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If you trading ,then read this

  
Analysis, Economy, Education
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Below, we share a presentation from Morgan Stanley’s Jim Caron, Measuring Risk: Extracting Market Sentiment from the Interest Rate Markets, in which the credit strategist provides a much more detailed framework of what critical credit signals are and how to interpret them. We recommend that all those still trading, either with their own, or other people’s money, familiarize themselves with this 27-page overview.

(Instead of Watching TV -Cricket Match -Movies ,Traders just read this -)

 

 


Why Gold Is Such A Dog

  
Analysis, Education, Gold / Silver

Summary

  • Gold prices have been in a bear market since the August 2011 peak at $1920
  • Prices are making new 52-week lows
  • Gold has primarily been a monetary asset throughout history and moves closely with the global monetary base (GMB), the sum of the U.S. monetary base and total international reserves
  • Gold has lost some of its luster as a store of value as goods and services inflation failed to materialize after the printing presses flooded the global economy with trillions of reserve currencies during Great Financial Crisis
  • Surprisingly,  demand remained steady or even increased as the major central banks emitted trillions in new currency
  • The broken credit mechanism resulted in an overall monetary contraction and  shortage of dollars
  • The gold bugs had their day as gold moved 650 percent from August 1999 to August 2011 while the GMB moved 455 percent during the same period, the result, mainly of a massive build in international reserves
  • The global monetary base will continue to contract over the next several months as the Fed shrinks its balance sheets and emerging markets continue to lose international reserves
  • Gold prices will thus linger and drift down toward and below $1,000 unless a major global shock results in a flight to quality
  • Just as the simultaneous unfolding of umbrellas do not cause but, instead, reflect a reaction to similar external forces – rain;  so to do comovements in the dollar and gold. In other words, moves in the dollar do not cause moves in gold but reflect a reaction to similar external stimuli
  • The next round of QE, which will probably be the result of a G7 sovereign debt crisis, should cause the massive spike in gold prices that the bugs were looking for in round one
  • We could be wrong

HOPE

  
  Education

It’s human nature to be optimistic. It’s human nature to hope. Furthermore, hope is a component of a healthy state of mind. Hope is the opposite of negativity. Negativity in life can lead to anger, disappointment, and depression. After all, if the world is a negative place, what’s the point of living in it? To be negative is to be anti-life.

“Ironically, it doesn’t work that way in the stock market. In the stock market hope is a hindrence, not a help. Once you take a position in a stock, you obviously want that stock to advance. But if the stock you bought is a real value, and you bought it right, you should be content to sit with that stock in the knowledge that over time its value will out without your help, without your hoping.”

Trading Wisdom – Gary Bielfeldt

  
  Education
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The most important thing is to have a method for staying with your winners and getting rid of your losers. By having thought out your objective and having a strategy for getting out in case the market trend changes, you greatly increase the potential for staying in your winning positions. The traits of a successful trader: The most important is discipline – I am sure everyone says that. Second, you have to have patience; if you have a good trade on, you have to be able to stay with it. Third, you need courage to go into the market, and courage comes from adequate capitalization. Fourth, you must have a willingness to lose; that is also related to adequate capitalization. Fifth, you need a strong desire to win. You have to have the attitude that if a trade loses, you can handle it without any problem and come back to do the next trade. You can’t let a losing trade get to you emotionally. If a trade doesn’t look right, I get out and take a small loss.

Specific Observations for Traders

  
Economy, Education
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  • If you find yourself holding a winning position, adding up your profits, and confidently projecting larger gains on the horizon, you are probably better off exiting the trade. The odds are that the trade has run its course.
  • When entering a trade with a market order and your fill is clearly better than expected, odds are it will end up being a losing trade. Good fill, bad trade. Get out!
  • If all your ‘trading buddies’ agree with your expectations regarding the next big move, it probably will not work out. If everyone’s conviction level is as strong as the consensus, do the opposite.

 

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