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Nikkei 225 closes higher by 0.70% at 21,419.23

  
  Analysis
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Japanese stocks get a boost from more stimulus talk

Nikkei 27-05
The government is reportedly going to be pouring another ¥100 trillion at least in a new round of stimulus package, and that is helping to give the Nikkei a bit of a lift today.
The mood elsewhere in the region is more mixed with the Hang Seng down by 1.0% and the Shanghai Composite down by 0.2%, with the former dragged lower amid the clash between protesters and the police in Hong Kong.
US futures are keeping higher by about 0.6% though, but after the setback yesterday, major currencies are keeping on their toes in response to start European trading.
The dollar is a little firmer across the board, but nothing too overwhelming for now. AUD/USD is down 0.2% to 0.6640 while EUR/USD is also lower by 0.2% to 1.0960.

Asian stocks slide as coronavirus fears spook markets : Nikkei 225 closes lower by 2.03% at 23,343.51

  
Analysis, Global Indices
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Asian stocks slide as coronavirus fears spook markets

Nikkei 27-01

There’s still a high degree of uncertainty involving the new coronavirus outbreak situation and that is keeping markets very nervous to kick start the week.

Chinese markets may be closed but A50 futures are taking a beating – even down by over 5% earlier – as risk aversion continues to flow throughout markets.
US 10-year yields are down to their lowest level since October, 4.8 bps lower on the day at 1.635% as we look towards European trading. Meanwhile, the likes of the yen and gold are bid as safety flows are the name of the game to start the day.
USD/JPY sits at 109.05 currently while commodity currencies such as the aussie and kiwi are also being weighed lower, alongside the offshore Chinese yuan.

A look at the best/worst major currencies this week is worrisome

  
Analysis, Forex
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Swiss franc strength isn’t what you expect to see in a run-away week for stocks

Swiss franc strength isn't what you expect to see in a run-away week for stocks
It’s rare to see the Swiss franc and Japanese yen at opposite ends of the FX leaderboard. They generally move in the same direction because they’re both low yielders and safe-haven currencies.
So what happened? One argument is that this was a Swiss idiosyncratic move:
  • The US added Switzerland to the FX watchlist for manipulation. That diminishes the chances of large-scale intervention
  • Technical breaks in EUR/CHF and USD/CHF added to momentum
  • Russian political drama added to the bid for CHF
I wouldn’t disagree with any of those factors but it’s still a stark difference. The other argument is that this run-up in risk is driven by leverage from cheap money, retail chasing momentum and year-end effects.
Ultimately, the market will have to answer but I just can’t get behind this run in risk until we see a bit more alignment in equities with FX and bonds.
CHFJPY

30 Trading Rules

  
  Education
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1. Buying a weak stock is like betting on a slow horse. It is retarded.
2. Stocks are only cheap if they are going higher after you buy them.
3. Never trust a person more than the market. People lie, the market does not.
4. Controlling losers is a must; let your winners run out of control.
5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
7. Emotional traders want to give the disciplined their money.
8. Trends have counter trends to shake the weak hands out of the market.
9. The market is usually efficient and can not be beat. Exploit inefficiencies.
10. To beat the market, you must have an edge.
11. Being wrong is a necessary part of trading profitably. Admit when you are wrong.
12. If you do what everyone is doing you will be average, so goes the definition.
13. Information is only valuable if no one knows about it.
14. Lower your risk till you sleep like a baby.
15. There is always a reason why stocks go up or down, we usually only learn the reason when it is too late.
16. Trades that make a lot of intellectual sense are likely to be losers.
17. You do not have to be right more than you are wrong to make money in the market.
18. Don’t worry about the trades that you miss, there will always be another.
19. Fear is more powerful than greed and so down trends are sharper than up trends.
20. Analyze the people, not the stock.
21. Trading is a dictators game; you can not trade by committee.
22. The best traders are the ones who do not care about the money.
23. Do not think you are smarter than the market, you are not.
24. For most traders, profits are short term loans from the market.
25. The stock market can not be predicted, we can only play the probabilities.
26. The farther price is from a linear trend, the more likely it is to correct.
27. Learn from your losses, you paid for them.
28. The market is cruel, it gives the test first and the lesson afterward.
29. Trading is simple but it is not easy.
30. The easiest time to make money is when there is a trend.

Focus

  
  Education
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75% of the price movement in most stocks takes place in 20% of the time.The rest is notingbut noise withing a range.Relevant information that causes repricing doesn’t change quickly and frequently.This is why trends exist .Higher prices often attract more buyers and lower prices attract more sellers untull the rules of the game change.Focus on the main drivers and forget the rest.

Parabolic Moves Up:

  
  Education
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These are stocks that jump 100%, 200% or more in a span of several days. The top of the pattern is marked by buying exhaustion and the best way to determine the exact top is to look out for the following candlestick patterns: doji, gravestone doji, long-legged doji, shooting stars, dark could covers, and bearish engulfings. All patterns are typically accompanied by the highest volume bar on the entire chart. Entering on the topping day may provide more profit, but it is riskier. The next day is considered the confirmation day in which the stock breaks down. The 2nd option for entry (less risk) is to enter at the very beginning of the breakdown.
parabolicmoves

Losers Average Losers

  
  Education
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There are so many concepts about the stock market that are taught in the classrooms, promoted throughout the media, and passed along from generation to generation but, unfortunately, most of them are FLAT OUT WRONG!

I decided to write a 5-part series (this is part 2 of 5) on the common misconceptions that really need to stop being promoted. Keep in mind, these are all my humble opinions, but after 16 years of trading and studying market history, one really begins to notice what works and what doesn’t.

Common Misconception #2 – Dollar Cost Averaging

Paul Tudor Jones is one of the greatest traders in market history. Why? Because he’s consistently profitable. The best “anything” in the world are the best because they perform at a consistent, superior level for long periods of time. Michael Jordan isn’t considered the best basketball player ever because he scored 30 points ONCE in a game. It’s because he averaged 30 points per game over his ENTIRE career. (more…)

Seven Sins of Trading

  
  Education
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7numbers1. Trading an inappropriate position size.
Simply put…if you risk too much, you’ll lose too much. In my eyes, this is the single most important rule of trading. Risking only 1-2% of an acct value is crucial to staying in the game.

2. Not knowing when to take the loss.
If you cannot answer the questions “Where am I taking the loss,” and “Where is my profit target” then stay out of the market. If you leave these decisions for later, then you will make them emotionally, which will be the worst decisions a trader can make.
3. Trading on someone else’s research or recommendation.
We have all heard stock tips thrown our way. Sometimes we might even hear people throw out potential trades that they are watching and become tempted to jump in. Sometimes I throw out stocks that I am trading and I am watching. The problem is that you might not know what this person is watching for, what strategy this stock fits, or what types of efforts are thrown into their research. If you take these stocks into consideration, make sure they are trades you would have likely come across on your own by conducting your own research. (more…)

Trading Truths

  
  Education
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    1. It’s all about risk management … never risk what you can’t comfortably lose.
    2. Never fall in love with a stock.
    3. To be succesfull in trading; study, understand and practice. The rest is easier.
    4. Always start by assuming your analysis is WRONG and that people much smarter and with more recent information are already positioned opposite you.
    5. Never take on a position larger than your comfort zone. (Don’t overtrade)
    6. Patience. never chase a stock.
    7. Before entering the trade very think carefully what will make you wrong, write it down clearly and put it infront of you where you trade, and when your wrong get out happy you’ve followed your trading discipline.
    8. Buy strength, sell weakness. Most traders are essentially counter-trend; most traders lose.
    9. No one ever went broke taking a profit!
    10. Once you find a good one, hang on unless of course they do you wrong.
    11. Never add to a losing position! (Unless scaling in was part of the plan).
    12. Whenever you think you’ve found the key to the lock, they’ll change the lock.
    13. Do not overtrade.
    14. Trade price not perception.
    15. Know the difference between stocks that you want to stay married to and those that are just a fling.
    16. The only sure way to make a small fortune is to start with a large one.

      17. and to paraphrase Will Rogers: Buy only stocks that will go up. Don’t buy the ones that don’t go up. “THIS is GAMBLING.”

    17. Cut your losses quickly and you may have a chance.
    18. An indicator works until it doesn’t.
    19. “MR. MARKET” IS ACTUALLY “MRS. MARKET” ONLY WOMEN CAN THINK, AND ACT THE WAY THE MARKET DOES. THAT IS WHY -ON AVERAGE -WOMEN ARE BETTER TRADERS THAN MEN, THEY UNDERSTAND WHAT THEY DEALING WITH! (more…)

    Six Rules for Traders & Investors

      
      Education
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    1. Make all your mistakes early in life. He says the more tough lessons you learn early on, the fewer errors you make later. A common mistake of all young investors is to be too trusting with brokers, analysts, and newsletters who are trying to sell you bad stocks.

    2. Always make your living doing something you enjoy. This way, you devote your full intensity to it which is required for success over the long-term.

    3. Be intellectually competitive. This involves doing constant research on subjects that make you money. The trick, he says, in plowing through such data is to be able to sense a major change coming in a situation before anyone else.

    4. Make good decisions even with incomplete information. In the real world, he argues, investors never have all the data they need before they put their money at risk. You will never have all the information you need. What matters is what you do with the information you have. Do your homework and focus on the facts that matter most in any investing situation.

    5. Always trust your intuition. For him, intuition is more than just a hunch. He says intuition resembles a hidden supercomputer in the mind that you’re not even aware is there. It can help you do the right thing at the right time if you give it a chance. In fact, over time your own trading experience will help develop your intuition so that major pitfalls can be avoided.

    6. Don’t make small investments. You only have so much time and energy so when you put your money in play. So, if you’re going to put money at risk, make sure the reward is high enough to justify it.

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