When the market accommodates, trend trading can be highly lucrative. The trick, of course, is to divine the market’s often fickle moods. Tina Logan sets out to help the trader identify and exploit the “good times” in Profiting from Market Trends: Simple Tools and Techniques for Mastering Trend Analysis(Wiley, 2014).
The book is divided into two parts. The first, trend development, has chapters on trend direction, trend duration, trend interruptions, early trend reversal warnings, and later trend reversal warnings. The second part, putting trend analysis to work, deals with the broad market, bull markets, bear markets, and monitoring the market trends; it also includes a case study of the current bull market. Throughout, the text is illustrated with TC2000 (Worden Brothers) charts.
Let’s look at the chapter on early trend reversal warnings to get a sense of the book as a whole. Logan summarizes the warnings in a table. In an uptrend they are: a bearish climax move such as a key reversal or an exhaustion gap, bearish divergence, failure to break a prior peak, change of slope—rising trendline, break of tight rising trendline, approaching a strong ceiling, and bearish candlestick reversal pattern. The warnings in a downtrend are the reverse. >> Read More
22 February 2014 - 13:28 pm
David Halsey throws out the old notion of a measured move: that you copy an AB move up (or down) and paste it on a retracement low (or high) of C to get your price target D. In Trading the Measured Move: A Path to Trading Success in a World of Algos and High Frequency Trading(Wiley, 2014) he substitutes Fibonacci levels.
He uses three trade setups: the traditional 50% retracement measured move (MM), the extension 50% MM, and the 61.8% failure. When a trade is entered, its target is 123% from a swing high or low (and sometimes from a breakout) that is followed by a retracement (50% in the traditional setup). That is, the target is AB + 23%. Halsey shows both successful and failed MM trades on charts—unfortunately usually grey bars on a black background, which makes them hard to decipher.
The measured move trade setups are not stand-alones. Halsey discusses the use of multiple time frames, seasonality, NYSE tools, tick extremes and divergences, and gaps. He also discusses how to manage positions and take profits, advanced (actually, pretty basic) risk management, trading psychology, and having a trading plan and journal. >> Read More
28 September 2013 - 9:51 am
India’s current account deficit, which hit a record high in the last fiscal year, is expected to rise in the June quarter from the previous three-month period before easing due to sharp fall in gold imports and improving exports.
Five economists predicted the June quarter current account deficit (CAD) would rise to $23-25 billion, or 4.8-5.4% of gross domestic production (GDP), from $18.1 billion, or 3.6%, in the March quarter.
The data will be released on Monday.
The gap typically widens in the June quarter from the previous quarter due to seasonal factors including lower exports. In the June quarter last year, the current account deficit was $17.1 billion.
“CAD is likely to peak in Q1 and is expected to fall in subsequent quarters because there has been a clamp down on gold imports.
India’s high current account gap has made the country especially vulnerable to a surge in capital flows out of emerging markets in recent months, sending the rupee down as much as 20% this year to a record low on 28 August, although it has since recovered some ground.
In a bid to narrow the gap, which has been fuelled by heavy oil and gold imports and sluggish exports, the government increased the gold import duty three times this year to 10%. >> Read More 25 September 2013 - 12:48 pm
1. Forget the news, remember the chart. You’re not smart enough to know how news will affect price. The chart already knows the news is coming.
2. Buy the first pullback from a new high. Sell the first pullback from a new low. There’s always a crowd that missed the first boat.
3. Buy at support, sell at resistance. Everyone sees the same thing and they’re all just waiting to jump in the pool.
4. Short rallies not selloffs. When markets drop, shorts finally turn a profit and get ready to cover.
5. Don’t buy up into a major moving average or sell down into one. See #3.
6. Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you’re in big trouble.
7. Exhaustion gaps get filled. Breakaway and continuation gaps don’t. The old trader’s wisdom is a lie. Trade in the direction of gap support whenever you can. >> Read More
23 September 2013 - 15:35 pm
We’ve all read innumerable times that we learn more from failure than from success. Well, that’s not quite accurate. The sentence should probably read: “Failure provides a better opportunity for learning than does success.” Not all people—in fact, probably few people, take advantage of the opportunity that failure offers.
John C. Maxwell, a prolific author of self-help books, wants to increase the number of learners. Sometimes You Win—Sometimes You Learn: Life’s Greatest Lessons Are Gained from Our Losses (Center Street/Hachette, October 2013) explains how to turn failure into learning. John Wooden wrote the foreword to the book, based on its outline, a few months before he died.
Losses are tough, there’s no getting around this fact. They cause us to become emotionally stuck and mentally defeated, they create a gap between knowing and doing, they never leave us the same. They hurt, but when we don’t learn from them they really hurt.
Maxwell approaches learning from multiple perspectives: the foundation of learning, the focus of learning, the motivation of learning, the pathway of learning, the catalyst of learning, the price of learning, and the value of learning. His final chapter is entitled “Winning Isn’t Everything, But Learning Is.” He incorporates anecdotes, insights from others, and apposite quotations such as Bill Gates’s famous line: “Success is a lousy teacher. It makes smart people think they can’t lose.” >> Read More
04 September 2013 - 15:13 pm
India has slipped to 60th position in terms of its competitiveness globally, while Switzerland has retained its top rank.
This is India’s lowest ever rank and also 31 places below its peer emerging market China.
Releasing the annual Global Competitiveness Report 2013-2014, Geneva-based World Economic Forum (WEF) today said highly innovative countries with strong institutions continue to top the rankings.
While Switzerland is on top for fifth year in a row, United States has reversed its four-year downward trend to occupy 5th position and Japan has risen to ninth place. >> Read More
04 September 2013 - 14:45 pm
Deutsche Bank’s co-CEO Anshu Jain has been speaking at a banking conference in Frankfurt this morning organised by German newspaper the Handelsblatt, reports the FT’s Frankfurt correspondent, Alice Ross.
After suffering some light teasing from the German presenters about the fact he was speaking in English, here are some highlights:
- He expressed concern over the stricter rules on leverage ratios being imposed on US banks compared to European banks, saying that the US was adopting a ‘very’ high standard and that Europe hadn’t and shouldn’t. Still, he said that the debate over leverage ratios was “done” and that the industry now needed to move on.
- He sounded repeated warnings about the growing gap in economic growth between the US and Europe, with European countries falling further behind: “Europe is falling behind the US in every factor; the banking sector is one of them,” he said.
- He also warned that regulation has become competitive between different regimes: specifically the US and Europe, such that at times the regulations contradict each other and make it hard for the banks to follow – though he insisted he was critical of the need for regulation as such. >> Read More
Consumer price inflation in Japan rose to an annual rate of 0.7 per cent in July, its highest level in almost five years, as the effects of a weaker yen pushed up the cost of fuel and electricity.
The headline figure is likely to viewed with some satisfaction by policy makers trying to overturn more than a decade of deflation in Japan, which they claim has sapped companies’ willingness to invest while weighing on household consumption.
The Bank of Japan, under the firm direction of Shinzo Abe, prime minister, is aiming to keep monetary policy loose enough to achieve a 2 per cent rate of inflation by March 2015. Mr Abe, for his part, has adopted a more flexible approach to fiscal spending while pushing for various structural reforms to boost Japan’s attractiveness as an investment destination.
However, the figures showed that while resource-poor Japan is paying more for mineral fuels, a broader, demand-driven recovery is yet to take hold. Excluding fresh food, the all-items index rose by 0.7 per cent from a year earlier, and by 0.1 per cent from June. >> Read More
25 August 2013 - 10:28 am
India’s finance minister P. Chidambaram met with top bankers Saturday to discuss ways to boost the weak rupee and bring in more foreign capital to bridge a trade gap that has put pressure on the currency.
Chidambaram was accompanied by top officials at the meeting in India’s financial hub of Mumbai with representatives of leading private and public sector banks.
As the US economy picks up, the Federal Reserve is expected to start winding down its bond-buying stimulus scheme which has helped fuel an investment splurge in Asia’s emerging markets.
“The meeting was mainly to seek ideas and suggestions on what can be done about capital inflows. It was a very good and positive meeting,” ICICI Bank’s chief executive Chanda Kochhar told reporters. >> Read More
23 August 2013 - 11:23 am
Indonesia, home to the Asian equity market worst hit in the broad sell-off this week, has lowered its GDP estimate and announced a series of new policies aimed at shoring up the rupiah and increasing confidence.
Policymakers revised GDP growth this year down to less than 6 per cent, versus 6.3 per cent before.
Indonesian policymakers including economy minister Hatta Rajasa and finance minister Chatib Basri outlined the new policies as follows:
- offering corporate tax breaks and certain tax deductions for labour-intensive companies (to help avoid lay-offs)
- curbing imports with higher duties on luxury goods
- relaxing quotas on mineral exports, which were set in May 2012 to protect the nation’s resources.
- providing incentives to research and development
- simplifying permits for investment
- speeding up strategic infrastructure projects >> Read More