This chart pattern continues to work
Wednesday, April 30th, 2008
FR: Adam Hewison, President INO.com
RE: Trading patterns that work
We first previewed this simple yet powerful theory that most traders overlook and ignore seven weeks ago. In case you missed this video, I highly recommend that you take a few minutes and grasp the theory before watching our second video. In our second video we test the theory with two real world trading examples.
Here’s the theory:
After you watch the theory, watch as we put this theory to work with two real world trading examples.
Here’s the theory in the real-world:
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Sent: 4/29, 11:03
Hi Adam, I just wanted to let you know in a few words, a big thank you, I have bought “JRCC” at your recommendation. I never been happier since finding your website.
This is what I have been looking for a long time. I still have a lot material to read and learn. I will write more later. Adam, thank you very much and regards Netty
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It’s all here, the theory, two real world examples, and the above email is proof that this concept works. Watch, learn and benefit from this powerful new trading video that most traders have overlooked.
Watch with our compliments. No registration required.
Adam Hewison
President, INO.com.
What’s profit got to do with it?
By: Matthew Zimberg
www.optimusfutures.com
Traders have to detach themselves from the money they’re trading.
Everybody wants to be a profitable trader and with the advent of the internet and the growing literature about trading, most people know that the 3Ms are essential to succeed: Methodology, Money Management, and Money (capital).
Will traders be disciplined and adhere to the 3Ms? Not likely. Why? Because after all we are talking about money… and from personal experience, I can say that the majority of us are attached to money and no matter how effective our “Methodology” is, we as emotional beings will often tend to outguess our system.
Why?
- Many traders can not follow a methodology that loses 3 times in a row. Doubts will set in and consequently the trader will stop using the proven methodology and start looking elsewhere.
- Traders bypass and “adjust”‘ their money management technique based on their risk tolerance instead of applying the methodology’s risk management. For instance, a lot of traders are enamored with Gold but will not risk more than $1000 per trade, which represents a mere $10.00 in the price of Gold. This is an unrealistic expectation given that Gold can easily move $10 to $20 from low to high on a given day.
- Traders are not necessarily investors. They often trade to supplement their income while trying to earn a living. Shouldn’t an electrician do what he does best in his own field and leave the trading to the Methodology, for which he/she probably spent thousands of dollars to purchase?
By now you’re probably wondering about the 3rd M (Money) and thinking why in the world am I even bothering to trade if NOT to make money? And what about all the money you spent educating yourself at seminars, reading technical books on trading? Was that all just a waste of time and money?
I’ll let the reader answer that question. All I can tell you is “Trader, Know Thyself.” But here’s another perspective to all this: Making money is a by-product of success. What does that mean? It means that successful trading is the result of applying the 3Ms: Methodology, Money Management, and Money. There is nothing will guarantee you success, but following the 3Ms would help you to increase the odds of being a successful trader.
(PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THERE IS A RISK OF LOSS IN FUTURES TRADING)
The phrase “making money is a by-product of success” and does not include such things as “I HAVE to make money” or “I have to make the mortgage payment” and “I need to get extra cash.” I think you get the picture.
I truly believe the concepts of fear and greed come to fruition when someone is trading money they can not afford to lose. So instead of taking a small loss, the undisciplined trader will let a $1000 loss turn into a $2500 loss. The truth is that trading has to encompass only risk capital. What does “risk capital” mean? It means that you need to allocate capital towards the building of your business. It has to be separate from the rest of your capital like your day to day finances, retirement capital, your children’s college fund, etc.
That should help you mentally since this is theoretically money you can afford to lose. The following few facts should also be considered when trading:
- Most traders will be losers.
- Most profitable traders will be in the minority, so maximize your profit potential and don’t exit too soon.
- Your methodology sometimes will not hold during certain market conditions, but if it’s been tested and proven effective than stick with it.
We can all live with the winners, but to stay calm during the storm is the strength that it takes to stay in the markets and hopefully become a “trader.”
Hope this helps,
Matt
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURES RESULTS. THERE IS A RISK OF LOSS IN FUTURES TRADING. FUTURES AND OPTIONS TRADING INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS.
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Can an egg timer improve your trading?
True Story
When I first started my career in this great business in the early seventies, I worked under a guy named Gary who acted as a mentor to me.
Now Gary was definitely over the top personality wise and his trading style was something else altogether.
Let me share with you one of Gary’s trading quirks. Gary was a short term trader and good at it. He was talented technically when it came to charting as he kept all his charts by hand on special graph paper. Remember this was back in the seventies before we had all these wonderful computer charting programs .
Well here I am next to Gary watching him trading in and out, in and out, of all these different markets throughout the trading day. Gary was a super busy, and successful trader and I was happy to watch over his shoulder and learn how the markets really work.
The one thing I haven’t told you about Gary, was that he had a big egg timer on his trading desk. Every time he made a trade he would flip the egg timer over and the sand would start running.
Now you have to remember, I was green to trading back then and had never seen someone of Gary’s caliber and trading style. I just thought that having an egg timer on your desk was a normal part of trading.
Have you figured out yet why Gary was using a egg timer?
Was it because …
(A) He liked playing with egg timers
(B) He liked to time his poached eggs
(C) He used it for money management
If you chose (C) you are correct. Gary did use an egg timer for money management. It’s not as crazy as you might think and it suited Gary’s style of trading perfectly.
You see Gary was using a TIME STOP.
How it worked is like this, Gary would see something on his intra-day charts that was a buy, and then buy it immediately. If it did not go up by the time the sand had finished running through his egg timer he would exit the market win lose or draw. It was just that simple.
I never had the type of trading personality to trade like Gary, but I have to admit the egg timer worked.
Have a great weekend and trading week.
Adam Hewison
Co-founder, MarketClub.com
P.S. If you missed any of the “Traders Whiteboard” series watch them here.
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After the action yesterday, you need to watch this video
On the 21st of March we created a video on gold and presented an in-depth analysis on what we thought was going to happen in that market.
I think sometimes it’s good to look back and reflect on what was happening over 4 weeks ago and then compare what is happening right now.
In this short video we give exact downside targets that many folks thought were crazy. We are beginning to see the first of those targets reached with today’s down move in gold. You can see all of our other target zones when you watch the video.
Could gold move further on the downside? I will let you decide that.
Take a look at this short video that was made over a month ago on gold and see what you think. You will see just how accurate our Trade Triangle technology has been in spotting the turns in this precious metal.
Enjoy the weekend,
Adam Hewison
Co-founder, MarketClub.com
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Apple, Amazon Update … did we get it right?
There is an old adage on Wall Street that goes something like this…
“Buy the rumor, sell on the news”
Many times in the financial markets, price is already factored in before the earnings news is released. This appears to be the case for both Apple (NASDAQ_AAPL) and Amazon (NASDAQ_AMZN) who both released earnings today (4-23-08) after the bell. As we showed in our latest Apple Amazon video, we expected to see these two stocks enter into a trading range. We also displayed in the video why we thought that both stocks were at the upper end of their respective trading ranges.
If we see downward pressure today in both Apple and Amazon shares, I think it will confirm that we are moving into a broad trading range for both these stocks.
Let’s see how the day develops and how much profit taking affects the stock price of these two companies.
Every success in life and in the markets,
Adam Hewison
Co-founder of MarketClub.com
Before the closing bell - Apple and Amazon
Posted @ 3:27 p.m. EST on 4/23/08
Today we are looking at Apple (NASDAQ_AAPL) and Amazon (NASDAQ_AMZN). We are looking at both of these markets before their earnings are released after the bell today. We will be carefully analyzing each stock and coming up with the real conclusion that we believe makes sense.
We are using MarketClub’s “Trade Triangle” technology, which has been found to be a superior tool for most traders. In this short video you will see how we analyze each stock and how you can do the same thing using these tools.
Nobody knows at this point what the earnings are going to be for either of these companies. It should be an interesting experiment for our “Trade Triangle” technology. Having said that, nothing is ever 100% accurate in trading stocks. However, if you’re 80% right or even 70% right you can still do very well trading in stocks, futures, mutual funds, precious metals and the foreign exchange markets.
MarketClub’s “Trade Triangle” technology provides an elegant solution that has a history of being on the right side of the market.
Enjoy the video,
Adam Hewison
Co-founder of MarketClub.com
This just in:
Amazon.com 1Q profit rises 29 percent
7 minutes ago
(AP:SEATTLE) Web retailer Amazon.com Inc. says its first-quarter profit rose 29 percent, helped by solid sales in the U.S. and abroad.
Quarterly earnings climbed to $143 million, or 34 cents per share, from $111 million, or 26 cents per share, in the same period last year.
Those results beat Wall Street’s expectations. Analysts surveyed by Thomson Financial had forecast a profit of 32 cents per share.
Revenue increased 37 percent to $4.14 billion from $3.02 billion in the year-ago quarter.
Sales in North America rose 31 percent to $2.13 billion from a year ago, and international sales grew 44 percent to $2.01 billion.
Now here comes APPLE:
Apple fiscal 2Q profit jumps to beat street on Mac sales
2 minutes ago
(AP:NEW YORK) Apple says its fiscal second-quarter earnings jumped to beat analyst estimates as computer and iPod revenue grew.
The Cupertino, Calif.-based computer and electronics maker’s second-quarter profit totaled $1.05 billion, or $1.16 per share, compared with $770 million, or 87 cents per share, in the year-ago quarter.
Apple’s revenue rose almost 43 percent to $7.51 billion from $5.26 billion.
Analysts polled by Thomson Financial had expected earnings of $1.07 per share on $6.96 billion in revenue.
During the quarter, Apple shipped 2.3 million Macintosh computers, accounting for $3.49 billion in revenue _ an increase of 54 percent from the same quarter last year. It also sold 10.6 million iPods and 1.7 million iPhones in the quarter.
How my worst trade, turned out to be my best trade ever!!
Today I’d like to share with you my worst trade ever. In retrospect it turned out to be my best trade.
Here’s why…
I started in the commodities business as a broker for a company called Conti Commodity Services. Conti was a division of Continental Grain Co. one of the largest and oldest grain companies in the world. Back in the 70s, Conti was just starting a new division to handle customers in the brokerage business. I was lucky enough to have them hire me as I had no experience and very little education. But, I was enthusiastic and willing to learn.
So there I was at Conti Commodity Services dialing and smiling and looking to get business for myself and the company. All this was back in the 70s when grain prices were skyrocketing. After a brief time on the job I guess I thought I knew better than everybody else.
So here’s my worst trade…
I was following the wheat market, just like everyone else because markets were hot. All of a sudden a slumbering December wheat market shot up dramatically on no news. I thought to myself that wheat had gone up too far and too fast, so I went short (that is I sold something that I didn’t own). It had to come down, right? That alone shows you how naïve I was back then. Well, for 20 minutes I looked like a hero. Rather than take a small profit when I had it, I decided I’d sit and wait for a bigger profit (call that greed). Well, you probably know what happened next, wheat closed up the limit and I was unable to get out of my short position and finished the day with a loss. Well I said to myself that wheat has got to pull back tomorrow, right? In the commodity markets, things only go from bad to worse when you’re on the wrong side of a trade and that’s what happened to me and my wheat position. I am not going to bore you with the gory details or the pain I went through, but the bottom line was I lost $10,000 on that trade. It doesn’t seem like a lot of money now, but back then when I was just starting up my career it seemed like an insurmountable fortune.
To be truthful it was the best thing that could ever happen to me and here’s why…
I learned a very tough lesson in that wheat trade, one that I’ve never forgotten. I’ve learned that there are two sides to every coin, two sides to every sword and two sides to every trade. For every profit opportunity you see in the marketplace there is an associated risk that comes along with that profit. I learned the value of risk management and why there is no free lunch when it comes to the markets.
Later in my trading career I’ve lost much more than $10,000 in other trades, but it never bothered me because I was managing my risk. A friend of mine lost over a million dollars on one trade. To many, this would seem like an insurmountable amount of money to lose on one trade. But my friend is trading with $50 million, so a $1 million loss is only 2% of his risk capital which is certainly very manageable. It is when you lose 40%, 50% or 60% of your capital on a single trade that it becomes very difficult, if not impossible to come back from.
So when I say my worst trade happened to be my best trade; I mean it. In my mind that early loss in December wheat was a priceless education in risk management that I still use to this day.
I cannot say enough about risk management and how you should manage your risk, but here are some trading tips that will help you avoid disasters like mine..
You must use stops. You must be disciplined. You must be diversified. If you have those three core trading items in your portfolio, you can survive and thrive no matter what the market throws your way.
I hope that like me, your worst trade turns into your best trade in the long run.
Every success in trading and in life,
Adam Hewison
Co-founder MarketClub.com
You got it right!
Congratulations to all readers of this blog.
I would like to thank you for participating in all our polls that we have posted over last several months. The predictive power of these visitor blog polls has been amazing.
Not only did you predict months ago that the dollar had not bottomed out, but the collective poll indicated negativity for the U.S. economy. Both of these predictions turned out to be 100% correct.
Our latest poll is asking who will be the Democratic nominee for president? The results have been very interesting. I believe our poll voters have it correct, 44% of you indicated that you are just plain tired of this going on for so long. In fact, it was quite a relief last week to see the Pope Benedict on television instead of Clinton or Obama. So once again I believe the poll has it right, the majority of people are just tired of the whole thing.
Today being Tuesday, it’s time for the Pennsylvania primary. Our poll indicates that
Senator Barack Obama is leading Senator Hillary Clinton overall and will be the Democratic nominee for president. Obama leads Clinton by a two to one margin overall . We did not do a poll for Pennsylvania as we believe that it was too narrow a focus for our users. We believe Obama’s lead on this poll is significant as it is coming from a financially related website.
Tonight, I’m sure many of us will be glued to CNN watching the results come in precinct by precinct. We are all hoping for an end to this incredibly long process to nominate a candidate.
The purpose of this blog posting today is to thank you for participating in all of our previous polls and encourage you to vote in new polls that we are planning in the months ahead.
One thing I found out today on this blog is that you can actually e-mail a friend on any of the blog postings. You may like to do this with some of our videos.
Here’s how you do it. At the end of every post, you will see a number of little icons that help “spread the word”. To the right of that, you will see several links called: a promo, print, e-mail and comment.
If you’d like to e-mail a friend about this blog, any postings or any video that we do, please use the easy to use e-mail link that I just mentioned.
If you’d like to add your comments to this blog, just click the comment button. Quite honestly we encourage you to comment on our posts.
If you’d like to post your own experience about the markets on this blog, please send us a comment and we will reply to you. Also include your telephone number so that we can reach you if we have any questions. As you know, we are not brokers so we won’t be asking you to open the account with us. Rest assured your privacy is guarded with our company.
Thanks for taking the time to read this brief posts and lets see what happens tonight with the Democratic primary in Pennsylvania. All the best in life and in the markets.
Adam Hewison
Co-founder MarketClub.com
P.S. If you missed any of the “Traders Whiteboard” series watch them here.
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It is a no-brainer …
It’s a no-brainer.
If I’ve heard that expression once, I have heard it a thousand times from traders over the years.
While trading in the pits of the Chicago Mercantile Exchange early in my career, that expression was a common phrase used by many of my fellow traders on the trading floor. Many traders are saying that MarketClub is a no-brainer, we prefer to think of MarketClub as a refuge for smart traders.
Today we are looking at the forex market and in particular the EURO/YEN cross. This cross first came to our attention in MarketClub’s portfolio alerts system. So, today I decided to spend a little time and analyze this market for you.
As you may know the foreign exchange market is a $3 trillion a year market, making it the biggest market in the world. This game is played 24 hours a day, six days a week. The EURO/YEN cross has had a particularly big move over the last several years, the question now is: is this cross going to continue higher?
In my detailed analysis of the EURO/YEN cross, you will see my reasons and my analysis for why this market could be beginning a big move right now.
We’ll also be looking at this market scientifically using MarketClub’s “Trade Triangle” technology. This technology has enjoyed a great deal of success in forex as well as other markets. The “Trade Triangle” approach is a totally driven, non-emotional way to look at any market including the EURO/YEN cross.
I’m sure you’ll get a lot out of this seven minute video as it will help you further understand how the markets really work.
Every success in trading and in life,
Adam Hewison
Co-founder of MarketClub.com
