Market View; World Stock Indexes & Trading Journal - page 8
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Discipline – Conclusion
For many “neo-traders”, trading in order to generate consistent profitability is an insurmountable challenge .
The knowledge and skills required to achieve consistent performance are very broad, so the relevant experience and achievement of sufficient aptitude, becomes very difficult, especially when such experience does not always result in financial returns at the beginning of your career . However, perseverance and resilient search of your own “Edge”, the self-discipline of the daily advance planning approach and its implementation, will tip the balance in your favor.
Results will not come quickly, and if that happens, they tend not to last. A disciplined approach to trading is an investment in your future that will allow you to reap consistent and enduring rewards if you have the strength of character to implement it.
The stock market have been consolidating this morning and investors are waiting data release on Gross Domestic Product and it’s impact on interest rates measures in the world’s largest economy.
Apart from the main economic release, the US GDP, final figures will show the Thomson Reuters/University of Michigan consumer-sentiment index.
In the U.K., lawmakers will vote today on whether to authorize airstrikes on Islamic State positions in Iraq. Military action may start within days if the proposal is approved.
Pro-democracy protests in Hong Kong induced to the fall of stocks in Asian markets, and in turn produced the same effect in the European market. The economic data release of the German Economy, the U.S Consumer Spending and personal income data, did not change the market sentiment, as it is not presented too far from expectations. In the euro zone consumer confidence declined in September and the value of stocks remained low.
The European economy continues to weaken and the demonstrations in Hong Kong add to uncertainty.
Investors should remain cautious until the next earnings season starts, so in the short term is not expected to emerge signs of strength in the stock market.
The stock market kept falling in the day. EBay earnings failed to offset the decline in consumer confidence.
The uncertainty is large and many investors are waiting for the next catalyst to make their entry in the markets.
Protests in Hong Kong remain as a political concern and also remain the rumors that the Fed may raise the interest rates sooner than anticipated.
The SP500 fell about 1.75% in September, with the Fed on course to end its monthly bond buying program, in October.
An important issue for the successful trader
The pressure for quick profits leads to Over Leverage and this reduces the ability of the trader to align with the market, in that it eliminates the required presence of mind to keep our belief and raises the risk of unsustainable loss.
The Over Leverage leads to the shortening of the time to make gains, making it more difficult to ride winning trade ideas. An important virtue of the successful trader is precisely the ability to preserve winning positions.
If many are Over Leveraged, there is a potential advantage to increase the duration of the trade, as when others are shaken, we may negotiate the long-term movements more effectively.
Stocks Gain Before Jobs Data
Yesterday the North American indexes ended the session almost unchanged, rebounding from losses earlier in the session, a movement that seems to have been purely technical, since some titles were already oversold. In the European market, the situation was quite different, with the major indexes declining more than 2%, as investors react negatively to ECB President Mario Draghi’s speach, on concern the European Central Bank asset-buying plan won’t be enough to revive growth.
As investors assess the strength of the U.S. economy, analysts are predicting a return to gains of more than 200,000 in monthly nonfarm payrolls.
US macroeconomic data continues to exceed expectations, in which the employment numbers strengthen a recovery scenario for the American economy. However, after today’s opening, U.S. stocks fell, with the Standard & Poor’s 500 Index retreating after touching its average price for the past 50 days, as small-cap shares resumed a selloff following a fifth weekly decline.
This morning, Asian shares closed positive, reacting to the smaller number of protesters on the streets of Hong Kong.
The positive opening of major European indices, led to a marginal climb throughout the day. DAX30 was in decline throughout the day. It is important to notice that the German market was closed last Friday.
Despite the US stocks being stronger than the European, the stock market is falling in general.
The SP 500 index depreciates the second day and European stock markets follow in a sharp fall. Despite occasional recoveries, the markets continue to show signs of weakness and if nothing changes, a return to the minimum of August will not take long.
Here are the current factors of worry among investors:
Dubious economic data, some geopolitical risk, the rise of the dollar, the protests in Hong Kong, the fear of Ebola, the decline in oil prices. In addition the IMF cuts the forecast for global growth in 2015, warned about the risks of rising geopolitical tensions and also about a potential correction in the financial market with shares in speculative levels.
The decline in recent sessions leave some nervousness in the air, given the possibility to be tested the important support zone that represents the minimum of August. For the particular case of DAX30, the breaking down of this support may create an inversion, with bearish implications.
This does not necessarily mean we have to watch to a ‘crash’, but it is certain that from that moment onward the price action would present Lower Highs and Lower Lows, which are not witnessed for a few months.
The charts tell us that the long-term trend remains bullish, even with the break of the mentioned support.