I just returned from a gathering with a group of traders, and one of them shared a very interesting concept today - The Kelly Criterion. I'm no expert on it... so decided to google it and you can read up about it here.
Under money management, there are two schools of thought - Fixed Fractional Method and Fixed Ratio Method. For both methods, one needs to decide what is the position size to trade. Under Fixed Fractional Method, there's what's called an "optimal F" which is generally achievable only on hindsight. So Kelly Criteron comes in nicely to help determine what kind of market exposure you can take on your trade. Interesting stuff... new to me still, and something you might want to explore.
Cheers!
Technical Analysis of the Forex Spot Markets using Elliott Waves, Chart Patterns, Candlesticks and other tools. Disclaimer: None of the comments in this blog shall be construed as professional trading or investment advice.
Wednesday, April 22, 2009
Saturday, April 18, 2009
Trading for a Living
There are many people who dream of trading for a living. It does appear to have certain perks - total freedom of time, no reporting to bosses, unlimited earnings potential...etc
But living of trading profits can be more difficult and complex that it first appears. And providers of FX training would often portray how easy it is to be profitable with their own trading strategies.
I came across this 2007 old post on ForexFactory. It really provides some cold hard facts on what it takes and the reality of trading for a living. It deserves a thorough read and thinking through.
But living of trading profits can be more difficult and complex that it first appears. And providers of FX training would often portray how easy it is to be profitable with their own trading strategies.
I came across this 2007 old post on ForexFactory. It really provides some cold hard facts on what it takes and the reality of trading for a living. It deserves a thorough read and thinking through.
Freeweek from Elliott Wave International
Once each year or so, our friends at Elliott Wave International do something unheard-of in the world of financial analysis – they give it away for free!
But it always ends soon after it starts, so your time to get more than 100 pages of free analysis and forecasts on every major world market is running out.
This time they've upped the ante.
For the first time ever, EWI is giving away one month of its most popular global analysis publication, a 120-page "little black book" of investment insights called Global Market Perspective, which includes EWI's three regional publications:
1. The U.S. Elliott Wave Financial Forecast ($19/month value)
2. The European Elliott Wave Financial Forecast ($29/month value)
3. The Asian-Pacific Elliott Wave Financial Forecast ($31/month value)
PLUS, the 120-page book includes analysis culled straight from EWI's professional-grade Specialty Services, each of which is valued at $199/month. This means you also get analysis and forecasts for the following global markets:
- World stock markets (China, Japan, Korea, U.S, France, Britain and more)
- Global interest rates (Australia, Europe, Japan, U.S.)
- International currency relationships (U.S. Dollar, Euro rates, Swiss Francs, Japanese Yen and more)
- Metals and Energy (Crude Oil, Gold, Silver, Natural Gas)
- And so much more!
This is truly a very rare occasion, and it only lasts for just a few more days. Whether you use Elliott or not, we highly recommend you stop by the webpage below and take advantage of this limited-time, completely free offer.
Learn how to get your free 120 pages of global analysis here
But it always ends soon after it starts, so your time to get more than 100 pages of free analysis and forecasts on every major world market is running out.
This time they've upped the ante.
For the first time ever, EWI is giving away one month of its most popular global analysis publication, a 120-page "little black book" of investment insights called Global Market Perspective, which includes EWI's three regional publications:
1. The U.S. Elliott Wave Financial Forecast ($19/month value)
2. The European Elliott Wave Financial Forecast ($29/month value)
3. The Asian-Pacific Elliott Wave Financial Forecast ($31/month value)
PLUS, the 120-page book includes analysis culled straight from EWI's professional-grade Specialty Services, each of which is valued at $199/month. This means you also get analysis and forecasts for the following global markets:
- World stock markets (China, Japan, Korea, U.S, France, Britain and more)
- Global interest rates (Australia, Europe, Japan, U.S.)
- International currency relationships (U.S. Dollar, Euro rates, Swiss Francs, Japanese Yen and more)
- Metals and Energy (Crude Oil, Gold, Silver, Natural Gas)
- And so much more!
This is truly a very rare occasion, and it only lasts for just a few more days. Whether you use Elliott or not, we highly recommend you stop by the webpage below and take advantage of this limited-time, completely free offer.
Learn how to get your free 120 pages of global analysis here
Sunday, April 5, 2009
ATIC 2009 (18-19 Apr 2009)
The Asia Trader & Investor Convention will be held at Suntec City on 18 & 19 Apr 2009. If you are interested, do visit the website to get your free tickets. :)
Saturday, April 4, 2009
Free Elliott Wave Theory Tutorial
Hi Folks, it appears that Elliott Wave International has re-released the EWI Basic Tutorial. It features 10 lessons across 50 pages adapted from Bob Prechter’s Wall Street bestselling, Elliott Wave Principle: Key to Market Behavior; and it’s probably the most comprehensive free Elliott wave resource on the Internet. :)
If you hadn't accessed it yet, click here to find out more. By the way, you would have to sign up as a member (its free!) to access the tutorial.
To give you a sense of its coverage, here is the outline of the 10 lessons:
Lesson 1
1.1 Introduction
1.2 Short History
1.3 Basic Tenets
1.4 Wave Mode
1.5 Essential Design
1.6 Wave Numbers
1.7 Degrees
1.8 Wave Function
Lesson 2
2.1 Motive Waves
2.2 Extension
2.3 Truncation
Lesson 3
3.1 Diagonal Triangles
3.2 Diagonals
3.3 Leading Diagonals
3.4 Corrective Waves
3.5 Zigzags
Lesson 4
4.1 Flats(3-3-5)
4.2 Expanded Flats
4.3 Triangles
4.4 Triangle Examples
Lesson 5
5.1 Correctives
5.2 Wave Formation
5.3 Function & Mode
5.4 Alternation
5.5 Alternation cont.
5.6 Corrective Waves
5.7 Wave Extensions
Lesson 6
6.1 Channeling
6.2 Technique
6.3 More Guidelines
6.4 Volume
Lesson 7
7.1 Wave Personality
7.2 Personality cont.
7.3 Ideal Personality
7.4 Wave Tendencies
7.5 The Basics
7.6 Application
7.7 Application cont.
Lesson 8
8.1 Fibonacci
8.2 Fibonacci cont.
8.3 Sequence
8.4 Sequence cont.
8.5 Geometry
8.6 Golden Spiral
8.7 Spiral cont.
Lesson 9
9.1 Meaning of Phi
9.2 Conceptual Phi
9.3 Phi and Elliott
Lesson 10
10.1 Phi & the Market
10.2 Phi cont.
10.3 Additive Growth
Except for buying the book, I don't think you will find another site with more comprehensive resource. Enjoy the tutorial!
If you hadn't accessed it yet, click here to find out more. By the way, you would have to sign up as a member (its free!) to access the tutorial.
To give you a sense of its coverage, here is the outline of the 10 lessons:
Lesson 1
1.1 Introduction
1.2 Short History
1.3 Basic Tenets
1.4 Wave Mode
1.5 Essential Design
1.6 Wave Numbers
1.7 Degrees
1.8 Wave Function
Lesson 2
2.1 Motive Waves
2.2 Extension
2.3 Truncation
Lesson 3
3.1 Diagonal Triangles
3.2 Diagonals
3.3 Leading Diagonals
3.4 Corrective Waves
3.5 Zigzags
Lesson 4
4.1 Flats(3-3-5)
4.2 Expanded Flats
4.3 Triangles
4.4 Triangle Examples
Lesson 5
5.1 Correctives
5.2 Wave Formation
5.3 Function & Mode
5.4 Alternation
5.5 Alternation cont.
5.6 Corrective Waves
5.7 Wave Extensions
Lesson 6
6.1 Channeling
6.2 Technique
6.3 More Guidelines
6.4 Volume
Lesson 7
7.1 Wave Personality
7.2 Personality cont.
7.3 Ideal Personality
7.4 Wave Tendencies
7.5 The Basics
7.6 Application
7.7 Application cont.
Lesson 8
8.1 Fibonacci
8.2 Fibonacci cont.
8.3 Sequence
8.4 Sequence cont.
8.5 Geometry
8.6 Golden Spiral
8.7 Spiral cont.
Lesson 9
9.1 Meaning of Phi
9.2 Conceptual Phi
9.3 Phi and Elliott
Lesson 10
10.1 Phi & the Market
10.2 Phi cont.
10.3 Additive Growth
Except for buying the book, I don't think you will find another site with more comprehensive resource. Enjoy the tutorial!
Wednesday, April 1, 2009
Singapore May Devalue Currency in April, Survey Shows (Update1)
March 30 (Bloomberg) -- The Monetary Authority of Singapore may devalue the city’s currency and allow it to drop 4 percent against the U.S. dollar by June 30 to aid exporters and lift the economy out of the worst recession since independence in 1965.
Read More here.
Read More here.
Friday, March 6, 2009
Why The Dollar has not died
Technically, I'd been expecting USD to drop further. USDCHF had ended in a diagonal (27 Jan - 20 Feb ) with a subsequent sharp drop. Prices has since retraced a significant portion, threatening my analysis of the charts.
Fundamentally, with all the increase in supply, poor economic indicators, failing banks and major companies, the USD should be dropping. The counter for that is that USD is a repatriation currency, and a flight-to-safety is keeping the USD rallying.
I came across this artile by Dr Barton on why the dollar has not died. I thought its pretty interesting so have provided it below. Enjoy!
-----------------
Three Reasons Why the Dollar Has Not Died
by D.R. Barton
This much is clear: the U.S. government is borrowing unprecedented amounts of money and is printing or is about to print unheard of amounts of greenbacks to cover the cost of bailouts, stimulus programs, etc.
This, however, is not a political discussion, but a financial one. Better yet, it is a discussion of behavioral finance.
The simplified argument on the dollar goes something like this: the increased supply of U.S. currency is now, or is going to soon be massive. With the world being flooded with U.S. dollars, the value should go down and go down hard.
In the long run, this view is probably very valid.
But for now it’s not working out that way. The question is “Why not?”
If I were to ask my third grade economics students this question, they’d immediately answer that we’re only looking at one side of the supply and demand equation.
Clearly, even with supply growing, demand is growing even faster.
Three Reasons People Still Want U.S. Dollars
Since last summer, the dollar has strengthened against almost all major currencies.
Here’s an example with the Euro on a weekly chart (notice that in Forex land, they use the Euro/dollar cross, meaning that downward movement equals a stronger dollar):
The chart is pretty self-explanatory. If we fully test the October ‘08 lows, I would expect the first test to be a failure since the Euro is oversold on a weekly basis, and we do have a strong divergence.
However, the reasons for the dollar’s strength in the face of overwhelming fundamental forces is pretty interesting.
The dollar is still the world’s reserve currency. As long as the world does business denominated in dollars, then underlying demand will still exist. And if one thinks the dollar could lose this role anytime soon, there really is no close second. The yen has its own problems, coming out of decades of non-existent economic growth. The Euro has worse troubles than the dollar with the eastern bloc banking system on the ropes. And the next reason backs up reason number one pretty well.
The U.S. will be the world hegemon for the foreseeable future. I have to give credit for this phrase to my business partner and market maven Christopher Castroviejo, whose Harvard education often bleeds over into his macro economic analysis. In short, the U.S. is still the world’s dominate military power, and this will be a foundation for the dollar for years to come.
The dollar's perception is that of safety and strength. Dennis Gartman, writer of the his eponymous letter, likens the dollar to the “world’s family mattress.” It’s where people stuff their money in times of trouble. And clearly, people are voting with their trades and saying that these are troubled times.
For all of these reasons, the correlation is currently that tough economic times and downward equity moves mean upward moves for the dollar. And that’s not likely to change anytime soon.
Great Trading!
D. R.
Fundamentally, with all the increase in supply, poor economic indicators, failing banks and major companies, the USD should be dropping. The counter for that is that USD is a repatriation currency, and a flight-to-safety is keeping the USD rallying.
I came across this artile by Dr Barton on why the dollar has not died. I thought its pretty interesting so have provided it below. Enjoy!
-----------------
Three Reasons Why the Dollar Has Not Died
by D.R. Barton
This much is clear: the U.S. government is borrowing unprecedented amounts of money and is printing or is about to print unheard of amounts of greenbacks to cover the cost of bailouts, stimulus programs, etc.
This, however, is not a political discussion, but a financial one. Better yet, it is a discussion of behavioral finance.
The simplified argument on the dollar goes something like this: the increased supply of U.S. currency is now, or is going to soon be massive. With the world being flooded with U.S. dollars, the value should go down and go down hard.
In the long run, this view is probably very valid.
But for now it’s not working out that way. The question is “Why not?”
If I were to ask my third grade economics students this question, they’d immediately answer that we’re only looking at one side of the supply and demand equation.
Clearly, even with supply growing, demand is growing even faster.
Three Reasons People Still Want U.S. Dollars
Since last summer, the dollar has strengthened against almost all major currencies.
Here’s an example with the Euro on a weekly chart (notice that in Forex land, they use the Euro/dollar cross, meaning that downward movement equals a stronger dollar):
The chart is pretty self-explanatory. If we fully test the October ‘08 lows, I would expect the first test to be a failure since the Euro is oversold on a weekly basis, and we do have a strong divergence.
However, the reasons for the dollar’s strength in the face of overwhelming fundamental forces is pretty interesting.
The dollar is still the world’s reserve currency. As long as the world does business denominated in dollars, then underlying demand will still exist. And if one thinks the dollar could lose this role anytime soon, there really is no close second. The yen has its own problems, coming out of decades of non-existent economic growth. The Euro has worse troubles than the dollar with the eastern bloc banking system on the ropes. And the next reason backs up reason number one pretty well.
The U.S. will be the world hegemon for the foreseeable future. I have to give credit for this phrase to my business partner and market maven Christopher Castroviejo, whose Harvard education often bleeds over into his macro economic analysis. In short, the U.S. is still the world’s dominate military power, and this will be a foundation for the dollar for years to come.
The dollar's perception is that of safety and strength. Dennis Gartman, writer of the his eponymous letter, likens the dollar to the “world’s family mattress.” It’s where people stuff their money in times of trouble. And clearly, people are voting with their trades and saying that these are troubled times.
For all of these reasons, the correlation is currently that tough economic times and downward equity moves mean upward moves for the dollar. And that’s not likely to change anytime soon.
Great Trading!
D. R.
About D.R. Barton: A passion for the systematic approach to the markets and lifelong love of teaching and learning have propelled D.R. Barton, Jr. to the top of the investment and trading arena. He is a regularly featured guest on both Report on Business TV, and WTOP News Radio in Washington, D.C., and has been a guest on Bloomberg Radio. His articles have appeared on SmartMoney.com and Financial Advisor magazine. You may contact D.R. at “drbarton” at “iitm.com”.
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