“Saturday Seminars”- Trading the Short-Term Volatility Breakout without a Mechanical System
Mechanical systems do have merit, but after ten years of trading in the cash and energy markets Michael became convinced that a discretionary approach was more suited to his personality and gave him more consistent profits. In this seminar, Michael describes every aspect of the discretionary methodology he developed for profiting from a short-term volatility breakout in futures and equities markets.
Michael’s strategy employs numerous studies, but it assembles them in a logical and efficient manner that is easily grasped. Using his techniques, Michael analyzes twelve futures markets and ten equities in the two hours of this session. His methodology employs classic pattern recognition, average true range, swing, Fibonacci support and resistance, MACD, ADX/DMI, price/volume/open interest relationships, momentum, historic volatility, and the Commitment of Traders report.
Michael also discusses the full anatomy of a trade including entries, exits, setting stops, account leverage, and money management. He presents actual trades in detail so that you gain a complete understanding of his pragmatic, winning methodology. This session provides you with an enhanced understanding of the markets, thereby improving profitability regardless of experience level or trading style.
PDF Workbook
Before Michael Mazur began trading in the futures industry in 1994, he spent ten years as an international cargo trader in the energy market. He traded for Mobil Oil, Mitsubishi, Salomon, and Vitol SA, and he managed trading personnel and a trading portfolio that reached from the Arabian Gulf through India to the Pacific Rim. His group sales ranged from $500 million to $1 billion annually. Michael lives in Pacific Grove, California, where he operates M.J. Mazur, Inc., a registered commodity trading advisor. Michael manages futures accounts, publishes M Trade, a daily trading sheet, and provides consulting services to institutions and independent investors.
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Saturday Seminars are just a taste of the power of INO TV. The web’s only online video and audio library for trading education. So watch four videos in our free version of INO TV click here.
Everything you need to take your trading to the next level
Dear trader and blog reader,
One of the things I have always enjoyed, is sharing what I know with others. I have to thank my parents for teaching me the joy of sharing.
So it is in their memory, that I am excited to share with you, what I hope will be an informative, interesting and helpful series of trading that I named … Traders Whiteboard.
Participating in the Traders Whiteboard experience will teach you everything you need to know to become a successful trader.
In every Traders Whiteboard video I explain in detail how to use many of the same trading tools that are in use today by some of the worlds top hedge fund traders.
You are probably wondering much all of this is going to cost? The truth is, the service is free, and there are no catches.
You can credit my parents for that.
There’s no registration required or needed to experience the Traders Whiteboard videos.
Your journey towards greater trading knowledge begins right here.
Sincerely,
Adam Hewison,
President INO.com
About Adam Hewison
Adam Hewison is a former floor trader and past member of several major exchanges, including the International Monetary Market (IMM) a division of the Chicago Mercantile Exchange in Chicago, Index and Options Market(IOM) Chicago, New York Futures Exchange (NYFE) and The London Financial Futures Exchange (LIFFE). Adam is the author of “Right on the Money, The Definitive Guide to Forecasting Foreign Exchange Rates” and numerous other financial ebooks and web videos. His latest project with partner Dave Maher is INO TV. This newly created service is dedicated to educating traders through streaming video seminars.
A look at divergence in panel indicators
Today I’d like to welcome back Gary from Biiwii.com. I’ve asked Gary to teach us a bit on divergence.
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I want to have a look at divergence by the lower panel indicators and the valuable clues they can provide when used in conjunction with price activity, support/resistance levels and of course fundamentals of a given stock, commodity or other asset.
Divergence can be used to help define bullish or bearish setups. With my M.O. as a ‘bottom feeder’, today I will focus on a chart that sports most of the components I like to see when setting up for a swing trade; it is the etf UNG (the United States Natural Gas Fund) which has been declining relentlessly from a manic high in June and mercilessly punishing anyone innocent enough to buy into this mini-bubble under the incorrect assumption that it was ‘commodities to da moon’. But as “what goes up comes down” so too does the reverse eventually assert itself.
In looking at NatGas, I like the fundamentals much better from a seasonality and value perspective (thanks to a 40% decline) if only for a swing trade into the fall or winter. Fundamentals are the first priority. Check. Next, the decline has brought the price down to a notable area of lateral support. A decline like this is simply not going to be arrested until support can be defined. Check, we are at noticeable support.
Finally, what I like to see in a bottom feed is relentless and and dispiriting price action down to said support with bullish divergence by the indicators. We have that in spades with RSI, MACD, CCI and Rate of Change all nicely divergent even as bubble participants give up the ship (fresh lows in price). Right at support. I have included the full Stochcastics which have also diverged but more importantly are on the verge of ‘triggering’ above 20. That would be another important cross reference to a bullish case.
So there you have it. A simple bottom feed amid terrible price action down to support and bullish divergence. Nothing but NOTHING in this market is 100% and it is all about risk vs. reward. This trade in my opinion has a good risk profile. The risk is certainly better for Natty than back in July, wouldn’t you say? I have my own money in this trade and speaking of risk, if the noted support fails so too will the trade and I will book a loss. It won’t be the first time. But the key is to always understand your risk profiles and control same.
Edit (10:00) At the time this post was written (pre-market 8/27/08) I was expecting UNG and NatGas to continue hammering out a painful bottom (those are the best kind for sustainability). But during normal market hours we appear to be getting quite excited and gappy. If UNG registers a manic over bought condition directly off of the low I am going to sell it. Please use the above as a chart study on indicator divergence only.
The Monetary Case for Silver
For today’s guest blog post I’ve contacted one of my “go-to” silver guru’s David Morgan from Silver-Investor. The silver bug bit David as a very young man and his thirst for and knowledge of silver has only grown over the years. I asked David to give us some insight into why silver is money!
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The Monetary Case for Silver (Silver Institute speech abbreviated)
Most of this research came from my friend and associate Mr. Franklin Sander’s Sanders of the Moneychanger (see www.the-moneychanger.com).
The surest way today to be laughed off the podium and out of any economics department is to declare that silver is money, and money vitally necessary to our economic survival. I should know recently a rather significant “silver” event took place in Spokane and some very notable people attended this affair including Jeff Christian from the CPM Group, The Commodities Futures Trading Commission, The Silver Users Association, and several producing silver companies along with a host of silver exploration companies. Mr. Phil Baker CEO of Hecla Mining gave the Silver Institute’s presentation due to Michael DiRenzo’s unavailability.
I was asked to do an outlook for silver and my presentation was mainly about the fundamental case for silver with some thoughts given to the possible fate of the U.S. dollar. I was the only one that even mentioned the current state of economic affairs from both a current and historic point of view. Following my presentation a listener that seemed very shaken quickly approached me. He blurted out you are NOT going to speak about silver, as money? I thought the question to be rather odd, because obviously I had not.
This dislike for any mention of silver in the monetary system has been that way since the end of the bimetallic discussion in 1873 (in the US), but not because the monometallic gold standard advocates, or inflationary fiat money advocates, had better arguments. They just bought more effective politicians.
I will prove, from logic and experience, that not only is silver money, but no sound money system is possible without it. This of course is a very tall order and perhaps it would be better said that I will present the case and you decide.
Proving from Experience
From the mists of recorded history, over 4500 years, mankind has used silver as money. Most of the time silver was used exclusively in daily commerce, some time with gold, but gold always functioning for large purchase and international trade only. MOST of the time the standard coin of the realm was a silver coin, with the gold coins valued in terms of the silver coins (symmetallism, not bimetallism).
In fact, research history and you will never find any trouble with bimetallism whatever. In a true free market system where both gold and silver are not set at a government dictated ratio but the market itself determines the correct ratio we have ample evidence this method works best. The market always quickly and successfully adjusted to changes in the ratio over a range of 2.5:1 to 16:1 — UNTIL governments began to fix official mint ratios, late in the Middle Ages.
Allegedly, bimetallism broke down under the stress of the 19th century. Let us examine if this is true?
The Arguments
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Bimetallism caused too much fluctuation. This argument will be found in many texts dealing with precious metal money. However, the truth: The fluctuation over a 40-year period hardly amounted to 5% at greatest. Let us put that in context with today’s monetary system where currencies can swing 5% in a day.
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So much new silver was discovered that price was driven down. This argument is one widely propagated by nearly every monetary textbook in existence. Again the truth is that the ratio was trending upward (silver becoming cheaper than gold) from about 1800 to about 1840), when new gold discoveries in America (California 1848) and Australia cheapened the value of gold relative to silver. Why? Because they flooded the market with gold. So if anything was a “problem” it was new gold discoveries not more available silver.
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Is there a problem with a state mandated bimetallism? Yes, because this displaces the free market altogether. Rather than learn from 4500 years of human experience and use this experiential knowledge, the state knew better and fixed the gold/silver ratio. The out is predictable in fact it gave rise to what is known as Gresham’s law: cheap money drives expensive money out of circulation. The silver became worth more as bullion than it was at its face value, so coinage was melted down and disappeared from circulation.
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Unless the free market remains free to determine the gold/silver ratio, state mandated ratios would always be driving one or the other metal out of circulation. Therefore bimetallism with state mandated ratios but only with state mandated ratios will deflate the money supply, proportionate to new supplies coming to market.
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The U.S. never was bimetallic, but always symmetallic. Founders were too smart for anything else. US Coinage Act of 1792 made the dollar of silver (371.25 fine grains of silver) the standard coin of the realm and legal monetary unit. It also provided for gold coins, eagles, half eagles, and quarter eagles of about 1/2, 1/4, and 1/8 ounce each, to be minted. These were VALUED IN but not DENOMINATED IN dollars of silver.
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Therefore, whenever the ratio changing drove one or the other metal out of circulation, the content of the gold coins could be adjusted (raised or lowered) to accommodate changing market valuation. This exact thing happened in 1834, when the gold coin size was changed (reduced), yet without cheating anyone or changing the size of the standard silver coin, the dollar, at all.
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The tidal wave of silver coming out of the Comstock Lode cheapened and destabilized the value of silver so the US had to abandon silver. Truth: HALF the value of the Comstock was realized from its gold production. (Silver Bonanza, p. 24, Alexander Del Mar, Monetary crimes, p. 90).
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So let history be our guide, from the mists of time until the late 19th century, the bimetallic system served mankind without any major disruptions or instabilities. Compare that to the gold standard which lasted only about 50 years, from 1873 to 1914, or 1934, depending on which date you choose. Here you will have made academics like our good Professor point out problem after problem but it rests with a mono metal standard (gold) not silver although silver certainly gets blamed.
Proof by logic
Premise: Bimetallism is necessary in a sound money system because it establishes an unchanging reciprocal standard.
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In a bimetallic system, gold is valued in terms of silver, and silver in terms of gold. The standard for valuing both is OBJECTIVE. The free market is left alone to determine the correct ratio.
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In a monometallic [gold] standard, gold is valued in terms of a fiat currency unit.
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Therefore, a monometallic standard is already, in embryo, a fiat system, because no empirical valuation can be made for the fiat unit, which becomes the standard of value for gold.
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Therefore, no sound monometallic money system can exist. Could this be a reason that mankind used it for so many millennia?
Theory versus history
The test of any theory is simply does it work or does it not? How did bimetallism, with silver as the linchpin — work versus fiat money or monometallism? Bimetallism worked well for 4500 years, adjusted to every stress, even as the ratio grew from 2.5 to 16. Alleged instability of the 19th century was determined to be; a result of state action smothering free market adjustment. For all practical purposes no instability at all was observed when compared to monometallism or fiat currency.
Compare this to the economic history of the late 19th and whole 20th century. The monometallic gold standard lasted only from 1873 until the first crisis appeared near the founding of the Federal Reserve or it could be argued at the worldwide abandonment of gold standard in Great Depression. Whichever end date you choose, it is substantially less than 4500 years. The only conclusion to be drawn from history and theory is that a sound money system without silver and bimetallism is impossible.
We have now arrived at what is probably the culminating monetary and economic crisis of the last 200 years. It is possible we will see the death of national fiat currencies. It is also possible now with gold and silver backed electronic currencies that all national Central Bank currencies could be replaced within 24 months, once the panic starts.
But enough of history and what may or may not happen. Let us explore the present time. I interviewed Mr. Hugo Salinas Price in The Morgan Report. Mr. Price wrote and article in mid December 2004 and brought the question of silver being brought back into the monetary system. This in my view is the most significant story about silver in the past decade, in fact far more important than the announcement by Warren Buffett in early 1998 that Berkshire Hathaway had purchased nearly 130 million ounces of silver.
It is an honor to be,
David Morgan
Polish up your trading skills with these seven free trading lessons
trading experience both in the pits of Chicago, and from Geneva, Switzerland .
Look for more educational Traders Whiteboards in the near future
| If you enjoyed this educational series, be sure to check out our next video series titled, “90 Second Trading.” In this series we cover trading in stocks, futures, forex, crude oil and gold. For a limited time only we are making this series available free of charge.
Watch with our compliments.
Look at our logical approach to decision making.
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“Saturday Seminars”- Simpler Is Simply Better — Getting Down and Dirty in the Real World - Part 3
Stewart shares many of his basic daytrading rules and observations. Simplifying the decision process removes many of the psychological impediments involved in placing an order and frees valuable time for trading. Fifteen years of real-world trading and advising have convinced Stewart — and will convince you — that simpler is simply better.
Stewart Taylor began his trading career sixteen years ago by trading basic patterns and breakout strategies. These simple strategies evolved into complex day-trading strategies utilizing Elliott Wave and intraday cycles. Stewart’s trading style has come full circle, and he is now a leading proponent of the “simple is simply better” approach. Stewart developed his analytic abilities as an institutional broker serving the fixed income community with Brittenum & Associates, Refco, Vining Sparks Securities, Shearson Lehman, American Express, and Prudential Securities. In 1992, Stewart formed Taylor Consulting, Inc., and began publishing his market letter, The Taylor Fixed-Income Outlook.
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Saturday Seminars are just a taste of the power of INO TV. The web’s only online video and audio library for trading education. So watch four videos in our free version of INO TV click here.
Please don’t miss this
Tuesday, August 26nd, 2008
FR: Adam Hewison, President INO.com
RE: Please don’t miss this
Dear Blog reader,
Learning by experience can be costly, especially in the financial markets. Fortunately, there are shortcuts. “I’ve changed from losing money to consistently making a profit,” says Paul, a trader from Illinois. “I’ve learned techniques that really have made a big difference in my trading.” He credits INO TV’s streaming educational videos and audios for his success. INO TV is a division of INO.com, a pioneer in the web-based delivery of financial information since 1995.
Traders of all levels will appreciate INO TV’s online digital library of video and audio seminars, the largest and most comprehensive collection of trader and investor seminars available anywhere today. INO TV’s seminars-currently numbered at 547 with more being added all the time - present time-tested theories, techniques, and strategies from over 150 master traders. INO TV offers traders an easy and convenient way to improve their skills, confidence, and profits.
Traders say online seminars are more convenient, less costly compared to the high price tag of live seminars, INO TV’s annual membership fee of $99.95 (or $49.95 for three months) is a bargain. While many traders find the live atmosphere of seminars enjoyable, others find that the registration fees, travel expenses, and hotel charges are cost prohibitive. Dean, a trader in the UK, is one of the latter. The live seminar he attended, which cost him $7,500, failed to meet his expectations. “I should have avoided going to the actual seminar,” he says. “What I learned through the online videos was more than what they were giving me at the seminars.” Dean says that the knowledge he acquired in a single month of viewing INO TV online would have cost him about $24,000 in seminar fees.
It’s not just the cost that makes INO TV so attractive to traders. It’s also the convenience. Dirk, a financial writer and seminar instructor in the Netherlands who has been an active trader for over a decade, elaborates. “I was invited by my broker to attend a seminar on futures. For me, coming from a small village near Amsterdam, that would be a time consuming and high-priced event,” he explains. “It is far more convenient to watch a video online. Watching them at any convenient time and seeing them again and again brings a trader far more value while being very time efficient.”
Anyone with a computer and a high-speed internet connection can take advantage of INO TV’s digital seminar collection. The on-demand streaming seminars feature some of the world’s top experts, whose ranks include trading systems pioneers, trading contest champions, authors, trading coaches, and real floor traders. Many of the seminars come with free downloadable workbooks. INO TV’s digital library of trading seminars is the most extensive collection available online, and these seminars are not available anywhere else. Members are free to watch and listen to as many seminars as they want, as often as they want, for one low membership fee. A 3-month membership is just $49.95, and an annual membership just $99.95. To enroll FREE go online.
A special note from Adam:
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Even though I caught some lucky breaks early in my financial career and went on to become a successful forex trader, I still look back with 20/20 hindsight and realize that I could have been more successful, sooner, if I had been a more educated trader. That’s why I’m so excited about what we have to offer at INO TV: proven trading techniques - practical tools for consistent success - step by step trading methods that will empower you to build wealth and create the life you want. And all straight from the lips of the masters themselves. If you do nothing else today, visit FREE INO TV and find out if the service is right for you
Adam Hewison
Co-Creator, INO TV
New trading video
Hi,
It sure is good to be back. This past weekend I returned from vacation in France with my wife where we were cruising the canals just outside of Strasbourg. It was a great deal of fun.
I have to say, every trader needs and deserves a break away from the markets. Normally the August markets are fairly quiet, so it seemed like a good time to get away. Boy… was I wrong. Not wrong on the markets, but wrong on the markets being quiet.
Arriving back in the States having not seen a newspaper for two weeks and with limited access to internet, I was surprised to see some of the moves in the major markets. I was also happy to see the price of crude oil!!
I have known for a long time that news is not the important driver of price action. Most new traders believe they needed to be glued to the news every second of the day, frightened they will miss some news headline.
Here’s a little secret… the most important element in the market is not the news, it is the market action itself. Everything else is secondary. In my new video I explain exactly how we look at the market and how you can benefit from looking at the market the same way.
The new video is only four minutes long and I think you’ll find it fresh, timeless and interesting.
The simplicity speaks for itself.
Enjoy the video,
Adam Hewison
President, INO.com
Fundamental or Technical Analysis
Today I’ve asked Tony from TheGrainTrader.com to talk a little about Fundamental VS Technical Analysis when it comes to the grains…and trader in general! Enjoy!
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I have always been a faithful user of technical analysis as my choice of ways to predict market direction, and I have had much better success with it as compared to what I have had with fundamental analysis.
Technical analysis lets me use a price chart to compare the past and present markets to find profitable trends and patterns, which brings me to one exception that I do use at times.
Although I don’t put much faith in crop reports, hard freezes, or droughts, I have had some use for seasonal patterns in the grain markets, and I like them, because I can identify them on a price chart.
Now, a tendency is just that, a tendency. Not all seasonal patterns are consistent enough to trade on, so you have to be careful to only use them as a guide and not as a fact. You must verify them with technical analysis before you actually make a trade. Don’t make a trade based solely on the seasonal tendency, or you probably won’t have much success!
Seasonal data can be found many places, but the best tendencies to use are the ones you can validate for yourself, on a chart. One of the best tendencies, I have identified, is for Oat futures to bottom around July and August, and then rise into December. (That’s just a little tip!)
Just remember to verify seasonal patterns with technical analysis, and always keep your stops placed! Good luck with your trading.
Tony Lorenzo
Getting simple with GOOGLE
We first showed you the theory in our introductory Traders Whiteboard video. If you missed this video we highly recommend that you take a few minutes to watch it before you watch our second video with real world trading examples.
After you watch the theory, watch as we put this theory into practice with two real world trading examples. Our first example shows how one of the biggest stocks in the world falls apart, and how you could have taken advantage of this fact by using this simple trading theory. In our next example of this theory, we show a stock whose move is just beginning and still has along way to go on the upside.
It’s all here, the theory, two real world examples, and proof that this concept works. Watch, learn and benefit from this powerful new trading video. There is no charge and no registration is required to watch either video. Watch with our compliments.
Enjoy the videos.
Adam Hewison
President, INO.com
