish long-term financial goals.

Remember that an investment strategy is NOT a system. Trading systems are mechanical and rigid. Even the good ones can only be altered so much. On the other hand, an overall investment plan or strategy should be fluid and be able to change as your investment objectives change. A winning forex strategy should be able to deliver profitable results in a variety of market conditions. Knowing that, let’s take a look at a few ways to develop a top-flight forex strategy.

What Currencies Are You Going To Invest In?

As the forex market has grown, so have the available options for traders. Even rookie forex traders know about the major currencies. These are the US dollar, the Euro, the Japanese yen, the British pound, the Swiss franc and the dollars of Australia, Canada and New Zealand. Forex investors now have access to more currencies known as exotics. These include the Mexican Peso, Brazilian Real, Thai Baht and South African Rand.

Now, it may sound intriguing and alluring to play the exotics, but be assured that the risks and the costs are higher. When you trade a major pair like the euro/US dollar (EUR/USD) you might have a bid/ask spread of just one or two pips simply because this is a highly liquid pair and one that thousands of investors trade every day. On the other hand, if you invest in a more exotic pair like the US dollar/Thai Baht, you may see a spread of five pips or more and that’s your cost to enter the trade. In addition, it’s harder to get off an exotic trade because the exotic currencies are far less liquid than their major counterparts. So proceed with caution if you’re considering investing in exotic currencies.

Keeping Your Losses Small, Let Your Winners Run

Seems simple doesn’t it? Yes, it does, but it’s surprising how many investors don’t follow this advice. This applies to trading asset class, but especially to forex where the use of leverage puts the investor who isn’t cautious at risk of losing more than his initial investment. So how do you keep your losses small? Regardless of what type of forex investor you are, assess your risk BEFORE you get into the trade. Decide how much you are willing to lose and if the trade goes against you, don’t let it go any further than your pre-determined loss threshold. Don’t turn a losing trade into a disastrous investment.

On the flip side, we don’t want to cut a winning trade short or let it turn against us. The way to do this is by using protective stops. Once your profit goal is reached, set a protective stop at that price and let the trade ride. The worst thing that can happen is that the trade goes against you, but you’ve already locked in some profit. If the trade keeps going your way, move your stop order to lock in even more profits.

Know Why You’re Investing In A Particular Currency

While many investment experts believe the market acts at random, that doesn’t mean you should pick currencies to invest in at random. Since the forex market is more volatile than stock or bond markets, we cannot hold forex investments for months or years as we might be able to do with stocks and fixed income. This makes investment selection critical. Are you going long on the Canadian dollar because oil prices are rising? That’s a sound investment thesis, but if you’re just buying a currency because you think it’s going to do what you want it to, you might be better off heading to a casino and gambling. When you buy stocks, you probably have a reason. Forex should be no different.

Research And Test Your Strategies

With all the advancements in technology, it is possible for investors to test their forex strategies on demo accounts without risking a penny. This is a wise move, especially for those new to forex investing. In conjunction with testing your strategy, there are plenty of free resources available for you to research how various currencies act during a variety of market conditions. Since these market conditions invariably repeat themselves over history, it is worth looking back to get a leg up on the future.

George Angell Keys in on Volatility and Liquidity

Volatility and liquidity are the two elements independent trader George Angell looks for in a market to trade. Currently, Angell exclusively trades the S&P 500 futures, putting on intraday trades only, never holding positions overnight. “Liquidity and volatility are the two things you have to have. You can’t day-trade something like oats–it wouldn’t work” Angell said.

Back in the early 1970s, Angell first became interested in the commodities markets. “I bought sugar and it went limit up … then I bought copper and it went limit up, so I bought some more. Then it went limit down. I called my broker and told him to sell and he said to whom?” Angell said. “That’s when I realized I had more to learn,” Angell added.

In the early 1980s, Angell headed for the Chicago trading pits. He was a local trader at the MidAmerican Commodity Exchange, focusing primarily on gold. While Angell now trades for himself, off-floor, from a screen, he called trading on the floor “an invaluable experience.”

“People on the floor are very short-term oriented” Angell said. “It taught me to get in, capture the trend, get your money and leave” he said.

Now, however, Angell prefers off-floor trading. “I’m alone in a room trading. When I’m on the floor there are thousands of people. It’s a social event. People want to talk about their positions, they want to have coffee. You lose your concentration… you can’t see the forest for the tress,” Angell said.

Technology has revolutionized the capability of off-floor traders in the past 10 years, according to Angell. “The playing field has been leveled,” Angell said, explaining that technology has decreased the advantage the floor trader was once seen as having over an off-floor trader. “The key beneficiary is the public trader. The public can’t scalp, but they can day-trade,” he explained.

Angell disregards fundamentals, relying on technicals “100%.” He has developed two proprietary trading systems: LSS and Spyglass, which he utilizes in his day trading, along with “discretion and personal judgment.”

“Everybody needs some sort of mechanical system. It enables you to take the difficult trades you wouldn’t normally take on the seat of your pants” Angell noted.

Also, “every day I go in without an opinion … and I let the market tell me where it wants to go … opinions are what get you in trouble,” Angell added.

While “a lot of people don’t have the discipline to trade without stops,” Angell said he doesn’t use them. “The problem with stop trading is that you get out at the worst possible moment. Instead of stops, I use action points. That means when it hits that point I’ll get out, but I’ll wait for the bounce (if the market is going down)” Angell explained.

Angell has traded the bond market as well. He keys m on his two key elements of volatility and liquidity when judging markets. “Occasionally, markets die on you. For instance, in 1980 we had a big gold market. It had gone to $850 per ounce…but volatility dried up and then liquidity dried up. At that point I went to the bonds,” Angell said. When the S&P 500 contract was launched at the Chicago Mercantile Exchange, Angell started trading that market. However, he noted after the stock market crash of 1987, liquidity dried up in the S&Ps, and Angell moved back to the bonds for a time.

“Big institutions are trading bonds and there are thousands to buy and sell at every tick. Nobody can play with that market. Nobody can manipulate it. That’s why orange juice goes limit up all the time-because there is nobody to sell it,” he said. When asked about GLOBEX trading, Angell said, “I don’t pay any attention to it, because there’s not enough liquidity there. On Eurodollars,” Angell noted, “there is huge liquidity but not enough volatility to make money.”

On the differences between markets, Angell noted that “all the markets have different characteristics and you have to know your market very well. On the floor, a guy who trades lumber isn’t going to trade the S&P. And traders trade the markets differently. People are known according to how they trade. This guy is a scalper. This guy trades back months. This guy is a spreader. This guy is a position day-trader. The novice trader needs to know he’s got to be a specialist.”

When asked why many futures traders don’t succeed, Angell pointed to three main factors. “One, a lack of discipline. Two, they are underfinanced. Three, they don’t know what it’s all about. They don’t know about paradoxical even” Angell said. The dictionary definition of “paradox” is an apparent contradiction, which is nevertheless somehow true, Angell explained. One example of this in the markets is that “the whole game on the floor is to run the stops” he said.

“In the market, everyone thinks it’s going up, but everyone won’t make money,” he added. Advice that Angell has for beginning traders? “Be well-enough financed with risk capital that you can afford to lose. Don’t think about the money, drink about the market, and the money will take care of itself,” Angell concluded.

5 Keys To Survival In Forex Day Trading

Day trading has always been one of the most well-known and widely misunderstood forms of speculation, not only in the forex (foreign exchange) market but also in stocks and futures. Skill and experience is especially important to forex day traders since the market movers (the “smart money”) are notorious for manipulating short-term price action to deliberately slaughter the fresh prey.

Unfortunately, beginners to online forex trading seem to have a tendency to believe that day trading is somehow easier, safer, and more appropriate for those with very little experience — and a a very little account balance to match. It isn’t.

Profitable day trading in the foreign exchange market is indeed possible, even in such a heavily manipulated market environment… but it simply isn’t suitable to every trader for many reasons, both psychological and practical. If you choose to attempt it, then make sure you’re choosing it for the right reasons.

I’ve come up with five keys to survival to illustrate what it really takes to become a full-time day trader.

1. Watch price action in real-time… every day

I know this isn’t what beginners want to hear but it’s the truth. If you want to be able to learn text book chart formations and immediately be able to apply them, then at least start with hourly or daily charts first. Reacting to the price action on shorter term charts used for day trading (generally 15 minute, 5 minute, or below) requires an element of skill and experience in addition to an understanding of basic price action principles.

If you’re determined to learn day trading (or even scalping) time frames, pay close attention to the speed of price movement and the price areas surrounding round numbers (x.xx00 price levels, or xxx.00 in the case of Yen pairs.)

2. Learn, understand, and internalize what price action really is

The forex market is driven by orders, whether they originate from corporate entities or speculators. Imagine that the current price is a city bus that will either travel north (long) or south (short) after you’ve boarded it (entered a trade.) At every 10 pips on this “road”, there’s a traffic light. At every 100 pips (big round numbers), there’s a major intersection.

For the purposes of this strange (but hopefully illustrative) metaphor, let’s assume that you have no access to the schedule and maybe you’re visiting this strange foreign city (newcomers to forex) so you can’t even ask the driver which way the bus will head (you can’t ask the market movers what they intend to do) — all you know is that you want to travel one way but there’s an almost-50/50 (and I emphasize almost 50/50, because it isn’t exactly) chance that the bus might take you in the opposite direction from the one you desire.

The point is that, after you’ve hopped onto a bus (entered a trade), whichever direction it heads toward, you should remember that at every 10 pips there are traffic lights (opposing orders) that might or might not turn red (and consequently stop the bus.) If it turns red, the bus might have reached the end of its route (reversal) or it might continue in the direction it came in when the light turns green (continuation.)

As mentioned before, the traffic lights we should pay the most attention to are the major intersections (the big “double zero” round number price levels.) The bus is less likely to end its route at some random little residential street in between than at one of these — less likely but not impossible.

Remember, the driver won’t tell us where he/she is heading so we trade probabilities, not certainties. Our job as day traders is to learn, practice, and internalize ways to profit from higher probabilities.

3. Never assume that advice meant for other (longer term) forms of trading applies to day trading or scalping

A lot of the advice from books and internet forums are excellent for swing traders and position traders, mostly on hourly and higher time frames. Very little of it, as far as I’ve seen, is well suited for short term day traders and scalpers.

One example that comes to mind is the common strategy used to enter trades after a “confirmation” of a break-out. In hourly and higher time-frame strategies, waiting until price has clearly broken a support or resistance area can be very effective. In short term intraday styles of trading, where these areas of short-term support and resistance are much closer together, the odds don’t favor such late entries. Instead, try to “speculate” on an overall direction based on a higher time frame chart (or simply zoom out for the bigger picture), and then enter based on short term retracements.

Likewise, many trading books stress the importance of trading psychology. While it’s a major factor in dealing with inevitable losing days, weeks, and months in day trading, it’s actually less of a factor for longer term traders — less but not entirely insignificant. In day trading, more than any other trading style, psychology really is a major factor to your success because it’ll affect your decision making process on every trade, every day.

There are other examples out there I’m sure but just remember that not everything you read will apply to your situation — though some of it will in different ways.

The point is, as a day trader in the forex market, you’re attempting to tame one of the world’s most vicious and carnivorous tigers. While some of the advice given to owners of domesticated house cats might apply to your situation in some way, it’s generally best not to assume that all (or even most) of their advice applies in the same way.

4. Never expect to win every single trade… and never assume that you need to

90% of the world’s trading advice will tell you that you can’t win every single trade. The other 10% is lying to you (or, more accurately, trying to sell a lie to you.)

No professional trader has a 100% win rate, not even the tier 1 bank traders and market makers. Sure, their percentage is higher than the average retail trader or even hedge fund trader, but there are still occasional losses. And it doesn’t matter.

FX trading, and all trading of financial instruments for that matter (stocks, futures, options, forex, etc.), is a business. Like every other business, from movie studios to convenience stores, losses are a fact of life. In the end, all that matters is whether a month, quarter, or year is profitable — but not every transaction along the way needs to be.

Most beginners to online forex trading tend to hop from one method or “system” to another in search of that one, single, key to loss-free trading. Marketers take advantage of this ignorance by marketing lies with “no loss” robots and books that promise the impossible. There’s no secret “no loss” formula to forex any more than there’s a “no rejection” formula to dating; some people manage to come pretty close but it’ll never be a perfect 100% record… and it doesn’t need to be.

5. Have realistic expectations if you’re a beginner

I realize that not everyone reading this is a complete beginner. Some of you might even be profitable traders looking to expand your range of strategies. Unfortunately, the vast majority of traders looking for new information are system hoppers with very little experience and knowledge. And for this reason, #5 is almost entirely aimed at struggling beginners.

Don’t expect to be able to instinctively predict market movements with little to no understand of markets and price action. You might get lucky in a demo account but it won’t be the same experience when you trade with real money, especially when it comes to day trading — the most psychologically tolling trading method for newbies.

Conclusion

The truth is the majority of beginners, and other less experienced traders (and not yet consistently profitable on the monthly or quarterly basis), are far better suited for longer term trading strategies. Among other things, longer term strategies allow a trader far more free time and require less screen time.

Day trading is a specialized occupation that takes years of work and experience to master. If it’s the road you choose, be prepared for the bumpy road ahead. Rest assured, it’s not impossible — but it’s also not easy… and it’s not the only way to trade profitably either.