Larry Levin's Blog (68)

Pomo Schedule

Bernanke_pours

Everyone at Trading Advantage hopes you had a great holiday, with plenty of relaxation and good times with the family.  It was with family over this extended weekend that generated this post.  When discussing the markets (which I can never avoid) the Fed came up, but specifically how the Fed is “supporting” the markets via POMO.

POMO is the Fed’s acronym for Permanent Open Market Operations.  From the FRBNYs website we read its…

Indecision

Who’s Next?

venus

When the US housing market was starting to fall apart Ben Bernanke made a now rather famous statement because he was so wrong.  Regarding the situation he said on March 28, 2007 “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”

On which planet of the solar system it was contained, he did…

Indecision

If I had to describe today’s market in one word it would be: indecision. Although the market closed lower, it was mostly indecisive.  There were many rumors concerning the Cypress situation – all indecisive in the end. 

 While the news/decision for Cyprus as a whole may be indecisive as of yet, the reality for its citizens is final: there is little-to-no-money in the ATMs.  The news wires carried the following during the day…

*Cyprus Popular Bank…

Secret Trading Tip #15

Trailing Stops

The topic of trailing stops comes up on occasion in my Virtual Trading Room. They can often cause some confusion, so let’s take a bit of time to clarify what constitutes a trailing stop and how you can use it in futures trading..

Trailing stops are actually stop loss orders that you move according to certain parameters in your trading plan.

Why Move Stop Loss Orders?

Stop loss orders are stop orders…

Secret Trading Tip #1

Trade with a Plan – Using a Stop Loss

In my opinion, every trade you consider should be laid out ahead of time with a roadmap. A complete map should have an “off ramp” or a place where it makes sense to enter the market. It should also have exits for your destination (profits) as well as off ramps for emergency exits. This part of your plan will likely include stop orders.

Stop orders placed to potentially close an open position are…

Waiting Game

waiting

There was no action Thursday.  Traders are waiting on Friday’s monthly employment situation report. 

 The way Chairman Ben has the market cornered, either a better than expected or worse than expected outcome can be spun like cotton candy into a bullish reaction.  That is the normal course of business on Fraud Street; however, because the market has gone up almost every day this year without a pullback, traders are looking for a…

Secret Trading Tip #3

A Little Lesson in Lingo

The world of trading has many parts that seem a little foreign to new traders. There are plenty of catch phrases, symbols, and other banter that can be intimidating or even confusing at first. One of the biggest sources of confusion includes the shorthand that you see for many markets. Understanding what you are reading is important, and learning the basic lingo can come in handy.

Everything has a specified…

Barnyard Economics

Barnyard

Which came first - the chicken or the egg in the new world of Barnyard Economics???

If the first two months of 2013 market’s action could be compared to the farm, the crop would be poor and the animals unproductive, but the farmer would be enjoying a banner yea...except on Mondays. Because alas, for the eight Monday in a row, the S&P 500 closed lower. The farmer (and the markets) might opt for a three day weekend in…

Secret Trading Tip #29

Advanced Technicals – Moving Averages

In Tip #14, I talked about some of the basics for technical analysis. Trends and simple chart patterns are just the tip of the iceberg for technical analysis tools. There are many advanced tools that technicians use to try to find signals in the market price. One of the terms you might hear quite often is moving average.

The moving average for a market plots the result of a…

Presidential Ponzi

ponzi

With the markets closed for the President’s day, American took time off and paused to honor this iconic office. While many of us have grown disenchanted with the current state of affairs, our presidents have a rich and storied history.

From national icons to Carl Ichan, the only real market news on Friday was this battle with William Ackman over Herbalife,  cause there’s nothing like a couple of Wall Street tycoons getting in a…

Secret Trading Tip #20

Understanding Candlestick Patterns – Harami

I've already covered some of the better known patterns like doji (Tip #18) and engulfing (Tip#19) – now it's time to add harami to your candlestick chart pattern arsenal. Let's take a look at what this technical signal looks like, and what opportunities might be presenting themselves when you see it.

Harami patterns can be bearish or bullish

Harami, like engulfing patterns, are…

Secret Trading Tip #8

Avoiding Mental Sabotage

I have heard that 95% or more of all traders ultimately fail.

Have you ever wondered why?

Most traders will tell you it was the system or method they were using. They'll also tell you they had a few bad trades they couldn't recover from. Or their dog chewed through the telephone cord just as their computer crashed, and they couldn't get out of a losing trade.

Everyone has a different…

Secret Trading Tip #14

Getting Technical

If you know your way around a price chart (Tip#5) then you are ready to learn a little more about technical analysis. This kind of analysis is defined as an attempt to try to forecast price movements based on patterns observed in price changes on charts, or other changes that are not rooted in fundamental observations.

For technical analysts the key to observing the market lies in signals and…

Super Bets

Over 150 million people watched the super bowl last night and we can only guess how many people had wagers on everything from the final score of the game to whether or not Alicia Keys was lip synching during the national anthem.

Superbowl Sunday is a fabulous time to be an odds maker as they will make money no matter who wins. But what if they booked bets on the market? Even with the benefit of hindsight, it may be not be such a great proposition.

Think…

Secret Trading Tip #5

Knowing your way around a chart

For most traders, charts are like their road maps to potential trades. Technicians see potential patterns, key clues that they interpret for trading opportunities. Fundamentalists see confirmation of news stories or supply and demand dynamics playing out in the price fluctuations. Charts are indispensible to traders

Understanding what a chart is telling you is paramount for traders

We are going to…

The Handoff

baton

If you’re a fan of the summer Olympics, I am sure you have watched plenty of track events – especially the exciting 400 and 800 meter relays.  Four athletes run in each event and hand a baton off to the next athlete until the race is complete.  Although the handoffs are usually done without mishap, it still happens from time to time; they can be simply sloppy to an outright drop of the baton that disqualifies the whole team.

In the…

Secret Trading Tip #4

How to Determine When the Market is Really Trending

How often have you looked at a chart and tried to determine whether or not the market is really trending? How many times have you been fooled by your Stochastics or RSI indicators? How many times have you sold because your oscillators were screaming overbought then watched the market dip a little and then continue higher, stopping you out for another loss? One of the most important things…

Secret Trading Tip #12

The Value Area & Your Trading

What is Market Profile?



Each day the market defines a Market Profile (MP), a Value Area (VA) and a Point of Control (POC), all of which are invaluable to trading the following day. Similar market-derived data over longer time frames is also of great value to day traders and other time frame (OTF) traders. Before I expand on this…

Secret Trading Tip #15

Trailing Stops



The topic of trailing stops comes up on occasion in my Virtual Trading Room. They can often cause some confusion, so let’s take a bit of time to clarify what constitutes a trailing stop and how you can use it in futures trading..

Trailing stops are actually stop loss orders that you move according to certain parameters in your trading plan.

Why Move Stop Loss Orders?…

Trillion Dollar Pay Day Loan

payday_loans

Referring to the constant rumors of a Portuguese bailout last year in Europe, Jean-Claude Juncker, the prime minister of Luxembourg, said “When it becomes serious, you have to lie.” 

For weeks the Eurozone ministers lied to the public about the behind-the-scenes bailout that they were working on.  But here in the US the politicians aren’t lying about the next “crisis” and what to do about it, which is the…