candidate transition blueprint that I wrote well-nigh a piddling land ago. Observe how selling book was quite high on 9/1 as well as has gradually petered out since then. Now, on the heels of a largely favorable laid upwards of unemployment numbers, we're seeing the one-time resistance inwards the depression G expanse similar a shot trying to human activeness every 2d support. If that back upwards tin hold, nosotros should come across a prissy swing chance to the upside.
Meanwhile, nosotros come across or hence dollar strengthening; golden as well as crude oil are off their highs; as well as 10-year Treasury yields are higher, exactly likewise off highs. We'd desire to come across these intermarket themes boot inwards to back upwards whatever upside rally inwards stocks.
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Saturday, January 31, 2015
Friday, January 30, 2015
Info!! Midday Briefing For September 4Th: Breaking Higher
the transition designing mentioned inward the morn briefing playing itself out, equally the intense selling from 9/1 dried upwardly in addition to straightaway has led to an influx of buyers today. As a rule, the longer it takes for the marketplace to bottom, the greater the subsequent rise. That is partly due to the fact that to a greater extent than shorts decease trapped subsequently extended bottoming, contributing to the market's upthrust in i trial buyers enter.
Note how the weakness inward the U.S.A. dollar has played into the pattern: when nosotros come across intermarket themes cooperating amongst a setup, that gives us greater confidence inward the trade.
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Note how the weakness inward the U.S.A. dollar has played into the pattern: when nosotros come across intermarket themes cooperating amongst a setup, that gives us greater confidence inward the trade.
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Thursday, January 29, 2015
Info!! Farther Ideas On Learning How To Merchandise In Addition To Conclusion Back Upwards For Traders
I desire to give thank you lot readers for their insightful comments together with reactions to my post service on learning how to trade. Influenza A virus subtype H5N1 lay out of respondents rightly noted that an unmoderated give-and-take is a recipe for chaos together with merely calling out one's ain trades does not, inwards itself, learn traders how to trade.
This is where the concept of "decision support" is important. Traders demand to prepare ways of seeing markets that are unique to them, that brand feel for them, that tally their opportunity tolerance together with lifestyle, together with that best brand role of their skills together with talents. Simply giving traders ideas could genuinely stunt their development, much similar doing a child's homework for them.
An of import challenge inwards trading is that at that topographic point is typically to a greater extent than valuable data streaming from markets than a unmarried private tin sack reasonably procedure on their own. This is why portfolio managers at hedge funds together with usual funds typically hire analysts together with assistants. Influenza A virus subtype H5N1 lay out of informed, disciplined eyes watching markets expands the trader's cognitive bandwidth.
The form of weblog I envision is interactive, but inwards a moderated fashion that focuses on determination support. Backtested signals from trading systems together with historical studies of marketplace seat patterns supply potential ideas to trade, but it remains the trader's chore to filter these ideas, execute them, together with and thence stimulate out them every bit trading positions. The signals together with studies back upward determination making, but produce non substitute for science development.
By reviewing successful together with unsuccessful trades later hours, however, a comprehensive weblog could advance that science development, helping traders seat together with cultivate best practices inwards timing entries, managing risk, etc.
Think of a basketball game omnibus working amongst players earlier the game to prepare for the opponent; calling fourth dimension outs during the game to brand mid-course adjustments; reviewing tapes later the game to laid on strengths together with seat weaknesses: that is what a comprehensive, interactive weblog could provide.
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This is where the concept of "decision support" is important. Traders demand to prepare ways of seeing markets that are unique to them, that brand feel for them, that tally their opportunity tolerance together with lifestyle, together with that best brand role of their skills together with talents. Simply giving traders ideas could genuinely stunt their development, much similar doing a child's homework for them.
An of import challenge inwards trading is that at that topographic point is typically to a greater extent than valuable data streaming from markets than a unmarried private tin sack reasonably procedure on their own. This is why portfolio managers at hedge funds together with usual funds typically hire analysts together with assistants. Influenza A virus subtype H5N1 lay out of informed, disciplined eyes watching markets expands the trader's cognitive bandwidth.
The form of weblog I envision is interactive, but inwards a moderated fashion that focuses on determination support. Backtested signals from trading systems together with historical studies of marketplace seat patterns supply potential ideas to trade, but it remains the trader's chore to filter these ideas, execute them, together with and thence stimulate out them every bit trading positions. The signals together with studies back upward determination making, but produce non substitute for science development.
By reviewing successful together with unsuccessful trades later hours, however, a comprehensive weblog could advance that science development, helping traders seat together with cultivate best practices inwards timing entries, managing risk, etc.
Think of a basketball game omnibus working amongst players earlier the game to prepare for the opponent; calling fourth dimension outs during the game to brand mid-course adjustments; reviewing tapes later the game to laid on strengths together with seat weaknesses: that is what a comprehensive, interactive weblog could provide.
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Wednesday, January 28, 2015
Info!! How Trading Systems Tin Dismiss Inform Discretionary Traders
Here is an update of we made a dainty bottom this week. It was logical to desire to become dwelling long over the extended weekend. Maybe that volition work; I see, however, that Vertical Solutions' backtested trading organisation went dwelling short.
Buying trace together with selling weakness, over time, has lost people money. Indeed, I run into where MarketSci identifies "mean reversion" equally "the nearly effective directional trade".
There are limits to human discretion: The best trades are non e'er the ones that experience best.
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Buying trace together with selling weakness, over time, has lost people money. Indeed, I run into where MarketSci identifies "mean reversion" equally "the nearly effective directional trade".
There are limits to human discretion: The best trades are non e'er the ones that experience best.
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Tuesday, January 27, 2015
Info!! Personal Perspectives On Wellness Help Reform
There are ii crises normally acknowledged inwards the wellness attention debate. The get-go is that the toll of providing wellness attention to the growing puddle of senior citizens from the babe nail generation (as good equally to those who come across low-income guidelines) volition spiral out of command inwards coming years. The United States of America spends to a greater extent than on wellness attention than other countries, with some regions charging far to a greater extent than than others (yet non producing amend outcomes). With the toll of premiums far outstripping wage increases in addition to inflation, at that topographic point is a demand for toll containment.
The 2nd crisis is the large in addition to growing publish of uninsured people inwards the U.S.; equally premium costs burgeon in addition to unemployment strips workers of benefits, fewer people tin afford wellness coverage. Indeed, the Gallup Poll finds to a greater extent than than 20% of Americans inwards a publish of states are without wellness insurance entirely. By the fourth dimension they seek help, uninsured Americans require costly specialty attention in addition to hospitalization that could own got been prevented past times timely visits to main attention providers.
Much of the challenge that the electrical current direction has faced with observe to wellness attention reform tin hold upward traced to the tension betwixt these ii crises: reining inwards costs in addition to expanding coverage are non easily compatible goals.
Lost inwards the din of recent fence is the elementary fact that the electrical current organisation for insured individuals rations attention inwards ways that reach suboptimal wellness outcomes. It does this past times restricting access to (relatively depression cost) main care, field roofing (relatively high cost) specialty, subspecialty, in addition to infirmary care. Stated inwards other terms, the organisation rewards the handling of illness, rather than the advertisement of health.
A personal sense drove that domicile for me yesterday. I had my annual checkup with my identify unit of measurement physician. He spent over ninety minutes with me. He did non own got other rooms booked with patients; I was his sole focus for those ninety minutes. We ran an extensive battery of blood in addition to physical tests to reveal early on see in addition to lung problems, equally good equally cancer. He briefed me on the latest enquiry studies that had come upward out for each of the medications I take. He examined me from caput to toe, explaining each of his findings equally he proceeded.
During the visit, nosotros detected ii blood anomalies that showed upward only because of the laboratory he used in addition to its updated reference ranges. Both were contributory to recent fatigue I had noticed, in addition to both were addressed past times the halt of the visit. One potentially precancerous peel growth was detected in addition to removed. We laid upward goals for fitness measures: trunk mass, fat, etc.
My Dr. establish that, inwards his hospital-affiliated practice, he but did non own got fourth dimension to perform the sort of attention that he had learned nigh in addition to valued inwards medical school. With some soul searching, he developed a exercise where he sees a express publish of families, each of whom pays an annual fee for his coverage.
We tin heighten our noses at such "concierge care", but the reality is that several of my problems would likely non own got been detected inwards the traditional brief main attention visit. How many early on signs of cancer in addition to see affliction acquire undetected, but because the insurance organisation (modestly) reimburses physicians for appointments inwards units of xv or xxx minutes? How tin you lot brand such a organisation operate equally a Dr. paying off six-figure educatee loans, unless you lot run iv rooms at the same time, shuttling alongside the rooms field nursing staff rush through questions in addition to tests?
Is that character healthcare?
When I was inwards Syracuse in addition to ran a private exercise inwards psychology, ane of my most of import practices was to hand all clients my domicile telephone publish in addition to brand myself available 24/7. Why? I knew that psychological crises are besides times of opportunity: if I could acquire to a someone presently enough, nosotros could plough the crisis roughly in addition to avoid an expensive in addition to disruptive psychiatric hospitalization. As a result, it was very, real rare that I e'er needed to hospitalize anyone.
Those telephone consultations in addition to emergency visits were rarely reimbursed past times the insurance system. The organisation reimbursed weekly therapy, in addition to the organisation reimbursed psychiatric hospitalization. Insurers rarely compensated me to view someone iii times a calendar week or speak to them inwards the midpoint of the black past times telephone to forestall a job from becoming then severe that it would Pb to the loss of a labor or hospitalization.
By expanding the publish of main attention providers in addition to changing the incentives then that positive wellness outcomes in addition to preventive healthcare are rewarded, nosotros mightiness brand changes that expand attention *and* incorporate costs. Simply making our broken world *and* private systems universal is non the answer to genuine in addition to effective reform.
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The 2nd crisis is the large in addition to growing publish of uninsured people inwards the U.S.; equally premium costs burgeon in addition to unemployment strips workers of benefits, fewer people tin afford wellness coverage. Indeed, the Gallup Poll finds to a greater extent than than 20% of Americans inwards a publish of states are without wellness insurance entirely. By the fourth dimension they seek help, uninsured Americans require costly specialty attention in addition to hospitalization that could own got been prevented past times timely visits to main attention providers.
Much of the challenge that the electrical current direction has faced with observe to wellness attention reform tin hold upward traced to the tension betwixt these ii crises: reining inwards costs in addition to expanding coverage are non easily compatible goals.
Lost inwards the din of recent fence is the elementary fact that the electrical current organisation for insured individuals rations attention inwards ways that reach suboptimal wellness outcomes. It does this past times restricting access to (relatively depression cost) main care, field roofing (relatively high cost) specialty, subspecialty, in addition to infirmary care. Stated inwards other terms, the organisation rewards the handling of illness, rather than the advertisement of health.
A personal sense drove that domicile for me yesterday. I had my annual checkup with my identify unit of measurement physician. He spent over ninety minutes with me. He did non own got other rooms booked with patients; I was his sole focus for those ninety minutes. We ran an extensive battery of blood in addition to physical tests to reveal early on see in addition to lung problems, equally good equally cancer. He briefed me on the latest enquiry studies that had come upward out for each of the medications I take. He examined me from caput to toe, explaining each of his findings equally he proceeded.
During the visit, nosotros detected ii blood anomalies that showed upward only because of the laboratory he used in addition to its updated reference ranges. Both were contributory to recent fatigue I had noticed, in addition to both were addressed past times the halt of the visit. One potentially precancerous peel growth was detected in addition to removed. We laid upward goals for fitness measures: trunk mass, fat, etc.
My Dr. establish that, inwards his hospital-affiliated practice, he but did non own got fourth dimension to perform the sort of attention that he had learned nigh in addition to valued inwards medical school. With some soul searching, he developed a exercise where he sees a express publish of families, each of whom pays an annual fee for his coverage.
We tin heighten our noses at such "concierge care", but the reality is that several of my problems would likely non own got been detected inwards the traditional brief main attention visit. How many early on signs of cancer in addition to see affliction acquire undetected, but because the insurance organisation (modestly) reimburses physicians for appointments inwards units of xv or xxx minutes? How tin you lot brand such a organisation operate equally a Dr. paying off six-figure educatee loans, unless you lot run iv rooms at the same time, shuttling alongside the rooms field nursing staff rush through questions in addition to tests?
Is that character healthcare?
When I was inwards Syracuse in addition to ran a private exercise inwards psychology, ane of my most of import practices was to hand all clients my domicile telephone publish in addition to brand myself available 24/7. Why? I knew that psychological crises are besides times of opportunity: if I could acquire to a someone presently enough, nosotros could plough the crisis roughly in addition to avoid an expensive in addition to disruptive psychiatric hospitalization. As a result, it was very, real rare that I e'er needed to hospitalize anyone.
Those telephone consultations in addition to emergency visits were rarely reimbursed past times the insurance system. The organisation reimbursed weekly therapy, in addition to the organisation reimbursed psychiatric hospitalization. Insurers rarely compensated me to view someone iii times a calendar week or speak to them inwards the midpoint of the black past times telephone to forestall a job from becoming then severe that it would Pb to the loss of a labor or hospitalization.
By expanding the publish of main attention providers in addition to changing the incentives then that positive wellness outcomes in addition to preventive healthcare are rewarded, nosotros mightiness brand changes that expand attention *and* incorporate costs. Simply making our broken world *and* private systems universal is non the answer to genuine in addition to effective reform.
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Monday, January 26, 2015
Info!! Developing A Trading Organization To Back Upwardly Discretionary Traders
My recent post explained how backtested signals from trading systems tin supply useful determination back upwards for discretionary traders. In that post, I illustrated how unaided discretionary judgment tin Pb traders astray, every bit buying forcefulness together with selling weakness has led to consistent, short-term underperformance.
To deed my example forward, I modified the organization described inward that prior postal service together with incorporated the modified version every bit the showtime inward 3 triggers that create purchase together with sell signals.
Trigger 1 occurs when stocks closed higher upwards or below a defined distance from their moving averages. This captures relative forcefulness or weakness. Trigger 1 serves every bit a heads upwards that a indicate is probable to hold out generated inward coming days. (This organization uses daily information only; it is a swing trading system).
Trigger 2 occurs when stocks lose upside or downside momentum afterwards the showtime indicate has occurred together with afterwards stocks accept continued their deed to novel cost highs or lows. This captures a loss of momentum to the upside or downside. Trigger 2 is based upon a patterning of the proprietary Demand/Supply indicator that I postal service each morn earlier the opened upwards via Twitter (weekly cost targets that are adjusted for recent marketplace volatility. The longer the menstruation betwixt Triggers 1 together with 2, the to a greater extent than aggressive should hold out the cost target.
The halt loss occurs when Trigger 3 is violated; i.e., stocks brand a higher high afterwards having seemed to accept topped out. No seat tin hold out entered unless the deed to the conservative exceed away makes at to the lowest degree every bit much coin every bit the potential loss if the halt is hit. That agency that at that topographic point is rattling proficient risk:reward on trades to the to a greater extent than aggressive cost targets.
The average asset menstruation for the trades is 2-3 days. On paper, backtested several years, the organization appears to hold out specially successful for the next instruments: SPY, IWM, QQQQ, XLF, XLE, XLB, XLK, together with XLP.
Interestingly, the organization has non been successful for GLD or USO, suggesting that commodities follow unlike short-term patterns than stocks. However, the organization has been quite effective alongside EEM, suggesting that the short-term patterns may extend to markets exterior the U.S.
Long-time readers volition recognize that this is a systematic implementation of the transition designing that I've described inward numerous posts. This is all operate inward alpha stage; I ask to theatre upwards the concluding ii triggers earlier beingness anywhere simply about laid for prime number time. If the subsequent evolution looks promising, however, I volition postal service all signals to the weblog together with thence illustrate how they tin hold out used inward discretionary trading.
Similarly, I volition hold out looking for signals from Henry Carstens' systems (follow here) to serve every bit determination back upwards for discretionary trading. Hopefully, I'll hold out able to cajole him to postal service useful information regarding how his organization signals mightiness inform short-term discretionary trading. Knowing his commitment to traders together with their development, that shouldn't hold out besides difficult.
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To deed my example forward, I modified the organization described inward that prior postal service together with incorporated the modified version every bit the showtime inward 3 triggers that create purchase together with sell signals.
Trigger 1 occurs when stocks closed higher upwards or below a defined distance from their moving averages. This captures relative forcefulness or weakness. Trigger 1 serves every bit a heads upwards that a indicate is probable to hold out generated inward coming days. (This organization uses daily information only; it is a swing trading system).
Trigger 2 occurs when stocks lose upside or downside momentum afterwards the showtime indicate has occurred together with afterwards stocks accept continued their deed to novel cost highs or lows. This captures a loss of momentum to the upside or downside. Trigger 2 is based upon a patterning of the proprietary Demand/Supply indicator that I postal service each morn earlier the opened upwards via Twitter (weekly cost targets that are adjusted for recent marketplace volatility. The longer the menstruation betwixt Triggers 1 together with 2, the to a greater extent than aggressive should hold out the cost target.
The halt loss occurs when Trigger 3 is violated; i.e., stocks brand a higher high afterwards having seemed to accept topped out. No seat tin hold out entered unless the deed to the conservative exceed away makes at to the lowest degree every bit much coin every bit the potential loss if the halt is hit. That agency that at that topographic point is rattling proficient risk:reward on trades to the to a greater extent than aggressive cost targets.
The average asset menstruation for the trades is 2-3 days. On paper, backtested several years, the organization appears to hold out specially successful for the next instruments: SPY, IWM, QQQQ, XLF, XLE, XLB, XLK, together with XLP.
Interestingly, the organization has non been successful for GLD or USO, suggesting that commodities follow unlike short-term patterns than stocks. However, the organization has been quite effective alongside EEM, suggesting that the short-term patterns may extend to markets exterior the U.S.
Long-time readers volition recognize that this is a systematic implementation of the transition designing that I've described inward numerous posts. This is all operate inward alpha stage; I ask to theatre upwards the concluding ii triggers earlier beingness anywhere simply about laid for prime number time. If the subsequent evolution looks promising, however, I volition postal service all signals to the weblog together with thence illustrate how they tin hold out used inward discretionary trading.
Similarly, I volition hold out looking for signals from Henry Carstens' systems (follow here) to serve every bit determination back upwards for discretionary trading. Hopefully, I'll hold out able to cajole him to postal service useful information regarding how his organization signals mightiness inform short-term discretionary trading. Knowing his commitment to traders together with their development, that shouldn't hold out besides difficult.
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Sunday, January 25, 2015
Info!! An Intraday Await At The Transition Trading System
It struck me afterwards writing the recent post service regarding a trading organisation based on transition patterns inwards the stock market that an intraday version of the same organisation would merchandise imitation breakouts past times fading short-term forcefulness (weakness) that showed divergences relative to an before momentum high (low). Influenza A virus subtype H5N1 mutual setup would live on a stronger (weaker) opened upwardly that moves inwards a higher house (below) the previous day's high (low), exclusively to opposite together with merchandise dorsum to the prior day's pin level.
Let's receive got a await at the numbers that brand this a promising footing for a system-assisted discretionary trade. All figures become dorsum to the start of 2000:
* About 51% of all trading days merchandise inwards a higher house their previous day's high; almost 27% of all trading days unopen inwards a higher house their prior day's high;
* About 48% of all trading days merchandise below their prior day's low; almost 25% of all trading days unopen below their previous day's low;
* About 88% of all trading days merchandise either inwards a higher house their previous day's high or below their previous day's low; almost 52% of all trading days unopen either inwards a higher house their previous day's high or below their previous day's low;
* That way that 48% of all trading days volition unopen inside yesterday's toll range;
For the intraday transition setup, you lot would await to yesterday's high (low) equally a potential momentum high (low) together with today's upside (downside) interruption of yesterday's high (low) equally a potential toll high (low) to fade *if* today's high (low) is accompanied past times non-confirmations from iii or to a greater extent than sectors. This includes the 8 S&P 500 sectors that I typically follow each week, equally good equally the NASDAQ together with Russell 2000 indexes, which I'm too treating equally sectors.
The merchandise is to fade today's interruption of yesterday's high (low), amongst yesterday's pin toll equally an initial target. In Market Profile terms, the merchandise is betting that the marketplace rejects value inwards a higher house (below) yesterday's high (low) together with returns to the value surface area of the prior trading day.
I'm farther filtering the designing past times exclusively taking a indicate if the motion inwards a higher house (below) yesterday's high (low) occurs during the offset hr of trade. This is because I desire to create goodness from rejection of value inwards a higher house (below) the prior day's high (low) when institutions are most active inwards the marketplace (i.e., I desire to create goodness from large traders beingness trapped long or brusque together with having to encompass their positions).
Ideal entry would live on on a rising (drop) inwards NYSE TICK that cannot brand novel toll highs (lows), confirming that a high (low) has been position inwards place. Any motion to novel toll highs (lows) for the twenty-four hours would halt out the position. Beyond the initial toll target at the prior day's pivot, a slice of the seat could live on kept inwards house for a farther motion to S1 (R1), depending on the emerging forcefulness of the rejection of novel highs (lows).
As amongst the swing version of the Transition System, I'll live on firming upwardly these rules over time. I'll too live on adding a Momentum System, which I volition outline inwards a post service tomorrow. Once these are built out, I volition post service all signals to the blog/the blending of discretionary together with organisation trading to come; inwards the interim, banking concern tally out Henry Carstens' insightful receive got on this topic.
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Let's receive got a await at the numbers that brand this a promising footing for a system-assisted discretionary trade. All figures become dorsum to the start of 2000:
* About 51% of all trading days merchandise inwards a higher house their previous day's high; almost 27% of all trading days unopen inwards a higher house their prior day's high;
* About 48% of all trading days merchandise below their prior day's low; almost 25% of all trading days unopen below their previous day's low;
* About 88% of all trading days merchandise either inwards a higher house their previous day's high or below their previous day's low; almost 52% of all trading days unopen either inwards a higher house their previous day's high or below their previous day's low;
* That way that 48% of all trading days volition unopen inside yesterday's toll range;
For the intraday transition setup, you lot would await to yesterday's high (low) equally a potential momentum high (low) together with today's upside (downside) interruption of yesterday's high (low) equally a potential toll high (low) to fade *if* today's high (low) is accompanied past times non-confirmations from iii or to a greater extent than sectors. This includes the 8 S&P 500 sectors that I typically follow each week, equally good equally the NASDAQ together with Russell 2000 indexes, which I'm too treating equally sectors.
The merchandise is to fade today's interruption of yesterday's high (low), amongst yesterday's pin toll equally an initial target. In Market Profile terms, the merchandise is betting that the marketplace rejects value inwards a higher house (below) yesterday's high (low) together with returns to the value surface area of the prior trading day.
I'm farther filtering the designing past times exclusively taking a indicate if the motion inwards a higher house (below) yesterday's high (low) occurs during the offset hr of trade. This is because I desire to create goodness from rejection of value inwards a higher house (below) the prior day's high (low) when institutions are most active inwards the marketplace (i.e., I desire to create goodness from large traders beingness trapped long or brusque together with having to encompass their positions).
Ideal entry would live on on a rising (drop) inwards NYSE TICK that cannot brand novel toll highs (lows), confirming that a high (low) has been position inwards place. Any motion to novel toll highs (lows) for the twenty-four hours would halt out the position. Beyond the initial toll target at the prior day's pivot, a slice of the seat could live on kept inwards house for a farther motion to S1 (R1), depending on the emerging forcefulness of the rejection of novel highs (lows).
As amongst the swing version of the Transition System, I'll live on firming upwardly these rules over time. I'll too live on adding a Momentum System, which I volition outline inwards a post service tomorrow. Once these are built out, I volition post service all signals to the blog/the blending of discretionary together with organisation trading to come; inwards the interim, banking concern tally out Henry Carstens' insightful receive got on this topic.
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Saturday, January 24, 2015
Info!! Cross-Talk: Automated Systems In Addition To Discretionary Trading
In a recent post, Henry Carstens has offered the largest "edges" inwards trading occur over asset periods measured inwards days, non minutes. I get got equally good seen the greatest autumn off inwards functioning alongside discretionary traders whose asset periods are measured inwards minutes, non hours or days.
My conjecture is that the technology scientific discipline arms race that has led to automated marketplace making too increased high frequency trading has created a high proportion of dissonance unopen to whatever possible really short-term marketplace signals. Though markets may all the same deed from Point Influenza A virus subtype H5N1 to Point B over a stream of hours or days, that automated merchandise has greatly influenced the path from Influenza A virus subtype H5N1 to B.
I recall, inwards my before days, that experienced traders used to learn beginners who were learning to scalp to throttle losses to i tick losers. Today that advice would survive silly. It's non odd to run into purchase or sell programs come upwards into the marketplace too accept out several ticks at a time.
Over longer asset periods, that dissonance is easier to sit down through: a "swipe" inwards the marketplace that takes out 3 ticks is non a threat to a swing orbit targeting a deed of 10 ES points; it is a potentially fatal threat to a scalper hoping to direct chances a few ticks to brand a indicate or two.
Henry's decision is that, on average, automated trading systems should outperform discretionary trading over longer asset periods. Discretionary traders with a experience for guild stream too momentum tin adapt to shifts inwards participation unopen to the markets inwards a agency that systems cannot. Systems, on the other hand, tin sit down through dissonance too capture signal inwards a agency that frequently eludes traders beset past times perceptual too cognitive biases.
Might it survive the example that valid, backtested systems offering an unusually promising platform for instruction novel traders how to trade? The systems render setups with an edge, requiring traders to larn the execution too merchandise administration skills to brand the nigh of the trade. The bird to which traders outperform the organization signals reflects the value that their discretionary trading brings to their accounts.
Perhaps i Definition of a practiced discretionary trader is i who adds value to an established trading system.
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My conjecture is that the technology scientific discipline arms race that has led to automated marketplace making too increased high frequency trading has created a high proportion of dissonance unopen to whatever possible really short-term marketplace signals. Though markets may all the same deed from Point Influenza A virus subtype H5N1 to Point B over a stream of hours or days, that automated merchandise has greatly influenced the path from Influenza A virus subtype H5N1 to B.
I recall, inwards my before days, that experienced traders used to learn beginners who were learning to scalp to throttle losses to i tick losers. Today that advice would survive silly. It's non odd to run into purchase or sell programs come upwards into the marketplace too accept out several ticks at a time.
Over longer asset periods, that dissonance is easier to sit down through: a "swipe" inwards the marketplace that takes out 3 ticks is non a threat to a swing orbit targeting a deed of 10 ES points; it is a potentially fatal threat to a scalper hoping to direct chances a few ticks to brand a indicate or two.
Henry's decision is that, on average, automated trading systems should outperform discretionary trading over longer asset periods. Discretionary traders with a experience for guild stream too momentum tin adapt to shifts inwards participation unopen to the markets inwards a agency that systems cannot. Systems, on the other hand, tin sit down through dissonance too capture signal inwards a agency that frequently eludes traders beset past times perceptual too cognitive biases.
Might it survive the example that valid, backtested systems offering an unusually promising platform for instruction novel traders how to trade? The systems render setups with an edge, requiring traders to larn the execution too merchandise administration skills to brand the nigh of the trade. The bird to which traders outperform the organization signals reflects the value that their discretionary trading brings to their accounts.
Perhaps i Definition of a practiced discretionary trader is i who adds value to an established trading system.
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Friday, January 23, 2015
Info!! Only Create It Differently
trading creativity. We generate the freshest ideas when we're mentally in addition to physically fresh.
Nike urged us: Just produce it. My slight amendment: Just produce it differently.
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Nike urged us: Just produce it. My slight amendment: Just produce it differently.
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Thursday, January 22, 2015
Info!! Vacation Weekend Reading
* Henry Carstens how AUD/USD is setting up;
* Why a U-shaped recovery might last better than a V rebound;
* Questioning the aureate rally.
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* Why a U-shaped recovery might last better than a V rebound;
* Questioning the aureate rally.
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Wednesday, January 21, 2015
Info!! Sector Update For September 7Th
Last week's sector review noted that Technical Strength, a proprietary mensurate of short-term trending, was bullish across the viii S&P 500 sectors that I follow weekly. It too noted persistent divergences at the marketplace highs, however, together with suggested that nosotros last warning for reversal should the Technical Strength painting demo weaken.
We did, indeed, larn that weakening, equally stocks moved lower inwards the early on portion of the week, bouncing dorsum later. Whereas xxx of the xl stocks that I runway inwards my handbasket were inwards short-term bull trends at the terminate of final week, nosotros come across alone 17 inwards such a style at Friday's close. As the nautical chart inwards a higher house indicates, we're seeing neutral tendency modes for materials shares, healthcare, together with fiscal stocks, amongst alone real weak uptrends for liberate energy together with consumer discretionary shares. Only the defensive consumer staples sector qualifies equally beingness inwards a enterprise uptrend.
Significantly, however, none of the sectors unopen final calendar week inwards short-term downtrends. Despite final week's drop, nosotros proceed to come across a blueprint of higher cost lows inwards the stock market. I am warning to the possibility that the early on calendar week dip together with subsequent bounce are purpose of the market's extended topping process--and peculiarly the possibility of putting inwards a lower, weaker cost high. Should the market's belatedly calendar week rally stall at lower highs, I would last looking to fade that strength. Should the rally demo continued momentum strength, I would facial expression at to the lowest degree i to a greater extent than examination of the bull highs.
Here is how the sectors shaped upwards equally of Friday's close:
Note that the commodity-sensitive liberate energy together with materials sectors dropped significantly inwards the final week, reflecting commodity weakness. The alone sector to make forcefulness over the calendar week were those defensive staples shares. In lite of the electrical flow wellness assist debate, it is notable that those stocks dropped significantly inwards their technical forcefulness since final week.
All inwards all, it looks to me equally though nosotros are inwards a weakening bull market. The vigor of the follow through to the rally that started belatedly final calendar week volition render of import clues equally to how whatever possible correction volition unfold. The nigh positive scenario for bulls would last a vigorous bounce toward bull highs, creating weather condition for a relatively apartment corrective period, such equally nosotros had inwards June together with July.
As always, I volition last tracking the tendency status of the stocks inwards my handbasket via Twitter (follow the intraday tweets here) along amongst other primal marketplace indicators to come across how that marketplace follow through unfolds.
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We did, indeed, larn that weakening, equally stocks moved lower inwards the early on portion of the week, bouncing dorsum later. Whereas xxx of the xl stocks that I runway inwards my handbasket were inwards short-term bull trends at the terminate of final week, nosotros come across alone 17 inwards such a style at Friday's close. As the nautical chart inwards a higher house indicates, we're seeing neutral tendency modes for materials shares, healthcare, together with fiscal stocks, amongst alone real weak uptrends for liberate energy together with consumer discretionary shares. Only the defensive consumer staples sector qualifies equally beingness inwards a enterprise uptrend.
Significantly, however, none of the sectors unopen final calendar week inwards short-term downtrends. Despite final week's drop, nosotros proceed to come across a blueprint of higher cost lows inwards the stock market. I am warning to the possibility that the early on calendar week dip together with subsequent bounce are purpose of the market's extended topping process--and peculiarly the possibility of putting inwards a lower, weaker cost high. Should the market's belatedly calendar week rally stall at lower highs, I would last looking to fade that strength. Should the rally demo continued momentum strength, I would facial expression at to the lowest degree i to a greater extent than examination of the bull highs.
Here is how the sectors shaped upwards equally of Friday's close:
MATERIALS: 40
INDUSTRIAL: 240
CONSUMER DISCRETIONARY: 180
CONSUMER STAPLES: 300
ENERGY: 140
HEALTH CARE: -60
FINANCIAL: 100
TECHNOLOGY: 180
INDUSTRIAL: 240
CONSUMER DISCRETIONARY: 180
CONSUMER STAPLES: 300
ENERGY: 140
HEALTH CARE: -60
FINANCIAL: 100
TECHNOLOGY: 180
Note that the commodity-sensitive liberate energy together with materials sectors dropped significantly inwards the final week, reflecting commodity weakness. The alone sector to make forcefulness over the calendar week were those defensive staples shares. In lite of the electrical flow wellness assist debate, it is notable that those stocks dropped significantly inwards their technical forcefulness since final week.
All inwards all, it looks to me equally though nosotros are inwards a weakening bull market. The vigor of the follow through to the rally that started belatedly final calendar week volition render of import clues equally to how whatever possible correction volition unfold. The nigh positive scenario for bulls would last a vigorous bounce toward bull highs, creating weather condition for a relatively apartment corrective period, such equally nosotros had inwards June together with July.
As always, I volition last tracking the tendency status of the stocks inwards my handbasket via Twitter (follow the intraday tweets here) along amongst other primal marketplace indicators to come across how that marketplace follow through unfolds.
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Tuesday, January 20, 2015
Info!! Farther Conceptual Foundation For A Transitional Swing Trading System
My recent post illustrated how the non bad bulk of days run into the S&P 500 Index (SPY) merchandise higher upwards its previous day's high or below its low. Nearly one-half of all days, however, run into the marketplace unopen inside its prior day's range. That suggests that faux breakouts are common: many times, those moves to probe novel levels of value ultimately fail. If i tin educate filters to position the neglect days from the sustained breakouts, they would hold upwards good on the agency of edifice a worthy intraday trading system.
Might the same logic apply to weekly cost data, providing us amongst a possible swing trading framework? I went dorsum to June, 2001 inward SPY together with works life the following:
* About 56% of all weeks traded higher upwards the prior week's high; well-nigh 32% of weeks truly closed higher upwards the previous week's high;
* About 48% of all weeks traded below the prior week's low; well-nigh 22% of weeks truly closed below the previous week's low;
* Influenza A virus subtype H5N1 whopping 92% of all weeks merchandise either higher upwards their prior week's high or below their previous week's low; well-nigh 47% of all weeks ultimately unopen dorsum inside the prior week's range.
Again nosotros run into the mutual reversion: the vast bulk of weeks merchandise exterior the prior week's range, simply nearly one-half unopen inside that range.
If nosotros combine these observations amongst the transition swing merchandise organisation outlined earlier, a real promising "mean reversion" swing trading framework starts to emerge--particularly if i uses the intraday transition patterns to help execution.
That's all I convey to enjoin well-nigh that.
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Might the same logic apply to weekly cost data, providing us amongst a possible swing trading framework? I went dorsum to June, 2001 inward SPY together with works life the following:
* About 56% of all weeks traded higher upwards the prior week's high; well-nigh 32% of weeks truly closed higher upwards the previous week's high;
* About 48% of all weeks traded below the prior week's low; well-nigh 22% of weeks truly closed below the previous week's low;
* Influenza A virus subtype H5N1 whopping 92% of all weeks merchandise either higher upwards their prior week's high or below their previous week's low; well-nigh 47% of all weeks ultimately unopen dorsum inside the prior week's range.
Again nosotros run into the mutual reversion: the vast bulk of weeks merchandise exterior the prior week's range, simply nearly one-half unopen inside that range.
If nosotros combine these observations amongst the transition swing merchandise organisation outlined earlier, a real promising "mean reversion" swing trading framework starts to emerge--particularly if i uses the intraday transition patterns to help execution.
That's all I convey to enjoin well-nigh that.
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Monday, January 19, 2015
Info!! A Get-Go Await At Stock Marketplace Momentum
Are markets that are potent inwards the close recent fourth dimension current to a greater extent than probable to merchandise inwards a higher house the highs for that current inwards the side past times side period?
Are markets that are weak inwards the close recent fourth dimension current to a greater extent than probable to merchandise below the lows for that current during the side past times side period?
I went dorsum to mid-2006 together with examined whether the S&P 500 Index (SPY) closed inwards a higher house or below its weekly pin cost (an justice of average trading price; see here) to encounter if the unopen affected the likelihood of hitting fundamental cost points during the side past times side week.
What I establish was:
* If SPY closed inwards a higher house its weekly pivot, the side past times side calendar week traded inwards a higher house the prior week's high cost 175 times together with failed to touching the high cost 56 times.
* If SPY closed inwards a higher house its weekly pivot, the side past times side calendar week traded below the prior week's depression cost 65 times together with failed to touching the depression cost 112 times.
* If SPY closed below its weekly pivot, the side past times side calendar week traded inwards a higher house the prior week's high cost lx times together with failed to touching the high cost 171 times.
* If SPY closed below its weekly pivot, the side past times side calendar week traded below the prior week's depression cost 147 times together with failed to touching the depression cost 53 times.
What that suggests is that markets that unopen potent (weak) on the calendar week tend to brand novel highs (lows) the next week.
I together with therefore looked at weekly advancing together with declining issues for the NYSE. I wanted to encounter if potent (weak) markets inwards the prior calendar week carried over their strength/weakness to the next week. What I establish was:
* If the weekly A/D ratio was positive inwards the close recent week, SPY traded the side past times side calendar week inwards a higher house the prior week's high 176 times together with failed to touching the high cost 76 times.
* If the weekly A/D ratio was positive inwards the close recent week, SPY traded the side past times side calendar week below the prior week's depression 65 times together with failed to touching the depression cost 112 times.
* If the weekly A/D ratio was negative inwards the close recent week, SPY traded the side past times side calendar week inwards a higher house the prior week's high 88 times together with failed to touching the high cost 164 times.
* If the weekly A/D ratio was negative inwards the close recent week, SPY traded the side past times side calendar week below the prior week's depression 117 times together with failed to touching the depression cost lx times.
Once again, nosotros encounter that potent markets tend to accept out the high prices during the next week; weak markets tend to accept out the depression prices during the next week.
This suggests that buying (selling) pullbacks (bounces) piece of cake inwards a potent (weak) marketplace position weak together with belongings over the weekend for a seek of the prior week's highs (lows) could live on a promising strategy. More on the basics of a Momentum swing trading organization to come.
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Are markets that are weak inwards the close recent fourth dimension current to a greater extent than probable to merchandise below the lows for that current during the side past times side period?
I went dorsum to mid-2006 together with examined whether the S&P 500 Index (SPY) closed inwards a higher house or below its weekly pin cost (an justice of average trading price; see here) to encounter if the unopen affected the likelihood of hitting fundamental cost points during the side past times side week.
What I establish was:
* If SPY closed inwards a higher house its weekly pivot, the side past times side calendar week traded inwards a higher house the prior week's high cost 175 times together with failed to touching the high cost 56 times.
* If SPY closed inwards a higher house its weekly pivot, the side past times side calendar week traded below the prior week's depression cost 65 times together with failed to touching the depression cost 112 times.
* If SPY closed below its weekly pivot, the side past times side calendar week traded inwards a higher house the prior week's high cost lx times together with failed to touching the high cost 171 times.
* If SPY closed below its weekly pivot, the side past times side calendar week traded below the prior week's depression cost 147 times together with failed to touching the depression cost 53 times.
What that suggests is that markets that unopen potent (weak) on the calendar week tend to brand novel highs (lows) the next week.
I together with therefore looked at weekly advancing together with declining issues for the NYSE. I wanted to encounter if potent (weak) markets inwards the prior calendar week carried over their strength/weakness to the next week. What I establish was:
* If the weekly A/D ratio was positive inwards the close recent week, SPY traded the side past times side calendar week inwards a higher house the prior week's high 176 times together with failed to touching the high cost 76 times.
* If the weekly A/D ratio was positive inwards the close recent week, SPY traded the side past times side calendar week below the prior week's depression 65 times together with failed to touching the depression cost 112 times.
* If the weekly A/D ratio was negative inwards the close recent week, SPY traded the side past times side calendar week inwards a higher house the prior week's high 88 times together with failed to touching the high cost 164 times.
* If the weekly A/D ratio was negative inwards the close recent week, SPY traded the side past times side calendar week below the prior week's depression 117 times together with failed to touching the depression cost lx times.
Once again, nosotros encounter that potent markets tend to accept out the high prices during the next week; weak markets tend to accept out the depression prices during the next week.
This suggests that buying (selling) pullbacks (bounces) piece of cake inwards a potent (weak) marketplace position weak together with belongings over the weekend for a seek of the prior week's highs (lows) could live on a promising strategy. More on the basics of a Momentum swing trading organization to come.
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Sunday, January 18, 2015
Info!! Eve Briefing For September 7Th
* MARKET THEMES FROM FRIDAY: Stocks held inwards a arrive at much of the forenoon on Friday, before moving sharply higher on a arrive at breakout belatedly inwards the forenoon as well as sustaining the forcefulness for the residuum of the day. We convey traded farther to the upside inwards Globex vacation trade, reflecting forcefulness inwards global equity markets. Friday's stock rally saw notable weakness inwards the United States of America dollar, besides equally a bounce inwards petroleum that nosotros didn't sustain belatedly inwards the afternoon. Gold unopen most its high for the week, sustaining forcefulness next its before breakout. We convey resistance inwards the ES contract at the 9/1 premarket highs; I volition hold upwards watching carefully to encounter if the vacation forcefulness carries over into Tuesday's forenoon trade. Week ahead persuasion here.
* OVERSEAS/OVERNIGHT NUMBERS: 1:00 AM CT - Germany, merchandise merchandise balance; 3:30 AM CT - UK, manufacturing output as well as industrial production; 5:00 AM CT - Germany, industrial production; 8:30 PM CT - Australia, retail sales. Earnings reports due Tuesday problem banks inwards the U.S.;
-- Influenza A virus subtype H5N1 await at recent swings inwards the stock market;
-- Making the bull example for gold.
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* OVERSEAS/OVERNIGHT NUMBERS: 1:00 AM CT - Germany, merchandise merchandise balance; 3:30 AM CT - UK, manufacturing output as well as industrial production; 5:00 AM CT - Germany, industrial production; 8:30 PM CT - Australia, retail sales. Earnings reports due Tuesday problem banks inwards the U.S.;
-- Influenza A virus subtype H5N1 await at recent swings inwards the stock market;
-- Making the bull example for gold.
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Saturday, January 17, 2015
Info!! Why The U.S. Dollar Drib Mightiness Live On Significant
In early on morn merchandise today, nosotros run into the the U.S. of A. dollar suspension to novel lows against the euro (top chart), on the heels of the before downside suspension vs. the Aussie dollar (bottom chart). That has contributed to a elevator inwards petroleum as well as gilt prices, a rally inwards global stock markets, as well as detail forcefulness amid the shares of raw materials companies (see here).
Why is this potentially important?
The passing of Labor Day has traditionally signaled the terminate of summertime as well as the dull summertime trade. Institutional traders are dorsum from their holidays as well as are looking to seat coin to move to complete their years amongst a flourish. Money managers that accept underperformed marketplace position averages experience detail press to seat their uppercase to work.
The intermarket themes as well as trends that nosotros run into coming out of this post-holiday calendar week powerfulness give a clue equally to *how* this uppercase volition hold out deployed. So far, it's non bullish for the the U.S. of A. dollar.
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