BULLS against the bad revised GDP

Yes, it happened yesterday. The revised US GDP down from 2,4% to 1,8% by the Commerce Department. But what was the market reaction?

Gained. The investors think maybe the tapering of QE by the FED is not so eminent as it seemed last week. We are still in negative territory since may, but it is a good sign, that the bulls are getting stronger. Against bed news the market could be strong on the long side.

Technically, on daily chart yesterday was a breakout from the selling mood after one week. Our first resistance is at 14980, if it breaks we have a nice area up to 15.300.

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A bit more about Jesse Livermore…

Basically I was planning write about Nicholas Darvas, who invented the box theory and made fortune on the market, But my last blog was so popular about Jesse Livermore so I want share more details about him.

All in all I wanna write here about his trading technics, which is fully can be found in his book How To Trade In Stocks, which was inspired by his son. I call this book a must read book, If you read you will understand better how the markets generally works. When I have read that I already had passed few years with trading, but it really changed my approach to the markets. It was for me personally a real revelation. So  I am not only recommending this book for beginners bor for pro’s as well.

At his age there was no any computers, so he only used his notes about the price movements mosty on stocks and commodities. He marked all price movements and looked for similarities in the past and the present. He was a price pattern trader at all. So that is one of the reason why he is still relevant today, beacuse the price movemnet nothing has changed this is a infinity rule at all.

On the other hand he was a genious trend follower, he did’nt want to create the trend he only wanted to follow that one, and try to avoid the ranging markets. He only traded the breakouts of ranging markets. Only entering in new highs or in new lows. He used his “PIVOTAL POINT” When it was broken he bought or sold. He mentioned in the book, when he was too early and opened the postion before the pivotal point occured, he lost all the time. And what he learned from that loss? Do’nt do that again, be disciplined, do’nt break the rule. This is today still a brilliant statement.

If he was in a winning postion he started to build up pyramids, so increased the postion side if he gains, but never inscreased the size if he lost. Never added to a losing trade!!!

He also cheked all the time the volume. If any breakout occured without significant volume he did’nt trade that. He preferd if the volume came into the market direction of the market.

And finally he was absolutely aware of the importance of timing. All of us have had this kind of experiment, basically our hypothesis was good but we did into our postion too early or too late. He absolutely believed in that there is no better timing signal than the price itself. If the price doing nothing he did’nt trade and kept flat.

His system is so simple, but I do beleive it still working because he used only the same rules which still today protects you from big losses. And these rules I guess going to be with us forever.

Next time I am gonna collect best rules of Jesse Livermore.

 

 

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USDCHF short signal

We sold the swissie at 0,9375, SL 93,90, TP 0,9333

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Biggest traders ever…JESSE LIVERMORE

“MARKETS ARE NEVER WRONG - OPINIONS OFTEN ARE.” Jesse Livermore

I start today a serial about the most remarkable speculators in the 20. century. This post is gonna be more personal, because this list is only my list, Just contains my personal favourites, who effected me and to my trading style mostly since beginning of my trading career.

All in all my best favorite speculator no doubt, is Jesse Livermore. I’ve read everything from him and about him. He is my personal hero. He was the most impressive and most profitable trader I’ve ever seen. Maybe there are others, more profitable, but they are out of my horizon. Why is he my Nr.1? Shortly his rules, strategies are as valid today as they were hundred years ago. When first time I’ve read his most popular book about his life - Edwin Lefèvre, Reminiscences of a Stock Operator, 1923.-  that was a revelation to me. After that I decided I want to be a trader for sure. This book tells us how nice job is our, being everyday in the market, it is so fascinating. This book totally turned to the markets. It is so amazing, if you do’nt know that was written almost 100 years ago in 1923, could be today either. What I learned that nothing new in the markets, the human behaviour is constans on the floors. Everybody still today greedy and scared as they were a century ago. There is nothing new.

His other book, J. Livermore, How To Trade In Stocks, 1940.  - how weird - is not so popular as the the first. But is this book he shares all his trading technics about money management, how open and close positions…etc. Personally I learned the far the most things about the markets and in my view this is the best book about how to trade, and how to be profitable, I recommend this book to everyone, before go any the market. From this book you can learn how not to lose money. And this is the most important part of the trading on the market. The massage of this book is this: “The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.”

He was legendary about his accuracy in terms of trading, he noted all datas about the markets, and reviewed time by time. At the end of each year he locked himself into a bank tresor, with foods, and drinks for 3-4days just to rescan which mistakes he made at that certain year and how he can solve that mistakes and how can he learn from those failures and losses. He studied closely all positions at that year.

During his life he gained and lost few multi-million dollar fortunes. But all the times he learned from his faults, and this is the most important personal attitude which needs have we being a good trader.

And he proved also to me the big rule - do’nt listen to anyone. Livermore few times did’nt follow his own rules strictly and at those cases he lost significant amounts.

Here you can find  a nice page, and there are some brilliant rules from the genious Livermore.

http://www.businessinsider.com/jesse-livermores-21-trading-rules-2013-2

So read Livermore and I can assure you, you gonna be much better trader.

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Forex trading workshop

Our daytrading workshop is on skype. Skype name: “Blindfoldedmonkey” or go to http://about.me/blindfoldedmonkey

 You can visit our “BLINDFOLDEDMONKEY’S TRADING WORKSHOP” each day from 10:30-16:00(GMT+1, Paris, Bruxelles)

What a red day!!!

Yesterday the fear ruled all markets, fear about the FED scales back the QE(not Qquen Elisabeth), bond buying program. Indeces turned into red.

Huge decline on the whole day. For dow jones this was the biggest intraday drop since last november. The remarkable thing is that the volume was huge, the second biggest in this year. The market switched into RISK OFF mood. But during the night Asia recovered and Nikkei made a nice gain +1,66%.

Technically the Dow still in consolidation pace. We have to see some breakout and then react. But every bad news is bad news only for two days. So lets see today what does the market in US session.

Anway. In the last few days riot occured in Brasil too, after few weeks of street battles in Turkey. New development that after Greek, Spain where the mass goes against the austerity and political elit, status quo, Brasil and Turkey are both very strong economically, has been increased massively GDP in the last decade. The prosperity makes higher life quality for an avarage citizen too. It seems to me now the middle class wants to get more political power, can be this is the reason. This is my bet.

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Forex trading workshop 21st June

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