Must Reads For Trading

  • Enhancing Trader Performance(Steenbarger)
  • Fooled By Randomness(Taleb)
  • Market Wizards(Schwager)
  • New Market Wizards (Schwager)
  • Pit Bull(Schwartz)
  • Reminiscences of a Stock Operator (Livermore)
  • The Black Swan (Taleb)
  • Trade For A Living(Dr. Elder)
  • Trading In The Zone (Mark Douglas)
  • Trading Rules That Work (Jankovsky)
Custom Search

June 1, 2010

June Swoon? Trading notes, helpful books!

Hello Traders!
Wow, what an evening last night. Big spikes, big illustration of why WE ALWAYS USE STOPS! So, for those of you fleet-fingered traders, last night was a dream-land. Short, long, short, long, fast profits. But for those of you who are still learning, prefer larger/slower time frame trading, or just don't have the time to be a slave to the computer, I wanted to point out a few pieces of literature that I KNOW will help. Investing in our own progress is not simply a good idea, I personally see it as one of the only ways to 'earn your keep'. Battle tested experience is always the best, but have a back-bone to your theory, strategies, and trading in general is a must. The books below provide this and much more. My personal favorite is "Beat th Forex Dealer" by Agustin Silvani. Most dealers in FOREX are not required to follow all of the laws and regulations we might find in a typical broker for equities. Although this is changing, having an inside look at what we potentially are up against (even when we are right and make great trades!) is always a great idea. That stop that gets hit by just ONE PIP, the over-night SPIKE out of nowhere that takes everyone out and seems to THEN and ONLY THEN go in the direction you originally expected. There are ways to avoid these traps, and traps they are. Help yourself and invest in your own success. The trading ideas for tonight are as follows...

GBP/JPY: We saw some major covering and FX official buying into the spike below 110.00 for the EUR/JPY that caused a lot of waves in all other pairs, GBP/JPY included. I had been short most of the night, making small pipage here and there, but was ultimately stopped out when the spike took place. I did manage to get a very nice and unexpected short on the EURJPY right before it sank sub 110.  Be very careful around these levels guys, the EURJPY pair is causing a lot of whip-saw on all JPY pairs, and with the Prime Minister 'quitting' and the litany of financial dramas around the globe, these 'defensive spikes' can and WILL come out of absolutely nowhere. This is why we use stops and have disciplined systematic approaches to our trading. Long story short, GBPJPY is dangerous and untamed until further notice. Any trades should be quick scalps and include tight stops. No point in being whip-sawed to death on these guys, this environment is still 'figuring itself out'. My bias for tonight is short, but cautiously...

GBPUSD: Similar story to the GBPJPY pair, but it has acted a bit stronger during the Asian session than our good old buddy GBPJPY. Same for the Euro, which continues to see strong selling into covering waves and profit taking. The GBPUSD is, however, sitting just UNDER a relatively large Fibonacci level at 1.4732. This level corresponds to the high and low of May trading, so while it's not a HUGE level, it is definitely in play with the daily, weekly, and monthly big traders. A break and hold is a great entry long, with stop under the Fib level, same goes for shorts that cannot recover this level and continue down. Stop is the same, Fib level. Again, my bias tonight for this pair is short, a bit stronger than GBPJPY, but pay attention to our critical levels. They must be respected, not fought against.

EURUSD: I am laying off this pair tonight, but it should lead/react to the /DX futures contract (Dollar basket). Watch for key moves getting started there or in gold/oil, but mostly we have seen things the other way around with the Euro reacting to the Dollar and vice versa with regard to oil and gold. The US futures have also begun to head down (as of 2am EST) while the Pound and Yen remain resistant to such movement. We shall see if this holds up. Again, I am staying AWAY from the Euro and looking to JPY pairs and GBP pairs for the main action tonight. Keep an eye on Europe as well...
Happy Trading!

The two other great books mentioned above...

No comments: