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Weak

To Trade Successfully, You Must Trade With The Trend

In life, trends are all around us and you only have to look at the weather to know that’s true. It's a pretty safe bet that temperatures will be colder in December than they will be in August, at least in the Northern Hemisphere. Trends also persist in the marketplace, but unlike the weather, these are moving trends and change year to year. As a trader and investor, you want catch the trends near a top or bottom.

Learn more about trading the trend here.

The Importance Of Stops

Some traders may question the importance of stops and be concerned about putting a stop in the market, only to be quickly stopped out for a loss. Nothing could be further from the truth! Stops allow traders to protect and grow their capital. You can use the different types of stops to your advantage, and tailor them to your strategy and the type of market you are trading.  Let stops work for you!  They only risk what you decide is worth it.

Learn more about using stops here.

Did Tesla Just Make A Classic Candlestick Bottom?

I first learned about candlestick charts when I was speaking in Tokyo on the US markets in the late 80's. I was immediately fascinated by this form of charting I had never seen before. It was similar, but so different from the way I was looking at regular Western charts.

What I like about the Japanese candlestick charts is the interesting names they have for them and the patterns that immediately tell you where the market opened and closed for the day.

At MarketClub, when you have a blue candlestick bar, it indicates the market opened lower for the day, then closed higher. When it's a red candlestick bar, it is just the reverse, indicating that the price opened higher, then closed lower for the day. This is very valuable information, information that you can use time and time again.

During my stay in Japan, I learned later that candlestick charting has been around for centuries and it was originally used to chart and track rice prices. Now, this same form of charting is used for practically every traded market in the world today.

Japanese candlestick charts differ from Western charts as they are much more visual and descriptive than Western charts. Besides the more advanced formations on candlestick charts, they also have such interesting names like "hanging man," "hammer," "dark-cloud cover" and "morning doji star." I could go on, but I think you get the picture. The names of these formations are very colorful. [Read more...]

Isn’t It Time You Took A Look At These Two Portfolios?

How would you like to know exactly what to do the next day with any given market and the price you want to do business at? What if the odds are amazingly in your favor when you trade and approach the market this way?

Sounds like a no-brainer.

The trading approach I'm about to share with you is one that has proven to be successful in both bull and bear markets.

If this sounds like some "pie-in-the-sky," too good to be true idea - it isn't. I have been involved with the markets for many years and this is the one approach that I have seen consistently make money. In fact, it is the genesis of my success in the markets.

This trading approach produced gains of 65.3% and 77.1% last year. Was that a fluke or just sheer good luck? How much does luck count in the market? Very little in my opinion, what really counts is having an approach that is well thought out and has proven to be successful. Once again, luck has nothing to do with that. The only lucky thing is perhaps you're reading this post and beginning to understand that there is a way to make money in any kind of market.

This well planned out approach has produced gains in one of our strategies as high as 501%, with the lowest gain being 35.3% in 2010, it has never had a losing year.

Here are the results from that approach: [Read more...]

3 Ways To Improve Your Trading This Summer

As traders, we are always looking for a trading edge, but sometimes we can overlook the big picture and miss how we can change some fundamental ways in which we approach and make trades.

For myself, one of the key elements is to be disciplined in one's trading. I must say that it’s easy to say, but, it did take me quite some time to master this skill.

Often you want to justify your position, and you listen to someone else who thinks the same way you're thinking, even though you both could be wrong on the trade. When you follow that line of thinking you are doomed, as you tend to keep pointing to the other person and use them as a crutch for a trade that has gone bad. This can create bigger and bigger losses for your account so, much so that it freezes your brain to the point you can’t see other market opportunities. It also gets to the point where you say to yourself, "I’ve lost so much money I can't get out now." This is not the attitude to have if you want to be successful. The good news is there is an easy cure for that, and you must follow it if you are going to be successful.

The one easy cure for this is using stops in the market.

I used to listen to Ron Popeil pitching the Ronco 4000 Showtime Standard Rotisserie on TV and the keywords he always used to say after you put the chicken is was “Set It And Forget It."

I'm not sure if Ron Popeil ever traded in the markets, but his concept of “Set It And Forget It” can be applied to stops. Simply enter your stops and leave them there until either you are stopped out, or you have taken a profit on the position.

You can still take a profit on a position even if you get stopped out… You simply keep moving your stops up as the market moves higher. Doing so helps you lock in a profit when the market reverses. So use Ron Popeil’s “Set It And Forget It” philosophy for your stops. It could be the difference between eating chicken and having nothing to eat.

The other key thing to trading is to trade [Read more...]

Time To Buy Gold

Yesterday, the spot gold market flashed a major trend change to the upside. Major trend changes do not occur that often and when they do I like to pay close attention to them. The signal came in at $1,331.45, and even though gold is now lower than that point, it is still a valid signal.

With all the Trade Triangles now positive and the fact that we are seeing a pullback today in gold (FOREX:XAUUSDO), this may be an ideal time to get long gold in the ETF SPDR Gold Shares (PACF:GLD), a leveraged ETF, or in futures.

The current pullback on the intraday 15-minute chart puts this market back into a Fibonacci support area which should offer good support. With the long Fourth of July weekend, I do not expect anybody will want to be short this market going in to the weekend. I expect to see some recovery later today from the lows seen this morning.

There are no guarantees in trading, but with all of the Trade Triangles positive on gold, I feel this is a fairly low risk trade on the upside. As always, you should protect your position with money management stops. If you'd like to learn more about money management stops, you can read about them here.

Chart Legend: [Read more...]

How To Avoid Dead Fish In Q3

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? [Read more...]

Is This Stock Ready To Pop?

I was looking over the charts this past weekend and noticed one stock that I wanted to bring to your attention. There are two reasons why I think this stock is worth a look.

1. There was a new monthly Trade Triangle signal on June 27th at $48.04.

2. I like the formation. This chart has a "W" formation, which normally occurs at the bottom of a move and signals a reversal. In this case, it would look as though once we close over $48 a share, we could see a quick pop up to $50.

The stock I am referring to is Coca-Cola Enterprises Inc. (NYSE:CCE), traded on the New York stock exchange. This is a large company and has been around for a long time. While not usually considered a hot stock, the formation is undeniable. As with any position, you should always be using money management stops.

Another part of this formation I like is the classic Fibonacci retracement of 60%, that was again tested on June 13th and it held. [Read more...]

What's Brewing In The Coffee Market?

One of the many things I enjoy about MarketClub is interacting with our members and discussing the markets. One of our members recently asked about the coffee market and what I thought about it.

"Would love to see your analysis of coffee as a special situation. Know it is currently in a pullback. Monthly is still green. Sounds like the shortage is expected to continue and increase. That should mean prices will go even higher. The question is where to get back in. I have been using the ETF JO to play it. Have had a good run with in and outs following TT's, RSI, and other. Expect we could all benefit from a right time buy and proper trailing stop and just following it for a while?"

As you can see, Harold is pretty smart investor and a valued member of MarketClub. He's also taken some nice profits out of the coffee market.

So without further ado, here are my thoughts on the July Coffee (NYMEX:KT.N14.E) market. Now remember, Harold is trading the ETF Ipath DJ-UBS Coffee Trust Sub-Index (PACF:JO). This ETF pretty much mimics what the coffee market is doing.

Chart Code
1. Trade Triangles
2. Price negative divergence
3. RSI negative divergence
4. Fibonacci support area

When trading in the futures markets, we are relying on the weekly Trade Triangle for the trend and the daily Trade Triangles for timing. It's also important not to forget the monthly Trade Triangle, as it shows the longer-term trend. [Read more...]

Never Bet Against This Chart Formation

I was skimming through my portfolios in MarketClub and noticed that Hewlett-Packard Co. (NYSE:HPQ) had three green Trade Triangles, indicating a very strong trend to the upside. I decided to take a look at the chart to see what was making this stock show three green Trade Triangles while the rest of the market was falling.

When I opened the chart on Hewlett-Packard Co. (NYSE:HPQ), I was immediately drawn to a classic technical formation known as a "head and shoulders bottom." This is the same as a "head and shoulders top," only the reverse.

[Read more...]

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