Secret Trading Tips - page 5
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Thanks, Larry for sharing your knowledge. Very helpful. I've bookmarked this for reference.
Secret Trading Tip #28
Secret Trading Tip #28
________________________________________
Know Your Limits
One thing that I see that catches traders up all the time is knowing their limits. There are times when it is probably wiser to step away from a trade or not trade at all.
Sometimes the best favor you can do for yourself is to take a break.
It doesn't matter who you are or what kind of trading you do. There are going to be times when you need to step back and take a break from things. This can happen after a bad trade, a big loss, and even after a really good performance. It can help you get things back into perspective. It also allows for an opportunity for you to review your trades, and learn from any mistakes or plans that you think cost you in the long run.
It is easy for traders to get caught up in the action.
A lot of amateurs find themselves getting swept away in the wave of enthusiasm. The trading highs that come with winning are just as strong as the pull of panic that can accompany a loss. It is up to the individual trader to look at themselves in the mirror and admit when passions and emotions, rather than common sense, are at the helm.
Huge market movements like those that come on the waves of spiking prices are often irresistible. The trouble is that these times of high volatility can sabotage careful trading plans. Remember that there is no circumstance under which it is wise to enter a trade without a solid plan that includes:
- specific entry points based on your analysis
- specific profit exit level
- specific loss exit level
Even at the best of times it can be an exercise in patience and risk tolerance to trade. You don't want to muddy the waters by trading during extreme market events until the complete macro picture is available. An example of the kind of action I am talking about is relative to the panic over debt issues. When news is trickling in 24 hours a day from Europe and the United States, or when a big ratings agency decides to lower a AAA credit rating over the weekend, you can be sure that there is an environment where markets can gap through your stop prices or leave you very vulnerable. Trading in futures is risky enough without adding that level of anxiety.
Every time you trade you should ask yourself what is motivating you.
Before you enter any kind of trade you should ask yourself what you are looking for. Are you following a solid plan based on careful analysis and rules? Are you making sure you are only using risk capital? Can you really afford the loss if the market moves against you? Are you just trading to "be in the market"? Understanding the answers to these questions and being honest with yourself is important. These aren't just warnings to pay lip-service to. There are substantial risks of loss in all trading, and that's why you have to know and respect your limits. It is always ok to sit things out. No one ever loses money by staying on the sidelines and out of trades in a volatile market.
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Blah, Blah, Blah
Blah, Blah, Blah
blah
The market temporarily stabilized on Friday after a little bit of decent economic data as consumer sentiment rose to its highest level in more than five years. The Thompson Reuters/University of Michigan on consumer sentiment came in at 84.9, up from 82.
Why said consumer is suddenly optimistic, I have absolutely no idea. Generally, most economic data remains mixed at best, but even data like the last jobs report are lacking the necessary wage-based income growth needed to be sustainable.
Factor in the disruption from Sandy which will most likely exert a drag on consumer spending growth headed into the holiday season, and the forecast turns downright sketchy.
All of this comes with a worsening European “s%@t storm” and the big daddy downer of them all, the looming fiscal cliff. While both President Obama and Speaker of the House John Boehner took to the airwaves on Friday, proclaiming they want to solve the fiscal cliff, it sounded to me like more of the same.
Obama called for compromise in the context of tax cuts on the wealthy while Boehner talked of spending cuts and really by the end both of their eloquently crafted words amounted to blah, blah, blah.
Tuesday night’s results did nothing to change the basic dysfunctional dynamic between the two political parties. Victory guarantees the president nothing more than the headache of building consensus in a gridlocked capital. And of course, it’s all of us that pay the price. Somehow it’s hard to be confident.
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
Secret Trading Tip #29
Secret Trading Tip #29
Advanced Technicals – Moving Averages
In Tip #14, I talked about some of the basics for technical analysis. Trends and simple chart patterns are just the tip of the iceberg for technical analysis tools. There are many advanced tools that technicians use to try to find signals in the market price. One of the terms you might hear quite often is moving average.
The moving average for a market plots the result of a calculation that averages the prices in a certain time frame. Fans of the indicator say that it “smoothes out” the data, giving a clearer picture of potential trends.
The word “moving” refers to the way that new data is added while older points are dropped.
A simple moving average would take the closing prices from a set number of days – let's say 20 days – add them all together, and then divide by 20. The result can be plotted on the chart. The number of days is usually up to personal preference. The more days used to calculate the average, the smoother the line will be. Here is an example of a 5 day versus a 30 day moving average
Past Performance is not necessarily indicative of future results. Chart courtesy of Gecko Software.
Past Performance is not necessarily indicative of future results. Chart courtesy of Gecko Software.
See how the two compare? The 30 day has far fewer dramatic movements in it. The choice of line usually depends on the strategy that you are looking to use with the moving averages.
Some moving averages use a formula to give recent data more influence on the final numbers. One of these is the exponential moving average, which some computer programs might use if you select this indicator. The following chart shows the difference between a simple moving average (in red) and an exponential moving average (green) where both are calculated for 10-day. See how the EMA looks like it responds to the changes in price faster than the SMA?
Past Performance is not necessarily indicative of future results. Chart courtesy of Gecko Software.
One of the most common uses of Moving Averages is in confirming trends.
Moving averages use data or prices that are in the past, so they are not really good for predicting trends. The slopes higher or lower in the moving average line can be used to help a technician looking to confirm a possible trend. Take a look at the chart of the 5 day moving average. A trader looking to hold a long position would probably not be comfortable doing so if the current prices were above a downward sloping moving average line. On the flip side of that, a short position would not be on the top of a trend-traders list if the market price was above the line.
Some technical analysts use larger or bigger MAs to try to identify support or resistance. If the market price bounces off the line for a 100 or 200 day moving average, it is a possible spot for support or resistance. Trading opportunities might come into play if the prices crossover that line. Other strategies using MAs come into play when the lines for two different time periods cross each other. In this way the technical analyst will be watching for signs or confirmations of a reversal.
Moving Averages can be used alone or as a complementary tool to other analysis.
Like most technical analysis tools, the moving average for a market can be used in tandem with other analysis. It is a lagging indicator, since it uses price data from the past, so there is reason to keep it handy for confirming trends, rather than trying to apply it in a predictive manner. Keep in mind that different time periods might be more appropriate for specific trading intentions. If you are day trading, it probably wouldn't be the best use of your chart reading time to use a 50 day MA. You might feel better with something that is an aggregate of minutes or hours. Do your research and practice, and you might find that this simple technical indicator suits your style.
Day trading is fast, and risky, and not for everyone.
The quick pull-the-trigger style trading that is synonymous with day trading is not for everyone. There are great disadvantages and heavy risks. I think the big trick is to find and stick to a trading plan. Having a pre-determined approach to the market – a place to get in and a place to get out for profit OR for loss – should help you keep your head on straight. Trading with a plan instead of raw emotions is what separates the cocky cowboy image most people might have from the actual serious day trading reality.
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Thanks Larry, seems like you are taking your time to make this useful posts for us
Sandy?
Sandy?
sandy
Other than last Thursday’s mini-deluge of economic data, the week’s news was sparse. Friday was no exception with just one report: Industrial Production.
Economists had expected the report to read 78.4% but it was only 77.8%. Did economists, analysts, and reporters blame the miss on a weaker Europe (which is in recession), a weaker global economy, or even a weaker US? No, they immediately blamed it on hurricane Sandy. Or was it Sandy from Grease? Nope, it was the hurricane.
Bloomberg said the following once released
Industrial production declined 0.4 percent in October after having increased 0.2 percent in September. Hurricane Sandy, which held down production in the Northeast region at the end of October, is estimated by the Fed to have reduced the rate of change in total output by nearly 1 percentage point. The largest estimated storm-related effects included reductions in the output of utilities, of chemicals, of food, of transportation equipment, and of computers and electronic products.
Market expectations apparently were way off on Sandy impact with the consensus at up 0.2 percent for overall industrial production.
Does this make sense? Didn’t hurricane Sandy land in the New York region on October 29th, which was the END of the month and therefore should not have affected October data by much at all? I would expect it to affect November’s data due to the lengthy power outages.
And one last question/observation: doesn’t this report cover the entire country and not just the New York region? Something seems odd – like analysts & economists do not want to admit to the slowdown. Just sayin’.
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.
Value Areas:
ES 1357.00 / 1345.00
POC… 1356.00
YM 12548 / 12473
NQ 2532.50 / 2507.00
Best Trades to you,Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Two Martini Lunch
Two Martini Lunch
There’s nothing like a lunchtime speech from Ben Bernanke to make you want to head straight to the bar.
Speaking in front of the Economic Club of New York, Ben seemed downright depressed about the economic morass he has of course helped to create. His hopium seemed all but gone, claiming that he can no longer fix the problem that is the U.S. economy. Like the kid on a playground shouting, “NOT IT”, Ben took Congress to task and ran away from the looming fiscal cliff.
Claiming there’s no bullets left in his bailout gun, Ben said that Congress and the White House are on their own. Oh yeah, it’s solely their fault for leading the nation to this dire fiscal situation that could cause another recession.
From blatant blamer to obvious overstater, Ben went on to call the economic recovery "disappointingly slow" and then claimed that the fiscal cliff would in fact, be bad.
"The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery — indeed, by the reckoning of the Congressional Budget Office and that of many outside observers, a fiscal shock of that size would send the economy toppling back into recession,"
Wow, Ben thanks for that bit of wisdom! Needless to say, the markets headed south after Ben’s musings temporarily giving back some of Monday’s gains.
This came on top of news from Hewlett Packard that stunned investors. In their earnings report, HP announced that it had effectively bungled the massive acquisition of Autonomy, despite extensive prior warnings about the accounting practices of the UK firm. HP paid over $10 billion for a transaction that is now clear will provide zero income statement benefit.
But come market close, poof, all this bad news disappeared and the E-mini rallied back on miraculously light volume. The Thanksgiving holiday celebration must have started early. Like all too often, everyone will be okay with drinking on credit and letting the house figure out a way to pay.
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.
Value Areas:
ES 1385.50 / 1379.00
POC… 1384.25
YM 12753 / 12703
NQ 2592.75 / 2580.25
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Cliff Rally
Cliff Rally
sales_negotiation
The market had quite a rally last week – didn’t it? It actually started the prior Friday on the 16th of November, near 1340.00 in the ES.
What happened? John Boehner held a press conference about the “fiscal cliff” negotiations in which he suggested that said negotiations were going well. Naturally, Fraud Street took this to mean that the massive deficit-can would be kicked into next year yet again, when we will go through this all over.
A week later the ES traded 67.00 points higher in the post-Thanksgiving Day trade. Surely in this week there was even more “negotiations” that were “going well” – right? Not so much.
Sunday we read from Reuters that the nothing is happening. Is anyone really surprised?
Nov 25 (Reuters) - U.S. lawmakers have made little progress in the last 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled for Jan. 1, a senior Democratic senator said on Sunday.
The United States is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, which in Washington is referred to as going over a "fiscal cliff," could easily trigger a recession.
"Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess ... much progress hasn't been made," Dick Durbin, the No. 2 Senate Democrat, told ABC's "This Week" program.
A deadline is looming. Absent action by lawmakers and President Barack Obama, roughly $600 billion in tax increases and spending cuts will start to hit households and companies in early January.
Republicans and Obama's Democrats are at an impasse over the president's wish to raise income tax rates on the wealthiest Americans, which Republicans say would hurt job creation.
Republicans also want to cut spending on social programs more than Democrats say they will accept.
Durbin said Democrats are willing to allow small changes to parts of these entitlement programs, including public health insurance programs for the elderly and poor, but the Social Security government pension program should not be on the table.
"Bring entitlement reform into the conversation. Social Security, set (it) aside," Durbin said.
The possibility of a deal – with NO DETAILS – was good for 67-handles in the S&P500.
Will the reality of no progress remove the fraud rally? LOL!!!! Yeaaahhhh, right.
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.
Value Areas:
ES 1405.00 / 1396.00
POC… 1401.00
YM 12950 / 12884
NQ 2634.00 / 2617.00
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
Enforcer Tuesday
Enforcer Tuesday
tuesday
From black Friday to cyber Monday to enforcer Tuesday, today’s news moves from the shopping mall to the regulatory milieu.
First, SAC Capital Advisors LP fund manager Mathew Martoma was released on $5 million bail on Monday after making his first appearance in a New York court on charges of making illegal trades that hedge fund titan Steven A. Cohen personally signed off on. Martoma was charged last week in what U.S. prosecutors called "the most lucrative" insider-trading scheme ever.
He was accused of helping Cohen's firm avoid losses and reap profits totaling $276 million in the summer of 2008 by using insider tips he obtained from a doctor about Elan Corp and Wyeth LLC. Martoma worked for CR Intrinsic, a unit of Cohen's SAC Capital.
Let’s see if Martoma actually does time. It certainly hasn’t been the case, but there may be an improvement in that arena as we also learned that Mary Schapiro will step down as chairman of the Securities and Exchange Commission next month after her tumultuous tenure. Schapiro’s critics, and yes I fall into that camp, claim that she failed to act aggressively to charge the fraud Street banksters for their role in the financial crisis of 2008.
For example, in 2010, Goldman agreed to pay $550 million to settle civil fraud charges that it misled investors about mortgage securities before the housing market collapsed in 2007. That is all of about two weeks of earnings at Goldman and no senior executives were singled out. Plus, Goldman was allowed to settle the charges without admitting or denying any wrongdoing, as were other large banks that faced similar charges.
President Obama named Elisse Walter as her replacement. We will see if she is anything more than a wrist slapper, but let’s not hold our breath.
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.
Value Areas:
ES 1402.00 / 1397.50
POC… 1400.25
YM 12923 / 12881
NQ 2646.25 / 2629.75
Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom
In the fallout from the 2008 global financial crisis, there have been moments that have been driven by pure fear. These are the moments when it can be hard to maintain your composure and trade your plan. Unfortunately, these big days are the times when you need that composure the most. Here is a quick lesson in why it is important to keep focused in a scary market and how to achieve that focus.
Market Basics
First let us understand some market basics. Markets exist to facilitate trade. From moment to moment the market offers traders the opportunity to profit from price movement. It's an environment where every trader has the freedom to create his own results, i.e. all the choices and the power to exercise those choices reside with the trader.
'Scary' implies fear, anxiety, or insecurity.
In his book, The Disciplined Trader, Mark Douglas addresses these issues in a no-nonsense, no holds barred way.
Let me give you an example of his views on this subject:
"It was only the lack of trust I had in myself to do what was needed to be done that I was really afraid of."
"The market is never wrong in what it does; it just is."
"The market cannot take anything away from you that you don't allow."
"In the trading environment the outcome of your decisions is immediate, and you are powerless to change anything except your mind. You have to learn to flow with the markets; you are either in harmony with them or you are not."
It becomes self evident that your trading success will be dependent on your ability to correctly perceive opportunity, to execute a trade arising from that perception and your ability to allow your profits to accumulate.
Are You Consumed by Fear?
Markets are inherently scary. If you are a trader consumed by fear, then the market will always be scary, and the only variable is how scary it is at any given time. When consumed by fear a trader is doomed to failure. Fear will twist your perceptions and blind you to the opportunities available. Fear will almost always drive us to make the wrong action, and it will without question make us totally incapable of accumulating profits that might be made. Even for disciplined and proven successful traders, the markets can be scary.
Objectively scary markets can be quantified by the Volatility index, the VIX - the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge." Levels below twenty are associated with market complacency and over thirty with increasing market anxiety. Extremes are often excellent contrarian indicators.
Trading should be considered a business, and your rules should reflect good business practices. These would include adequate capitalization. Conservation of capital is your primary job. If you are under-capitalized, you are half way to the losers stall before you even start.
Over-Trading & You
Do not over-trade. This too will drain your energy, your attention to detail, your perception of price changes and the efficiency of your trade execution. Over-trading will inevitably drain your capital from your account to the guy on the other side of your trades, who you can be sure does not have his/her perceptions blunted. If you have this as your guiding star, chances are you will eventually succeed in this business. Preserving capital is closely associated with risk management, and I will address this in the five things you can do when there is evidence of market anxiety.
5 Rules to Trade By
1) Stick to a Trading System that has proved itself over time to be profitable despite losing trades. No system is 100% correct. It only needs to be correct 50% of the time if profits are substantially greater than losses.
2) Never Anticipate Your System. Let your system fully play out so that its various criteria are fulfilled before entering your trade. When in doubt keep out or if already in a trade, get out!
3) Always Use Stops; NEVER trade without them. Make it your practice to enter your stop loss trade before you enter your trade.
4) Never Let a Winning Trade Become a Losing Trade; use a trailing stop once your trade is showing a profit. Once a trade is showing a two-point profit, consider bringing in your stop to the entry price. Should the market unexpectedly reverse, it would be a scratch trade. After that, trail your stop two points for every two points prices move in your favor.
5) Trade with the Trend. Do not attempt to pick tops and bottoms to trade against the trend. Following these principles and spending the time necessary to create the psychological stability necessary to succeed is the most difficult part of this profession. Your goal should be to have the self knowledge and confidence that you unquestionably believe in your trades. Identify with Mark Douglas' dictum, "markets can't do anything to any trader who completely trusts himself to act appropriately, in his best interests, under all market conditions."
Best Trades to you,
_________
Larry Levin
Founder & President - Trading Advantagehi friend , thnks for your posting .I had become exhausted searching the tips trying to make sense of all the garbage and then I discovered that secrets . I have been trading forex for over a year now using the strategy that this guy developed and I am impressed with myself. I profit on a consistent basis and for that I thank this tips which I have found from forex-metal .