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Eurozone Markit Feb mftg PMI final 58.6 vs 58.5 exp

  
Analysis, Education
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Eurozone Markit Feb mftg PMI final data now out 1 Mar

  • 58.5 flash
  • mftg output 59.6 vs 59.5 flash
Do you yearn for those heady days of yore when a 0.1% change in final PMI’s gave us a 20-30 pip move ?!
EURUSD still drifting lower and now 1.2188. Decent demand between 1.2150-80 should help contain further falls quite apart from the 1.2150 and 1.2200 option interest.

15 Crucial Points for Traders

  
Analysis, Education
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  1. You don’t have a crystal ball, and therefore accept you cannot predict a non-existent future. All you can do is can place your bets, control your risk, and then sit back and watch what happens.
  2. Price can only do one of three things: go up, go down, or go sideways. Ultimately, it is only when price moves that a profit or loss is generated. Therefore, as a trend follower it makes sense to focus your attention on price.
  3. Accept that you can only control the things you can control – namely when to enter or exit a trade, which markets to trade, how much equity to risk etc. All these elements should be part of your trading plan. Your entry parameters should be designed to identify when a trend may start developing, and your exit parameters when a trend has finished.
  4. Equally, accept that once you are in a trade you are no longer in control. You cannot control the market – to make money you have to let the trades play themselves out.
  5. Acknowledge that you can lose money even when all your criteria are met. You need to accept that you are playing an odds game, and there are no “can’t lose” trades out there.
  6. Being very conservative in the amount of equity you risk on each position means that you can have an emotional indifference towards each individual profit or loss generated.
  7. You MUST take full responsibility for your trading decisions, and adherence to your system rules.
  8. If things go against you do not blame anyone else, or any other external factor. You make all your trading decisions off your own back.
  9. Accept that luck (good or bad) may play a part on any one individual trade, however over the long run luck plays no part in your success or failure.
  10. Using a system with positive expectancy, allied to good risk control, and having control over your emotions will mean that, in the long term you will make money. However, there is a complete randomness about which trade will produce a profit or a loss. All you do is look for a set up which matches your own criteria, and then open the trade once the desired entry price level is reached.
  11. Once in a trade, your only concern is controlling your open risk, by cutting losses aggressively, By the same token, you need to let profits run. Providing the trend is still intact, then you should remain in the trade. Correct placing of your stops will keep the trade open until that happens.
  12. If done properly, trend following can take up very little of your normal day. Other than placing orders to open new trades, or to update stops on existing positions, there is very little to do in market hours. The process of identifying potential new setups can be done when the markets are closed, in the evening or at weekends.
  13. You only ever get taken out of a trade when price breaches your stop level. Do not close a position simply because price has moved a reasonable amount in your favour. Do not fear an open profit evaporating.
  14. Once a trade is closed, review the trade. Did you enter when you should have done? Was your initial stop correctly placed, and consequently were your position size and equity risk correct as per your trading plan? Was the trailing stop placed properly? If you can answer yes to all these questions, then it was a good trade, irrespective of whether you ended up with a profit or a loss.
  15. You know that, if you have a high level of trading efficiency, then it proves you are able to follow your trading rules, both emotionally and operationally. If the system you are using is proven to have a positive expectancy, then you will make money.

India:A Downhill Slide

  
Analysis, Education
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After recording a higher-than-average (i.e. >3.2%) growth rate in three of the last four years (FY11-14), rural economic growth stepped off the pedal in FY15 and rural consumption looks increasingly likely to remain subdued through FY16 with: a) government measures to curb inflation by lowering wages growth and crop MSPs (minimum support prices); and b) unseasonal heavy rainfall in early 2015 and forecasts of a consecutive year of weak monsoon further clouding the outlook.  
State of the Agricultural households: Agriculture sector GDP grew at a tepid 1.1% in FY15, as per initial government estimates. With monsoon rainfall coming in 12% below average in 2014 and unseasonal rainfall in early 2015 causing crop damage on up to 8-10mn hectares of cultivation (4-5% of total cropped area in India), rural consumption will likely remain weak in the medium term. Our analysis of NSSO survey data on the state of rural agriculture households over the past decade reveals little structural progress has been achieved – although income (12% CAGR) and fixed capital spending (15% CAGR) have increased impressively, structural issues persist because monsoon-dependent farming remains the principal source of income, improvement in institutional credit penetration has been weak and a lack of awareness of modern agricultural practices is pervasive. Legislative agenda progressing: 

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‘Price’ Makes All Markets the Same

  
  Education
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Richard Donchian blazed the trail with the straightforward notion that trading many markets at the same time with the same rules — works:

“When I first got into commodities, no one was interested in a diversified approach. There were cocoa men, cotton men, grain men … they were worlds apart. I was almost the first one who decided to look at all commodities together. Nobody before had looked at the whole picture and had taken a diversified position with the idea of cutting losses short and going with a trend.”

Don’t get hung up on the word “commodity.” His quotation is probably 60 years ago. The key is the STRATEGY, not the INSTRUMENT.

Warrior Trading : Clifford Bennett

  
  Education
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warriror tradingThese eight steps are intended as a guide to the new trader and a reminder to the experienced.

1. Find Your Strength.  It is important that the trader determine what type of market, trending or consolidating, best suits their own personality and strength.  The best traders stay focused on one or the other and master it.
 
2. Know Your Market.  You should know your market when trading.  In other words, know the levels of support/resistance;  know how the instrument you trade moves with the general market; know who is likely to be on the other side and what they are thinking; and “the terrain of any market includes the “long-term charts” (140).
 
3.  Prepare Your Order.  Know when to get into a trade and why and know when to get out of a trade and why.  Just like a secret agent who will “never enter a room without knowing how to get out of it in a hurry” (142).
 
4.  Placing Your Order.  Once you have adequately prepared for a trade, it is then necessary to be ready to place the trade when the time is right.  Here “patience is the key…you must be able to wait for the market to tell you when the moment is right.  Wait for the market to generate the action; don’t force it” (143).
 
5.  Sticking With Your Plan.  This is probably the hardest part about trading.  Once you enter the battlefield (enter a trade), the emotions of fear, ecstasy, greed, and sheer excitement can then take over and cause you to forget your well prepared plans for entry and exit.  You must enter a “Zen-like mental state” where you remain in control of your emotions.  Not doing so could spell disaster. (more…)
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