Spain has successfully got away the sale of EUR3.9bln benchmark bonds this morning. Target amount was EUR3-4bln – bid/cover ratio 2.1
Updated at 14:30/10th June/Baroda
Archives of “target” tag
rssBook Review :Sell & Sell Short
Sell and Sell Short (Wiley Trading) by Alexander Elder
If you are searching for a book on trading stocks then look no further, this is it. I have been a successful trader for years and read over 160 books on trading,and in my opinion this is one of the very best. Alexander Elder actually read the change in the market from bull to bear in late 2007 and was able to get this books first edition released in early 2008 when it was needed most.
While as the title suggests it teaches when to sell your stocks for profits, and also does the best job I have seen on explaining short selling and when technical indicators show to short. This book is a complete book for any trader. The main lessons of this book is when to lock in profits and exit a trade using a target, and how to double your potential for profits by not only buying stocks, but also selling stocks short and buying them back at a lower price for profit. Professionals sell short because while overall the stock market drifts upward, when a stock falls it falls over
twice as fast as it rises. I sell short and it is a powerful tool when used correctly. This book will show you when it is appropriate to short.
Dr. Alexander Elder is the only author I am aware of that integrates trading psychology, money management, technical analysis and keeping a trading journal into one book. These four factors will determine whether you are successful in the market or not, even more than the trading method you choose.
You will learn the three great divides in trading:
technical vs. fundamental
trend vs. counter trend
discretionary vs systematic
The author follows a discretionary, technical approach trading counter trend for the most part. However what you learn in this book can be applied to any type of trading. The authors own technical approach uses prices, volume, exponential moving averages (13 day, 26 day), envelopes, MACD, and force index. Limit your tools to no more than five, more is less, any more just causes confusion. The main method you will learn in this book is using the moving averages as a technical base for agreed upon value and buying at the lower edge of the envelope and selling at the high edge of the envelope when you have favorable MACD and force index agreement, or buying at value between the EXP MAs.
If you are going to be a trader you must follow the money management suggestions
in this book. NEVER risk more than 2% of your total equity on a trade, and if you lose 6% of your equity in a month you must stop, clear your head and start back next month. If you follow the 2% rule from the book, it will be a major life lesson in your trading and save you a ton in equity draw downs and will almost completely eliminate your risk of ruin. (more…)
7 Things for Traders
The definition of man·age:
- To direct or control the use of; handle.
- To exert control over.
- To make submissive to one’s authority, discipline, or persuasion.
- To direct the affairs or interests of.
- To succeed in accomplishing or achieving, especially with difficulty; contrive or arrange.
1. Traders must be great risk managers.
“At the end of the day, the most important thing is how good are you at risk control.” -Paul Tudor Jones
2. Traders must manage their own stress.
Trade position sizes that keep your stress level manageable, if you can’t talk calmly to someone while trading you are trading too big.
3. Traders have to be able to manger their emotions, we have to trade our plan not our greed or fear
“There is nothing more important than your emotional balance.” – Jesse Livermore (more…)
Do the hardest work first
The greatest performers in any field delay instant gratification in pursuit of their ultimate goal, which is to be the best they can be while pushing through less than comfortable situations. For me, the hardest work is determining a loss target. I firmly believe that the very best traders determine where a loss is to be taken before determining where money can be made. It is difficult to consider how much you are willing to lose before you consider the instant gratification of adding to your bank account. But it has to be so. Accept a loss and delay the gratification of instant money for the reward of a lifetime of income.
Resolutions For 2012
Resolutions On Trading & Investing:
- Define my trading plan and stay with it.
- Take no trades without establishing a complete and precise trading plan before the initial trigger.
- Keep an open mind for new market scenarios based on what the price action and pattern setups provide.
- Always trade with the trend.
- The less trading I do, the better my results so for 2012 I’m adoping weekly/monthly time frames
- Once I am in a trade, stick with the original plan for target and stop-loss – Don’t panic!
- Make every trade meet the strategy requirements and what happens from there is up to the market.
- I need to exercise greater patience in both buying and selling.
- Be more willing to take a position, even if it is very small. It is tough though to gain the confidence to do so as the market has been tough.
- I am NOT going to overtrade. I will only make “A” trades.
- Don’t ever force a trade, stay in cash when unsure.
- I resolve not to violate my stops.
- Wait for opportunities instead of looking for trades.
- Do not make a move until your indicators say so.
- Follow this important Gartman rule: “Do more of what is working and less of what is not.”
- To clarify my trading approach in my mind and in writing.
- Be dispassionate and thoroughly objective when evaluating positions.
- Do not be afraid to cut a loss, even if the trade is later re-entered at a higher price / better set-up
- Never trade on impulse.
- To memorize and practice the cardinal rules of trading.
- Only trade when you can pay very close attention or exclusive attention to the market.
- Dedicate more time during non-market hours to prepare for trading.
- Take emotion out of my trading. Follow price action.
- I need to overcome my unreasonable fear of the market.
- Try to avoid personal bias in making decisions.
- Wait for pattern to work out – do not jump the gun.
- Don’t be in such a damn hurry. Wait out the times when the setup is just not there.
- Avoid buy and hold in times of high market volatility.
- Actually ignore the news and trade the charts! It’s harder than it sounds.
- Don’t force the trade. The market will open again tomorrow and there will be new opportunities.
- Don’t turn a trade into an investment. Continue to focus on price action.
- Approach each trading day well-rested, of clear mind, and with a positive, opportunistic attitude just like Kirk
Resolutions On Learning:
- Learn to do 1-2 things very well and focus.
- Write the plan for the year ahead. Specify initial position, goals, entrance and exit strategies for action, identify risks to take and manage.
- Study more on the weekends to prepare for the upcoming week.
- I will be more diligent in keeping a journal of EVERY trade made in the year.
- Quit searching for the holy grail of trading – there is none.
- Turn off CNBC and all other distractions in the way of my success
- I will keep good records and document all of my research, trades, and outcomes.
- Use the right side of my brain and be careful of the left.
- Do not blindly follow anyone else.
- Accept failure and move on.
- Methodically analyze what went right and wrong on each trade.
- Spend more time nightly looking at charts.
- Learn 10 new chart patterns this year and trade only setups identified by those patterns.
- Apply a consistent decision tree toward every single trade.
- Tune out the noise. No calls during the day. No more “experts”, no more TV and definitely, absolutely and without a smidge of doubt no more twitter.
- Transition from paper trading to live trading.
- Need to read more charts and read less newspapers.
- Assess my strengths and what is working well for me and determine how I can improve. Also, assess what does not add value and eliminate it.
- Stay with low risk, probability based methods.
- Every trade I take requires a one page description of why, how, and at what levels I intend to take action.
- Paper trade new ideas before putting real money at risk.
- Study and read more, establish a trading plan, follow the plan, experiment, re-evaluate and keep learning.
- I resolve to improve myself by: managing my emotions better, become more patient and understanding, define my goals more completely, and constantly review my efforts to these accords.
- My resolution would be to trade/invest during all market conditions. Emotion still has some control over my investments.
- Work on consistency!! (more…)
The Hidden Variable in Your Trading Success
Most traders realize that trading involves a lot of psychology. And most traders readily admit that a significant portion of their trading losses, or lack of performance, is due to “psychology”. Although the term ‘psychology’ isn’t always mentioned as an explanation, you can see it easily enough in the following statements ……”I froze just as I was about to pull the trigger”….. ”I hesitated and missed that trade and was so pissed that I got myself into an impulse trade right after”….. “That large loss was not what I wanted, I held it thinking it would come back because last time I bailed out of this type of trade I got stopped out right before it reversed”….. “I was really nervous about losing money again so I got out of my winning trade way before my target”
Those are four common examples of trading psychology issues manifesting in one’s trading. Do you recognize yourself in the above statements?
All four of those statements have in common one thing, fear. Whether it’s the fear of not being perfect, the fear of being wrong, fear of losing money, fear of missing out, the fear of not being approved by others, or some other fear, the common theme is fear. Most trading mistakes are a maladaptive attempt to deal with fear or anxiety. (more…)
Japanese Public Debt 2X GDP With Deflation Threat
In summary, Japan has “$9.5 Trillion in public debt”, 2x GDP (192% 2009 estimate, #2 behind Zimbabwe at 3x from CIA.gov) with threats of deflation and falling wages. This is after 2 lost deflationary decades and a loss of 75% on the NIKKEI index since 1990 (39,000 to 9,700 today, 1st chart below). The good news is, most of Japan’s public debt is held domestically in Japanese Yen. Some analysts believe US Treasuries could end up like Japanese Government Bonds (JGBs) and catch a bid even with hardcore reflationary policies (see David Rosenberg’s debate on March, 2010). What about the S&P, would it follow the NIKKEI’s footsteps in a deflationary environment? Or is the US economic machine too strong for that to happen.A 75% drop in the S&P from the October 2007 peak would be around 400, which is David Tice’s S&P target. What are the odds. Paul Krugman had an op-ed in the New York Times today titled The Third Depression. Hopefully Gold and the S&P move in tandem from here if more $ printing is coming. The 10-Year US Treasury Note is trading at $122 resistance in an ascending triangle (Chart 2) and I’m going to see what happens with the $USD at its 50 day moving average tomorrow.
Why is Jim Rogers Sceptical of India's Future?
Investor and Adventure Capitalist Jim Rogers remains deeply sceptical of India’s future. In an interview with Forbes India, he argues the country is sitting on a fiscal time bomb.The finance minister has changed the direction of India’s budget deficit by reducing the target for 2010-11 to 5.5 percent.
You really believe it will happen? Go back over the years and see their previous claims.
He has got a lot of praise for that in India. Still you are not impressed. Why?
Even if it happens, it is not being done by sound budgeting. It is from selling off the family jewels if it happens.
Don’t you think a high deficit was justified last year when the government had to spend and help the economy revive?
No. They are just trying to push the problems out into the future rather than solving the underlying problems. Do you really think the solution for a problem of too much debt and too much consumption is more debt and more consumption?
Are we not living in extraordinary times when we have to follow such flexible policies?
We are indeed. They are making the problems worse in extraordinary times which require tough measures to correct decades of abuse.
The finance minister rolled back some of the economic stimulus measures he had announced last year. Would you have preferred to see a complete rollback than a partial one?
Yes. And more.
If you were to set an agenda for the government, what would that be?
Cut spending and subsidies dramatically. Many studies have shown that countries start having serious growth problems when debt is 90 percent of GDP (gross domestic product). India is now [at] 80 percent and will be [at] 90 percent soon under this budget. The subsidies distort the economy in less productive areas.
Trading Thoughts
To truly become a proactive trader, you need to believe that your trade WILL go the direction you thought. This shows that you have belief in your system that finds your trade setups in the first place. If you put your trade on and the first thing you do is mark your stop or think “I hope this goes well”, then you are bound to fail as a trader. Successful traders do not hope. They do the research and use their system to find good candidates and enter the trades. It is at that point that they manage risk. They know exactly how much they have at risk and are perfectly fine if they lose that much. Why? Because it is baked into their system, and every trade does not go the way they thought.
You need to be the same way in your trading.You need to have the courage to fail, step off the curb, and enter the trade. Expect that the trade will go your way and use the power of positive thinking. Set your target, entry and your stop and then you know, at any point during the life of the trade, where you stand. If your target gets hit and you see the stock continue to go the same direction, you can’t get mad. You simply put the positive trade aside and evaluate it in a couple weeks to figure out why it continued to go beyond your target. It is at that point that perhaps you make an adjustment to your system. Perhaps you find out that it was a news item that caused the surge and then you know that it was atypical, rather than the norm, and no adjustment is needed.
In going through this thought process, you prepare yourself emotionally and as a result remove the chance of trading on emotion once in the trade. As an example, you need to be fully prepared to lose the amount invested in a single trade if your stop is triggered. If you aren’t fully prepared to take that risk, then you need to adjust the size of your trade or move on to another trade. If you prepare and emotionally accept the fact that you could be wrong, your trading becomes more mechanical and less emotional. Take some time to role-play the different scenarios and see what your reactions would be.
Mark Mobius Articulates The Discipline Of Buy And Sell Decisions
The thought of giving up a once-treasured possession can be an emotional exercise for anyone, even if the object of affection has outlived its use. As investors, we can find it difficult to sell a once-favored holding — even more difficult than the decision to purchase it. But sometimes, you just have to let go.
I’ve often been asked about my team’s process, not only in selecting potential opportunities, but also when and how we determine a particular holding may not be worth keeping in a portfolio and bears replacing with something we deem to be a better opportunity. Emotion simply can’t play a role in our decisions. Instead, we pair bottom-up, rigorous research with step-by-step analysis, first identifying potential bargains within a dataset of more than 25,000 securities, then conducting deep quantitative and qualitative analysis to assess each company’s long-term value potential.Our quantitative analysis includes five-year historical audited financial statements and five-year forecasts based on projected future normalised earnings, cash flow, or asset value potential. Qualitative analysis covers understanding of the company’s business, management quality, ownership structure, corporate governance and commitment to creating shareholder value. That includes an understanding of who owns and controls the company, how it operates, and in what markets. As you can see, our research approach is extensive.
As I’ve said time and again, we firmly believe an on-the-ground presence is necessary to provide local, first-hand understanding of investment opportunities. Our Templeton Emerging Markets team currently numbers 53 investment professionals spread across 18 global offices and visits as many companies as we can—approximately 1,500-2,000 per year— to tour facilities and conduct management interviews. I personally travel more than 250 days a year. (more…)