One Last Day For The October Contest…
If you haven’t entered Trader’s Blog contest for October, you only have until the stroke of midnight on Alls Hallow’s Eve to enter. It couldn’t be any easier… just click the INO TV and Trader’s Blog October Contest link that is sitting on the right hand side of your screen. Click the comment link and just answer the question,
“Besides MarketClub’s ‘Trade Triangles,’ what is your favorite technical analysis indicator?”
It just takes a second and there are no wrong answers, just differences of opinions. I will be using an random integer generator to pick a winner who will receive 6 free DVD/Audios from our INO TV trader’s
library. These 6 discs will cover an array of technical analysis indicators and will be shipped to you with no strings attached.
HAPPY HALLOWEEN & GOOD LUCK!
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To see the rules of the drawing, please see the original post please click the link on the right, or click here.
Getting naked short selling
The practice of short selling has been blamed for the collapse of several major companies’ shares during the financial crisis. What is short selling? You will learn all you need to know about naked short selling in this video from Senior Editor Paddy Hirsch.
We thought that this was one of the most informative videos on how naked short selling works.
Enjoy,
Adam Hewison
Crude oil looks cheap, doesn’t it?
Crude oil looks cheap, doesn’t it?
Just because something looks inexpensive doesn’t mean that it’s necessarily a buy. It’s very possible for crude oil (NYMEX_CL) to rally up into the low 70s, but you have to remember that it would still be in a bear market. We have seen very few counter trend rallies in this market since it began its amazing fall from grace. The liquidation of the hedge funds and speculators from this market pushed crude down so much that OPEC had to have an emergency meeting. During that meeting, they agreed to cut production by a total of 1.5 million barrels a day. I don’t believe for a second that they are going to follow through with that plan. I don’t think its every going to happen.
OPEC is now between a rock and a hard place, and is being forced to continue pumping oil because of other financial commitments. Most if not all of the OPEC countries have recently put economic programs in place, all of which require further funding. These economic programs are now having to be financed from a lower income stream. I doubt seriously, giving the players in OPEC, that they will live up to their word to cut output levels. They need the money much like a drug addict needs a fix.
I expect certain countries (Venezuela and Russia) to continue pumping as much crude as they can, so that their socioeconomic infrastructure does not come to a screeching halt. As I have said before, trading this market with a technical program and a game plan far exceeds just looking at the fundamentals. The fundamentals always come in late and after the fact. Market action, and market action alone, determines the trend for not only crude oil, but also for all of the other markets.
Remember, when you are trading against the major trend you should always use positions smaller than if you are trading with the major trend. I believe that the conservative play would be to allow crude oil to rally, and then sell the rally when you have a technical signal to do so.
Every success,
Adam Hewison
President, INO.com
Co-creator, MarketClub
A bear market rally, or a genuine turn in the market?
A bear market rally, or a genuine turn in the market?
With the Federal Reserve cutting the discount rate 50 basis points to 1%, it remains to be seen if this will loosen up the credit markets. There remains a great deal of mistrust among banks and borrowers at the present time, and until that changes, we would look for the economy to limp along.
The sharp move up, in both the DOW and the other indices on Tuesday was a sharp counter trend rally to what remains a prolonged bear market. One day does not make a trend, and we will not know for some time if the lows we have seen recently in the past month are going to be the final lows of this bear market.
My gut feeling is, that we will see more sideways action in these markets for some time to come. I would not look for any dramatic upside action in stocks. If we do see a further rally from current levels, it would be perfectly normal within the confines of a bear market. If you are inclined to trade these markets from the long side, I suggest doing so with a slightly smaller position than you would normally trade. We expect the volatility level to subside from its current torrid pace and fall back to a more normal level as we move sideways.
The judicious use of a game plan and money management stops is highly recommended for everyone. These markets can cut you into pieces in hours mainly because of the market’s inability to fashion out a firm trend either on the upside or downside.
Just because the market is going sideways does not indicate that all is over on the downside. The longer we see these markets move sideways, the greater the opportunity that we may be building a base to carry the markets higher.
dam Hewison
President, INO.com & Co-creator, MarketClub
The rate cut maybe too late for the baby boomers …
The rate cut may be too late for the baby boomers …
As many baby boomers are facing retirement, this recent meltdown in the stock market has put many in a precarious position. Money they had counted on for their golden years has quickly disappeared and will not likely return anytime soon.
To illustrate this point, a friend of mine recently sent me a chart which I would like to share with you. This charts shows that we may be going into a prolonged period of no growth in the overall stock market. The NASDAQ peaked at 5,132.52 on March 10th, 2000. The NASDAQ market is in many ways more important than the DOW, and should be considered more of a leading indicator. If that is truly the case, then we have been in a bear market for the last eight years.
If many stocks have lost 50% of their value, they must now go up 100% just to get back to where they were. If we are to assume that the stock market grows by 10% a year (and that is not a good assumption), then it’s going to take at least 10 years for many of these stocks to reach the heights they once were at. Many stocks will never come back. I don’t think we will ever see Yahoo trade anywhere close its all time intraday high of $500.13 (set January 4, 2000).
I expect to see a prolonged economic climate that is not conducive for stocks to move higher. However, there will be pockets of opportunity where certain markets and sectors will move higher.
All in all, this is not a rosy picture for either the US economy or the world economy. As I have said many times on this blog, these are trading markets and not markets to hold long-term. Witness our General Motors blog, and the fact that General Motors (NYSE_GM) is a scrambling to either avoid bankruptcy or to find a partner. The latest rumor is that they’re looking at Toyota (NYSE_TM).
Trading throughout the balance of this decade and into the early part of the next decade is going to be the key to survival and for recovering the profits in your portfolio. We strongly recommend that you approach these markets with some level of expertise and knowledge of technical trading.
The future is going to be the future and we need to take advantage of every moment and prepare ourselves to be the very best we can be in whatever business or endeavor we are pursuing.
Every success in the future,
Adam Hewison
President, INO.com
Co-creator, MarketClub
Forex 1-2-3 Method
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This particular technique has been around for a long time and I first saw it used in the futures market. Since then I have seen traders using it on just about every market and when applied well, can give amazingly accurate entry levels.
Lets first start with the basic concept. During the course of any trend, either up or down, the market will form little peaks and valleys. see the chart below:
The problem is, how do you know when to enter the market and where do you get out. This is where the 1-2-3 method comes in. First let’s look at a typical 1-2-3 set up:
Nice and simple, but it still doesn’t tell us if we should take the trade. For this we add an indictor. You could use just about any indicator with this method, but my preferred indicator is MACD with the standard settings of 12,26,9. With the indicator added, it now looks like this:
Now here is where it gets interesting. The rules for the trade are as follows:
Uptrend
- This works best as a reversal pattern, so identify a previous downtrend.
- Wait for the MACD to signal a buy and for the 1-2-3 set up tobe in place.
- As the market pulls back to point 3, the MACD should remain inbuy mode or just slightly dip into sell.
- Place a buy entry order 1 pip above point 2
- Place a stop loss order 1 pip below point 3
- Measure the distance between point 2 and 3 and project thatforward for your exit.
- Point 3, should not be lower than point 1
The reverse is true for short trades. As the market progresses you can trail your stop to 1 pip below the most recent low (Valley in an uptrend). You can also use a break in a trend line as an exit.
Some examples:
There are a lot of variations on the 1-2-3 setup but the basic concept is always the same. Try experimenting with it on your favorite time frame.
Good Trading
Best Regards
Mark McRae Forex Avenger
Bio - Mark McRae is a fulltime professional trader, author and coach. He has coached some of the top names in Forex trading. David Curran, Forex’s latest rising star attributes his success in the Forex market to the teachings of Mark McRae. To read more about David, go HERE
What the heck is going on in the gold market?
Dear Trader,
Gold at the moment is perplexing to a great many traders. To many it was a shock when gold recently traded below the $700 an ounce level. So the question is, what happened to the $2,000 an ounce target that most gold bugs were calling for?
In my just released video, we explore that question and look at what we think will be this markets next move. You might find our analysis and conclusions rather surprising.
Adam Hewison
President, INO.com& Co-creator, MarketClub
An 800 year trading secret that has stood the test of time.
I can honestly say that 30 years ago I learned how to trade the markets in the pits of Chicago.
It was there, in one of those sweaty, tumultuous, in your face trading pits, that I learned one of the most valuable trading secrets in the world.
This one trading secret opened my eyes to why things happen in the markets.
This trading secret, which is over 800 years old, is one of the most monumental mathematical discoveries of all time.
The publication in 1202 of the “The Book of Calculation” was never meant to be a road map to success in the markets. However, it turned out to be an extraordinary blueprint for how modern day markets work.
The number sequences contained in this amazing 800 year old book, is like having a virtual DNA for every stock, futures and foreign exchange market.
No one knows for sure why these number sequences work. Some traders believe them to be mystical, others, like myself prefer to call them one of life’s little mysteries.
I have been using this sequence of numbers to trade the markets for over 30 years. I have to say that after all this time, I am still amazed that these numbers still work!
My new 8 minute educational trading video that remains true to core principles of the “The Book of Calculation.” Show you step by step, exactly how you can benefit from using this trading secret.
Once you view the video and absorb this valuable educational trading lesson, you can apply the exact same principles you learn to your own trading. What could be better than that.
We do not require you to register to view this video.
Discover and benefit today, from what I learned over 30 years ago in the trading pits of Chicago.
Every success.
Adam Hewison
President, INO.com.
Be Our Guest
We welcome syndication of our content in your blog or on your trading website. Please feel free to use our content with attribution - more details here to syndicate our content
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co-founder of MarketClub
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“Saturday Seminars” - Finding & Maintaining Your Personal Trading
The popular sports press often focuses attention on what they call “the zone.” This term refers to a state of mind “which produces the highest expression of oneself and the most satisfying results.”
Traders (just like great athletes, musicians, and artists) who experience this state of mind create for themselves the environment in which to be successful at their craft. For traders, that craft is the accumulation of wealth. Mark explores and discusses the underlying mental dynamics that cause you to enter and exit your personal zone. From his own experiences, he shows you the advantages of trading from within your zone and the pitfalls of trading without this critical mindset. He shows you how the zone applies to trading, and teaches what you can do to take conscious control of the process and use the zone to your advantage. Mark recently discussed this concept at the annual Futures Industry Association convention in the United States.
Most traders don’t recognize the psychological paradoxes inherent in trading. Therefore, they often never really understand why success is so elusive — always clearly within sight and yet just out of reach. Consistent success is difficult to achieve because the trading environment differs in almost every way from the environment of our everyday lives. For example, our fears usually help us avoid unpleasant or painful experiences but in the trading environment, fear colors our perception of market information and thus influences our actions. As incredible as it may sound, fear of making a mistake, losing money, or missing an opportunity will actually cause us to create the very experiences we are trying to avoid.
Mark believes that consistency as a trader does not depend upon your knowledge of market behavior but rather upon a unique market mindset. Mark draws upon his experience with hundreds of traders to explore the attributes and components of the market mindset that helps you to create consistent results in your zone of success.
PDF Workbook
Mark Douglas is president of Trading Behavior Dynamics, Inc., a Chicago-based consulting firm that helps traders around the world (individuals, CTAs, and brokerage firms) master the psychological discipline necessary to trade successfully. Mark leads seminars, counsels individual traders, and consults with financial trading organizations. He is a frequent speaker for TAG in Europe and the Far East as well as the annual TAG conference in the United States. Mark’s first book, the critically acclaimed bestseller, The Disciplined Trader, is based upon his personal trading experiences. It is hailed as the most provocative and stimulating work on trading psychology published in the last decade. Mark has recently completed his new book, Trading in the Zone: How to Create a State of Mind That Eliminates the Fear, Stress and Anxiety from Your Trading.
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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.
