I still hear some of these “old school” guys on the net – talking about “investing”. Good luck with that.
You see – for those of us who got started in this game around the time of the crash in 2008, the word “investing” has more or lost its appeal. Considering the current environment, and the forecast for the future – anyone considering investing in anything (for any extended period) should most certainly have their head examined.
I wish it was still that easy.
I pull up charts on any number of things, going back some 10 odd years or so – and laugh. These guys still think they know what they are doing because of their experience back in 2005 when it didn’t matter if you bought ” day old cake”. Every morning you woke up – called your broker – and your stock went up.
This is fantasy land now. This will likely never happen again.
If you are not willing to spend an extra hour or two studying the company you just invested in, or following a couple of charts, or tuning in to the current news (and I’m not talking about CNBC) to get an idea of what’s going on day-to-day – I can assure you….you and your hard-earned money will “all too soon” be parted.
You don’t have to become a “day trader” – as I don’t day trade either, but you should at least come to understand that there is nothing wrong with selling when you see a profit – and buying back again when your favorite stock dips. Trust me – you won’t miss a thing.
Markets today (more than ever) are designed to rid you of your cash – designed with “alien type precision” in fact…..for that very purpose. If you don’t learn to “trade” – I have some very bad news for you.
For all your efforts….and all your hard work……you will most certainly end up with zero.
Learn to trade – or……….
Morning Kong….. I will hold until 11am…..
Still running USD/CAD long….EUR/JPY…. EUR/AUD
I will however cut USD/CAD & AUD/USD before then….. in the red but very small…..
Schmed – you’re a little scattered in that……..these thing smove in tandem. Risk “on or off” is always a good question to ask yourself, and in turn consider the currencies that are risk related and those that are considered safe havens.
Put it this way – I would never be long EUR/JPY as well as short AUD/USD at the same time – and expect things to go to well.
Food for thought.
Mostly true. Either you are risk on or risk off. However you have to admit the aud/usd charts look nothing like aud/jpy charts. Aud/usd did go down significantly while aud/jpy was powering higher.
The fundamentals are the difference in the two charts and currencies in question. As well the volatility and ATR (average true range) of the given pairs. AUD vs JPY has far more volatility than AUD vs USD.
Of interest – a chart of AUD/CAD. 400 pip range more or less a year running. It’s the fundamentals that are different.
So when is gold going to break its downtrend line, Kong
This is the trouble with only following one asset class – especially the damn metals.
We have to imagine (as outlined in an earlier post) that the “holders” of large amounts of gold, are obviously in the midst of a move – on a much larger scale than the average investor can fathom. Coupled with the entire planet hooked on “QE” – again we’d have to imagine that “the powers that be” are having a complete ball watching all the money coming into gold , and in turn getting rinsed – as every investor / newsletter on eartlonger suggests “buy gold!” – wow…..what a concept.
My feelings are / where that the “golden hammer” (another post) last friday was as good an indication / (tradable) that buying interest had appeared…and thus far – it’s held up. Looking at longer term charts (weeklies at least) we are going sideways, and is viewed as completely normal.Keep in mind as well – the “massive swings” felt in gold are also reflective of its price – $1650.00 – wow! – 20 bucks up or down on a given day is nothing.
I avoid “sideways” in my trading at all costs. I will however look to buy gold and related names “when” the turn arrives – still holding a wopping 1500.00 bucks in options on GDX, NUGT and EXK.
Thanks Kong. Do you also trade SPY, QQQ, and oil?
I don’t as such, but watch them all – like a hawk.
I am extremely “lery” of the U.S stock market – as I’ve seen time and time again how “any and all” fundamental analysis is a complete waste of time when “DOW down -1000 points – flash crash huh?” headlines hit the news. It’s heartbreaking really. I truly wish I had the faith in it as to not sound like such a “dooms dayer” (as I’m not at all) but seriously….investing hard earned money in an ETF / stock – only to hear that the CEO was recently found with his pants around his ankles in some back alley….and watch the stock go to “zero” – I can’t do it.
Currency markets don’t have these silly mis-givings, and for all the bad press / heat “forex” gets as being taughted “risky or a scam” – I really don’t understand. A country and it’s currency has a difficult time squeezing down that alley – let alone “gettin busy”.
Help me out here guys.
I know there are a number of intelligent / savy investors and traders reading here. If we could juuuuust get a little more participation / input – I am 100% positive that this forum could really do some good for our bank accounts in general.
I’m hoping to learn from others with experience in other areas as well , and in my view there are no stupid questions.
For anyone else “lurking around” – don’t be afraid to hit the comments – and get in here to contribute.
totally agree regarding “investing”. However, if you have a very long term time horizon, say more than 10 years, and if you have capital available on a regular basis to trade or “invest”, one approach is to buy the market every month or every quarter. Unless we enter a Prechter-type deflation scenario (which he’s been calling for since the early 90’s… wtf ???), in 10 years or 20 years, you will have done very well. As long as TPTB continue to debase the dollar, stocks are likely to be higher in 10 years than where they are now. And if they continue this trading range for another 5 or 10 years, by buying every month or every quarter, you’ll be buying at the low end of the range (as well as the mid and upper end), so you’ll come out ahead in the long run.
But for those of us who don’t have that very long term horizon and need to make money from the market NOW, or at least this year, then learn to trade… or die!
You’ve nailed it bang on.
If I had the luxury to lounge around all day watching my long term investments grow and grow – oh what a perfect world it would be!
Unfortunatley (well not really considering that I absolutely love the currency game) I don’t have the patience for that. Your trade plan looks fantastic if you’ve got the money and the time….and for those that do – I wish them well.
You and I need money from the markets now – and “trading” is a fantastic way to get it. I don’t mean day trading either as I think there is a misconception there – I don’t “day trade”. However, my strategies will have me “pop in and pop out” while I am looking at the longer term fundamentals. Take yesterday for example….I went to 100% cash after banking a solid 4% – and here we are today, and the exact same entries (more or less) are again – available – should I choose to continue with the same fundamental view/trade. I’m not “switching teams” or turning on a dime and “shorting” the very trade I was long yesterday – that’s the fool’s game.
My short term indicators / tech keep me out of “sideways” – and I usually nail significant market turns to the 1H time frame.
When we put this in perspective – I am usually well into a trade, or even selling and banking profits at day 1 or 2 – when I generally start hearing about it at other blogs / news sites. I never EVER worry that I am missing anything as with currencies – there is always a trade available.
Sitting in cash and watching the silly “$DXY” down a massive .25! – you’d think the DOW would be up 100+ points!
zzzzzzzz……..zzzzzzzz……..a good time to go for a dive.
Since you don’t “day trade” (although I completely understand why you’d want to open and close the same day when a big move yesterday like EUR/JPY happens for example), do you usually minimally target a larger number of pips? Like 100+ on pairs like EUR/JPY. Also curious on your risk/reward ratio if you don’t mind me asking.
Also, do you only tend to trade trend breakouts (jumping back in on dips, etc) ? Or will you even bother playing the support/resistance zones during periods of ranging?
First off – I am a fundamental trader at the root of it all. I don’t just pull a chart and trade any given pair if the fundies aren’t in my back pocket. The example (and profits made) in EUR/JPY is great – when you have “all things” playing in your favor….major news from Japan and massive selling pressure AS WELL dollar weakness and the opposing/ opposite UPWARD presusre on EUR. Those are the kinds of “alignment” I look for.
Once I’ve got the fundies on my side – I look at longer term charts (weeklies and even monthly), plot some horizontal lines of support and resistance to “envision” the possible magnitude of the move.There is an “imaginary target” but nothing set in stone.
Considering that I trade so many pairs at one time ( at times as many as 12 or more active and open trades) – I look moreso at the cumulative total of pips on any given day – as opposed to those in a single pair or trade. Going to cash yesterday for example – 300+ pips across the board.
I rarely have more than 25% – 30% of my total capital exposed – and stay away from anything ranging as best I can
Good trading my man. Nicely done. Novice trader here myself. Stumbled across your blog. Thought about email alert subscription service?
Thanks for the positive message and suggestion.I have been considering “how” I can offer something more tangible to traders as a service etc. Your suggestion is fantastic as “yes” that would likely do the trick. As it stands, I’ve been working on my writing skills and continued trading efforts so..for now we’ll stick with that.
I might suggest the twitter feed for real time stuff – and obviously continued reading here. I don’t want to bomb everyone with every little wiggle but will likely look to “tweet” at least a couple times a day.
Stick around – and chime in here with your thoughts whenever it strikes u!
Not a full time trader. I have a full time job. It would be helpful if you decide something like that. Maybe paypal or something for email setups/trades. PM me whenever you decide.
Interesting, so once you have a set up you like, do you just place one initial order or do you scale in, as in add more to your position if you still believe in the trade even if the move initally goes against you, but does not violate any fundamental/technical factors in order to gain even more profits (say 50-100 pips, which is barely a blip on a weekly/monthly chart).
Hope you don’t mind me picking your brain, always curious how other traders that make consistent profits actually trade.
Please read the posts on “position size” for a little more detail – but yes….I do what I call “buying around the horn” – with smaller orders speckled around areas of support and resistance. And yes again – trades go against me all the time (and even greater than 100 pips) but my grasp on the fundamentals keeps me in a trade. I can’t stress this enough – in that….from a purely technical view point these “dips” can easily freak a new trader out.
It’s the knowledge/study of the fundamentals that allow me to trade in this fashion.
Ah, just read that… great post! I’ve noticed the typical “place full order here, set stop/loss here” doesn’t work for me either, I wonder how many profitable traders actually use that system that most sites/brokers try to sell.
He he he….sounds like you are making strides here David – awesome.
The brokers have this entire market so “in the bag” that the average new comer really doesn’t stand a chance. They tell you/I to use those stops for a reason! So they can clean you out as fast as possible. As fast as you place your order – they are already trading directly against you.
My brokerage has mailed and called me several times with attempt to find out more about “how” I am trading. Get this…..I don’t use their charting software at all – so they have no idea what indicators/what trade concepts I employ…they only see me manually enter orders into their system with no clue where I get my ideas. I chart on one software – but enter orders / brokerage on another.
Trust no one! he he he….
That’s interesting your broker has tried to contact you; which broker do you use if you don’t mind me asking? Think or Swim? (I think I’ve seen you mention them on here). As far as charting goes, I’m totally with you as far as the MT4 goes; awesome free charts that I also use for my analysis.
I currently trade with Oanda, who I think is great (trade execution and customer satisfaction wise; the charting software not so much on their main platform, but I use their practice MT4 for that).
I’ll be looking to short PM’s, DOW,S&P & NAS within the next 60 to 90 days…. yes this is out in the future and things can change but one needs a plan before entry – I do at least. While I wait for the PM options to bear the fruits of my labor and scalp to keep myself from going crazy. Putting the trends together as a base-line and as we get closer will start to dip my toes should the time be right…. but that;s off in the distance… but I am already thinking…..
For now, in & out of FB…. this was a COW today, looking for a top to go short. RIMM is running, 10% today, Jan 30th release will provide a few weeks of action. Also in SAIC have a look…. cheers schmed….
Sounds good Schmed -I’ve similar time lines as per prior posts. Mid Feb-early March I plan to be “adjusting” my thinking with a more bearish slant. Currency wise it will be interesting this time around – as alot has changed since the last “big fall” but I assume the ol USD will still take a large part in the “flight to safety” – as crazy as that sounds.
Stock wise – I will start preparing as well, and perhaps dip my foot in the pond too. One thing I do like about “bearish activity” – is that things fall alot faster than the’ve climbed and their should be some woppers.
I have not been through much ” Bearish Activity” so far in trading, I do rememner 07/08 when most everyone got wiped out. I have been involved in the PM sector for 3 years & only on the phy side. In this time period I did a lot of readying and play trading but up until August of this year was when I got very serious. Just finished closing the books for 2012 @ 32%GM dollars.
Made a bunch of mistakes in the last 5 months but extremely pleased with my progress learned more about myself then anything. There is nothing like putting real skin in the game & then battle those emotions…. but I quickly learned a plan… gotta have a plan and stick to it , removes all emotion.
I expect that once we have reached new highs we will go lower, I also suspect that a majority will be thinking the same so expecting this to be more difficult & testing to time correctly.
Set my target for 2013 @ 64%should be an exciting year …. cheers….