Archives of “January 2019” month

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10 Rules For Traders

  
  Education
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1. Find and trade markets where your edge is the greatest.
2. Avoid markets were the probability of rule changes and lack of transparency is present.
3. Think of and imagine market scenarios others fail to.
4. Fundamental macroeconomic forces will ultimately prevail.
5. Trading time frames and profit objectives though must coincide with what the market is giving you at any one time.
6. Quantify risk with a multidimensional perspective, not just by one or two measures such as VAR or a price stop.
7. Learn from history. Jay Gould and his attempts to corner the gold markets in the late 1860’s. The Russian default of 1917 and 1998. The European Rate Mechanism break up. The Tequila crisis of 1994. The Asian financial crisis.
8. Be deadly serious, as Gichin Funakoshi said “You must be deadly serious in training”. If you have a position make it a meaningful size and monitor it carefully. I recall many comments from fellow traders the past few years saying something like “I am long EuroSwiss just to have some on but not really watching it.”
9. Define and use a trading methodology that incorporates a process and framework that works for you. Inclusive in this should be a daily routine that includes diet, exercise, family time, etc.
10. Seek out catalysts for CHANGE in markets. Where are the forces, in a Newtonian like law of motion, building up the greatest to cause a CHANGE and movement in markets?

European manufacturing PMI at 29-month high (Full Detail )

  
Analysis, Education
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Eurozone-wide manufacturing data for November has met forecasts, reaching their best level since June 2011 as national-level numbers from the sector also beat expectations.

The Markit purchasing managers’ index survey for the shared currency area came in at 51.6, just ahead of the 51.5 predicted in a poll undertaken by Reuters.

Any reading above 50 indicates growth.

Markit said:

The recovery in the eurozone manufacturing sector accelerated again in November. Although the pace of expansion remained modest overall, the real positives were that growth extended into a fifth successive month with the rate of increase hitting a near two-and-half year high.

At national level:

  • Italy’s PMI reading for the month was 51.4, better than the 50.9 forecast
  • Germany’s index came in at 52.7, narrowly ahead of expectations of 52.5

  • France’s manufacturing sector continued to shrink, but by less than expected, with its PMI reading 48.4 against expectations of 47.8

15 Steps Must For Traders

  
  Education
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  1. Commit to doing the work to become a successful trader.
  2. Study the top resources for trading success.
  3. Decide what level of annual returns you want to make on average.
  4. Decide the maximum capital draw down level you can tolerate and accept.
  5. Become a reactive trader not a predictive trader, learn how to trade price action.
  6. Focus on a system with a winning risk/reward ratio. Bigger winning trades than losing trades.
  7. Build and back test a trading methodology that is profitable over many different market environments and meets your requirements.
  8. Write a trading plan that quantifies entries, exits, positions sizing, and your rules.
  9. If you have the personalty to trade this system and plan with real money then proceed.
  10. Eliminate the risk of ruin by never losing more than 1% of trading capital on any one trade.  (more…)
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