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Tricks of the Trade

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Trading TricksThe pros trade differently. That’s why they’re pros!

Everyone needs an “edge” in trading. Without it, you’re dead meat.

Have you ever felt that sometimes it’s uncanny how the market does exactly the opposite of what it’s “supposed” to?

That’s not a coincidence.

Professional traders make a living out of breaking the rules everyone “knows” to be true about trading.

I remember the first time I went to the CME (Chicago Mercantile Exchange). I hired a floor trader to work with me for 10 days.

I had already been trading for years before I met with him, but the very first day we started talking I felt like we were speaking different languages!

There was some foreshadowing of this before I went. He required me read a small library of books before I flew to Chicago. I already read over 100 books on trading … and I thought I had read all of the important ones. But he had me read books I never heard of, about techniques I never heard of!

One week into the training, my head was spinning. I was in a different world. He entered the market with completely different techniques than I ever dreamed of. And he got out of the market when I would normally be getting in!

His style was TOTALLY foreign to me.

The things I saw him do in his trading (we traded together the entire time) looked completely STUPID in my opinion! I mean really outrageous. He broke all the rules in every book I ever read.

… and he raked in piles of cash!

I had to struggle to literally “change my mind” because I thought I was pretty smart. But he was the #1 trader in his firm, making millions of dollars. So I decided to struggle through the complete paradigm shift.

And I’m glad I did. My trading has never been the same.

Recently I wrote a Special Report that reveals, for the first time to many, 4 distinct tricks the pros use to get an edge over the retail trader day after day.

The pros also use technical analysis techniques that are “invisible” to the amateurs.

Now you can see them for yourself and learn how to make them visible on your own charts, by getting “Trading Tricks.”

The feedback I’ve received so far has been great. Check it out and I’m sure you’ll have an “a-ha” experience!

Are You Keeping Up?

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“The times, they are a-changin.'”

The world in which we trade is changing DRAMATICALLY.

I’m primarily a technical trader. However I learned a magical lesson from my good ‘ole Dad: “Keep up with the world.”

My Dad always said enjoyed he trading and investing because EVERYTHING impacted the financial markets. To invest well, it’s important to stay on top of business, politics, economics, technology, religion, war, international relations, science, etc.

So even though I’m mostly a technical trader, I learned from my Dad to watch for major shifts in the culture and in the world because those major shifts bring incredible investing opportunities.

The video below is not about trading or investing. But it is about the dramatic changes happening in our world right now.

It’s a different world. Invest accordingly!

Da Bulls!

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After a surge in energy to the downside, the S&P completed it’s A, B, C pattern and has now made a Higher High.

S&P Daily ChartTechnically it made a Lower Low as well, but looking at the real bodies of the candles, it’s clear that the market rejected a Lower Low, put in a Spike Bottom Reversal Bar, and then broke the previous Cycle High.

The big move down put us into Bearish territory on my broad market indicator. However, that Bearish reading would not be confirmed unless the market stayed in that territory on the way back up. It has failed to do that, and it’s right back into Bullish territory again.

There is no Trend in the S&P right now. The 50 MA is flat and instead of having a Higher Low and Higher High, we have an expanding triangle, which is a consolidation pattern (not to be confused with a contraction pattern).

The move off the bottom on the Daily Chart is a bit parabolic in nature, just as the move down was. From a technical point of view, it wouldn’t be surprising to see the market go all the way back up and test the February High.

S&P 3-Day ChartSeasonal issues:

  • May is coming soon – a time when conventional wisdom advises to stand aside.
  • The up move started in July which is earlier than usual (late October is the “conventional wisdom” time to buy the market). So perhaps the up move could end earlier than May, though it is looking good for now.
  • It’s the third year of the presidential cycle, which is most often a very bullish year.

I’ve also included a 3-Day Chart (each bar represents 3 days) which is better than a Weekly Chart when looking for confirmation of the indicators on a longer term time frame. You can see that we’re likely putting in a Cycle Bottom here and still have a ways to go, so it wouldn’t be surprising to see this carry into April and even beyond.

Watch the next Cycle High and Low for clues, and keep your eye on the 50 MA!

You can click on the charts to make them larger for easier viewing.

“Da Bears”

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I just returned from the Wealth Expo in Atlanta where I gave a talk on Friday.

It’s always fun to meet with other traders and share our stories.

After a major, multi-year Bullish run, my indicators have put the markets in Bearish territory for now. We’ve had a 3 Wave or A,B,C pattern down off the highs. Now it remains to see where we go from here.

So far we’ve held the previous low in the major indices and are in a trading range. It wouldn’t be surprising to see this range hold until after the Fed announcement, but no one can predict the future.

However, whereas the long move up was on very low volatility, that has changed. The market is now in a high volatility situation. This is especially important for Option Traders to note as you decide which strategies to use. It may be time to employ different strategies than you’ve been using the last few years … or at least make adjustments in your style. Bottom line – watch your Vega!