So Here We Are....In The Middle

Hello traders everywhere!  Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Wednesday, the 17th of August.

So here we are... We're in the middle of the month, it's the middle of the week, and the markets are stuck in the middle.  Stocks rallied early today, but they look like they are failing now.

Gold rallied again to test the $1,800 an ounce level.  It has now fallen back and looks to be on the defensive.  Crude oil has also rallied and is now faltering from a key resistance area.  Once again bank stocks look to be on the defensive.  I'll also share a chart pattern in the bank stocks with you that does not look good.

So let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011. Continue reading "So Here We Are....In The Middle"

How to Position Size and Allocate Capital

Today the Trader’s Blog welcomes back Marc Nicolas of TradingEmini.com. In previous posts Marc has shared invaluable trading concepts on risk management and using runners to increase profits. Today will be no different as he discusses the often overlooked method for calculating proper position sizing to stay in the game by taking into account your total risk capital and stoploss level.

Visit TradingEmini.com to learn more about trading psychology, money management and Marc’s trading strategies.
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In my 17 years of trading and having traded for a hedge fund, it is Proper Position Sizing and Capital Allocation which has kept me consistently in the game as a professional trader. Even if you have a great trading strategy, if you do not understand how to properly size your positions, you are unlikely to achieve a comfortable level of consistency and you risk blowing account after account. Proper Position Sizing and Capital allocation protects your risk capital by determining how big a position you should take on any one trade. This will mean fighting the urge to buy an arbitrary number of shares because you “feel” a trade is a sure winner. It is the bridge between your chart analysis and risk management plan. Unfortunately position size is the most overlooked aspect of trading and yet is the most important aspect, especially with the volatility we have seen in the markets lately. I hope the 4 steps below will help you.

• Step 1: Capital Allocation

This calculation will split your capital according to the number of different positions or instruments, like futures, stocks, forex, commodities or options you want to trade, or hold in your portfolio. For instance, assume that you have $100,000 Total Risk Capital and you want to include 5 different positions in your portfolio to diversify your risk. Your Instrument Capital Split should be Total Risk Capital/Number of Positions, in this example, $100,000/5 = $20,000 is the capital allocated to each position. Continue reading "How to Position Size and Allocate Capital"

Obama's Magical Mystery Tour

Hello traders everywhere!  Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Tuesday, the 16th of August.

Obama's Magical Mystery Tour

Like a lot of folks, I enjoy the music of the Beatles.  While watching the news this morning, it struck me that President Obama's bus tour was not unlike the Beatles "Magical Mystery Tour" album of 1967.

Let me explain... Here we have a President who is so out of touch with what this country is going through, he finds it necessary to go out on a three day bus tour at tax payers expense and announce that he has a job plan.  But wait, this is the magical part: he's not going to announce this plan until after his vacation!  And the mystery part: if he has a plan, why didn't he announce it!  Did America really need to hear him announce that he has a plan, then not announce what the plan is?  I think not.  If you are unemployed, I'm sure the last thing you want to hear is that your president, the leader of these United States, has a job plan but his vacation is far more important than every day American jobs.  Talk about self centered.  There I said it, the king has no clothes.

By the way, one of my favorite track from the Beatles "Magical Mystery Tour" album is, wait for it, "The Fool on the Hill" written by Paul McCartney, sort of fits the times don't you think?

So let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011. Continue reading "Obama's Magical Mystery Tour"

Advanced Technicals - Moving Averages

If you follow our blog, then you are definitely familiar with trader Larry Levin, President of Trading Advantage LLC. We have gotten such a great response from some of his past posts that he has agreed to share one more of his favorite trading tips as a special treat to our viewers. Determining the direction of the market can be tricky and just plain confusing at times, but Larry’s expert opinion keeps it simple. If you like this article, Larry’s also agreed to give you free access to his favorite technique.

In Tip #14, I talked about some of the basics for technical analysis. Trends and simple chart patterns are just the tip of the iceberg for technical analysis tools. There are many advanced tools that technicians use to try to find signals in the market price. One of the terms you might hear quite often is moving average. Continue reading "Advanced Technicals - Moving Averages"