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Here is an interesting chart with MCD coming up and crossing a pivotal point at $100 which was the last previous major high at the beginning of the year. Why did I look at this? There was news that sales are down with McDonalds. http://www.bbc.co.uk...siness-22212564 It is good practice to look up the company chart if you ever read any news - how many people do this? Not many. Another thing is if you see a new trend in the real world - I saw self service tills appearing everywhere and ATM machines. If you notice, the logo is NCR corporation and this is a listed company. If you see something, make a mental note, and look it up later.

 

Anyway - MCD didn't cross the pivotal point convincingly this week - look at the last bar. So MCD will stay neutral. The clue was the lack of volume - 20m shares are normally traded, a "high volume" move should be at least twice that.

 

 

I'm keeping an eye on McDonalds, as it looks like it doesn't want to go down below $100, which is a potential psychological price level and becoming a pivotal point. Maybe we'll look at maybe opening a probing position next week, lets see what it does today.

---

I am assuming people read still these pages, as I have removed my links on HPC as my own probe to see where I am getting the hits from on my microsite.

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Youtube allows a new generation of traders to learn about the markets - we are in a golden age of information and dis-information. I think I will post more videos on this thread that I think are useful (or funny!)

 

70-90% of Day traders lose money. Wife phones in about her husbands expensive hobby!

http://www.youtube.com/watch?v=BWIpTdg7tj8

 

And this guy losses $1500 on trying to catch a bottom! Watch the reaction!

http://www.youtube.com/watch?v=B8cN586JUR8

I guess if I was 10 years younger and playing video games (day trading is just an adult video game), this is called being owned, pwned, or max ownage. 10 Jun 2011 the video date reads on his trading platform.

 

The chart where the action happened;

untitled.PNG

 

And the daily chart

 

untitled.PNG

Just picked a very volatile day to day trade on - unlucky!

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70-90% of Day traders lose money. Wife phones in about her husbands expensive hobby!

 

I guess if I was 10 years younger and playing video games (day trading is just an adult video game), this is called being owned, pwned, or max ownage. 10 Jun 2011 the video date reads on his trading platform.

 

 

 

I'm sure this is true, I post a lot on another forum and there are many trading diaries where it is clear the 'traders' treat trading not as a business but as an opportunity to gamble. They have no strategy, very limited research, and practice minimal risk control. The owner of the forum was at his wits end as he keeps hearing hard luck stories such as the gentleman that lost $50,000 of his childrens college fund and $20,000 of his and his wife's own savings (and he hadn't yet told his wife this). The fact that these people allow themselves to lose such sums is a clear indicator that they are gamblers, not traders. They are just simply gambling with trading.

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Online Poker

 

Talking about gambling, I took a look at online poker a few years ago (which came to a dead end, as I didn't like staring at a computer screen endlessly). I actually remember when online poker was banned in the US, but as I live in the UK I didn't think much of it, but do recall Party Gaming shares LSE:PRTY, crashing some 80%. I didn't think the US market was that big when the world is so big, but clearly it was a very important market for online poker companies.

 

untitled.PNG

 

---

 

The boom (pre 2000) and bust of online poker (after 2006). This post looks at this moment in history.

 

These are useful videos (I don't play now, but the psychology is useful), and illustrates how boom and bust cycles occur in any asset class and instrument. The easy money is made through the boom, but not so easy even for the best after the boom. I guess one can view online poker as another instrument in wealth transfer from one to another.

 

A Kids Game, The Story of Online Poker. These are interviews with online pokers players who made hundreds of thousands and even millions during the online poker boom.

 

P1 youtube.com/watch?v=Y8zRgHpP8AQ

P2 youtube.com/watch?v=G4DQZtQow7w

P3 youtube.com/watch?v=YdQtxSqRQ0Y

P4 youtube.com/watch?v=6QLPvVEwMiU (corrupt, audio only link but still useful)

 

After the US outlaws online poker in 2006, the easy money disappears, and even the professionals go broke as the big fish have to play against the other big fish in a smaller pond as mentioned in the above links and here in an actual case study:

 

Completely Broke In Thailand Oct 2011

youtube.com/watch?v=ZtguRZak-mU

^ Don't worry he's OK now, according to his facebook page updated 22 minutes ago.

 

It is easier to be a big fish in a small pond.

---

 

Other Online Poker Documentaries;

 

BBC Online Poker Documentary: youtube.com/watch?v=ZUdUZXJeA9Q

 

From Busto to Robusto:

P1 youtube.com/watch?v=CK8OaYVjhTA

P2 youtube.com/watch?v=fcOIOPj7Szg

P3 youtube.com/watch?v=JPSmAgDmOOI

P4 youtube.com/watch?v=a5qmRKnUins

P5 youtube.com/watch?v=YEzFM5XShyo

P6 youtube.com/watch?v=S8wcX6-4ogU

P7 youtube.com/watch?v=Uy2Y8UYLjvg

 

Sorry but one must copy and paste the links into the address bar, as I wanted to keep it on one page.

 

I was thinking with the explosion of apps, new players can achieve an advantage by playing using apps to aid the player in a cyborg type of way which wasn't present before.

 

WIKI entry about the Online Poker Boom http://en.wikipedia....wiki/Poker_boom

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Work on the sector index page is finally finished! And here is the current strongest and weakest vs the FTSE ALL Share index at this point in time. The UK markets closed this Monday as it a Bank Holiday.

 

Strongest groups

1st Beverages +55%

Joint 2nd Financial Services and Household goods and Home Construction +52%

 

Weakest groups

1st Industrial Metals -80%

2nd Mining -32%

 

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Strongest in Beverages; Joint First; Diageo LSE:DGE Pivotal Point £20, and SABMiller LSE:SAB Pivotal Point £35

Strongest in Household goods and Home Construction; Barratt LSE:BDEV Pivotal Point 300p

Strongest in Financial Services; IP Group LSE:IPO Pivotal Point 150p

 

Weakest in Industrial metals; Ferrexpo LSE:FXPO Pivotal Point 150p

Weakest in Mining; New World Resources LSE:NWR Pivotal Point 150p

 

Whiteboard

FTSE All Share; new pivotal points upper 3,400pts, lower 2,600pts - 3,435pts Bullish

SP500; new pivotal points upper 1,600pts, lower 1,100pts - 1,614pts Bullish

PHGP£; pivotal points upper £1150/Toz, lower £1000/Toz - £921/Toz Bearish

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P5 youtube.com/watch?v=YEzFM5XShyo

P6 youtube.com/watch?v=S8wcX6-4ogU

P7 youtube.com/watch?v=Uy2Y8UYLjvg

In the second episode, a key point was that in the early days when wins were easy, the professionals made 300% ROI. Today, the professionals make 8% ROI and this chap has to put in 17 hours a day. That's how tough it seems in the small pond with other big fish.

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I finished 15th of 76 in the April 2013 http://www.stockchallenge.co.uk/ with a meager 3.73% monthly gain.

 

We're off to a good start - unfortunately I didn't realise BUMI had just been suspended which we are short on. Apparently this is so bad that people should be sued for getting listed on the main exchange, according to the the BB chatter. We are following the steps of Jesse Livermore; Long the strongest sectors, short the weakest sectors. That is the strategy.

 

The whiteboard hasn't changed much, still bullish on equities, and gold still needs to close above £1000/Toz to cancel the bearish signal.

 

Good Trading !

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LSE:IPO already stopped out after one day.

 

I can take a positive from this, because the market gave me a definite YES or NO answer as whether this trade was correct or not in the same way that Jesse Livermore writes out in his methods. The sooner the market can tell me if the trade is right, the bigger the mitigation of opportunity cost, which I shall write about in the next post. LSE:IPO will need to make a new high for us to have another look into it.

 

One must be brutal, and have the same conviction at the time of buying, AND when you are selling (and vice versa). I try to imagine that all trades are binary bets - YES or NO. There will be no "hope" that it goes up or down, only clear cut answers.

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theory.PNG

I was driving along yesterday, and some interesting thoughts came to my head. Risk and hence the amount you should risk is a mathematical function of time.

 

Chart 1 - The longer you are in the market the more unknown unknowns (such as black swans) your trade must endure. Assuming unknown, unknowns only impact negatively to your trade, risk must be increasing the longer your trade runs. I was thinking about this because in book "The Way of The Turtle" by Curtis Faith, the author was comparing trading systems, one had a time stop, and another didn't. The time stop was 3 months, I believe if the trade wasn't in the money by the end of three months, the loss would be cut, rather than waiting for the stop loss to be triggered. The systems were the same, but the one with a time stop and stop loss performed better under the same conditions than the system with just a stop loss. An additional benefit of course, is that opportunity cost is mitigated. Capital tied up in a bad trade cannot be used elsewhere because capital is always limited.

 

However, the risk profile will change, as soon as the trade shows profit, and increasing profits with time. I don't have an image in my mind of what this looks like.

 

Chart 2 - The normal trading position size that is bandied about is 2-3% of your capital on one trade. That is one should not risk 2-3% in one trade at any one time, ideally in non-correlated trades. If one has £100,000 in capital and sets the risk to no more than 2.5%, one should not risk more than £2500 in one trade. In major issues such as FTSE-350 companies, the risk of bankruptcy is lower, than junior companies, so one could put £5000 in share, and it would need to drop or have a draw down of 50% to be risking more than 2.5% of your capital. However, in a junior company, lets say a tech start up or minerals explorer, no more than £2500 should be bet because it could be suspended without warning.

 

Going back to the first example, the amount bet is £5000 in reality is 5% because the bigger the bet and the longer you hold it the bigger risk to your entire capital as the bankruptcy risk is not eliminated because of the companys' market capitalisation. So if one decides to bet more than 2.5% ( by using a stop at 2.5% loss as opposed to risking 2.5%), or using a leveraged product such as a spread bet or Contract for Difference (CFD), a time stop must be used as you are not pricing in unknown, unknowns. I believe the bigger that is bet, the shorter the time stop. Bet sizes bigger than 2.5%, the risk goes up via an exponential function, I believe.

 

---

 

I have one trade with LSE:ALY which has been treading water at a small loss/break even for 7 months. This is capital we can't afford to be tied up!

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I found a trailer to a new online poker documentary that is coming out this summer.

 

How the young in the US and world got out of the 2000 recession - via the Online Poker Boom.

 

Trailer for BET RAISE FOLD.

http://www.youtube.com/watch?v=h-ROorrK1pY

 

Perhaps we can get out this depression by lifting the online poker ban? And invest in Online Poker shares (but not a minute before)!

 

http://www.youtube.com/watch?v=BL71V9prveE

^ And another odd off-the-wall documentary on Youtube, episode 8.There is a actually a TV show.

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Thinking about trading psychology and the general public.

 

I was riding my bicycle this morning, and was thinking how most of the public don't plan or think ahead. You can see this by how people drive, and how people act in the street. Some are hurrying around, some are streetwise and keep themselves to themselves. People tend to think about important things until the last minute. Why is this useful or profitable? Well if you come across a trading idea, and think, gees this has gone a bit far, and you should wait until it is much later, that could be unwise. It maybe more people come into the trade that you don't know about, as the public is late as always to the party. However, following the trades you must be brutal, like a caged tiger. Business is business.

 

How do you know that you are not the public? But more of an insider?

 

- Do you plan your day ahead mentally in the morning (just a rough outline)?

- Do you get to any meeting or engagement/work in good time, and never be late?

- Do you rise in the morning early, and follow a routine?

- Do you own a diary and use it regularly?

- You are never double booked for anything by accident?

- You good supplies at home and rarely just pop out for a pint of milk?

- If you commute to work, you never hurry (why hurry to work - are you mad?), and travel calmly and coolly. Practice Road Zen.

- You don't tail gate, cut people up, or try to race people you don't know, just because they look at you in a starring way.

 

If you answered yes to most, I would think you are an insider!

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Currency Investment, the slow boring way.

 

Just tinkering with this idea, and pinning up some charts with GBP trending down over 10 years. An investment in Philippine peso over ten years looks OK and still trending down. If one bought 100 PHP with 1GBP in 2005, it would be worth about £1.5 now (63 PHP to 1GBP). That's 50% return in 8 years, (average 6.25% per year).

 

I haven't figured an easy way to trade exotic currencies apart from popping down to the currency exchange and physically buying and selling them. Does anyone actually do this? I assume there are people out there who do this and make a living out of it.The charts are from XE.com

 

gbpphp.PNG

60 PHP to 1 GBP looks a key level that it could break down from when it gets there.

 

There are so many currencies it will take a while to sift through them to look for the best ones against GBP. I am probably looking more into Asian currencies, and maybe some interesting ones such as the Icelandic Krona.

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ipo.PNG

IPO is now looking like it is backing off the 150p level (now 146p), so cutting the loss was the right move the other day. This doesn't mean we go short, but the price action is neutral between the 150p-40p level, and to some degree the 150p-100p level shorter term. Until we approach those levels, we don't do a thing.

 

MCD McDonalds looks like it wants to stay above $100, but we need some more price action to confirm it.

 

SAB and DGE have been added a few days ago, and look good.

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Retire Rich in 30 days!

 

Here are some Free Seminars (no doubt people paid £1000s to attend) - try to look at these seminars objectively with a cool calm mind. Do they make more money selling the "system" or actually trading? It has some references to passive income, and Rich Dad Poor Dad.Enjoy!

 

http://www.youtube.com/watch?v=MGzkkwmc_W8

 

Millionaire Mind Part 1 youtube.com/watch?v=lkSDIbAWb44

 

IFX Forex Video Part 1 youtube.com/watch?v=JKQPRG21uC4

In part 3 he describes a JOB - Just Obey Boss, or Just Over Broke.

 

This is the channel if you want to see more parts, http://www.youtube.c...s?feature=watch

 

There is a long thread about this chap on T2W http://www.trade2win...-real-scam.html

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Self Defence

 

Mind preparation and body preparation as one Zen. Youtube is a good source of information apart from trading and neuro linguistic programming. Everyone in the markets should be learning about self defence and martial arts. Both are highly linked, in the way you need to control emotions and enforce self discipline.

 

http://www.youtube.com/watch?v=2Sh4NlB6naQ

 

Some moves are easy to practice in your living room. Perhaps when time allows, I'll join a martial arts gym.

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dow+gold+ratio+2013.PNG

We're been here before. What happened in 1975?

 

Dow:

30DJIA.gif

 

Gold:

GC1970.gif

 

So it was gold that went down more so than the DOW?. This is the major gold correction that we have been expecting. 2008 was NOT it.

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This is a full length video -

 

http://www.youtube.com/watch?v=TEtEHCq5L3c

 

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The power of annual breaks (new highs, [and lows for shorting - not shown]) visualisation.

 

price+action+toothpaste.GIF

^The upper and lower grey lines depict the annual high and the annual low for each chart.

 

Interesting.

So what do you reckon on Gold ?

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board.PNG

^21st May 2013

 

gld.PNG

Gold needs to do a lot before I can become bullish. In the right hand chart, it would need to close above $1850 and clear all that congestion in the next three months, quite unlikely - I have put an imaginary weekly bar there to show what this would look like. As time moves on, the congestion is "forgotten" by the market, that is why a 2 year view is so useful (nearly all my charts I post on GEI are 2 year charts). Ah! But some people will say if you buy now and it got to $1850 you've missed out on all that profit, not so, $1850, wouldn't be the end, but it would be the beginning to something else. Maybe have a stop at $1790 (below $1800 as that would be a key round number), just in case you are wrong. Typically a powerful move would occur, moving the entire previous trading range difference. If the trading range was, upper $1850 and lower $1350, = difference of $500, so $1850 + $500 = $2350 Target.

 

In GBP terms, it only needs to close above £1150/Toz to clear that congestion.

 

 

--

 

Take a look at LLOYS, that I posted on the stock thread. http://www.greenener...showtopic=17817

lloy.PNG

There's no immediate congestion or sellers that will sell into that rise (probably) on that chart. Everyone who has bought in the last year or two is likely to be in profit and will hold on. The same principle can be applied to gold. The toothpaste tube is not ready for gold. But for LLOY it is. If I am wrong, and LLOY falls back down, then I cut my loss short and move on to something else, and will wait for another new high to appear near a round number (a potential pivotal point).

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