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Saturday, May 30, 2009

Week in Review: Risk will Price Itself … One Way or Another (PODCAST)

"When the logician has resolved each demonstration into a host of elementary operations, all of them correct, he will not yet be in possession of the whole reality, that indefinable something that constitutes the unity... Now pure logic cannot give us this view of the whole; it is to intuition that we must look for it. " - Henri Poincaré, Science and Method, 1952, page 127

A weaker U.S. Dollar.

Long Bond Curves.

The Credit Markets

Federal Reserve guidance.

Inflationary expectations.

Stagflation.

What does it all mean? I discuss that, and what I see economically, in this "Week in Review" ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

So, briefly, what's going on with the credit markets? The market is raising the rate; regardless of the Fed's action. The Fed lowered the rate, and lowered the rate, and lowered the rate. And in the end? Risk is pricing itself. The market is raising the rate regardless.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Friday, May 29, 2009

Know Your Environment (VIDEO)

"Most people in this room are going to fail. I'm here to help those who are willing to learn, willing to listen." - Dr. Alexander Elder

I'm Dan

I'm a swing trader.

Except for today.

Why would I start day trading for a week or two? Why, in 2004 was I primarily investing, and trading much less? Why, in 2009, am I trading, and not investing?

Because you have to know the environment that you are in. And this? This is a trading environment. And I think that the next few months are going to be an extreme trading environment ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)


You have to know the economic environment you are participating in, when you approach the markets. But more about that in tomorrow's "Week in Review" podcast.

Suffice to say, in 2004, it was an investing environment. Right now? We are in an extreme trading environment ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Wednesday, May 27, 2009

Frustrations and Distractions (PODCAST)

"Non-traders will never understand the trader mindset" - Myself

There is so much ... so much to having your own door, to your own space ... that you can shut while you are trading.

I will explain what I mean in the following podcast ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Tuesday, May 26, 2009

The Low Funded Challenge Account Project: June 2009

Last Month (May 2009) - Challenge Project Balances:

Investing Account Balance: $474.00 (Average)
Stock / Futures Trading Balance: $1,422.92
Online Savings Balance: $63.98

The original video explanation of the Challenge Project is to be found here.

A video summary of my decisions for this month is to be found at the end of this blog entry.

Back in October of 2007, I created sub-accounts from my main brokerages; as a main feature to this blog, and in November of 2007, I began the Challenge Project. Their purpose, as well as the purpose of many of the articles in this blog, is to assist the low-funded trader understand what principles he needs to consider when trying to get started in the markets, or if starting up again because his or her account account has been wiped out. These are actual sub-accounts at my brokerages that I own, and I will look to for growth. I will announce actual trades and investments that I perform in them, and the money management rationals and reasons for my decisions as a means to educate others. I wish to demonstrate that as long as one enters this business with the proper principles, strategy, education and emotional discipline in hand, you can 'make it' in this business.

In the beginning of this experiment, I placed $130.00 with Sharebuilder as a long-term investment account, and I placed $370.00 in the account for trading Futures options. I later added a small ING Savings account that has been built up to a balance of $63.98. Due to the initial investment, I once termed this the "$500 Challenge". Since we now have much more in these accounts than $500 at the end of May, I will term this the "Low-Funded Challenge Project" instead of the "$500 Challenge". At times I will refer to them simply as the "Challenge Project" accounts.

I also had three rules for the "Challenge Project" accounts. At the beginning of each month, I review and consider where we stand, and how those three rules impact the current months decisions. So let's do that for June of 2009.

Rules for the Challenge Account:

1) The initial investment is $500.00, to be split amongst the accounts. After creating the accounts in October of 2007, we had our initial deposited transferred in November of 2007. $130 went to Sharebuilder for longer term investments, and $370 went to the Xpresstrade brokerage for futures options purchases. Xpresstrade was later bought out by "optionsXpress", therefore this is now the optionsXpress account. This account is the 'trading' account, for stocks, ETF's, and futures options. Therefore, rule #1 is always complete.

2) Each month, I can contribute $100.00, that can be split amongst the accounts however I choose. In other words, I can send $30.00 to Sharebuilder, $70.00 to optionsXpress; or $100.00 to optionsXpress, and nothing to Sharebuilder, etc. Last month we deposited $10.00 to the Investing Account, $60.00 to the trading account, and $30.00 to the Savings Account.

For June 2009's deposits, I decided to send the entire $100.00 to the Trading Account.

3) I'll be using regular investment and trade vehicles. Bonds. Stocks. ETF's. Futures Options. I'll explain my ideas regarding these accounts in June, in the following vlog entry ...

(Video Included. If you're seeing this entry elsewhere and cannot play the video? Click this link to go to the exact blogged vlog entry ...)



June 2009 Balances after Deposit from Rule #2

Investing Account Balance: $
483.00 (This will fluctuate with the BAC, JNJ and KO stock, as well as dividends paid)
Stock / Futures Trading Balance: $1,522.92
Online Savings Balance: $63.98

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday, May 25, 2009

Trader Thoughts: Politics and Buying on Fear (VIDEO)

"Whatever course you decide upon, there is always someone to tell you that you are wrong. There are always difficulties arising which tempt you to believe that your critics are right. To map out a course of action and follow it to an end requires courage." - Ralph Waldo Emerson

Yes I own physical silver.

Yes I short silver.

These thoughts and more idle ramblings ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



Here's the link to Derek's (ohio1998) YouTube page ...

Everyone has the freedom to act as they wish. I'm not here to try to tell someone they shouldn't have the freedom to vote. But I do not want to hear I'm part of the problem. In fact, if we want to talk about 'the problem'? I think I would have a strong argument for switching that phrase inside out.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Saturday, May 23, 2009

Week in Review: The Credit Markets, the Credit Markets (PODCAST)

"It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities." - Josiah Charles Stamp

Imagine you own a credit card.

Imagine you've gotten yourself in a lot of trouble with that credit card. You owe a balance on that credit card of $40,000.00

Now imagine, that some rich uncle comes along, and says: "Wow. I'll loan you some money. I'll lend you $5,000.00, on very, very low interest. If I see you behave responsibility, then we'll take it from there."

And you take that $5,000.00? And buy yourself a new home entertainment system. What do you think your uncle would start to think about continuing to help you, and your ability to pay back that $5,000.00?

Yeah. That's about where the economy is at right now.

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

The Bond Markets cannot indefinitely fund expenditures, when operating at increasing deficits. It's just simple math.

China and other bond market buyers could walk away. But that doesn't mean inflation. Hyper-inflationists believe that the Fed will not raise the rate. I believe the Fed would, if it faced that situation.

Because the Fed will protect their own interests. They will not commit suicide. They would raise the rate. Other Central Banks have done the same thing in the past in similar situations, and although it resulted in Economic problems in England? England is still with us.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Friday, May 22, 2009

Fear and Respect (VIDEO)

"Fear is an emotion indispensable for survival." - Hannah Arendt

Traders are often told to be 'wary' of fear. To avoid fear. That 'fear' will destroy them as a trader.

That's true. You can never allow fear to immobilize your decision making process. You can never allow fear to cause you to take profits too early.

But the idea that fear will always destroy you as a trader? That's also a false idea.

When is fear a good thing for your trading? When it engenders respect for the markets ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Wednesday, May 20, 2009

Short in OJ and Position Sizing (VIDEO)

"He who fails to plan, plans to fail"

First of all, a brief note. I probably won't be in the Ventrilo "Market Buzz" Voice Server until Wednesday afternoon ...

This entry, is sort of a follow up to yesterdays entry.

It's OJ again. This was earlier in the day. Icius and Shakamma were in the Market Buzz Ventrilo Server with me as I made this trade. It was a tricky one, but I came out ahead ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



Icius, Aummadour and I had a really good conversation today on the discipline that it takes to be in the low funded position, and as I mentioned at the end of that video; why it's so important to add funds to a tiny account.

It provides a secondary stream to your trading equity for the low funded. Cash flow. Thus, your mindset doesn't turn to "I must trade and win, because that's the only way that account will grow." You know that equity will be added to your account, and you learn to balance trading, against that income of equity.

Trading is psychological. The trick is to learn how to ease the psychological burden upon yourself. Especially if you're in the low funded position.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday, May 18, 2009

A Good Sniper Knows When Not to Take the Shot

"Patience is passion tamed." - Lyman Abbott

Trading is a bit like hunting.

As the guys in the Market Buzz Ventrilo Voice server know, I've been stalking Orange Juice for a short. I was watching it. And watching it. The seasonal sell date is approaching.

So I wake up this morning and I decided to take a look at Orange Juice (/OJ in the ThinkorSwim platform, or OJN9 for the rest of us). I decide to pull up the 10 minute chart. And what do you think I find happened literally, right before I logged into my platform?


So what do I do? What would you do?

Do not react emotionally. Keep your emotions in check. When in doubt? Wait.

Just ... wait.

One of the worst things you can do when trading is just to jump into the market, feeling that you're 'missing something'. The worst thing I could have possibly done? Was to forget my methodology and jump into a short position.

And what proceeds to happen with OJ for the rest of the day?


Just as with my last Cocoa trade? Another opportunity presented itself. The market rose for the rest of the day. Now I still do not know if I will take this as a short position. But the lesson here?

Don't be in a hurry to trade. If the market leaves you behind? Then it leaves you behind. It's not the end of the world.

There will always be another trade ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Saturday, May 16, 2009

Week In Review: The Depression Deepens (PODCAST)

"When you're right for long enough, eventually they will start paying attention ..." - Amory Lovins

Disinvestment is a aggressive economic attack, in an attempt to coerce an industry to change their product, their policies, or their very existence. Disinvestment is usually attempted by ideological groups who believe that they have 'the fix'. It's effects can be exceedingly destructive, because it is an attempt to directly combat free market forces. The Soviet Union believed that they knew better than the free market forces of the agriculture market and the directly combated those forces. They believed that human management could 'better' and 'fix' things.

What was the result?

1932 to 1933. One of the worst famines that has ever descended upon mankind - within one of the most agriculturally productive areas in of all of Asia. It is called the Holodomor. It is rarely ever taught in Western schools. It's what I call one of the many, many "forgotten horrors" and crimes against humanity that is not taught in our educational system.

Disinvestment is exactly what has happened to the U.S. auto manufacturers. Through a variety of means.

I've said this again and again. The main problem? Is us. Humans who believe that we can manage our own problems, and "fix" things.

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

Here is the video that I mentioned in the podcast to review, that I found on CountryHorseFive's YouTube Channel ...



Rather shocking, but the effects are not that difficult to understand. It's really not that difficult.

High unemployment, with insanely high inventories.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Friday, May 15, 2009

Silver Loss and Risk Control (VIDEO)

"A man's errors are his portals of discovery." - James Joyce

What do you do ... when your methodology is telling you to take a trade, but everything outside of your methodology is saying: "This may not be a good idea"?

Traders are often told by the current 'market wisdom', to never change their methodology or your money management. "Pick a plan, and stick with it.", they are told.

Then in the next breath they're told: "Well, you have to allow for some flexibility"

I agree with both of those statements. The obvious question becomes, how do you harmonize those two conflicting points of view?

You harmonize them, through risk control. It all has to be about risk control. I illustrate what I mean, in the following video with a trade and a loss I had yesterday in mini-Silver ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)


Risk control.

Basically, my methodology was telling me to take the trade. Everything lined up for my methodology for this trade. But there were some worrisome signs outside of my methodology. It didn't mean I couldn't take the trade.

I simply adjusted my position in order to better control and manage my risk.

As I often tell traders: "Quit looking at the market so much, and start basing decisions on protecting your account equity".

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Thursday, May 14, 2009

Update: Brokerages and Challenge Project Thoughts (VIDEO)

"However beautiful the strategy, you should occasionally look at the results." - Winston Churchill

So I've been playing with the ThinkorSwim software here for a while. I've been testing out the software. And lately, I've been using it more and more. I'm sort of getting 'sucked in' to many of it's features. In fact, I'm hard pressed to find anything I like about my current broker more, than what I'm finding at ThinkorSwim ...

As well, I've been thinking about the progress of the Challenge Project. The two are sort of connected. Because I've been keeping my 'ear to the ground' as it were; as I listen to how ThinkorSwim treats those with low funds ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



Go Red Wings! Game 7 is on right now, and boy, are they playing with heart. They're most definitely controlling the neutral zone better than they did in Game 6.

God I'm going to miss Hudler if they lose him ... I love that sneaky little Czech!

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Wednesday, May 13, 2009

Cocoa Trade with CamStudio Software (VIDEO)

"To Believe without evidence and demonstration is an act of ignorance and folly"

I am often asked to post a video showing one of my trades.

I truly think that most of what makes a great trader is 1) Money Management, 2) Emotional Discipline, and 3) Understanding of one's own psychology.

But at some point? At some point I actually have to demonstrate all of that in practice.

So I figured it was about time I try out my new CamStudio software, and put together such a video, that follows my last two trades in Cocoa

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday, May 11, 2009

Oops.

Yeah, I must have been more tired from last nights fun than I thought. I fully expected to jump into the Ventrilo "Market Buzz" Voice Server today.

I just woke up.

Sorry about that ...

I Don't Want to Play the "I Was Right" Fight (VIDEO)

"Humility is the only certain defense against humiliation"

The U.S. Dollar strength

Deflation

The Economy

The DOW Jones

Trades

The Recession

The Depression

The Crash of October

Money Management

Shorting Gold at $1000

So what?

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



Could I play the "I was right fight"? Absolutely. But the point, is what am I doing today looking to the 'right side of the chart'?

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

I'm Going to Need A Few Hours This Morning ...

I won't be into the Ventrilo "Market Buzz" Server until about 12:45 pm est today.


Yeah, I had tickets to last nights Red Wings game, and when it was over, I stayed out a bit late. So I apologize in advance, but my voice is going to be a hoarse today.

Saturday, May 9, 2009

Week in Review: The Pieces are On the Board and in Play (PODCAST)

"The markets can remain irrational for longer than you can remain solvent for it" - Market Proverb

Welcome to the Week in Review ...

The pieces are on the metaphoric "chess-board", and in play that cause the stock market to move in the manner that it does. Not only the credit markets which I mentioned in my last podcast, but also other markets, or 'pieces'.

What pieces? Well, I discuss that in the following podcast ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

Something else I want to mention? Is that Gold has been up, as Bonds are down. That's also considered rather bearish. Just another 'piece' on the "chessboard", to think about ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Friday, May 8, 2009

Dear Low Funded Trader (VIDEO)

"Unless someone like you cares a whole awful lot, nothing is going to get better. It's not." - Dr. Seuss"

As this depression worsens, I am receiving quite a few emails from folks who are in a bad way financially. They've been trying their hand at trading, and they are struggling along. I'm here to help. I really, really am.

I want to share a few basic lessons I've learned along the way as someone who started out as a low funded trader ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



Tomorrow is the "Week in Review", and on Monday, I have a video prepared entitled: "The 'I was right' Fight".

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Thursday, May 7, 2009

Mid-Week Recap: The Jaws of Death (PODCAST)

"Through memory we travel against time, through forgetfulness we follow its course." - Joseph Joubert

Welcome to the mid-week Recap!

I often tell ones ... don't forget about the credit markets! Don't forget about the TIPS, or the Bond markets! Don't become so entralled with the histrionic movements of the stock market, that you forget about the reasons why the stock market moves in the manner in which in moves.

It'd be nice if I remembered my own advice from time to time.

Because over the last month, I haven't been following the credit markets that heavily. Through a 'chance' discussion yesterday, I decided to start looking over the credit markets. A very interesting picture emerged.

This week provides a perfect example of what I'm talking about, which I discuss in the following podcast.

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

Now. This leads to another possibility (Especially for you forex traders out there). Think about this. Where has the market run to during every downturn in the stock market? The U.S. Dollar. The symbol I use for the futures market at the moment is DXM9

So go ahead, and pull up the U.S. Dollar, and look for areas of support along moving averages and price.

We don't know the future. But this is how I, at least, look for low risk, high reward possibilities.

Just something to think about.

Edit: As an aside, remember: The worst possible thing you can see, is for the bond and the stock market, repeatedly, fall together. Basically, what we had in October of 2008.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Wednesday, May 6, 2009

Be the House (VIDEO)

"There is no better gambling than not to gamble" - German Proverb

I'm often asked what I do for a living.

I used to try to dress it up. I used to say "I analyze investments", or "I'm an investment manager". Although no one really understood what that meant? Somehow they'd just nod and say: "Oh, ok".

But some time ago, I just stopped dressing it up. Now I just tell people flat out:

"I trade and invest my own accounts".

And since I tell ones that, I cannot tell you the number of times I've heard the statement:

"Trading? Stocks? Futures? Man, that's just gambling. Just like gambling. In the end, the house will always win."

I've learned to simply smile and say: "Precisely. That's exactly why I make money".

I discuss what I mean, in the following vlog entry ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)


So in the end? I tell ones: Don't gamble. Instead, be the casino. Be the house. That is only possible in the career of trading.

I'm going to put up a recap podcast by tomorrow morning. There's a bit to talk about with a situation that is now developing in the credit markets.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday, May 4, 2009

Sacrifice (VIDEO)

"Sacrifice, which is the passion of great souls, has never been the law of societies." - Henri Frederic Amiel

Some time ago I read an essay by one of my favorite authors, Michael Crichton. In this essay, Crichton stated that he believed that as internet technology improved, as the 'information superhighway' became more advanced and as information was made more readily available?

A youthful culture would arise that would actually be dumber due to the ready access of information.

It seemed quite backwards, but he outlined why he believed; that having answers, quite literally at any second? Would contribute towards a culture of people who would not take responsibility and ownership of themselves. Because they would not think, truly think, for themselves. Therefore, he believed, they would not be able to educate themselves, even with the answers at their fingertips.

He stated: "In the information society, nobody thinks. We expect to banish paper, but we actually banish thought."

I thought it quite backwards at the time, but the more time passes? The more I'm seeing the wisdom in Mr. Crichton's essay.

As it is, I seem to have found a few of those people.

I kid you not, this was one of the private messages I received:

"hey pal, a manager in Manulife company wants me to be a financial planner in the company. Do u think it is a good option? Give some opinions. He said making 20k a month is not a problem."

Give you some options? Are you kidding me? I've told people again and again: "I'm sorry, I'm not here to give you stock picks, or some 'hot system'."

There very next reply?

"So just give me a stock to buy? Will it make money? Will it pay me 10% a year? I need to make 10% a year"

This vlog entry, is for them ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



Tomorrow's entry is "Be the House"

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Sunday, May 3, 2009

Week in Review: End of May is Coming Our Way (PODCAST)

"Sell in May and Go Away" - Market Colloquialism

Welcome to the Week in Review!

We discuss the recent market action (Look at those DOW Transports!), GM, Chrylser, and some up and coming content to the daily blog here.

Here is a chart of the DOW Jones Industrial average that I discuss during this podcast ...

(You can enlarge this picture, in a new tab or page)

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

Here's what a city looks like? When the dominanting industry is forced to close, or move away:

Gary, Indiana ... (Photo by Lee Bey)

(Gary, Indiana)

Seriously. Gary Indiana is a ghost town. Massive disinvestment and decreases in population has left entire sections of the city completely deserted. This has affected Chicago, which in turn forced massive disinvestments upon St Louis as well. The effects were felt across the entire Midwest.

Later Edit: Boy, blew that call on the DOW. Wasn't alone, but the portfolio is up. Remember ... hedge yourself.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Friday, May 1, 2009

Find Your Bias for Entrances (VIDEO)

"Prediction is very difficult, especially about the future." - Niels Bohr

I'm reviewing some emails, and I'm feeling pretty good about what I'm reading. Many readers and subscribers to this blog are truly understanding all of the pieces of Money Management.

That's fantastic. Awesome. Truly, if a new trader understands, truly understands money management? He or she will be about 3 years ahead of the game ... at least, that's true when I think of myself as a new trader back in 1996, when I started out in the markets.

But I have received many emails that, in essence state:

"Dan, I just can't seem to catch a break. I keep my loss restrictred according to the 2% rule? But I can't seem to have a profitable trade. I keep getting stopped out. I think the problem may be in my bias, or edge. What do I do?"

I discuss finding a bias, and edge, in the following vlog entry ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



This is the chart I mention to look at, during this video:


Here is a link to the book from MRCI that I order the metrics regarding seasonal data.

Here is the link to my YouTube series and playlist regarding Futures. There are four videos there you have to watch, in order to understand the COT Report. "The Players" of Small Speculators, "The Players" of Large Funds, "The Players" of the Commercials, and finally, the Video that talks about all of this en totum - The C.O.T. Report.

I go here, to "timing charts" to look at the C.O.T. Report each week. I like to look at the COT report from a two year time basis.

The trick with entrances, chart patterns, and technical tools? Is learning that those tools help you find low risk, high reward situations on the chart. But they cannot give you an 'edge', or 'bias' in the market, that you can message. They cannot give you, what some people term "positive expectancy".

I'll have more on the COT report on Monday, when I will discuss that this report has much to say for every type of trader. For stock, forex, commodity futures and index traders.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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