Fed’s Stance Sparks Fundamental Shift
Over the past week we saw a subtle fundamental shift, but sometimes that is all it takes to get a trend rolling. It started with the Fed hinting at a more neutral stance. A fourth interest rate cut had been widely expected in the December FOMC meeting. That may not happen now as some members […]
Is Option Trading Easy?
Let’s answer that question right now before we go any further…no! It takes a lot of work and patience to be a profitable option trader. Getting started by putting some cash into a trading account is easy. But that is where the easy part ends. Not only do you have to learn about calls and […]
How Will Brexit Affect Markets?
I was writing my daily commodity market updates early Thursday morning and just as I was ready to hit send, stock indexes and interest rates rose abruptly. The euro and pound rallied while the dollar dipped. Gold fell as well. These immediate reactions were reversed later in the day when it appeared not everyone in […]
To Find Money Flows, ‘Follow the Sun’
A week ago, we finished the first of 2 MTM Mastermind sessions. On the last day we had a visit from a very good friend and colleague, CNBC’s Rick Santelli. He and I worked together in the ’90s where we compared notes often. We each had our own personal style and technical approach to analyzing […]
How to Trade ‘in the Zone’
It was the mid-1980s and I was in my mid-twenties when I stepped on the CBOT trading floor as an employee. I was terrified, intimidated and eager. I got a jacket with team colors, a badge for access to the pits, and a warning to keep my mouth shut and do what I was told. […]
Learning the Option Greeks
As summer comes to a close here in Chicago, I have spent more than the usual amount of time over the past few weeks reviewing the option greeks in our Group Coaching class. It is always important to know about the greeks when trading options, but many traders neglect to properly educate themselves. It has […]
Reduce Anxiety by Decreasing Risk
Tariffs, China, Hong Kong, Russia, Iran, inflation, central banks, recession, negative yields, inverted yield curve: All these terms have dominated headlines, and they incite anxiety for investors. Even agile short-term traders struggle in an environment where unvetted stories and half truths move markets. Rumors and threats in social media have had more impact on prices […]
Big News From the Fed This Week
The Federal Open Market Committee has a mandate to promote full employment and keep inflation in check. It raises interest rates when the economy is overheating, and it lowers rates to promote spending or increase economic activity. Lately, Fed Chair Jerome Powell has taken a dovish or more accommodative stance. Many economists expect a 25-basis […]
Know Average Daily Range and Average True Range
Around holidays, especially in the summer, the participation rate often decreases, and subsequently so do volume and ranges. The typical seasonal lulls and end of each quarter are ideal times to do research and update statistics. I keep a spreadsheet with statistics covering average ranges over the most frequently analyzed time frames: day, week, month […]
How to Improve Trade Entry and Exit
One of the more difficult issues traders face is choosing prices that are apt to be extremes, or highs and lows, over a given time frame. Pinpointing daily entry and exit levels, also known as support and resistance areas, requires a view of recent history of the market you are trading. When charting, it is […]
How to Trade This Options Market
This is just a little blog to remind you about your options trading management. Everyone needs reminders, especially option traders. I will often say in my Group Coaching class to know exactly what you will do no matter what happens before you enter any trade. The same can be said about the trading environment we […]
Trade Talk and Tweets: the New Fundamentals
Fundamental data are also known as event risk. Professional traders keep a close eye on the economic calendar for events or reports that could alter a trend or start a new one. A treasury trader might hedge a long position by buying 10-year note puts or selling calls just before employment or inflation reports. Many […]
How to Save Time Analyzing Markets
Since leaving the trading floor at the Chicago Board of Trade I’ve been tethered to my desktop computer. My office is my workshop, and all the tools I need for trading market analysis are there. Since the futures markets virtually never close except on Saturday, the leash to my tools is short and therefore constrictive. […]
How to Catch Directional Moves
One of my chores is to write a weekly piece that enlightens traders. At times my interpretations are spot on, almost prophetic. And sometimes I am clueless. My 30 years of experience in the futures markets has taught me to accept, almost embrace, being wrong. Traders must embrace risk. No one likes being wrong, but […]
A Bullish Trade Setup to Consider
The market remains predominantly bullish, and we have considered potential bullish trade more than a few times in our Group Coaching class. One setup I continue to love is the 2-bar bullish break from a bullish base. When a Bullish Base is Created? A bullish base is created when a stock moves considerably higher usually […]
How to Become a Successful Trader
I was fortunate to spend most of my career at the Chicago Board of Trade as a broker in the 30-year bond pit. The ’80s and ’90s were the heyday for interest trading pits. Most days were filled with big swings and lots of volume. The pits were packed and often became chaotic and even […]
Think Like a Pro Trader
Spend time with a broker or pit trader from the era when all trades were executed at an exchange and you will learn about the auction process and the information it provides. Pits were created to facilitate trade. To an untrained eye a trading pit looks like a mess of mad, aggressive people wearing crazy-colored […]
A Reminder to Review Your Trades
I have mentioned this before and will continue to mention it as much as I can: Please record your trades and review them often. Simply put, there is no better way to see what you are doing wrong and doing right. To me, it has always been an eye-opening experience to go back and review […]
Trading Time – How to Read Open and Close Clues
Monitoring the trading time of day when extremes (high and low) are made can be helpful when timing entry and exit of a position. Liquidity is king. Large orders from professional traders are likely to be executed when volume is at a peak. The first hour of trade is frequently the highest volume or most […]
Traders Often Need to Be Reminded
Well over a year ago, I wrote about several of my favorite sayings that of course apply to trading. Well this is a short blog to remind everyone how important this one particular saying is to me and most likely to you. With the volatile market we have encountered over the past several months, there […]
Key Economic Sector and ETF Watchlist
Most days in futures class we review direction indicators for the major sectors of the economy. These sectors often correlate either directly or indirectly. For example, a rise in interest rates may affect currencies, which might have an impact on stocks or precious metals and energy. A small move in one of these sectors is […]
