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Blood bath on Wall Street?

For those who have been watching the US30 or the SPY or the DJI, there is some crazy stuff going on. The on the night of the Trump victory, the bears mauled the bulls – as you can see on chart below. The bulls rebelled within hours. The market rallied to a new high. But all is not well for the bulls. This could turn out to be a blood bath! I’m not predicting anything.Read More

Nerves of steel – like Formula 1 racing.

Many new traders are unaware that they actually need nerves of steel. Some will argue that ‘nerves’ are not part of the equation – if one is truly in the so-called fearless state. But hang on – on the way to achieving that state, there will be ‘nerves’. It’s no good expert traders telling new traders to lose their nerves. After a new trader gets his nerves of steel, then he actually realises there isRead More

Deceptiveness of the RSI

The RSI (relative strength index) is classified as a ‘leading indicator’ because it is thought to have predictive value. By contrast lagging indicators are said to simply follow price and have less predictive value e.g. bollinger bands. The reality is that no indicator can predict anything and all indicators have limited predictive value because they all rely on historical price movements. Notions of predictive value are formed after events have happened, and are subject toRead More

Looking again at Earnings Releases

This recent bounce on DEERE & CO has got me looking again at Earnings Releases.   For those who would play ER’s a Guaranteed stop maybe advisable (cost of this need to be factored into the equation) or Reward to Risk ratios. Alternatively no guaranteed stops may be taken but risk of significant slippage would need to be assessed.

In a good and difficult week

Only occasionally I share results of my trades. This week has been an important success in the lead up to the BREXIT referendum. The markets have been wild, to say the least. But in trading we like ‘wild’. I’ve used the ‘stealth trading system’ – and this last week was a pretty good test, playing 30min to 1H time frames. The wildest ride I ever had was with GBPCAD today 17th June 2016. See below. I kept myRead More

Is common sense allowed in trading?

The answer to this question is ‘no’ – if you’ve been trained in some system of rules, which you’re meant to follow rigidly.  The beauty of trend-following methods, is that it allows for a degree of common sense.  Indicators are there to help paint a picture. Trend followers are not chained by indicators or rules. There are some traders who cannot trade well without a set of rigid rules. It is not the purpose ofRead More

How following a trend can work

The chart below shows an ideal situation. In this example the trend was entered quite late. Caution: ideal does not mean representative of all trades. To learn more study the chart, where it is accepted that a very high percentage of setups will fail/lose. This is a game about losing but it’s not for losers! If the trend was spotted in time it could have been followed for a 1425 point gain over the courseRead More

What is and is not prediction?

The nature of what ‘prediction’ means has come up in a couple days ago, in one of my online discussions. The words that caused me to look into this were, “What’s harder to predict? 1 pip movement or 1000 pip movement?” – in the course an exchange of ideas on different methods. This question was partly rhetorical and somewhat argumentative (not that we were having an argument). It came from a seasoned trader who had on several occasions before claimedRead More

EURUSD Analysis

This is my latest analysis on EURUSD. This is based on combining a number of indicators to find a probability estimate of where the trend may go. In this analysis a trend is identified. No prediction is made. A strategy for entry and following of the trend is worked out.  Probability estimates based on standard indicators: 1. EMA50 2. Aroon 19 (a customised version). 3. BuySellSignal 4. ATR stop-loss by Vervoort. 5. RSI. 6. FibonacciRead More

More on trend following

Trend following is where the money really is! Why? Because you’re not bobbing in and out of the markets trying to catch a few quid. Instead you’re finding established trends to ride for quite a long way. There are several ways to catch trends. See: Trading with Guppy and  Revisiting the Williams Vix Fix . The technique in the chart below is based mainly on using Aroon and RSI indicators. This seems more efficient and less energy/timeRead More