This Week in the Markets - March 20th to 25th
I recently looked at a number of the most popular financial blogs out there. I know that they have their own content and the way they make money but for the most part their trading ideas are not that actionable. I think that most people want to know how to trade a particular news event or how to make money by entering calls. While this is indeed the whole idea it is not easy unless you belong to a trade room of some sort as the markets change so quickly. There is not much sense in me posting trades unless you go to my "Trading the EUR/USD and EUROFX blog where you can get a free actionable trade that you can take to the bank. Yes it is free and yes it has never lost. Not in over 100 trades my friends. Even the last thirteen or so trades have all been current counter trend and counter sentiment trades. So there you go. In other words it doesn't really have to be as difficult as some people make it out to be.
The biggest obstacle is leverage or position size. People see the odd Guru who is lucky enough to transform a small account into a fairly large account over a short time and they think that they can do it too if they follow the same pattern. Uh no. It doesn't work that way. In fact the more people that are trading the system in a zero sum game the greater the chance the system will fail. Especially in the currency markets where mean reversion happens as often almost as the sun rises daily.
So how do you create a signal which never loses. Isn't that the holy grail. Shouldn't I simply be a gazillionaire at the moment. Well I suppose in theory but that is not how it works. Some positions I have had to hold for a long time before realizing the profits. As in measured in months. I use drawdown as a friend versus an enemy. How can I do that? Well it is all about position size. I have tried to tell you that a 500 to 1000 pip move in the currency markets is not that much. That is why futures are so hard to trade. On a small account you cannot control the volatility or the leverage. It is simply too much. If you had a 100K account that is a different story. Then you can use maybe 2-3 contracts a trade and hope that you get more winners than losers. However it is an enormous risk with a 10K account. That is 2-300,000 Dollars you throw down on the table with every trade. 30 to 1 if you only take one position. Insane really. This is why most people continue to blow up their accounts. You cannot survive an adverse move against you.
Ok you know all that so what key markets am I looking at this week. Oil for one is due to fall. I think it will come down to about 31 dollars a barrel again very soon. I do not think that the indexes are getting ready to fall either just yet. All those shorts just continue to get squeezed. They never learn. The currencies are not poised for much other than the Canadian Dollar and the Australian Dollar may be at ideal levels to short them against the US Dollar. So keep an eye on them. They are pretty over bought at the moment.
Other than that I will be posting the news trades on here. A complete analysis ahead of time that in most cases you can take to the bank. Trust me you have never quite seen anyone call news trades like I do. Cheers!
The biggest obstacle is leverage or position size. People see the odd Guru who is lucky enough to transform a small account into a fairly large account over a short time and they think that they can do it too if they follow the same pattern. Uh no. It doesn't work that way. In fact the more people that are trading the system in a zero sum game the greater the chance the system will fail. Especially in the currency markets where mean reversion happens as often almost as the sun rises daily.
So how do you create a signal which never loses. Isn't that the holy grail. Shouldn't I simply be a gazillionaire at the moment. Well I suppose in theory but that is not how it works. Some positions I have had to hold for a long time before realizing the profits. As in measured in months. I use drawdown as a friend versus an enemy. How can I do that? Well it is all about position size. I have tried to tell you that a 500 to 1000 pip move in the currency markets is not that much. That is why futures are so hard to trade. On a small account you cannot control the volatility or the leverage. It is simply too much. If you had a 100K account that is a different story. Then you can use maybe 2-3 contracts a trade and hope that you get more winners than losers. However it is an enormous risk with a 10K account. That is 2-300,000 Dollars you throw down on the table with every trade. 30 to 1 if you only take one position. Insane really. This is why most people continue to blow up their accounts. You cannot survive an adverse move against you.
Ok you know all that so what key markets am I looking at this week. Oil for one is due to fall. I think it will come down to about 31 dollars a barrel again very soon. I do not think that the indexes are getting ready to fall either just yet. All those shorts just continue to get squeezed. They never learn. The currencies are not poised for much other than the Canadian Dollar and the Australian Dollar may be at ideal levels to short them against the US Dollar. So keep an eye on them. They are pretty over bought at the moment.
Other than that I will be posting the news trades on here. A complete analysis ahead of time that in most cases you can take to the bank. Trust me you have never quite seen anyone call news trades like I do. Cheers!
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