Archives of “May 2020” month

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Maintain your Physical-Psychological Edge

  
Analysis, Education
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  • Trading is actually a physical game. Playing the “sport” of trading should be handled as if you are the quarterback of an American football team.
  • Rest: Being well-rested is an edge.
  • Diet: When one really concentrates, the body and brain use an inordinate amount of energy. Eating properly keeps your energy up and adds to that physical-psychological edge.
  • Exercise: Exercise gives us a physical boost that makes us feel more optimistic, and that counts as psychological capital.
  • The body counts essentially as much as your intellect. If the body is feeling the static of tired or drained, the feelings and emotions of risk-management and people reading can’t properly communicate their data.

Detecting Your Unconscious Mental Fractals

  
Analysis, Education
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  1. Find a voice recorder and record your stream of consciousness through the sequence of two to three trades or decisions.
  2. Do this in sequence
    • Write down five to ten memories from before you were 18 years old.
    • From that list, pick three that stand out from the rest. Maybe they still have an emotional charge, maybe you even think of them every once in a while.
    • For these three memories, write the story of what happened, in the form of a kind of news report on who, what, where, why, and when.
    • Take these stories and look at them from a different point of view. Ask what the other people in the story were feeling or what it seemed like they were feeling.
    • Last, write down how the situation made you feel in the moment and what you told yourself about the situation.
    • Then set the writing and the recordings aside for a few days or weeks. Just let both simmer in the back of your mind.
  3. Keep a bedside notebook and jot down your thoughts and feelings from your dreams right away. What matters is the sequence of feelings and emotions in the dream; or, in other words, those feelings that you wake up with in reaction to the events in the dream.
  4. Now summarize the following using the data of your memories
    • What do I expect for myself?
    • How do I expect things to turn out?
    • How do I seem to feel about myself?
    • What kind of labels do I talk about myself with?
    • What fears come up?
    • How do I react to others?
    • How do I react to being told something other than what I want to hear?
  5. Go back to your trading recordings and summarize what feelings came up during your decision-making moments. We are looking for the themes and feelings that repeat themselves across market and decision sequences. Compare his information with what you discovered in the previous steps. What seems similar? If it doesn’t immediately click, let it rattle around in the back of your brain for a few weeks.

Major indices end mixed. 2nd weekly gain in 3 weeks for the major indices

  
Analysis, US Market

Major indices close near session highs

The major indices are closing near the session highs for the day. The final numbers are showing
  • S&P index +6.94 points or 0.24% at 2955.45. The hi for the day reached 2956.76. The low extended to 2933.59
  • Nasdaq closed up 39.705 points or 0.43% at 9324.58. The high for the day reached 9328.28. The low was down at 9239.41
  • Dow fell -8.96 points or -0.04% to 24465.18. The high reached 24481.64. The low extended to 24294.07
Also of note:
  • Dow best weekly gain in 6 weeks
  • NASDAQ closes less than 5% from all time highs
  • S&P index closes less than 12% from all time highs
  • Dow closes 16% from the record high

For the trading week:

  • S&P index rose 3.2%
  • NASDAQ index rose 3.44%
  • Dow rose by 3.29%
For 2020,
  • NASDAQ index leads the way with a 3.92% gain
  • S&P index is still down by -8.52% (and is -12% from the all-time high)
  • Dow is lower by -14.27% (and is -16% from the all-time high)

CFTC commitments of traders. Net dollar buyers in the net speculative futures positions this week

  
Analysis, Forex

Forex futures positioning data for the week ending May 19,2020

  • EUR long 72K vs 78K long last week. Longs trimmed by 6K
  • GBP short 19K vs 14K short last week. Shorts increased by 5K
  • JPY long 28K vs 28K long last week. Longs unchanged
  • CHF long 9K vs 7K long last week. Longs increased by 2K
  • AUD short 39k vs 35K short last week. Shorts increased by 4K
  • NZD short 16K  vs 16K short last week. Shorts unchanged
  • CAD short 35k vs 32K short last week. Shorts increased by 3K

Looking at the net speculative positions by currency show

  • The EUR, and CHF long currency  positions were trimmed.
  • The GBP, AUD, and CAD short currency positions were increased.
  • Two positions – the JPY and NZD were left unchanged in the current week.
So overall, the net speculative positions were dollar buyers (short currencies) as of the close of business on Tuesday.  The EUR remains the largest speculative position at long 72K.  The EURUSD did move up (peaked on Thursday, before retracing 50% of the move up from last week’s low.

US will test vaccines on more than 100,000 people starting in July – report

  
  Analysis
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Reuters report on the vaccine trial

Reuters report on the vaccine trial
The US plans a massive round of phase 2 vaccine trials in an effort to speed up the timeline for vaccine development to have a mass candidate ready by year-end.
Companies that pass phase one trials, including Oxford and Moderna, will shift to massive phase two trials rather than the small trials that are typical. Each of the vaccine candidates will enroll 20,000-30,000 candidates for a second phase starting in July and centered on workers and places where the likelihood of exposure is high. Many will get a placebo to compare data.
The data will then be shared among the +5 companies that will take part.
A risk among the test subjects is something called ‘disease enhancement’ which causes a vaccine to make the disease worse — something that’s happened in animal trials for vaccines for relatives of COVID-19.
“If all the cards fall into the right place and all the stars are aligned, you definitely could get a vaccine by December or January,” Dr Fauci said.

A Winning Mindset is Required To Succeed

  
Analysis, Education
  • A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to
    transform himself. That’s the kind of thing winning traders do.
  • The winning traders have usually been winning at whatever field they are in for years.
  • It is a happy circumstance that when nature gives us true burning desires, she also gives us the means to
    satisfy them. Those who want to win and lack skill can get someone with skill to help them.
  • The “doing” part of trading is simple. You just pick up the phone and place orders. The “being” part is a bit more subtle. It’s like being an athlete. It’s commitment arid mission. To the committed, a world of support appears. All manner of unforeseen assistance materializes to support and propel the committed to meet grand destiny.
  • In your recipe for success, don’t forget commitment – and a deep belief in the inevitability of your success.

Do Not Shut Out or Ignore Your Fear

  
Analysis, Education
  • The positive intention of fear is risk control.
  • People who are unwilling to experience fear tend to take big risks and wind up in big drama in which the risk materializes.
  • People with poor risk control tend to bet heavy. So they tend to outperform others in good markets, and under-perform them in poor ones.
  • Risk is the uncertain possibility of loss. If you could quantify risk exactly, it would no longer be risk.
  • Risk control has to do with your willingness to allow your stop to do its job.
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