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shaysworthy1.jpgWhat’s cookin’ James? Greenback Stew– “Lessons Learned from Lower Highs”

What makes up a lower high technical — Insights from Shay.

What makes up lower highs fundamentally?

Why am I not bullish on commodities?

AUS/NZD — USD

James why are you spooked by the Dow?

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shaysworthy1.jpgHope everybody had a happy Easter — Major European markets are still closed which leads to slightly illiquid day. Asia flat overnight. Go Taiwan, ETF’s opened up big on the elections and potential trade relations with China

What does or how can I trade well when Interventions is on the table?

Froth in the market leads to blow off and consolidation in commodities look at for price action to begin to base 1- 3 weeks and then move higher based off of fundamental demand

Intervention – Dennis Gartman, analyst on Bloomberg discussing the need to maintain strong liquidity and integrity in the financial system in the near term even though the long term effects are certain to follow.

Risk on scenario near term- look for equities and commodities to base, gain footing and then move higher for higher probability setups.

Hal set a date to get your first real trade in!

I PREDICT #4: I PREDICT that if you made a Currency Trading resolution, but you didn’t turn it into a specific, written goal with a deadline and a strong reason why you must achieve it, you will freely abandon it the moment the going gets tough. (4)

Fed BunnyIt has been a week now since the Bear Stearns collapse and the Federal Reserve decision to bail them out and lower rates by 75 basis points. Now what??? We see that Oil is starting to head back up and that the rally that we had in the markets were short and sweet. The dollar seems to be getting crushed again and may end up retesting the highs of 1.5900 again. I would like to know your thoughts on the Fed matters. Please fill out the poll so we can get your opinion on what the Fed is doing. Who knows, maybe the Fed will listen this time.

~ G

shaysworthy1.jpg James ‘I want to sell you some commodities’ Boyd- Outlook on GLD, USO, UNG and commodity related stocks.

What pairs to focus on going into the weekend? CAD/JPY, AUD/JPY. GBP/CAD, EUR/GBP, USD/CAD

Follow up with EUR/USD, AUD/CAD, NZD/USD. EUR/GBP. Watch for the lower highs on JPY and CHF crosses

Persian new year’s affect on the markets?

Re-group over easter

Lack of liquidity this weekend.

I predict plug –

I PREDICT that the way you see yourself in your Currency Trading mind’s eye today will be an exact reflection of what you see in the mirror at the end of the year. Barclays – Pros – Be in this profession not as a hobby but to make real money.

shaysworthy1.jpg Uncle James please tell me more about the Commodity Squeeze, the narrowing of the spreads between interest rates, economies, and supply and demand.

Attributing commodity sell off to the lack of the fed to meet expectations. What was the expectations? 50 – then, 75 then – 100 –

Look at the commodities get ….. shieza get kicked out it. – Then take the chill pill

Watch for near term divergences on near term dollar strength on $/JPY, $/CHF, EUR/USD on MACD.

Large traders looking at flattening on Long Gold/Short Equities

escape_from_alcatraz.jpg Coach Nick Jensen has provided part II of a great article he did last week, What does Alctraz and your trading rules have in common? Thanks Nick!

Last week I talked about the importance of having a trading plan and mentioned that having a psychological plan as well is an effective method to deal with market conditions. I have put some guidelines together that can be included in this plan and some of the questions you may want to ask yourself as you develop it. One thing I want to point out is each trader trades at a different skill set level and so each
trader will also trade at a different psychological level as well.

This plan needs to be yours; spend some time introspecting, really trying to understand how you tend to react in different market conditions. Then as you evolve as a trader this plan should evolve with you: do not stay stagnate, you need to progress and strive to achieve a higher level of trading competency as well as psychological competency.
Losses: Trading is not a business of perfection but a business of probabilities. Doing A, B and C does not always equal D and that is OK. You do not have to win on every trade but make sure that you are cutting your losers loose. How do you react when you take a loss? Identify those emotions and realize it is normal to take a loss in the market as long as your risk was justified when you entered the trade and you are taking on a minimum amount of risk.
·Do I fear taking a loss?
·When I take a loss how will I react to the market? (I say “next”)
·How many losses in a row will I take before re-evaluating my system or the execution of my system? (I have taken in 8 losses in a row before, it could be more)
Wins: It is just as important if not more important to control your emotions when you have a winning trade. Do not fall into the trap that you are invincible in the market. It is nice to go on a winning streak but that’s all it is: a streak. Take the profits, be grateful for them but don’t be surprised or disappointed when it comes to an end.
·What will I do to stay calm when I win a few in a row?
·Will I reward my efforts and if so how?

Capital Draw Downs: It is normal for your portfolio to fluctuate in value. Typically the more aggressive of a trader you are the wider the swings in your account. Identify what would be a typical swing in your account during normal trading activity. What you need to identify is how much of a capital draw down is abnormal and warrants a halt in trading to re-evaluate what may be going wrong.

·What percentage drawdown in my account will trigger a suspension of trading?
(In my opinion a 20% draw down is maximum)
·I can not trade real money again until I………….. (What things do you need
to identify and or fix before you can trade live again)

Emotional Extremes: We all know that emotions are a normal part of life. They are also a normal part of trading as well and that is nothing to run from. It becomes dangerous when those emotions get to extreme levels because we tend to become irrational.

·How am I going to identify what are normal emotions and what are extreme
levels?
·If my emotions are at extreme levels; why and what can I do to change it?

Again, in order to stand on the banks of Alcatraz and know we’re going to reach the other side of the bay, we have to be prepared to deal with those things in which we can not control. These are a few suggestions to prepare you to do so, feel free to add to them or take away from them as needed.

 

shaysworthy1.jpg Cat’s outta the bag and 8-2 the fed has decided to drop the interest rates by 75 basis points to 2.25%

First time commodities or inflation come up in comments

How much does the housing affect this – Gotta clear inventory starts/ permits down

CAD – Looking good with CPI which means C Bank has more flexibility w/ rates

Franc the hell out of other pairs – W/ Industrial Production #’s

Commodities are touching the void – where do they go from here

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