Friday, February 20, 2009
Thursday, February 19, 2009
Wednesday, February 18, 2009
Tuesday, February 17, 2009
Monday, February 16, 2009
Friday, February 13, 2009
10:26 pm - DJIA is testing on average volume.
I wud be careful tonite if DJIA wud break lower. Technically, DJIA has closed just above 7,900 support level.
Thursday, February 12, 2009
3:16 pm - DJIA is testing on low volume.
I expect it to hold on its support tonite. DJIA is likely to close lower.
Wednesday, February 11, 2009
10:48 am - This Saturday, Special Talk + Traders Club Meeting Feb 14, 2009
You are invited for this special talk - Sat, Feb 14 2009, 10 am, CIMB Auditorium, Jalan Semantan
Speakers:
1) Market Outlook 2009 - Nigel Foo, CIMB Analyst
2) Session sharing from traders club member.
3) Building trader confidence & minimizing the struggle with fear - Bill Wermine
4) Special Report on FKLI Futures Trading - Martin Wong
Tuesday, February 10, 2009
5:12 pm - Market Report by Bill Wermine
Dear Traders,
Event: On 14 Feb from 10 AM to 1 PM we are holding our Traders Club meeting at CIMB Auditorium Damansara . (Map attached- the auditorium is next to IBBM) We have Nigel Foo, head of research for CIMB to give a 2009 market outlook and shares to look at. In 2008, He correctly predicted the 42 % drop in the KLSE, the 70 % drop in Crude Palm Oil and the collapse in crude oil.
What is his current forecast ? You would be surprised.
One of our club members from Jakarta is flying over to share his recent trades in the US market + point and figure strategies in the CI CPO futures by Martin. I may speak on opportunities in the China as well as localmarket.
Please confirm your attendance as CIMB will provide refreshments.
Shanghai is up over 22 % from its low and has had an 18 day line change up - one of the most powerful indicators of trend change. This is a Turtle Traders indicator.
PMI figures in China moved from 41.2 to 45.3 % in December stunning the markets who were expecting a drop and the first hopeful sign that the horrific meltdown in the base metals might finally be at a bottom. New orders for exports and production rose strongly indicating that Bejing's 4 trillion Yuan (186 billion RM) stimulus plan has already started to have a positive impact.
Chinese banks have extended about 1.2 Trillion yuan in new loans in January, a monthly record in calls by the government to halt the economies decline.
Copper traders in Shanghai have lifted the red metal over 12 % from the lows while stockpiles have dwindled to a record low.
From a contrary point of view: Before the 75 % collapse in the Shanghai Index, beginning in the 4th quarter of 2007 there was heavy promotion of China Country funds. I counted at least 12 full page ads for China funds.
Many sheeps went to the slaughter house.
For the last few weeks as Shanghai had a powerful rally, I did not see one news ad for a China fund. It looks like the Tigers are quietly buying. For those with Phillip Singapore Wrap acounts we offer several China funds but obviously you need to manage your risks. I can help you choose a good one and if interested give me or Martin a call.
The recovery in China and base metals will definitely support Malaysia, Australia, Korea, Hong Kong stock markets and the AUD Man funds as well as the AUD.
The Chinese as well as most Asian economies are on much more stable footing than the US/ UK. The Chinese economy is run prudently and the banks are sitting on top of huge cash reserves.
The Chinese economy is built on savings and productivity as opposed to the US economy which is built on debt, living and spending beyond ones means. Many big name Investment banks and money center banks are built on a culture of fraud with the collusion of corrupt politicians and SEC regulators. No wonder scared savers have lost trust in the US banks and have rushed into Treasury bonds that pay almost no return. Many prominent US banks are technically insolvent
In China a corrupt banker will be shot at the execution ground with a bullet in the back of his head. In America the corrupt banker will get a multimillion dollar bonus paid by the taxpayer as part of the stimulus bailut plan ! Even the arch con man Bernie Madoff who stole upwards of USD 50 billion from thousands of investors continues to live in luxury in his 4 million condo. Because of his political connections he is untouchable. Some cheated investor hopefully should put a bullet in his head.
I am grateful to be living and working in Malaysia where our financial system is on real ground rather than fantasy land.
While technical analysis concentrate on price and volume, fundamentalists focus on economic forces that drive the economy
. Fundamentists study the cause while technical traders study the effect. Most traders use a combination of both approaches. The problem is that charts and fundamentals are often in conflict with each other. Usually at the beginning of market moves, the fundamentals do not explain or support what the market is doing. These are the critical times which traders looking for certainty and confirmation will miss the boat. Once the market moves the fundamentals are evident but it is too late.
It is like a bouncing ball. The most acceleration happens when the ball hits the support. Once the ball goes up it loses momentum and falls back.
Event: On 14 Feb from 10 AM to 1 PM we are holding our Traders Club meeting at CIMB Auditorium Damansara . (Map attached- the auditorium is next to IBBM) We have Nigel Foo, head of research for CIMB to give a 2009 market outlook and shares to look at. In 2008, He correctly predicted the 42 % drop in the KLSE, the 70 % drop in Crude Palm Oil and the collapse in crude oil.
What is his current forecast ? You would be surprised.
One of our club members from Jakarta is flying over to share his recent trades in the US market + point and figure strategies in the CI CPO futures by Martin. I may speak on opportunities in the China as well as localmarket.
Please confirm your attendance as CIMB will provide refreshments.
Shanghai is up over 22 % from its low and has had an 18 day line change up - one of the most powerful indicators of trend change. This is a Turtle Traders indicator.
PMI figures in China moved from 41.2 to 45.3 % in December stunning the markets who were expecting a drop and the first hopeful sign that the horrific meltdown in the base metals might finally be at a bottom. New orders for exports and production rose strongly indicating that Bejing's 4 trillion Yuan (186 billion RM) stimulus plan has already started to have a positive impact.
Chinese banks have extended about 1.2 Trillion yuan in new loans in January, a monthly record in calls by the government to halt the economies decline.
Copper traders in Shanghai have lifted the red metal over 12 % from the lows while stockpiles have dwindled to a record low.
From a contrary point of view: Before the 75 % collapse in the Shanghai Index, beginning in the 4th quarter of 2007 there was heavy promotion of China Country funds. I counted at least 12 full page ads for China funds.
Many sheeps went to the slaughter house.
For the last few weeks as Shanghai had a powerful rally, I did not see one news ad for a China fund. It looks like the Tigers are quietly buying. For those with Phillip Singapore Wrap acounts we offer several China funds but obviously you need to manage your risks. I can help you choose a good one and if interested give me or Martin a call.
The recovery in China and base metals will definitely support Malaysia, Australia, Korea, Hong Kong stock markets and the AUD Man funds as well as the AUD.
The Chinese as well as most Asian economies are on much more stable footing than the US/ UK. The Chinese economy is run prudently and the banks are sitting on top of huge cash reserves.
The Chinese economy is built on savings and productivity as opposed to the US economy which is built on debt, living and spending beyond ones means. Many big name Investment banks and money center banks are built on a culture of fraud with the collusion of corrupt politicians and SEC regulators. No wonder scared savers have lost trust in the US banks and have rushed into Treasury bonds that pay almost no return. Many prominent US banks are technically insolvent
In China a corrupt banker will be shot at the execution ground with a bullet in the back of his head. In America the corrupt banker will get a multimillion dollar bonus paid by the taxpayer as part of the stimulus bailut plan ! Even the arch con man Bernie Madoff who stole upwards of USD 50 billion from thousands of investors continues to live in luxury in his 4 million condo. Because of his political connections he is untouchable. Some cheated investor hopefully should put a bullet in his head.
I am grateful to be living and working in Malaysia where our financial system is on real ground rather than fantasy land.
While technical analysis concentrate on price and volume, fundamentalists focus on economic forces that drive the economy
. Fundamentists study the cause while technical traders study the effect. Most traders use a combination of both approaches. The problem is that charts and fundamentals are often in conflict with each other. Usually at the beginning of market moves, the fundamentals do not explain or support what the market is doing. These are the critical times which traders looking for certainty and confirmation will miss the boat. Once the market moves the fundamentals are evident but it is too late.
It is like a bouncing ball. The most acceleration happens when the ball hits the support. Once the ball goes up it loses momentum and falls back.
For those with Ameritrade accounts check out FCX Freeport McMoran which is a play on copper. It has formed a classic stage 1, support has been tested 6 times as of this writing and each test is on lower volume meaning selling has dried up. FCX has collapsed from 116 USD per share and is now at USD 27. Risk 20 % from this level with the chance of a 100 % return within 6 months. News is really bad but remember bad news is the friend of the smart money buyers.
Have a good week ahead and continue to focus on high grade blue chip KLSE shares which pay dividends.
Bill
Have a good week ahead and continue to focus on high grade blue chip KLSE shares which pay dividends.
Bill
Saturday, February 07, 2009
10:08 am - Stocks rise as investors look past January jobs data; Senate vote on stimulus looms
FKLI market is expected to gap up on Tuesday if DJIA trend continue to be up.
Stocks rise as investors look past January jobs data; Senate vote on stimulus looms
NEW YORK (AP) -- Investors have taken another big gamble on the government's plans to help the economy -- hoping that this one will finally work.
All the major indexes rose more than 2 percent Friday, including the Dow Jones industrial average, which rose more than 200 points as Wall Street looked past another bleak jobs report and awaited word from Washington about an economic stimulus plan and changes to the government's financial rescue program. The advance helped propel the indexes to their first winning week after four straight weeks of losses, and put the Nasdaq composite in positive territory for the year to date.
The Senate was expected to vote on its version of a stimulus plan that would include a mix of spending and tax cuts. The Senate bill would cost $937 billion; the House already passed a similar version.
Financial stocks led the market as investors also awaited the government's latest revisions to its lifeline for banks. Treasury Secretary Timothy Geithner and other top officials are close to finishing a plan to overhaul the government's $700 billion financial rescue fund. Geithner is expected to announce the changes in a speech on Monday.
Some investors were worried that the changes would involve nationalizing many banks and, in the process, wiping out shareholders. Many investors are hoping the plan will relax rules requiring businesses to assign a value to all of their assets each quarter. Advocates say altering the rule even temporarily could make it easier for banks to lend without worrying about depleting their cash reserves and running afoul of accounting standards.
Investors waiting for word on the government's plans were unfazed by a terrible employment reading. The Labor Department said U.S. employers slashed 598,000 jobs in January, the most since late 1974. The unemployment rate rose to 7.6 percent, the highest since late 1992.
"All focus right now is now is really on Washington," said Dan Cook, senior market analyst at IG Markets in Chicago. He said investors are hoping the unemployment report was bad enough to goad lawmakers into swift action on the stimulus plan.
Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, said investors now are wondering "will government stimulus stop this virus that's spreading throughout the country?"
Cook said investors are eager for the stimulus plan to pass even if it takes time to work its way into the economy, as many economists predict.
"We just want to see a plan and have a direction," he said. "We can adjust from there and make moves on the fly."
But analysts caution that the plan won't repair the economy's problems overnight.
"As the realization sets in that this is going to take some time to work its way into the system confidence could wane a bit," said Matt King, chief investment officer for Bell Investment Advisors, in Oakland, Calif. In that case, the market would be following its pattern in recent months as other government steps were unveiled -- early euphoria dissipated as the reality of a troubled economy set in.
The Dow industrials rose 217.52, or 2.70 percent, to 8,280.59 after rising 106 on Thursday.
Broader stock indicators also jumped. The Standard & Poor's 500 index rose 22.75, or 2.69 percent, to 868.60, and the Nasdaq composite index rose 45.47, or 2.94 percent, to 1,591.71.
The day's gains have left the Nasdaq higher for the year; investors have been turning to the index's tech stocks on the belief they will help lead the market higher. The Nasdaq ended the week with a huge 7.81 percent gain, while the Dow was up 3.5 percent and the S&P 500 rose 5.17 percent.
The Russell 2000 index of smaller companies rose 15.62, or 3.43 percent, to 470.70. It rose 6.13 percent for the week.
Advancing issues outnumbered decliners by about 5 to 1 on the New York Stock Exchange, where consolidated volume came to 6.38 billion shares compared with 6.51 billion shares traded Thursday.
On Thursday, the major indexes soared more than 1 percent as Wall Street shrugged off troubling economic reports and searched for bargains among battered retail and technology stocks.
Bond prices were mixed Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.99 percent from 2.92 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.27 percent from 0.26 percent.
The dollar was mostly higher against other major currencies. Gold prices edged higher.
Light, sweet crude fell $1 to $40.17 a barrel on the New York Mercantile Exchange.
Friday's rally reflects fear among some investors that they will miss out on a jump in stocks if the government comes up with the right mix of medicine for the economy, King said. Some of the buying was also likely the result of short covering -- investors who borrowed stock and sold it on expections the market would fall had to buy stock to repay the loans.
Many of the Friday's steepest gains occurred in hard-hit parts of the market like financials and retailers.
Financial stocks rose. Bank of America Corp. jumped $1.29, or 26.7 percent, to $6.13, while JPMorgan Chase & Co. rose $3.09, or 12.6 percent, to $27.63. Smaller banks also rose. Fifth Third Bancorp rose 99 cents, or 60.4 percent, to $2.63. State Street Corp. advanced $2.95, or 10.7 percent, to $30.49.
Among retailers, Macy's Inc. advanced 95 cents, or 10.9 percent, to $9.70.
Overseas, Britain's FTSE 100 rose 1.49 percent, Germany's DAX index rose 2.97 percent, and France's CAC-40 rose 1.84 percent. Japan's Nikkei stock average rose 1.60 percent.
The Dow Jones industrial average closed the week up 279.73, or 3.50 percent, at 8,280.59. The Standard & Poor's 500 index rose 42.72, or 5.17 percent, to 868.60. The Nasdaq composite index rose 115.29, or 7.81 percent, closing at 1,591.71.
The Russell 2000 index, which tracks the performance of small company stocks, rose 27.17, or 6.13 percent, to 470.70.
The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended at 8,785.09, up 449.45 points, or 5.39 percent, for the week. A year ago, the index was at 13,418.18.
Stocks rise as investors look past January jobs data; Senate vote on stimulus looms
NEW YORK (AP) -- Investors have taken another big gamble on the government's plans to help the economy -- hoping that this one will finally work.
All the major indexes rose more than 2 percent Friday, including the Dow Jones industrial average, which rose more than 200 points as Wall Street looked past another bleak jobs report and awaited word from Washington about an economic stimulus plan and changes to the government's financial rescue program. The advance helped propel the indexes to their first winning week after four straight weeks of losses, and put the Nasdaq composite in positive territory for the year to date.
The Senate was expected to vote on its version of a stimulus plan that would include a mix of spending and tax cuts. The Senate bill would cost $937 billion; the House already passed a similar version.
Financial stocks led the market as investors also awaited the government's latest revisions to its lifeline for banks. Treasury Secretary Timothy Geithner and other top officials are close to finishing a plan to overhaul the government's $700 billion financial rescue fund. Geithner is expected to announce the changes in a speech on Monday.
Some investors were worried that the changes would involve nationalizing many banks and, in the process, wiping out shareholders. Many investors are hoping the plan will relax rules requiring businesses to assign a value to all of their assets each quarter. Advocates say altering the rule even temporarily could make it easier for banks to lend without worrying about depleting their cash reserves and running afoul of accounting standards.
Investors waiting for word on the government's plans were unfazed by a terrible employment reading. The Labor Department said U.S. employers slashed 598,000 jobs in January, the most since late 1974. The unemployment rate rose to 7.6 percent, the highest since late 1992.
"All focus right now is now is really on Washington," said Dan Cook, senior market analyst at IG Markets in Chicago. He said investors are hoping the unemployment report was bad enough to goad lawmakers into swift action on the stimulus plan.
Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, said investors now are wondering "will government stimulus stop this virus that's spreading throughout the country?"
Cook said investors are eager for the stimulus plan to pass even if it takes time to work its way into the economy, as many economists predict.
"We just want to see a plan and have a direction," he said. "We can adjust from there and make moves on the fly."
But analysts caution that the plan won't repair the economy's problems overnight.
"As the realization sets in that this is going to take some time to work its way into the system confidence could wane a bit," said Matt King, chief investment officer for Bell Investment Advisors, in Oakland, Calif. In that case, the market would be following its pattern in recent months as other government steps were unveiled -- early euphoria dissipated as the reality of a troubled economy set in.
The Dow industrials rose 217.52, or 2.70 percent, to 8,280.59 after rising 106 on Thursday.
Broader stock indicators also jumped. The Standard & Poor's 500 index rose 22.75, or 2.69 percent, to 868.60, and the Nasdaq composite index rose 45.47, or 2.94 percent, to 1,591.71.
The day's gains have left the Nasdaq higher for the year; investors have been turning to the index's tech stocks on the belief they will help lead the market higher. The Nasdaq ended the week with a huge 7.81 percent gain, while the Dow was up 3.5 percent and the S&P 500 rose 5.17 percent.
The Russell 2000 index of smaller companies rose 15.62, or 3.43 percent, to 470.70. It rose 6.13 percent for the week.
Advancing issues outnumbered decliners by about 5 to 1 on the New York Stock Exchange, where consolidated volume came to 6.38 billion shares compared with 6.51 billion shares traded Thursday.
On Thursday, the major indexes soared more than 1 percent as Wall Street shrugged off troubling economic reports and searched for bargains among battered retail and technology stocks.
Bond prices were mixed Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.99 percent from 2.92 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.27 percent from 0.26 percent.
The dollar was mostly higher against other major currencies. Gold prices edged higher.
Light, sweet crude fell $1 to $40.17 a barrel on the New York Mercantile Exchange.
Friday's rally reflects fear among some investors that they will miss out on a jump in stocks if the government comes up with the right mix of medicine for the economy, King said. Some of the buying was also likely the result of short covering -- investors who borrowed stock and sold it on expections the market would fall had to buy stock to repay the loans.
Many of the Friday's steepest gains occurred in hard-hit parts of the market like financials and retailers.
Financial stocks rose. Bank of America Corp. jumped $1.29, or 26.7 percent, to $6.13, while JPMorgan Chase & Co. rose $3.09, or 12.6 percent, to $27.63. Smaller banks also rose. Fifth Third Bancorp rose 99 cents, or 60.4 percent, to $2.63. State Street Corp. advanced $2.95, or 10.7 percent, to $30.49.
Among retailers, Macy's Inc. advanced 95 cents, or 10.9 percent, to $9.70.
Overseas, Britain's FTSE 100 rose 1.49 percent, Germany's DAX index rose 2.97 percent, and France's CAC-40 rose 1.84 percent. Japan's Nikkei stock average rose 1.60 percent.
The Dow Jones industrial average closed the week up 279.73, or 3.50 percent, at 8,280.59. The Standard & Poor's 500 index rose 42.72, or 5.17 percent, to 868.60. The Nasdaq composite index rose 115.29, or 7.81 percent, closing at 1,591.71.
The Russell 2000 index, which tracks the performance of small company stocks, rose 27.17, or 6.13 percent, to 470.70.
The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended at 8,785.09, up 449.45 points, or 5.39 percent, for the week. A year ago, the index was at 13,418.18.
Friday, February 06, 2009
Thursday, February 05, 2009
9:37 am - DJIA is testing at the support at 7950 level !
If it hold tonite, this wud prevent further selldown ! Let's see tonite !
9:30 am - FKLI gap down due to lower DJIA closing !
With DJIA breaking below 8,000, there is a lot of fear in the market.
Wednesday, February 04, 2009
Tuesday, February 03, 2009
9:25 am - FKLI gap down due to lower DJIA closing over 2 trading sessions.
However, regional market is holding above positive area.
Monday, February 02, 2009
Friday, January 30, 2009
9:40 am - DJIA cannot break the resistance @ 8350 level.
DJIA is ready to test the support @ 8050 level.
Thursday, January 29, 2009
12:13 noon - How Do You Feel About Your Trading?
How Do You Feel About Your Trading?
by R.J. Hixson
The other day a friend told me she was having trouble signing a contract because she didn’t feel good about it. Her comments reminded me of how I felt about my trade entries that morning for one of my systems. I was still pulling the trigger but wasn’t feeling totally good about it. The system was performing well, but I’ve started to wonder if these unfamiliar market conditions might affect that system, and I’ve recognized some feelings of slight doubt at the entries.
Van stresses the critical importance of feelings, emotions, and mental states for traders. Those aren’t topics to which I paid much attention previously, especially relating to making money in the markets. By deepening my understanding of this area and following a simple process, my trading has seen a dramatic improvement.
How Do You Feel?
How do you feel right now? Moreover, how adept are you at identifying and describing how you feel? Good, fine, or OK? Those were the core of my emotional vocabulary before doing the Peak
Performance Home Study Course and other psychological courses since. Because we define reality through language, limited vocabulary can effectively limit options, a less than desirable condition when you have the ability to choose.
Quick test: write down as many descriptive emotional words as you can in one minute. How many emotions could you list? I thought I did pretty well coming up with 13 emotions by the one minute point—about the same time I was running out of words. Then, I turned the page in the book where I found this exercise to see over 300 words listed, and these were just positive emotions! I felt quite humbled (which, by the way, wasn’t one of my 13 words). Admittedly, I wasn’t highly conscious of my feelings or able to describe them very well.
To help traders with the common condition of being unconsciousness of their feelings, Van uses a bag of marbles to create a trading simulation game. It’s partly an emotional laboratory in his workshops. As the marbles get pulled, the teams respond and the drama ensues. He’s constantly prodding the players to “Notice your feelings.” It’s been enlightening to record how emotionally I can react in a simple game involving small amounts of money. Also watching my teammate’s wild-eyed excitement, frustrated aggravation, or occasional blank-faced despondence has been educational. Funny, I’ve felt each of those too the way I used to trade.
That’s the whole point of the game though—to generate emotions, to push your buttons in a controlled environment where you can notice what’s going on inside. In playing the game multiple times, I’ve experienced a wide range of emotions. It reminds me of the way I felt when I was trading several years ago.
The marble game is a powerful experience; ask anyone who’s played. From it, I’ve learned that clear objectives and preparing a thorough plan can make the game plain fun. On teams where we have taken these steps, I’ve felt calm, attentive and joyful.
An Emotionally Driven Process
My emotions used to be driven by what the market was doing. Volatility was good and smooth periods were bad (it meant waiting patiently or impatiently). By trying to call market turning points, I would be elated when I caught them or upset when I missed them. On top of that, my position sizing strategies (or lack thereof) provided another whole level of emotional reactions that compounded my responses to catching or missing the market turns. Gains engendered larger positions while losses produced seemingly more turning points to trade in my effort to make up some of the losses. For quite awhile, I actually thought this was working; I was only losing “some” money overall. When I was about halfway through the Peak Performance course, I started to recognize what was going on. I had been very lucky not to have blown up my entire account.
Process Driven Emotions
I was doing nearly nothing like what Van laid out in the Top Tasks of Trading, which were a host of new concepts. More important for me were some simple fundamentals for successful trading that I could follow:
1. Having a clear process.
2. Defining an effective emotional state for each part of the process.
3. Being able to get into those mental states to trade.
Wow, this was the most non-technical and radical trading advice I had read since I had decided to “get serious” about trading a few years back.
The Top Tasks of Trading provided a simple and effective structure to deal with a range of trading issues, including the emotional results of my trading. Rather than my variable trading results causing variable emotions, the Tasks could help me generate certain emotions in order to create stable trading results. Furthermore, the Tasks are simple steps that make it easy to identify and address individual trading issues that come up—like my entries last week.
Ken Long explains that he likes to feel professional when he trades. That’s an appealing idea for me, and I’ve adopted that as a mental state when I play the marble game as well as when I trade. The whole idea of picking how I would like to feel when trading was a new idea for me.
Prescription
To help improve my feelings about my recent entries, last weekend I checked a few things. Systems results—positive. Big picture—unchanged. The Top Tasks—a very fruitful review. Several tasks will play a supporting role with my entries this week including a review of my trading system, my ongoing self-analysis, and knowing I have an upcoming periodic review. One particular task, however, is where getting into a particular mental state will help me a great deal. It’s the action step where all of the “work” for a trade has been done already and the task is just to enter the position. I now remember to feel good when I have a valid setup and to enter the trade without thinking. The mental state for this step is to be totally committed to the entry. Remembering that little bit will help a lot this week.
Beyond Trading
Need I mention that if it’s possible to pick a particular mental state to get in to for trading, that it just might be a useful skill for life in general? It’s funny that working on a “trading skill” also has made my life better. I like to feel great. “Feel great” is simply a mental state that I can create now pretty easily instead of waiting for certain things to happen. Now, do I do that all the time? Well, no, but that’s called self-sabotage and a whole enchilada for another day.
How do you want to feel in your trading? How about a broader question: how do you want to feel in your life? Wayne Dyer said the plain statement “I want to feel good” can have a profound impact on your thinking.
Trade well and take care.
by R.J. Hixson
The other day a friend told me she was having trouble signing a contract because she didn’t feel good about it. Her comments reminded me of how I felt about my trade entries that morning for one of my systems. I was still pulling the trigger but wasn’t feeling totally good about it. The system was performing well, but I’ve started to wonder if these unfamiliar market conditions might affect that system, and I’ve recognized some feelings of slight doubt at the entries.
Van stresses the critical importance of feelings, emotions, and mental states for traders. Those aren’t topics to which I paid much attention previously, especially relating to making money in the markets. By deepening my understanding of this area and following a simple process, my trading has seen a dramatic improvement.
How Do You Feel?
How do you feel right now? Moreover, how adept are you at identifying and describing how you feel? Good, fine, or OK? Those were the core of my emotional vocabulary before doing the Peak
Performance Home Study Course and other psychological courses since. Because we define reality through language, limited vocabulary can effectively limit options, a less than desirable condition when you have the ability to choose.
Quick test: write down as many descriptive emotional words as you can in one minute. How many emotions could you list? I thought I did pretty well coming up with 13 emotions by the one minute point—about the same time I was running out of words. Then, I turned the page in the book where I found this exercise to see over 300 words listed, and these were just positive emotions! I felt quite humbled (which, by the way, wasn’t one of my 13 words). Admittedly, I wasn’t highly conscious of my feelings or able to describe them very well.
To help traders with the common condition of being unconsciousness of their feelings, Van uses a bag of marbles to create a trading simulation game. It’s partly an emotional laboratory in his workshops. As the marbles get pulled, the teams respond and the drama ensues. He’s constantly prodding the players to “Notice your feelings.” It’s been enlightening to record how emotionally I can react in a simple game involving small amounts of money. Also watching my teammate’s wild-eyed excitement, frustrated aggravation, or occasional blank-faced despondence has been educational. Funny, I’ve felt each of those too the way I used to trade.
That’s the whole point of the game though—to generate emotions, to push your buttons in a controlled environment where you can notice what’s going on inside. In playing the game multiple times, I’ve experienced a wide range of emotions. It reminds me of the way I felt when I was trading several years ago.
The marble game is a powerful experience; ask anyone who’s played. From it, I’ve learned that clear objectives and preparing a thorough plan can make the game plain fun. On teams where we have taken these steps, I’ve felt calm, attentive and joyful.
An Emotionally Driven Process
My emotions used to be driven by what the market was doing. Volatility was good and smooth periods were bad (it meant waiting patiently or impatiently). By trying to call market turning points, I would be elated when I caught them or upset when I missed them. On top of that, my position sizing strategies (or lack thereof) provided another whole level of emotional reactions that compounded my responses to catching or missing the market turns. Gains engendered larger positions while losses produced seemingly more turning points to trade in my effort to make up some of the losses. For quite awhile, I actually thought this was working; I was only losing “some” money overall. When I was about halfway through the Peak Performance course, I started to recognize what was going on. I had been very lucky not to have blown up my entire account.
Process Driven Emotions
I was doing nearly nothing like what Van laid out in the Top Tasks of Trading, which were a host of new concepts. More important for me were some simple fundamentals for successful trading that I could follow:
1. Having a clear process.
2. Defining an effective emotional state for each part of the process.
3. Being able to get into those mental states to trade.
Wow, this was the most non-technical and radical trading advice I had read since I had decided to “get serious” about trading a few years back.
The Top Tasks of Trading provided a simple and effective structure to deal with a range of trading issues, including the emotional results of my trading. Rather than my variable trading results causing variable emotions, the Tasks could help me generate certain emotions in order to create stable trading results. Furthermore, the Tasks are simple steps that make it easy to identify and address individual trading issues that come up—like my entries last week.
Ken Long explains that he likes to feel professional when he trades. That’s an appealing idea for me, and I’ve adopted that as a mental state when I play the marble game as well as when I trade. The whole idea of picking how I would like to feel when trading was a new idea for me.
Prescription
To help improve my feelings about my recent entries, last weekend I checked a few things. Systems results—positive. Big picture—unchanged. The Top Tasks—a very fruitful review. Several tasks will play a supporting role with my entries this week including a review of my trading system, my ongoing self-analysis, and knowing I have an upcoming periodic review. One particular task, however, is where getting into a particular mental state will help me a great deal. It’s the action step where all of the “work” for a trade has been done already and the task is just to enter the position. I now remember to feel good when I have a valid setup and to enter the trade without thinking. The mental state for this step is to be totally committed to the entry. Remembering that little bit will help a lot this week.
Beyond Trading
Need I mention that if it’s possible to pick a particular mental state to get in to for trading, that it just might be a useful skill for life in general? It’s funny that working on a “trading skill” also has made my life better. I like to feel great. “Feel great” is simply a mental state that I can create now pretty easily instead of waiting for certain things to happen. Now, do I do that all the time? Well, no, but that’s called self-sabotage and a whole enchilada for another day.
How do you want to feel in your trading? How about a broader question: how do you want to feel in your life? Wayne Dyer said the plain statement “I want to feel good” can have a profound impact on your thinking.
Trade well and take care.
9:23 am - FKLI gap up slightly. FKLI looks to move sideway to downward !
Regional market is retreating from its opening high this morning !
Saturday, January 24, 2009
1:45 pm - US STOCKS-Banks lift S&P, GE hits Dow; Nasdaq up with Google
US STOCKS-Banks lift S&P, GE hits Dow; Nasdaq up with Google By Chuck Mikolajczak NEW YORK, Jan 23 (Reuters) - Wall Street ended a difficult week with the broad S&P 500 closing higher on Friday as investors bought beaten-up financials on hopes of further aid from Washington, offsetting a disappointing outlook from General Electric that kept the Dow under water. GE's stock dropped almost 11 percent after the economic bellwether reported earnings that met Wall Street's expectations, but warned of an "extremely difficult" 2009. News that President Barack Obama and his economic advisers will meet on Saturday fueled hopes that the new administration will put together another rescue package for the ailing financial sector. The S&P Financial Index rose 3.4 percent. "Financials are getting a lift in anticipation of more creative federal involvement from the Obama White House next week," said Peter Kenney, managing director at Knight Equity Markets in Jersey City, New Jersey. "People are expecting the financials to get significant help." The Dow Jones industrial average shed 45.24 points, or 0.56 percent, to 8,077.56. But the Standard & Poor's 500 Index rose 4.45 points, or 0.54 percent, to 831.95. The Nasdaq Composite Index added 11.80 points, or 0.81 percent, to 1,477.29. For the week, the Dow dropped 2.5 percent, the S&P 500 slipped 2 percent and the Nasdaq fell 3.4 percent. The Nasdaq was the best-performing index, led higher on Friday by large technology companies, including Google Inc , whose shares rose5.9 percent to $324.70 after the Silicon Valley company's quarterly earnings beat estimates. JPMorgan Chase and Bank of America were among the top-performing financial stocks. Some analysts cited market talk of further government cash injections to banks, while others said investors were tempted by stocks whose prices were slashed in this week's sell-off. JPMorgan Chase, gained 5.1 percent to $24.28 and gave the greatest support to the Dow, while Bank of America's stock shot up 9.3 percent to $6.24, while Citigroup jumped nearly 12 percent to $3.47, all in NYSE trading. Chevron ranked among the Dow's best performers as March crude oil futures rose more than 6 percent to settle above $46 a barrel, aided by expectations of a cold snap in the U.S. Northeast. Chevron gained 1.2 percent to $70.82. During the session, the Dow briefly turned positive, but it couldn't overcome the drag of GE and investors' concerns about the weak business outlook in 2009 for some major industrial companies. Investors also fretted about a possible dividend cut at General Electric despite reassuring comments by the company's chief executive. GE's stock lost 10.8 percent to $12.03. Fellow Dow component United Technologies Corp, which was downgraded to "market perform" by Bernstein Research, lost 3.2 percent to $47.41. Also weighing on the Dow was Caterpillar, which dropped 4.2 percent to $35.66 after rival Komatsu Ltd lowered its profit forecast for the year, citing a sharp decline in global demand. Trading volume was light on the New York Stock Exchange, with about 1.42 billion shares changing hands, slightly below last year's estimated daily average of roughly 1.49 billion, while on the Nasdaq, about 2.19 billion shares traded, slightly below last year's daily average of 2.28 billion. Advancing stocks outnumbered decliners on the NYSE by a ratio of about 8 to 7. But on the Nasdaq, the trend was the opposite, with about seven stocks falling for every six that rose. (Editing by Jan Paschal) Keywords: MARKETS STOCKS
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