Thursday, December 21, 2017

25 things to improve next year

1. Be comfortable with being uncomfortable in trading. The best trades are the most difficult to make.
2. You have to have an edge that you can explain to your mother.
3. Making money is important and not being right.
4. Profit is the objective, but not the sole measure of trading quality especially when drawdowns are taken into account.
5. Maintain your mindset after a row of losing trades.
6. Trade aggressively when you do well and modestly otherwise.
7. Don't only watch the markets be participant even if with very small position size.
8. Stop thinking about the market being cheap or expensive.
9. Be very flexible in changing your opinion if market tells you so.
10. There will be opportunities every day. 
11. Prices very often lead the news. 
12. Trade the reaction but not the news.
13. Be patient with winning trades and enormously inpatient with loosing trades.
14. One or two trade in a month make up the profit, but you must do the rest to be able to do these winners.
15. Try to keep your charts as naked as possible focusing on the support and resistance zones.
16. Try to anticipate the right side of the chart and do not be bogged down in the left side.
17. Study chart to figure out where traders are lining up to buy or sell and where people are stopped out.
18. Before entering into a trade you must know exactly where (Profit Target) or how  (Trailing Stop) you will exit. 
19. Don't try to pick tops and bottoms.
20. Stop loss must be wide enough to absorb the chart noise.
21. Be patient with entries to improve payoffs.
22. Improve self talk. Talk as a trading coach talks to a novice trader. This should improve responsibility and help detach from thinking about money.
23. Focus on making a lot of small profits rather to find the big trade.
24. Focus on fine tuning the daily and weekly routines and tasks, define each task in details and also their timing.
25. Don't even think to fight the trend, fight the sideways only!

Tuesday, December 12, 2017

Jobs and Automation

This is a great post by John Mauldin on the topic. It is based on a McKinsey report downloadable here.

German - US 2Y Spread at new low

Whereas EUR/USD off the low.

Global Market Cap and CB Balance Sheets

It was in the mews recently that Global Stock Market Capitalization has reached $80 Trillion

This is a huge amount, but it is only five times the Central Banks' Balance Sheets that reached $17.5 Trillion. 

But the real point is that from 2017 the CB BS increased by some 10 trillions, whereas SM Cap by some 20 trillions only. 

Monday, December 11, 2017

Week Ahead 51

The SP500 bull trend is still very strong, it didn't even retest the previous breakout before making a new swing higher low.

DAX is trading in a range bellow the 13.5k high. 

The US 2Y yield is making new highs trading above the 1.8% level. 

It sent early last week both the US 10Y and the German 2Y spreads to US 2Y to new lows. We saw a bit of bounce back by the end of the week.

In general commodities exhibit bearish reversal signs.

Agriculturals are close to previous low.

Glold had broken an important resistance around 1206 and now heading to 1200 level maybe before retesting the previous resistance.

USD was recovering and it is now in the middle of a range.

Friday, December 8, 2017

Anticipate your trades

There is a great post by Nial Fuller about anticipating our trades rather just be reactive to market moves. A lot of wisdom is baked in this approach. In order to be able to anticipate market moves, we have to have a good understanding of the underlying market drivers let them be fundamental or technical in nature.