Updates from April, 2012 Toggle Comment Threads | Keyboard Shortcuts

  • Trader Lyn

    Trader Lyn 3:07 pm on April 4, 2012 Permalink | Log in to leave a Comment  

    How to ride the trend with a simple Moving Average 

    Stocks are either trending up, trending down or rolling sideways, understanding the direction of the stock’s movement and applying the right indicators will help us to become more successful traders.

    Let’s talk about an up trending stock, what indicator is more appropriate to use
    I personally use moving averages on trending stocks they work the best for me in a rising stock price.

    Let’s have a look below on the chart.

    The setting I use is a 55 Day, 21 Day, 5 Day moving average.I find that we can ride a stocks climb all the way to the top and exit as it reverses or closes below the 55 Day Moving average.
    In April 2009 we enter in November 2009 we exit with a nice gain.
    In March 2010 we enter in May we exit with a nice gain.
    In October 2011 we enter in June we exit with a nice gain.
    In February 2012 we enter and are still in the trade as the price is still above the 55 Day Moving Average.
    Now if you’re wondering about the big drop in price on the chart it’s a STOCK SPLIT why do I love stock split companies because  when I first started trading them 12 years ago it’s like a self-fulfilling prophecy a good growth company with strong earnings will eventually be driven back to the original price…yes my ah ha moment if you watched it is repeating itself.
    A stock trading at $77 a share is very expensive to buy 100 shares our investment is $7,700 but with an option we can control the same 100 shares for the next 2 years with only $1,000 deposit now that’s the power of leverage.
    The strike or the agreed price we have chosen here is the 80 strike.
    Let’s assume in the next 2 years the price goes back to the original price of $120 what is our call option worth well that’s easy to work out we realise the gain from $80 to $120 that’s $40 increase  x 100 shares it’s worth $4,000. That’s a 300% return.
    If we purchased the shares our return is 50% not  a bad return we wouldn’t complain as an options trader I ask where else could I be using my money wiser.
    In this example I have an extra  $6,700 to invest somewhere else.

     
  • Trader Lyn

    Trader Lyn 1:29 pm on March 5, 2012 Permalink | Log in to leave a Comment  

    How to create a trading plan 

    There are three key decisions you need to make when trading and if we think in these terms and your trading plan answers each question, then you may have the makings of a simple yet robust trading plan.

    •             Under what circumstances will you enter a trade?
    •             How much money will you commit to the trade?
    •             Under what circumstances will you close the trade?

    Having a trading plan facilitates your decision-making by helping reduce the influence of your emotions from the equation and, therefore, will hopefully make you trade more efficiently.

    The best way to ensure you get the most from your trading plan is to write everything down.

    I believe your trading plan should take into account three broad areas:

    •             Your trading mindset (or psychology)

    •             Your money management (position size, hedging strategies & using stop losses)

    •             Your trading method (requirements for entering a trade or exiting, technical analysis tools used and your daily routine.)

    Many people accept that a trading plan is an essential requirement to trading well, yet they don’t know where to start to put one together.  It can be overwhelming at first to tackle this issue, so some of the things you must ask yourself first are:

    Why do you want to trade the markets?
    1.       Increase and grow your money for retirement?
    2.       Increase your yearly income?
    3.       Create a monthly income to help pay for bills?
    4.       To save up for a new boat, holiday house, trip overseas?
    5.       Pay for your children’s college?

    What is your time frame for achieving your goals?
    1 year
    2 years
    5 years
    10 years plus

    How much money are you going to invest?
    5K
    10K
    20K
    30K
    40K
    50K
    60K or more

    How much of this capital will be invested into the market at any one time?
    10%
    20%
    30%
    40%
    50%
    50% or more

    How much of your capital are you prepared to lose before you stop trading?
    2%
    5%
    10%
    20%
    30%
    40%
    50%

    What are you going to trade? (Stocks, Options, CFD’s, Forex, Futures?)

    What is your time frame for holding positions?

    Do you understand the risk with the trading tool or strategy you choose?

    How many trades do you want to do?
    One per day        [  ]
    One per week     [  ]
    One per month   [  ]
    How many trades per year?
    How much of your time can you commit? (It is important to take into account your lifestyle, family and personal commitments)

    1.       One hour day                        [  ]
    2.       One hour per week               [  ]
    3.       5 hours per week                  [  ]
    4.       10 hours per week                [  ]

    You must set in stone the most important thing with money management – protecting your capital.

    Even though your primary motivation is to make money protecting your trading capital is even more important.

    How can you make money, if you don’t have any money to trade with?

    The most important trading rule is to cut your losses. One way to do this is using stop losses.

    A ‘stop loss’ is a pre-defined level (price) at which you will exit a trade based on the premise that it is not moving in the direction that you had anticipated, and therefore you are losing money. Your prudent level of loss has been met by the risk you are willing to take.

    The first thing is how are you going to set your stop loss point?

    One of the best ways to manage your risk when trading is to limit or set a cap on how much money you put into a single position.

    What is the maximum percentage of your trading capital you are prepared to commit to a single trade?

    Another crucial part of money management is position sizing. How are you going to position size?

    What is going to be your maximum risk exposure across your trading portfolio at any one time?

    Will you limit the number of trades based on how much risk capital you have at risk across all of your open trades?

    What happens if you keep losing money? This question has little to do with trading but rather your own financial situation.

    Are you prepared to lose every cent of your allocated trading capital before you are forced to stop, or do you think you would like to hold on to some of the money and commit it somewhere else, with the plan of waiting or being patient to review why it’s not working.

    There are numerous products available to trade including shares, futures contracts, options on futures as well as options on stock, currencies (foreign exchange), CFDs and more, and they all have different risk profiles. If you are trading multiple products, how are you going to allocate your capital accordingly based on the different levels of risk?

    How are you going to trail the stock price with your exit once the price moves higher?

    How are you going to calculate this?

    Are you going to trade short term reversals in medium term trends?

    Are you going to trade in only blue chip stocks and look at medium term trends with a view to buying stocks as they trade above 12 month highs? Or below12 month lows?

    Are you going to trade more speculative stocks at the other end of the scale and trade breakouts from trading ranges?

    If you are going to use technical analysis, what indicators are you going to use?

    For example, are you interested in trends? If so, over what time frame and how are you going to identify them? Are you interested in reversals of short term or medium term trends? If so, how will you identify them and then what will you do once you identify them?

    If you are going to use fundamental analysis, what items are of most interest to you?

    For example, are you interested in earnings, dividends, growth, acquisitions? If so, how will you use that information?

    Human nature and behavior over the years, remains constant in the market. All market participants are driven by similar emotions and will often react to situations in the same way. Moreover, there are always a continual flow of new participants into the market and they are generally ignorant of the way the market has behaved in the past.

    For this reason, the same mistakes are often repeated by each new group of market participants – this is why chart patterns often work.

    First, will you consider a particular chart pattern as a setup (lead into) for a trade entry? Second, are
    there any chart patterns that will immediately stop you entering a trade or at least have you waiting until the pattern has completed or dissolved?

    Strategies for Low risk traders max 10% risk
    Holding positions up to 12 months or more
    Buying stock
    Selling covered calls
    Vertical spread strategies
    Calendar Leaps min 12-month option expiry to max 3 years
    Leaps

    Strategies for medium to high max 20% risk
    Holding positions 3-6 months
    Min 6-month option expiry
    Buying calls and Puts
    Selling calls and Puts
    Buying stock
    Selling covered calls
    Vertical spreads
    Calendar Leaps
    Leaps

    Strategies for high-risk tolerance max 30%
    Holding positions 1 day to a couple of weeks
    Min 3-month option expiry
    Buying short term calls and puts
    Trading CFD’s, Forex, Futures,

    What kind of education have you done to qualify your knowledge?

    Have you tested your plan before committing your capital?

    How long are you prepared to paper trade for?

    What is your goal and time frame?

    Are your goals realistic and achievable?

    Some of the more important factors include your personality traits like patience, confidence, decisiveness, emotional stability, mental agility, and the most importantly  – your ATTITUDE.

    Trading has a greater potential for reward than investing but with that extra potential for reward is greater risk. Those who trade well have been well educated and prepared. Very seldom does somebody start trading and make money from day one. Putting together a proper trading plan can seem time consuming, however I can assure you that it is one of the best things you can do and will greatly assist you in achieving the results you want.

     
  • Trader Lyn

    Trader Lyn 2:38 pm on February 6, 2012 Permalink | Log in to leave a Comment  

    Latest Market News 

    After strong non payroll numbers announced on Friday, (243K against the projected number of  150K) the market advanced higher.
    Whether we think the data is manipulated or not, the good number gives confidence that it’s not getting any worse for now.

    However this interesting article has another way to look at those numbers. I’ll let you make up your own mind.

    http://www.zerohedge.com/news/trimtabs-explains-why-todays-very-very-suspicious-nfp-number-really-down-29-million-past-2-mont

    These numbers are  released every month, so next months numbers will be extremely important to watch. The Australian market also advances today on the positive payroll news in the US.

    This week in Oz, the RBA meets to decide on a rate cut, also the Big Blue Chips are announcing this week the likes of BHP, RIO, TLS, MQG.

    Greece may seems closer to a negotiation deal that may just calm the markets for now. But we must be aware of just how serious the events in  Europe are to the rest of the world and the consequences.

    If a positive deal is met with Greece soon, the markets will move higher. If not,  it could be the start of the falling dominos just like 2008 all over again.  I think Europe has the capability for now to kick the can down the road a little further before it implodes on them.

    It is also a presidential election year in the US this November and historically that means bullish. There has only ever been 2 negative election years in history.

    January 2012 has been a positive month in the markets, it has started the year off in positive territory. The only thing concerning some investors out there is that the volume for January was at a 10 year low.

    They are wondering how much of the 8 Billion dollars that is sitting on the sidelines, waiting to be invested somewhere, will go into the stock market.

    No matter what the market does, if we have a trading plan there is always an opportunity to trade. See you online tonight for a full market update.

     
  • Trader Lyn

    Trader Lyn 11:39 am on January 31, 2012 Permalink | Log in to leave a Comment  

    Understanding 200 years of defaults 

    Something a little different this month -  I would like to share with you a report that I found has some valuable  explanations of what has happened in past history what is happening now and what will happen in the future which effects ultimately the stock markets.

    This report is Written by Carmen M. Reinhart, University of Maryland and NBER, Kenneth S. Rogoff, Harvard University and NBER

    Abstract:

    This paper offers a “panoramic” analysis of the history of financial crises dating from England’s fourteenth-century default to the current United States sub-prime financial crisis. Our study is based on a new dataset that spans all regions. It incorporates a number of important credit episodes seldom covered in the literature, including for example,defaults and restructurings in India and China. As the first paper employing this data, our aim is to illustrate some of the broad insights that can be gleaned from such a sweeping historical database. We find that serial default is a nearly universal phenomenon as countries struggle to transform themselves from emerging markets to advanced economies.

    Major default episodes are typically spaced some years (or decades) apart, creating an illusion that “this time is different” among policymakers and investors. A recent example of the “this time is different” syndrome is the false belief that domestic debt is a novel feature of the modern financial landscape. We also confirm that crises frequently emanate from the financial centers with transmission through interest rate shocks and commodity price collapses. Thus, the recent US sub-prime financial crisis is hardly unique. Our data also documents other crises that often accompany default: including inflation, exchange rate crashes, banking crises, and currency debasements.

    Click the link below to view this 124 Page document:

    http://www.economics.harvard.edu/files/faculty/51_This_Time_Is_Different.pdf

     
  • Michael Brook

    Michael Brook 9:50 am on January 30, 2012 Permalink | Log in to leave a Comment  

    Eliminating the Confusion Factor – Building a trading system that works 

    One of the curious things about trading is that it is a rule free place. There aren’t any real rules as to how you interact with the ebb and flow of price on a daily or minute by minute basis. There isn’t a policeman there to tell you that you are speeding or going the wrong way. There aren’t any stop signs telling you that you just about to drive into a highway on the wrong side when all the traffic is heading in the opposite direction. The trading environment is a rule free space.

    There’s a saying in german, “Wer hat der Wahl, auch hat der Qual”. Translated this means that if you have the choice you have the burden of the choice and it’s consequences.

    In a rule free space like trading you have to make a lot of choices repeatedly and the burden of those choices are yours and yours alone. Every time you think about a trade you are making a choice about that trade. Will you stay in or will you get out… what about the last time this happened?, what’s going to happen next? Etc, etc, etc…

    In such an environment, what is critical it to decrease the burden of the choices you necessarily have to make by virtue of being in the rule free space we call the market.

    The best way of doing this is to have a clear set or rules that you have for yourself that you have worked out works for you. My style of trading will be different to your style. My risk profile may be different to yours, my skill level may be different, the instruments I like to trade may be different to the ones you like to trade etc, etc,etc…

    Before you can trade successfully you need to make clear decisions about:

    • The instruments and markets you trade in
    • The timeframe you trade in
    • The level of risk you are tolerant of.
    • The amount of time you have to learn the skill.
    • The intention you have for learning how to trade.

    Each of those choices will affect your decisions and future profitiability and success.

    Some people trade intruments that are too highly leveraged for their skill level. It surprises me that many people will trade instruments with the highest risk (leverage) without considering the downside consequences of that type of trading first.

    This is akin to taking a learner driver and putting him behind the steering wheel a formula one race car telling him it’s going to be fine you’ll get there really fast. The predictable carnage is not easily explained away.

    Traders who able to make quick decisions can make better short term traders than others who take longer to make decisions.

    Once you have decided the things above you will need to do everything you can to reduce the amount of work that you will need to be doing in your decisions making.

    To reduce the confusion factor you will need to have a trading plan that has clarity. The more complex any system is the more things that can go wrong with it. System theory holds that for a system that has “n” components there are “n squared” possible failure modes of that system.

    So if you are building your trading system you want to make it as simple as you can.

    In order to make your trading system simple you need to:

    • Have it as simple as you can
    • Have a precise market (context) for each trade
    • Have a set of trades for each market.
    • Have a set of simple entry and exit rules.
    • Have a detailed review methodology

    If your trading is not working the probability is that either the decisions you made before you started trading have not stood up to your interaction with the market or the market is not favoring your trading system.

    If you trading system is not as simple as it needs to be or is dripping with complexity the chances are that you aren’t getting the results you want out of it. There is a reliable predictable path for most traders whose trading gets initially more complex then substantially simpler with time.

    Most expert traders have systems that are simple to implement.

    The path to trading success is much like sharpening a knife. You have test it out before you know if it’s sharp enough. This means sometimes you will get a cut or too in the process.

    The saying that the simple things in life are often the best is true particularly when it comes to trading systems.

     
  • Michael Brook

    Michael Brook 10:07 am on January 16, 2012 Permalink | Log in to leave a Comment  

    A year of firsts. Lessons to be learnt. 

    If we fail to learn from the past we are condemned to relive it. Nothing is more truthful than this saying applied to trading. This is why many traders, correctly so, look to previous patterns of price action to guide their actions in the future.

    However, the market is constantly changing and evolving. One year may not be the same as any other. This year has proven to be different from every other year there has been in the market. As traders we must evolve our trading to the changing market within which we operate.

    In 2011 there was unprecedented volatility in the financial markets. In 2011 we saw

    • The first year where the XJO (the asx S&P200) closed down 2 years in a row.
    • The first day ever when XJO moved a total of 11% within a single day on XJO (Aug 9)
    • The largest ever single day volume spike in the history of XMJ ( the Australian materials sector)
    • The largest every 4 day volume on the history of the DJI Aug 9-11
    • The first year ever with 100 days greater than 100 point moves on the SPY.
    • The first time in 41 years where the spy closed within 0.5% of its opening, (this occurred in spite of the fact that the DJI moved over 120% of it’s value in 11 major moves)
    • The first period ever where 80% of all volume on an exchange was algorithmic(this occurred through august on the DJI)

    The market this year was characterized by massive moves sparked by news announcements, natural and man-made disasters and ongoing concerns about debt in Europe and elsewhere.

    So what is the significance of this information and how do we use this to our advantage?

    Firstly, we should never expect the past to be similar to the future. The speed and range of market movements is increasing and we should expect more of this in future markets. As the penetration of the algorithmic traders increases and the exchanges become more dependent on the income derived from those traders, the price movements will become more consistently larger.

    Secondly, traditional methods of trading are becoming more and more unprofitable. In such volatile markets last year’s where rapid movements of entire indices occur, tradition trading methods would have stops being hit all the time. Trend traders would be unable to make money because of the rapid swings and periodic clean outs of stops. Patterns would have difficulty making money as many patterns fail immediately after break out. The support and resistance line traders would have been worked over similarly as the volatility of the market pushes price briefly above and below support and resistance levels only to reverse once trades are entered into.

    Finally, the methods of trading that support shorter term profit targets that take advantage of the volatility will be the trading style that will be rewarded. Many retail traders like to hold positions for longer time periods. This is referred to buy and hold typically long trades. That strategy will have proven to be very costly in the past 18 months.

    As traders we must adapt to the new market and to use what the market throws at us to our advantage.

     

    An expertise acquisition perspective.

    The acquisition of expertise involves a systematic practice of the performance skill in many different conditions, so that when the performance is required in a new context it can be accomplished with skill.

    One aspect of training that is central to expert performance is the acquisition of flexibility to perform in different contexts. The performance skill is practiced in as many different possible environments to build flexibility into the performers performance.

    As traders, we need to have trading plans that are flexible that are able deal with different market conditions.

    By building flexibility into your trading you are able to function in profit in a market that is volatile.

     

    If you have flexibility as part of your trading strategy,

     you will never be in a market that you can’t profit from.

    So, how do you do that?

    Firstly, you need to have trade setups for volatile and non-volatile markets.

    Secondly, you need to have contingencies for each trade if the volatility of the market suddenly increases

    Finally, you need to know what sort of markets you don’t want to be in. If this isn’t it you should be out.

    2012 is likely to be as volatile as 2011. The causal factors of the volatility have not gone away and are likely to accelerate to their conclusion. If you are prepared you can trade profitably in any market.

     
  • Trader Lyn

    Trader Lyn 12:30 pm on November 28, 2011 Permalink | Log in to leave a Comment  

    We are headed for disaster or an opportunity are you prepared? 

    The last disaster the saw Dow plunged all the way to 6,500 and the Standard & Poor’s 500 collapsed to just below 700 followed by  the All Ordinaries here in Australia which plunged to 3,000 points.

    What is interesting in the last 12 years we had 2 massive stock market crashes it’s happening every 6 years 2002 recession  2008 Recession 2014 behold the future.

    Why have I been so bearish? Because governments and central banks around the world have borrowed, printed, and spent far too much over the past few years bailing out anyone and everyone.

    It stopped a massive meltdown in global capital markets but for how long? the PRIVATE credit crisis has turned into a massive SOVEREIGN credit crisis.

    Ask yourself “Who now controls the credit markets who are these people that own the printing press and what is their plan?

    They have nationalised the debt through bailing out the financial companies that were about to fail a failure would’ve shut down the Global credit markets overnight remember those companies

    American Insurance Group, Citgroup, Fannie Mae, Freddie Mac, Ginnie Mae and much more.

    Who really knows what that end figure is how many Trillions have been spent to rescue them we will never know through their accounting rules of offsetting debt not marking it to the market the real loss is never exposed.

    Now, the next stage of the crisis is taking down country after country, bond market after bond market, and even government after government!

    European bond markets are in free fall from Spain to Belgium to Hungary to Italy and Greece. France is on the verge of losing its AAA rating, and  Germany the stronger nation can’t seem to find investors for its bonds it’s causing borrowing costs and debt costs to rise, pretty soon they won’t be able to meet the interest payments on the debt.

    New news coming out of Belgium and Austria has crushed their bonds And now the bailout of bankrupt Belgian bank Dexia may fall apart, which just could hurt France’s AAA rating and then who else does t hurt?

    We have seen the collapse of MF Global a global derivatives broker who were also a primary dealer in treasury securities they are the 8th largest bankruptcy I the US.

    Then more warning signs of global manufacturing and service sector activity slowing as China confirmed this last week releasing PMI at 48 below the minimum level of 50.

    The last time these indicators were going haywire like this was a warning sign of a recession.

    There are lots of opportunities in a recession that’s why I love the stock market it’s the only place I know of,

    where you can make money on a falling asset so collapses like Bear Stern, Lehmann Brothers, American Insurance Group, Fannie Mae ect that saw their shares fell to pennies on the dollar in just a few months meant there was huge profits for those that bought the insurance policy’s, that invested on the opposite side. Ah time to pay attention and watch what the smart money is already doing yep betting on the downside again.

     
  • Michael Brook

    Michael Brook 12:28 pm on November 28, 2011 Permalink | Log in to leave a Comment  

    Intelligent decision making and emotions – essential ingredients to a profitable trade. 

    Many traders believe that the more they control their emotions the more they can make better trading decisions and make more.  After making a lot of trades they will have experienced a range of emotions and they can come to the conclusion that the emotions are the problem. They may also have spent some time in different markets, some of which support their trading style and some of which don’t. This will sensitise the trader to the emotions of making money and losing money.

    Recent advances from the world of cognitive neuroscience have proved that emotions are essential ingredients to good decisions making. Much of this work has been done by Antonio Demasio. Studies have been done on people who have because of some form of  brain injury are unable to experience emotions.  They are able to make conscious rational decisions but are unable to experience any emotions about those decisions or an emotion about the outcome of the decision.

    The results of the study of these individuals reveals that they are unable to make even the simplest of decisions.  The lack of an emotions in the decision making process caused them to be paralysed in the face of data. One study of people who are unable to experience emotions called the 2 deck gambling game is of particular interest to us as traders.

    The game involved 2 different decks of cards, one had higher risk and reward and one had lower risk and reward. Each hand involved the winning or losing of money according to the deck that was chosen.  Normal people who play the game naturally gravitate towards the lower risk and reward as the emotional feedback mechanisms that are present in them seek to regulate the intensity of the experience. Individuals who are unable to experience emotions do very poorly at this game because the feedback mechanism is no present.

    The implications of this research are immense.

    Firstly, Intelligent decision making is impossible without emotion. The presence of the ability to experience emotions is fundamental to making good decisions regarding risk and reward for risk.

    The greatest implication is that evolution has handed to us a very rich automatic system of rapidly solving problems intelligently that we can be presented with that we can’t solve biologically. Emotions are automatic and they are essential to quickly solving problems. By using emotions to provide guidance to the conscious mind this allows problem solving to be rapidly sped up thus aiding survival. The lack of emotions stops good decisions making in it’s tracks.

    As traders we have to evaluate data rapidly and efficiently in order to profit from the patterns that present themselves in the market. It is the combination of our emotional responses to the information and our emotion process that enable us to make good trading decisions.

    The truth about emotions and trading is that we should be relying on them more and not less.

    Expert traders know how to use their emotions to their advantage and know what to reward themselves for emotionally. They reward themselves emotionally on the execution of their trading plan and over much longer time frames.

    This is different to novice traders and how they use their emotions.

    Expert traders use their emotions to:

    • Reward themselves on the execution of their trade
    • Reward themselves on their execution of their trading plan
    • Reward themselves on the execution of their trading plan over a large period of time

    Note the difference between this and novice traders.

    Novice traders use their emotions to:

    • Get excited or depressed depending on their profit or loss on an individual trade
    • Get excited about their trading over  a short term.
    • Avoid creating a trading plan or don’t have one.

    This is covered in much more detail in the High performance trading course. Check out the Stockcourse and Trading State website for the next course.

    If you are experiencing difficulties with emotions in your trading, Trading State can help with coaching. Contact us to assist you with using your emotions in your trading in a more helpful way.
    Happy Trading!

     
  • Trader Lyn

    Trader Lyn 1:47 pm on September 26, 2011 Permalink | Log in to leave a Comment  

    Your wake up call 

    The losses so far on the Global markets is your wake-up call.

    Europe is headed for disaster, and that affects everything you own.  The Euro is collapsing, and so is America. Unemployment is stagnating and real estate is spiralling downward. A national debt of $14.3 Trillion and climbing. (Check out http://www.usdebtclock.org for some fun figures!)

    If you thought 2008 was bad, 2012 may well make 2008 look like a walk in the park. The DOW 6,000 or worse is a very real possibility and it could be sooner than you think.

    If this sounds scary, feel free to put your head in the sand and take what’s coming your way. However, if you’re like me and are prepared to do the work it takes to be on the winning side,  then spend a few minutes reading on.

    Trading put options is a way you can take advantage of a major fall in global markets -  as world indexes fall put options go up in value. They are also a way of insuring your stocks. If you suffered losses in 2008, don’t be foolish and let it happen again.

    I wonder in life if people really do understand their options.  There are things that happen in life that we can’t control but we can control the way we respond to them.

    Most people do not understand how the news is manipulated It is designed to trap the uniformed retail investor or trader into a poor position. Have you ever received a newsletter or a phone call from your broker convincing you to buy particular shares in a company? He probably told you a compelling story as to why you should buy right now. Perhaps you trusted his advice and are now wondering why you see a huge loss on that investment.

    Well the smart players (the “insiders” as we call them) have to distribute or sell to someone, so they prey on YOU,  the uninformed person that doesn’t understand how they play this game. We need to know their rules and play right along with them.

    Back in 2008, I received a phone call from a broker recommending me to buy shares of Macquarie bank when they were trading at $65 a share. He said “they’ve fallen from $95 a share it’s an absolute bargain and a great long term investment to hold in your Superannuation account”.

    Fortunately for me I was not convinced by him, as I am educated and know how they play this game. Today they sit at under $20 a share. How can you retire on that advice?

    One thing I have learned over the years never try and catch a falling knife. So when does a stock become a buy?  When the insiders are buying not selling.

    Don’t become their prey and lose your retirement money on bad advice.

    Buying shares on dips in a Bear Market will have devastating effects on your retirement. Get smarter and play this to your advantage. I don’t know of any investment on this earth that as it falls in value it actually makes you money except for put options in the Stockmarket.

    We are already profiting from this fall and you can too… if you are ready to learn how.

    The charts are a way of showing the big picture, take a look at the DOW (Dow Jones Industrial Average) showing where we have come from and where we shall return.

     
  • Trader Lyn

    Trader Lyn 1:18 pm on September 23, 2011 Permalink | Log in to leave a Comment  

    Global meltdown in full swing 

    The Global melt down is in full swing and in my opinion, we are already in a recession. However by the time the professionals acknowledge it, we will already be coming out the other side.

    But that’s just the way they manipulate the markets to calm the fear out there.  Fear is something I love to trade. The amount of money you can make from a falling market is enormous.

    Once you understand what is happening, and are properly educated, you can take advantages of the opportunities a falling market provides. Europe is collapsing, the sovereign debt is killing the PIIGS (Portugal, Italy, Ireland, Greece, Spain) watch for a full default of Greece then Italy.

    Oh my goodness Italy will bring the rest of the world to their knees! The rating agency has already downgraded their credit rating by one notch, and there will be a few more notches to come soon.

    The US has also been downgraded. All their money printing has done nothing to fix the GFC that started in 2008. Their high unemployment and zero jobs growth still remains.

    China, the strongest economy, is slowing down due to rapid growth. This was highlighted by a decline in their manufacturing numbers this week. and we are sure to feel the effects of China’s slow down here in Australia.

    The next wave to hit Australia will be a long overdue housing bubble.

    Now, more than ever it is important that you are informed and aware of Global events and how it will impact your savings and your family’s future.

    Most people don not pay any attention to what is really going on in the world, however those who do are in a better position to not only protect themselves, but to profit from these opportunities as well. What you do now will determine your financial survival.

     

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