Happy Fathers Day from the Traders Club Blog
I wanted to wish a happy father’s day to all the dads that read our blog. It’s not often that we get a whole day of credit for how much we do on the other 364 days of year.
We cut the grass, balance the checkbook, kill the spiders, move the couch, the list is endless.
I wanted to give you a special something as a thank you to all the dads and fathers out there who continue to do the things that are often not recognized.
We’d like to offer you a “2 Week Free Trial” to MarketClub. There is no billing information required, just enter your information and start browsing around the MarketClub site.
Click Here to start your 2 week trial
This offer only comes ONCE A YEAR…kinda like Father’s Day. The trial gives you access to ALL the tools that MarketClub has to offer. This promotion will be offered to the public tomorrow, but we wanted to extend this free trial to you on this special day.
So take the trial by using the link below:
Have a happy father’s day and enjoy gift,
Brad Stafford & The MarketClub Team
“Saturday Seminars” - Bonds and Other Futures, Equities and Cash Markets — A Master Trading Plan
You will learn several short-term trading techniques including three new trading signals, IDR (Inside Day Reversal), LMI (Leading Momentum Indicator) and TBS (Third Bar Signal), through the use of a daily bar chart. Joseph discuses mechanical entry points, protective stops and profit objectives for short-term trades of two to five days. Joseph’s presentation shows you his integration of the various short-term trading signals and how they form a master trading plan for participating in various markets.
PDF Workbook
Joseph B. Stowell, sole proprietor of Money Management Services, a financial and trading consulting business, has spent over thirty years trading his own account. Joseph created the Bond Investor Newsletter, a publication primarily devoted to teaching successful short-term trading methods for the bond futures contract. The development of his technical trading methods for the bond market (applicable to other markets as well) follows the precept of “keeping it simple,” a point which Joseph emphasizes in his book, Tips for Traders and Investors, Trading U.S. Bonds and Stocks. Joseph also has over twenty years of experience teaching in the public schools of New York. This combination of trading and teaching experience gives Joseph the unique ability to explain difficult concepts in clear and easily understood presentations. As a trader, Joseph often shares his trading methods through individual tutoring and seminars. Joseph has participated in TAG conferences in Southeast Asia, Europe, India, and the Middle East, as well as cities in Canada and throughout the United States. Using the bond market as his primary trading vehicle, he has developed seven new trading approaches. These techniques are useful across a variety of markets such as metals, currencies, stock index, individual stocks, the energy sector, and agricultural products.
These 3 markets will change everything
Every once in a while there comes a time in the market when you get to see some amazing trading opportunities.
I believe this could be one of those times.
In this special private video I analyze in detail the upcoming major moves in three major markets. This just maybe the most important video I have ever made on these three markets and I want you to see it.
Adam Hewison
President, INO.com
What’s the hardest thing a trader will ever have to do?
Today I’ve decided that we need to show our support to our huge Aussie following by giving Dean Whittingham, a native Aussie and trading mentor, the ability to teach us a thing or two about what he’s learned while trading in Australia. He’s been a mentor, trader, teacher, and technical analysist for years and today he’ll be blogging about the hardest thing a trader will have to do.
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Visit forums, join memberships, purchase tuition with member areas for support, read books, talk to fellow traders etc and you can be guaranteed you will come across many who will be struggling with a whole host of reasons why. Some will even appear as experts but beneath the surface are struggling with some aspect of their own trading system or style. But do you know what the hardest thing any trader will have to do is?
1. Learn the jargon – no way, this is easy and it just takes time.
2. Find a profitable trading system – there are hundreds of thousands of them, in fact many are just given away for free nowadays.
3. Back test and paper trade – c’mon, I know many people don’t like hard work but you’re way off here.
4. Learning to read charts – kids like reading charts as they look at the green thing and they say, “Hey that’s going up”, or if they see a red thing they say “that’s going down”.
5. Setting goals – important because if you don’t have a goal, you’re floating aimlessly; but not the hardest.
6. Thinking successfully – no matter who you are or where you are there is always something you are good at. If this is so you already know how to be successful.
7. Being true to yourself – knowing who you are is indeed a quality that sets one apart from the rest and is therefore one of the hardest things a trader will ever have to learn, but not the hardest.
8. Cut losses short – it is hard to do this for many but it is definitely not the hardest.
9. Logging trades – as we are lazy this is done by a very few, but this does not make it the hardest, not by a long shot.
10. Keep emotions at bay – trading without emotions is very hard, but as we are humans the proper definition is more like managing emotions; but either way it is not the hardest thing a trader will ever have to do.
11. Remain independent – listening to other’s advice whether it is a newsletter, internet forum, or just your buddy next door is very easy to do as we like to follow other people by nature so to do the opposite is hard, but not the hardest.
12. Sticking to the rules of a plan or system – this is indeed hard but not the hardest. Many people trade with only rules for analyzing or entering, but most never have a complete set of rules anyway, but even those that do, it is not quite the hardest and you’re about to find out why.
13. Letting profits run – BINGO!
The hardest thing a trader will ever have to do is to let profits run. It doesn’t matter whether a trader uses trailing stops or profit targets, the ability to let a trade run its full course is the hardest thing a trader will have to consistently do.
Why is this so difficult?
For one, most place more emphasis on seeking opportunities and rules for entering than on anything else to do with running a trading business. And this is exactly how the whole “trading” thing is marketed. Very few traders have rules for exiting.
But even those that do have rules for exiting, only a small minority will stick to them, and this is because we as traders can not get past thinking about the money. Money rules us as traders and probably rules us in our lives too.
If you go back over all the points above I can tell you that all of them contribute in some way to the most difficult thing a trader will do; hold on to winning trades.
For example, if you think you’re a successful trader then why would you cut your profits short?
Because if you thought you were a success you would know yourself and where you need emotional management, you would learn any jargon and how to analyze, you would have a goal, and you would have a plan to go with it, which means you would have a system with rules for analyzing, entering and exiting, and you would have a fair idea how this system performs, which means you would have back-tested or paper traded it, and you’d cut losses short and you’d log all trades, you’d remain independent, and finally you’d stick to all the rules.
What a trader will face is the situation where they cut a profit short and take a look at what they made for that trade; this will send out a good feeling throughout their body. What will compound this feeling is if they look a little later on to see their decision was justified because the trade would have resulted in a loss if they’d not closed it out earlier.
The problem is this good feeling we are experiencing is encouraging bad behaviour whether it’s breaking rules, trading without a plan or whatever. To continue on this path will lead you to having to find more winning trades because the trades you do get wrong will cost you more than what you make from the profitable ones.
Now here comes the litmus test: If you cut a profit short only to see it would have been a lot more profitable had you held on longer or used your exit rules then this should hurt – I mean really hurt, but not because of the lost opportunity but because you see it as a failure on your part. If it doesn’t then success means very little to you.
All traders will go through the process of seeing themselves in a winning trade only to see it end up as a loss. This is inevitable. Apart from having someone look over your shoulder to prevent you breaking rules or cutting profits short, the only person who can do this is you! If you find yourself cutting profits short then look for your weakest links in your trading business. I have given you many here to ponder.
Dean Whittingham
http://www.atradersuniverse.com - Stock, futures and forex trading system development for all traders.
If you’d like to learn more from Dean I highly suggest his latest report on The Subtle Trap of Trading
New educational video on Apple’s stock price.
Tuesday, June 10th, 2008
FR: Adam Hewison, President INO.com
RE: New educational video on Apple’s stock price.
Dave Maher my partner, just uploaded a new educational video on Apple’s stock price that I made after the close on Monday. I think you’ll find it interesting and very educational given Apple’s big announcement yesterday on the new iPhone.
Click on the chart to watch my new 3 minute educational trading video on Apple,
Cheers,
Adam Hewison
President, INO.com
P.S. Here’s all the details of the Apple announcement courtesy of AP
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By JORDAN ROBERTSON
AP Technology Writer
(AP:SAN FRANCISCO) The iPhone will soon be $200 cheaper _ and come with satellite navigation, faster Internet access and other new features _ but higher monthly service charges are likely to erase most of the savings.
Apple Inc. revealed Monday that it has scrapped its pricing plan for the iPhone as it unveiled a model that works over faster wireless networks, addressing key criticisms about the device that have hurt the company’s foray into the cell phone industry.
An 8-gigabyte version with the new features will go for $199 when it goes on sale July 11, and a 16 gigabyte model will cost $299, the Cupertino-based company said.
Current iPhone owners who buy a new model and sign up for a new AT&T contract won’t have to pay any penalties to get out of their current contract, AT&T spokesman Michael Coe said. And anyone who bought an iPhone in an AT&T store after May 26 can return it before Aug. 1 for full credit against a new one _ less a 10 percent restocking fee.
Apple plans to make up the difference in sales revenue with volume _ and with subsidies wireless carriers will now pay for the right to carry the gadget.
In changing the pricing arrangements, Apple is pulling out of revenue-sharing arrangements with some wireless carriers, a move that frees the carriers to charge higher prices for the service.
Apple shares fell $4.03, or 2.2 percent, to close Monday at $181.61 on the news, a sign that some investors were hoping for more and others were taking their profits after a four-month run-up in Apple’s stock price, which leaped from $120 in March.
The new iPhones, initially to be introduced in 22 countries, are designed to work over so-called 3G, or third-generation, wireless networks and have global-positioning technology built in.
They will also support Microsoft Corp.’s Exchange software, an addition that puts the iPhone in more direct competition with Research in Motion Ltd.’s BlackBerry and Palm Inc.’s Treo smart phones and is intended to appeal to the business market.
Analysts have said Apple needed to slash the iPhone’s price and make it usable on faster networks to hit the company’s target of selling 10 million iPhones by the end of 2008. Apple said the 3G iPhones download data twice as fast as the older ones.
Apple Chief Executive Steve Jobs said Apple has sold 6 million iPhones since the first model launched nearly a year ago and 700,000 since March. That points to a steady slowdown in sales starting in the fourth quarter last year as customers waited for a 3G version.
Jobs showed off the new models of the iPhone and about a dozen new applications for the device at Apple’s Worldwide Developers Conference in San Francisco.
New applications range from video games that use the iPhone’s motion-sensing technology to guide characters to study tools for medical students and a program that allows users to find nearby cell-phone-carrying friends on a map.
One program brings real-time video highlights and game stats from MLB.com; another creates an Associated Press news feed based on the user’s location and lets users submit news tips to the AP.
Apple also announced a new Web-based service called “MobileMe,” which the company describes as “Exchange _ for the rest of us,” a consumer-friendly way for people to link their iPhones to their home and work computers so updates entered into one device automatically appear in the others.
MobileMe will cost $99 per year and come with 20 gigabytes of online storage.
AT&T Inc., the exclusive U.S. carrier for the iPhone, said service for it will start at $39.99 per month, plus $30 for unlimited data. That works out to a $10 increase from the cheapest plan for the first-generation iPhone; over the course of a two-year contract, that increase wipes out the savings from the price cut Apple announced Monday.
AT&T’s pricing covers only U.S. residents. While iPhone prices will drop outside the U.S. too, it was not clear whether other carriers would raise monthly fees to compensate.
AT&T also warned that it will take an earnings hit due to the pricing because new subsidies it agreed to pay will produce the iPhone price cut _ not a reduction from Apple.
Apple said in a regulatory filing that under most of its new carrier agreements, it will not receive a share of subscribers’ monthly service fees as it has under contracts for the first-generation iPhone.
Jobs said Apple waited to improve the iPhone for use on the faster network because the chips available when the iPhone first came out sapped too much battery life and were too bulky to fit the iPhone’s slim design.
The addition of global-positioning technology improves the iPhone’s accuracy in locating users. Current versions use a combination of cell-phone towers and Wi-Fi locations to help users figure out where they are.
The 1.73 million iPhones Apple sold in the first three month this year gave it a 5.3 percent share of the worldwide smart-phone market, according to research firm Gartner. Apple has been adding overseas markets gradually with carrier deals.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Here’s one of my favorite chart patterns
Head and Shoulders Formations
One of the oldest and most reliable of all chart formations is the Head and Shoulders Formation. This formation takes place usually after a trend has been established and in place for some time. It can in rarer instances take place in a continuation pattern and still be effective. The two formations we are going to look at today are a Head and Shoulders Top (HAST) and a Head and Shoulders Base (HASB). Both of these formations have a high degree of accuracy and usually portend a major change in direction for a market.
A normal Head and Shoulders Top (HAST) or Head and Shoulders Base (HASB) has a right shoulder, a head, a left shoulder, and a neckline. More complicated formations have double heads or double shoulders and, in some rare instances, triple shoulders. Both a Head and Shoulders Top (HAST) and a Head and Shoulders Base (HASB) have a neckline, and a Head and Shoulders formation should only be considered completed when the neckline is broken.
Once the neckline is broken, it is possible that prices can set back and retest the neckline. It is perfectly normal and healthy for a market to do this. Care must be taken that the retest of the neckline does not exceed by too much the original neckline and thereby abort the formation.
As a general rule, if the market sets back through its neckline and violates the left shoulder formation, it should be viewed as invalidating the original buy or sell signal. In order to predict the extent of a move a measurement is taken from the top part of the head to the neckline. The Head and Shoulders Target Zone (HATSZ) is created when you add or subtract this distance from the neckline, depending on whether it’s a Head and Shoulders Top (HAST) or a Head and Shoulders Base (HASB).
See how many chart formations show up in MarketClub. This type of formation occurs in stocks, futures, forex, metals and mutual fund markets.
Every Success,
Adam Hewison
Co-Founder, MarketClub.com
“Saturday Seminars” - Understanding The Decision Marking Process In Any Market
In this presentation, Peter will describe the important distinction between internal and external market information and how successful floor traders rely primarily on data the market generates internally about itself. Floor traders can readily determine whether or not the markets supports, or “uplifts”, their decisions by evaluating the emotions, sounds, and energy levels generated in the pits. Physical proximity to the pits provides them with a distinct advantage over individual traders, for whom the only internal information available is volume.
Peter will describe the strides that the Chicago Board of Trade and NYMEX are making to provide users with more and better internal data. However, more data does not necessarily improve the decision-making process, causing the downfall of even highly trained and disciplined traders. Rather than overwhelming individual traders with too much information, the new platforms offered by the CBOT and NYMEX combine price, volume, and direction into a single market operating unit, and provide decision filters which, in essence, allow for forward testing trading strategies. Peter will describe the mechanics behind this process and provide examples from a variety of markets.
Peter Steidlmayer’s lifelong interest in the markets began during his undergraduate days at the University of California at Berkeley, from which he graduated in 1960. He joined the Chicago Board of Trade in 1963 and has been an independent trader ever since. Peter served on the board of directors of the CBOT from 1981 to 1983. While a director, he was responsible for initiating his own revolutionary concepts in data arrangement and trading information—Market Profile and the Liquidity Data Bank©. He is author of four books: Markets and Market Logic, Steidlmayer on Markets, New Market Discoveries, and 141 West Jackson, A Journey Through Trading Discoveries. He is presently working on his fifth book, The Essence of Trading. Each of these books establishes a rational working framework for organizing the underlying structure and movement of the market(s).
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For more audio and video seminars please visit INO TV
A sell signal in crude oil are you crazy?
I get to eat some humble pie.
As many of you know our “Trade Triangle” technology issued a signal to go short crude oil on 6/4. The question was whether this was a good signal or a bad signal. The truth is it was a good signal, why do I say that? The bottom line is when you’re trading with discipline you must take the signal and try not to over think it. If crude oil had moved down to $120 and then down to the $115-110 level we would have looked like heroes. Instead crude oil had its largest percentage move in seven years.
The last two days in crude oil have been extraordinary by anyone’s imagination and you have to respect the market.
One of my heroes in the market was a gentleman named Bernard Baruch. You basically don’t hear about him anymore, but his teachings about the market are extraordinarily useful. You may want to read his book, “Baruch: My Own Story,” which I highly recommend.
One of my favorite sayings that Baruch gets credited for goes like this: “The main purpose of the stock market is to make fools of as many men as possible.” Well that certainly happened to me this week on the blog when I issued that signal on crude oil. Would I do it again? You bet, because I know the odds are in my favor in the long run.
If you’ve been reading this blog for any length of time you know that we stress diversification and discipline in trading. When you do that, you really do win out in the long run. We have had hundreds of profitable signals trading crude oil and our gains in crude oil in Q3, Q4 and Q1 have been outstanding. Now, I agree with you with this last trade in crude oil was a doozy. But only seeing this occur every 7 years is not such a hardship.
Many traders would be afraid to take the next signal right after a big loss, but sometimes that’s the best time to do so. Many of you may remember the gold signal and how that worked out.
The key to the market, is to be consistent in your approach. Many traders will trade a market and then suddenly say it’s not working, and go onto something else. Then the very market they were following has an enormous move that they were waiting for.
Getting back to our sell signal in crude; would we take the same signal again? Absolutely! Not to take the signal would be a mistake because that could have been a signal that could be very profitable for us. No one knows the future, the only way to successfully achieve profits in the marketplace is to approach it with a game plan and a roadmap that has been successful over the years. Traders come and go, but human emotion is the one constant in the marketplace.
As we have stressed in our Traders Whiteboards Series, diversification, discipline and the use of stops are some of the most powerful tools you can employ in your quest to make money in the market. It doesn’t matter if this is crude oil, Apple, Dell or the Euro
Another one of my favorite Baruch saying is this, “Do not blame anybody for your mistakes and failures.” He also said this: “Whatever errors I have committed, whatever follies I have witnessed my private and public life have been the consequence of action without thought.”
Here is my last comment on the Bernard Baruch and you can apply this to any market: “Without control over your emotions, there is very little chance for profitable success in the stock market.”
Well that’s about it. That’s about as much humble pie as I can eat at one sitting.
Every success in the markets, have a great weekend.
Adam Hewison
Co-creator of MarketClub.com
Attitude = Altitude in trading
One of the most important tools that a trader possesses is his or her mind. Attitude can either make or break you as a trader.
To become a successful trader it begins with believing in yourself and having a winning attitude.
Everyone wants to be a winner, at least they think so. Unfortunately, most are not willing to perform the tasks necessary to become a consistent winner.
Winners generally achieve success by being focused on a goal. Being focused allows winners to remain committed to the tasks at hand. Most winners perform a lot of hard work, including a willingness to deal with sometimes mundane duties. Most of all, winners perform with an “I am responsible for both my failures and successes” attitude.
So, where does the would-be trader start to become a success? By focusing on the tasks at hand. Most of all, treat trading as a business. And, as in any business, money management is critical.
Money management, next to trend, is probably the aspect of trading most overlooked by smaller investors. Man, by nature, is an optimistic creature and the amateur trader often acts instinctively. Unfortunately, this instinct or optimism is often the undoing of the smaller trader.
When a person enters a trade, he does so with the hope that it will be a winner. When the position goes against him, he keeps thinking (or hoping) “it will come back.” He knows he should have a stop in place, but hope keeps telling him to stay just a little longer since everybody knows, “you always get stopped out the day the market turns.” Eventually, hope turns into frustration, desperation and, finally panic which prompts the trader to issue a GMO (get me out) order.
If the trader hasn’t learned his lesson by this point, he develops the “I have to get it back” syndrome. He generally rushes into another poorly planned trade, throwing good money after bad.
Winners show several different characteristics. They enter the market knowing they can be wrong and, in fact are wrong as often as they are right. They have learned markets don’t run on hope. They understand markets tell them when they are right or wrong. When a trader is losing money and getting worse, the market is telling them to get out.
Bad Trades
A bad trade is like a dead fish:
The longer you keep it, the worse it smells.
Good Trades
When a trade is making money, the market is telling them they are right and to let the position ride.
Don’t ever do this …
Winners don’t add to, or “average”, losing positions. They dump the trade and go looking for a new opportunity. Successful investors may add to the winning trades. When ahead, they press their advantage while remembering that at any time the market can turn on them and prove them wrong.
In trading keep your mind clear and do not get emotional about a trade. Remember you are not married to a stock rather you are in the dating game.
Learn more about common sense trading.
Adam Hewison
Co-founder of MarketClub
My First Experience In Forex Trading
Today I am pleased to introduce you to Thierry Martin from OnlineTradersForum.com. I asked Thierry, an expert Forex Trader, to talk about his experience in Forex and how the market has changed since he first started.
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by Thierry Martin / OnlineTradersForum.com
Like so many long-time stock traders, I have noticed over the last few years a constant stream of ads with the purpose of getting stock traders open an account to trade foreign exchange, or forex. These ads make it sound like we’re in the wrong business, because they usually point out all the advantages of trading forex compared to all the disadvantages of trading stocks. If you are like me, you were curious, but never bothered to actually go through with it and give it a try. 
Well, finally, I gave in. What triggered my decision to get my feet wet was that I opened a new stock trading account with a company that also offered forex trading. The minimum deposit needed for the stock trading account was $2,000 but for the forex account it was $250, what they call a “mini” account. This sounded like a reasonable amount to risk on something I knew very little about, so I went ahead and funded it.
While waiting the three days for the account to be processed, I started learning how to trade forex by using a simulator account, something that almost every forex dealer offers. These accounts are funded with virtual money, and operate exactly like a live account with the obvious difference that you can’t lose your money if your trades go south. I found this very useful, since I made a lot of mistakes that would have cost me real money otherwise. The simulators or “practice accounts” are a very good way to learn forex, although
you need to remember that your trading will be less relaxed when you are trading with real money.
Many forex firms offer the practice accounts to anyone who wants to open one, even those who aren’t funding a real account. So you really have nothing to lose trying your hand at forex this way, and finding
out whether or not you want to trade later with real money.
Experiencing the forex market with a practice account, I started to see the validity to many of the claims I heard over the years. I am a late-night person, and it was great to be able to trade at 2:00 a.m. - some of the currency pairs were trading thinly at this time, but there were others with massive moves and huge volume.
Trading long or short was simple, with the same amount of risk, in contrast to shorting stocks where you need to follow certain restrictions. I was able to get out of forex trades going in the wrong direction and reverse my position immediately, and often recoup my losses quickly.
Another great advantage with forex trading is that you don’t need to worry about day trading rules - you can trade in and out of a position as much as you want, scalping for small profits 24 hours a day, and you can start with as little as $100 with some forex brokers. (You should probably start with at least $250 though, this is the minimum you need to allow you to make mistakes without getting wiped out completely.)
In my next article I’ll point out some more “advantages” to forex trading versus stock trading.
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Thierry Martin operates the popular stock trading forum OnlineTradersForum.com - http://www.onlinetradersforum.com & the new forex trading forum ForexSuperForum.com http://www.forexsuperforum.com
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