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Highlights from Pres. Trump at the Economic Club of New York

  
Analysis, Politics
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Speaking at the Economic Club of New York

  • Jobs were not plentiful when he took over as President
  • The experts said they had no choice but to accept stagnation
  • I knew working together we could make America even greater
  • Fed moved rates higher far too fast and lowered rates far too low
  • US is competing against other countries and the Federal Reserve does not let us compete
  • Fed puts us at a competitive disadvantage to other countries
  • If we had a Federal Reserve that work with us the US stock market would be up by another 25%
  • last year GDP growth match the highest growth rate in over a decade
  • we want companies to be in America
  • The US has tremendous economic potential
  • Says he thinks US can bring down tax rates further
  • Corporate tax rate could go lower
  • US is pursuing energy independence
  • China has taken advantage of the US because of its WTO designation as a developing nation
  • to be a strong nation the US has to be a manufacturing nation
  • US has added 10,000 brand-new factories
  • Europe is set up terrible barriers for US on trade in some ways more worse and then China
  • No country has cheated US more than China
  • China is devaluing its currency, is dying to make a trade deal
  • We are close to signing a phase 1 trade deal and it could happen soon
  • we will only accept a deal if it is good for United States and US workers
  • China is having the worst year in over 57 years
  • Having strong, substantial negotiations with Japan on trade
  • Calls for passage of USMCA.  If put toward a vote Democrats would vote for today

Ten Pillars of Economic Wisdom

  
Analysis, Education
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1. TANSTAAFL: There ain’t no such thing as a free lunch.
2. Incentives matter; incentives affect behavior.
3. Economic thinking is thinking on the margin.
4. The only way to create wealth is to move resources from a lower-valued to a higher-valued use. Corollary: Both sides gain from exchange.
5. Information is valuable and costly, and most information that’s valuable is inherently decentralized.
6. Every action has unintended consequences; you can never do only one thing.
7. The value of a good or a service is subjective.
8. Creating jobs is not the same as creating wealth.
9. The only way to increase a nation’s real income is to increase its real output.
10. Competition is a hardy weed, not a delicate flower.

Driving is like Trading

  
  Education
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Driving a motor car or motor bike is probably the best analogy I can think of for trading.

Start, Stop, traffic lights, dogs and cats on the road, cows, give way signs, t intersections, signs saying “kangaroos for next 50 kilometres ahead–and that is just in the first few 100 metres of leaving home– and then when you hit the express way, and consider yourself in the clear, there may be road works, or fog, and unsighted hazards ahead.

It’s very rare you can enter an express way…of start to finish, or finish a journey uninterrupted.

It is our jobs as traders to close down all risks as they appear, in whatever form, to cause minimal bumps and bruises to ourselves. Problematic situations will appear when you expect OR when you least expect them, and when you do get uninterrupted runs, you appreciate them, since it is what you have planned for, but see less often than one may hope for.

Be flexible, bend like the tree, always give way when on the road, and when you hear the sirens move top the left and beware of trouble ahead.

Maxims of Baltasar Gracian

  
Education, Life
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Baltasar Gracian (1601-1658) wrote many popular maxims:

33. Know when to put something aside– One of life’s great lessons lies in knowing how to refuse, and it is even more important to refuse yourself, both to business and to others…it is worse to busy yourself with the trivial than to do nothing…All excess is a vice, especially in your dealings with others.

51. Know how to choose– Most things in life depend on it. You need good taste and an upright judgment; intelligence and application are not enough…Two talents are involved: choosing and choosing the best.

89. Know yourself-– The key to everything.

104. Have a good sense of what each job requires-– “Far better are the jobs we don’t grow bored with, where variety combines with importance and refreshes our taste.”

110. Don’t wait to be a setting sun. Similar: Quit while you’re ahead; don’t wear out your welcome

121. Don’t make much ado about nothing-– “Few bothersome things are important enough to bother with…Many things that were something are nothing if left alone, and others that were nothing turn into much because we pay attention to them.” Similar: Take it easy.

139. Know your unlucky days – “On some days, everything goes badly; on others, well, and with less effort…Take advantage of such days, and don’t waste a moment of them.” (more…)

Independent Trading: Pros & Cons

  
  Education
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In fact, there’s probably no better time than the present to talk briefly about the pros and cons of being an “independent trader.”

As someone who has worked independently for most of my professional career, you can say I place a tremendous value on “doing my own thing.” As I’ve often said, at least for me it has been a combination of personal choice (what I want in both life and career) and also necessity (as I don’t play well with others). Indeed, there are some tremendous positives for trading independently. After all, I wouldn’t be doing this if there were not some significant advantages from doing so!

Here are a few things that first come to mind:

  • As an independent trader, I set my goals and I’m in charge of my own destiny. I don’t rely on any other person for how much money I make or how I make it. Other people’s opinions of me are irrelevant to my own destiny. At the end of the day, bottom line trading results (not office politics) are all that matters.

  • Most people in “normal jobs” don’t have the opportunity to set out on their own and do something they really want and love to do and also make plenty of money doing it.

  • I spend most of my time every day doing things I really like to do (trading, reading, researching, running screens & mentoring others). These are things I would do even if I were not paid to do them because it is what I like to do the most! Every day I plan my work on things I want to work on, not what others want me to work on. That level of professional autonomy is rare.

  • The sense of accomplishment when you achieve success in the markets independently is unparalleled. There’s nothing like finding and taking a good trade that produces lots of upside gain. This is especially true when that trade is unpopular and unforeseen by the herd.

  • Through my research I’ve been able to learn about many things, many industries, many countries, and many people. At this point, I can have a conversation with just about anyone no matter what they do for a living or where they live because I know something we can probably talk about based on what I’ve learned and know about others.

  • It is always interesting and I’m NEVER bored. It is so true there is no better drama on Earth than following and being a participant in the markets daily.

  • Trading independently offers level of personal freedom that isn’t present in most jobs. If I want a day off to play golf, help a friend, visit with family, I do it. I don’t have to ask anyone for permission! However, offering a paid members-only website places some severe limitations on that freedom!

    • So, now I’ve talked about the positives, what are the downsides to trading independently? (more…)

Wisdom From Bruce Kovner

  
  Education
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On trading ranges and price patterns:

 

…as a trader who has seen a great deal and been in a lot of markets, there is nothing disconcerting to me about a price move out of a trading range that nobody understands.
…Tight congestions in which a breakout occurs for reasons that nobody understands are usually good risk/reward trades.
…The more a price pattern is observed by speculators, the more prone you are to have false signals. The more a market is the product of nonspeculative activity, the greater the significance of technical breakouts.
…The general rule is: the less observed, the better the trade.

On predetermined risk points:

Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis… I always put my stop behind some technical barrier.”
I never think about [stop vulnerability], because the point about a technical barrier — and I’ve studied the technical aspects of the market for a long time — is that the market shouldn’t go there if you are right. (more…)

Practical Aspects of Trading…

  
  Education
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Successful traders examine the current market conditions to determine if they are bullish, bearish, or a trading range environment. After determining the current market environment traders can select the tools from the their trading tool box that perform best in the current conditions. When the market conditions change then traders need to adapt to the new market environment by selecting new tools that are most appropriate for the new market conditions.

In addition to adapting to the current market conditions by using the appropriate tools from the trading tool box there are several practical aspects of trading that traders need to master.

Never enter a position without having a plan for exiting the position. If you Do not know where to get out of a position you should not enter it in the first place. In swing trading time frames stocks often run to the next resistance or Support level and then stall. We have seen that stocks rarely remain outside the Bollinger bands for long, so when a position reaches the Bands it is often a good Place to look at profit taking, especially in trading range environments.

There is usually no need to rush in when the markets trend changes. Any trend worthTrading does not require you to be in on the first day, by definition. It is usually better to make sure the trend change is real and then react rather than assuming that the first Day of a potential change is something that is going to continue.

There are a lot of jobs where people get paid every Friday. Trading is not one of them. There will be profitable weeks and losing weeks as the normal statistics work out. Remember that if you make enough trades there is a reasonable probability of seeing…

 

 

 

 

ten losing trades at some point, even with good trading systems. This is part of trading and traders need to allow for it when they work out position sizing and money management techniques.

You do not have to trade every day or take trades just because they came upon the evening scan. Carefully consider the recent price and volume action in the market before taking positions. Look for the best trades, consider long trades that have not shown a lot of recent distribution and have ‘room to run’ before hitting the next resistance area or the upper Bollinger Band.

Make sure that your position sizing is such that if all your current positions were stopped out that the total loss is something that is still comfortable. This happens from time to time and wishing it did not will not change it. Be prepared by using sensible position sizes.

Review each of your positions every evening and determine if it is something you still want to be holding based on the recent market action and the price volume patterns of the position. Longs going up on declining volume are showing weakness and I generally close out those positions and put the money to work in something stronger. You are hiring a stock to do a job for you, if it is not doing the job fire it and hire another. (more…)

Apple on the cover of Economist

  
Analysis, Education, Life
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Individual companies seldom make it to the cover of Economist. When they do, it might be  a kiss of death. You can not go by cover alone , but something to keep an eye on. Jobs was also named CEO of the Decade by Fortune recently. As they say when CEO is on cover, it might be a top.

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