Live Trend Trade: STEI

This stock has been channeling for about a month and now it looks to be breaking out. I'm in at $3.80 with a profit target at 5.50 and a stop at 3.30...a 3.4 r-multiple (risk/reward). Here's the chart:We'll see how this one works out.

On a different note, I've been working on a new currency trading method...kind of a momentum/trend following system...and it's been doing pretty well so far. I've been putting a little money to work with it to evaluate its performance and potential problems. Soon I'll post a breakdown of it and explain how it works for those interested. It's not a very complex system and it's very similar to what I've been previously using...I guess you could call this one a polished upgrade of what I'm already using. Anyhow, be on the look out, I'll post about it within the next day or two.

Have a great day!

TLT

An Idea for Some Pro Bono Legal Work

Here's a post from Zen Habits, an excellent blog that I frequently check. Leo Babauta, the creator of Zen Habits, posted the following article today:

Feel the Fear and Do It Anyway (or, the Privatization of the English Language)

Today I received an email from the lawyers of author Susan Jeffers, PhD., notifying me that I’d infringed on her trademark by inadvertently using the phrase “feel the fear and do it anyway” in my post last week, A Guide to Beating the Fears That Hold You Back.

The phrase, apparently, is the title of one of her books … a book I’d never heard of. I wasn’t referring to her book. I’m not using the phrase as a title of a book or product or to sell anything. I was just referring to something a friend said on Twitter.

Her lawyers asked me to insert the (R) symbol after the phrase, in my post, and add this sentence: “This is the registered trademark of Susan Jeffers, Ph.D. and is used with her permission.”

Yeah. I’m not gonna do that.

...

I'm not gonna start ripping on Trade Mark and Patent attorneys, but I will say shame on Susan Jeffers, Ph.D. That is just ridiculous. Leo, if she files suit on you, I'll step up and do a little pro bono (for free) legal work for you...just say the word.

TLT

Puttin' the Eur/Usd Short Back On

We got a trend reversal confirmation this morning on the Eur/Usd...back in with a 1.25 price target. Here's the hourly chart:Note the huge down bar that I circled on the chart...that's what it looks like when people run for the exits.

TLT

Swine Flu Stocks

This morning, traders have been playing the speculative swine flu stocks. They all gapped up big time, some as much as 140%! Here's a list of some of the high fliers: APT, AVII, BCRX, GNBT, HEB, QDEL, NVAX, SVA. Let's take a look at one of the charts. Here's the 1 minute chart for AVII:All of these stocks have pretty similar charts. Huge opening followed by a slow decline. This will probably be very painful for a lot of traders...they'll buy at the top, watch it slowly decline and then become bag holders waiting to just breakeven. Then, worst of all, they'll capitulate and sell for a big loss right before the stock takes off again. We've all gone through it at some point, the key is to learn from it and not allow yourself to become a bagholder again.

TLT

Weekly Wisdom Quote

"A poor chess player can still make a remarkable move."

Wang Yinggui

Eur/Usd Update: Got Out

Had to get out of the Eur/Usd short. It started out as a good trade but it ended up being a loser. I'm out and on the sidelines for now. Will hop back on the short if the pair starts making new lows...and vice versa if it breaks the 1.34 resistance. Here's an hourly chart showing the exit point:Unfortunately, that was the only trade I made this week due to how busy work has been for me...hate to have your only trade be a loser. Oh well, there's always next week.

TLT

Eur/Usd Update

Hope everyone's having a good trading week so far. I've been so busy with work that I haven't had time to initiate any trades this week...just been watching/managing the trades that I already have on. One of those is the Eur/Usd short...I'm short around the 1.3050 level. The pair rallied this morning, which probably caught a few people by surprise. Here's a look at the hourly chart:As I noted on the above chart, the pair was probably due for a decent pullback rally after the big drop we saw earlier this week. Does this rally signify a reversal? No, not yet. So far it's just a healthy pullback rally that will probably help the pair consolidate and then move to new lows. What causes these kind of rallies? It's hard to say for sure but generally, traders get nervous after big moves and start taking profits. That profit taking often leads to stops getting hit and panic from people that sold at the recent lows. The selling from the stops combined with the panic sellers is often what is behind large and quick moves like the one we saw this morning...this situation also provides a nice entry point if you missed the first move.

To get a proper perspective of this morning's move, it helps to pull up the daily chart. Here it is:The daily chart shows that the pair is still in a bearish pattern. The stair stepping lower lows combined with the failure to make significant new highs tells me that down is still the path of least resistance. What should we be looking for to determine if the move higher becomes significant. To start, a daily close above 1.30 (approximately Monday's high and Sunday's low) would be worth paying attention to and then follow through and a close above 1.3150 would be a sign to cut the shorts and run. The key, as always, will be the follow through in price action. If this morning's rally fails to continue, the pair will certainly move lower.

Only time (and price action) will tell.

TLT

A Good Potential Trade and Some Psychology

Sorry, I was really busy this weekend and didn't have time to post the TLT Trender signals...will try to post them some time tomorrow. Here's a potential trade...one that I'm currently in. Short the Eur/Usd. Yes, it rallied, and then it failed to achieve higher highs. Now's the time to jump in. I've got two targets right now: 1.27 and 1.25...we'll see if it makes it that far down. Here's a chart:
This trade may or may not work out, but it's the best currency trade that I see right now. Second best is long the Cad/Jpy...an oil play. We'll see how it works out.

I did put on a good continuation trade on Friday but unfortunately, it got stopped out. The only reason (or not really as you'll read about below) that I was stopped out was because the spreads were raised to ridiculous levels by my broker...like 20-30 pips on the Eur/Usd! Although this chaps me, I must also realize that it's my fault...my stop was not wide enough and I've even mentioned on this blog that setting wide stops going into the weekend is important, so it really does come down to me.

The sooner you learn to take complete ownership and responsibility for the outcomes of your actions, the sooner you can become a winning trader or a winner at anything else. When it comes down to it, everything in your life is the outcome of your own actions...whether you like it (or agree with it) or not. So make the best out of every outcome, whether good or bad, and either learn from an undesirable outcome or enjoy and grow from a desirable outcome.

So what does all this mean? For me, it means overcoming my natural feelings of wanting to blame external factors (my broker). What ticks me off is not the loss, as it was somewhat minimal, but the lack of profit because the Eur/Usd dropped down to my profit targets that I had set. Now, instead of just a loss, I have to deal with a loss plus a lack of profit. However, I will not dwell on this because I am taking ownership for the outcome and realizing that I should either accept the loss or just stop trading because blaming external factors does not lead to success...only learning and self improvement does. I'll stop preaching (ranting) now.

Hope everyone's doing well and is ready for a great trading week.

TLT

Weekly Wisdom Quote

“Success in any endeavor requires single-minded attention to detail and total concentration.”

Willie Sutton

(Professional Bank Robber)*

*You may be wondering how a bank robber that was caught (as implied by the above picture) could be giving advice on success...I mean, he was caught...right? Well, after being arrested, Willie would immediately begin planning his escape and fully concentrate on the task until his goal was accomplished. After being sent to prison for his last long stretch, Willie spent 10 years studying the law and working on his appeal. After a decade in prison, and after his appellate lawyers gave up and said it was a lost cause, Willie was able to launch a successful appeal and get acquitted. Now that is "single-minded attention to detail and total concentration."

Stocks To Watch Next Week

I'll be watching the following stocks closely and looking for trading opportunities:

APWR
NSH

CTGX
SQM
TRLG
As you can see, they are all break out plays...my favorite setup for trading stocks. I don't know if these will continue up or not, but they're certainly worth paying attention to.

TLT

Trade Update: TNA

Sold TNA this morning for a nice little 10% gain. Will the stock continue to go up? Maybe, but my plan was to sell at the $24 level and I stuck with the plan. All-in-all, this was a well planned trade that worked out according to plan...love it when that happens. Here's the chart:The markets are a little mixed today...stocks are down right now but not by much. I'm holding a few currency trades (short Eur/Usd, Usd/Cad and long Aud/Jpy, Cad/Jpy) and a couple of stocks (long AAPL and ATW) and I think that will do it for this week. I might make a continuation trade (read here for explanation of continuation trade) if the Eur/Usd is still showing considerable weakness going into the close this afternoon.

Have a great weekend!

TLT

File This One Under...Ouch!

This chart says it all.It happens to us all every now and then but it still stings.

TLT

Trades For Today

Good morning. Hope everyone has their taxes done...or at least has filed an extension. I put on a couple of trades this morning. First, I bought some TNA. TNA is the Direxion Small Cap Bull 3X Shares. Buying into an overbought market can be a little scary, but bullish conditions are still present so I'm buying. Here's an hourly chart of TNA:We'll see if that trend line holds as a resistance point. Other than TNA, I bought into the Gbp/Usd this morning after it dipped down to the 1.4920 area and then rose back above 1.4950. The pound has been strong this week, we'll see if it has any more steam left in it.

Have a good trading day.

TLT

LIve Currency Trade: Short the Eur/Usd

Good morning. Markets are a little mixed today after a few economic releases. I have a short term trade on in the Eur/Usd...found this trade while sorting through my morning chart scans. The dollar was strong overnight against the euro and this strength has continued throughout the morning. Here's the setup:

• Saw a sell signal on the 3 hour chart;
• Saw a sell signal on the 1 hour chart;
• And saw a buy signal on the 5 minute chart, however, the last 3-4 buy signals and rallies on the 5 minute chart fizzled out quickly.
• Therefore, I decided to fade the buy signal on the five minute chart and set a profit target for the prior lows in the channel.

Here's the five minute chart:As you can see, the outcome for this trade has yet to be determined. I'll post a follow up later today when the trade closes out.

TLT

**************************Update***************************************

It's just after 10:00 am and I just got stopped out. The trade looked good for a while but then it reversed. Fortunately, I didn't lose money because I had already moved my stop to break even...I try to do this with trades once they cross the halfway mark to my profit target. At one point in the trade, I was tempted to close the position with a small 10 pip profit, but, lately I've been bad about not letting profits run. Therefore, I left the trade alone and stuck with my plan. It's hard to do sometimes but I'm glad I did because I know it'll work out better in the long run that way. Here's the 5 minute chart with my exit:

Potential Trend Trade: OIH

The Oil Service Holders etf (OIH) has been channeling since mid November and has printed a nice chart pattern that could lead to a good trade. The key will be to see a break to the upside and then for the upper channel line to support the price after the break. Here's the daily chart:As you can see from the chart, I kinda mapped out what I thought the potential price action might look like...or at least what I think the ideal price action would look like. The entry would be around $90 with a stop placed around the $80 level and the profit targets are $124 and $143 roughly. If OIH breaks out in a similar fashion, I'll enter around $90 and sell half at $124 (protect profits) and sell off the remaining at the second profit target.

Other things to notice about this chart are the rising RSI and OBV indicators...this sometimes gives you the heads up that a breakout is likely to occur soon. The other interesting thing to note is the low BB Width. The BB Width measures volatility by printing the distance (or width) between the 2 Bollinger Bands. One thing I like to see is for the BB Width to break and rise quicly with the breakout in price action...this indicates that the breakout is more likely to sustain and move quite a bit, as opposed to a false breakout that fizzles out quickly.

Thought this was an interesting chart and wanted to share it with everyone.

TLT

Bought A Little AAPL Today

I couldn't help it...this stock has been so strong lately, hope I'm not just chasing the trend. I got a buy signal on AAPL because the Daily gave a recent buy when it broke out into new highs and the hourly chart just gave a nice bullish cross with the 10 and 20 moving averages. I've got a feeling that there's plenty of upward momentum left in this stock but, ultimately, price action will have to dictate when to get out. Here's a daily chart that shows some potential profit targets:Not doing to much today, except for a small position in the pound this morning. Hope everyone has a great trading day.

TLT

TLT Trender Signals

Here's this week's signals.

Weekly Wisdom Quote

“Don’t aim at success—the more you aim at it and make it a target, the more you are going to miss it.”

Viktor E. Frankl

Sittin' On My Hands

I'm currently holding a few currency positions (long: Aud/Jpy, Eur/Jpy, Usd/Jpy) but other than that I'm sitting on the sidelines. This week offered up a good opportunity to go long the stock market and I traded a nice little position in SSO and bought SNX...both of which I just sold into this morning's strength. Will they keep going up? Maybe, but I'd like to be in cash going into this holiday weekend, not to mention that selling strength quickly in the stock market has worked well lately.

As for currencies, I don't have a good feel for the primary trends...there's a lot of choppy action in the majors right now...especially the Eur/Usd. Until I get a good handle on the currencies, I'm just gonna stand back and watch. Here's a daily chart of the Eur/Usd:As you can see from my notes on the chart, there are bullish and bearish signs in the Eur/Usd. This may be an indication of a coming trend change...that being a bullish move in the Eur/Usd...or it could just be choppy action that followed a potential fake break out in the pair. For now it's best to wait and see what the price action dictates and then jump on when a trend is established.

Also, as I mentioned above, I had a couple of stock positions this week. My system gave me a buy for the S&P on the hourly and 5 minute time frames so I hopped on and then sold into overhead resitance this morning. I might have sold a little early but I want to play it safe in this market environment and book profits quickly. Here's an hourly chart of the S&P index:I hope everyone has a good trading day today and a good holiday weekend. I may or may not post tomorrow, we'll see. Also, I just starting reading Brian Shannon's book, Technical Analysis Using Multiple Timeframes, and so far it is really good. Will probably spend a few hours tomorrow reading through as much of it as I can since my office will be closed for Good Friday.

Happy trading.

TLT

Follow Up On The Usd/Chf

Plan the trade and trade the plan...this trade didn't work out as planned. The dollar picked up strength yesterday and the Usd/Chf popped out of the linear regression channel and stayed out of it. I did take a small position yesterday and it was profitable for a couple of hours, but now I'm out with a small loss. Can't win em all.

Here's an updated chart:Game plan for today:

Watch the Eur/Jpy--it's currently falling within in it's own trend channel and might offer up a nice buying opportunity;

Watch the Usd/Yen--this pair is still very strong but it needs to work of some overbought levels;

Watch the Eur/Usd--seems to be at a pivotal level..will go long if it holds the 1.3230 level at the end of today's session.

You can follow me on Twitter here for more updates throughout the day. Good luck trading!

TLT

By Request: USD/CHF Analysis

The Dollar has been weak over the past few sessions and the USD/CHF is no exception. I was asked to review the 4 hour chart for this pair and here it is:As you can see, I laid out a trade plan with some notes on the chart. Basically, the plan is to sell the pair if it reaches the top of the linear regression trend channel. It would also be nice to see the Stoch and RSIs both overbought (or near overbought) when the trade is executed. I also put down two profit targets on the chart. I'll sell half the position at the first target and then dump the rest at the second target or when the stoch gets oversold and then rises out of the oversold level--whichever occurs first.

Hope everyone's having a good start to the trading week.

TLT

TLT Trender Signals

Here are this week's signals:
As you can see, there's Dollar weakness across the board...except against the yen, which is really weak. Also, gold is tanking and oil is making a bullish break out pattern. Just my 2 cents...the Eur/Jpy is a good buy right now. Also, I know that one follower has a great Usd/Chf short on right now...good luck with the trade B.V.

Nailed The Continuation Trade For A Quick 55 Pip Profit

A simple yet profitable currency trade is the "continuation trade." Here's a chart from Oanda that shows the continuation trade that I made this weekend.
Here's the setup:

• The currency pair must be in a strong trend on Friday and the pair must remain strong as the close approaches;
• Enter a position in the direction of the trend 5-10 minutes before the close (be careful to buy/sell before spreads increase) and set a profit target of 30-60 pips out...the size of the profit target really depends on how volatile a currency pair you trade;
• Make sure to set a stop...I used the SAR level for the above trade.

That's it...easy. The idea behind the trade is that the currency pair tends to continue in the direction of the trend when the markets open up in Japan and Australia. There are several reasons that explain why the continuation occurs and I'm gonna leave those up to you to determine. This has been the 3rd weekend in a row that I've profitably traded this setup and I'm sure there will be many more.

Good luck out there.

TLT

Weekly Wisdom Quote

“Happiness comes through good judgment, good judgment comes through experience, and experience comes through bad judgment.”

Anonymous

On My Trading Screen Today

It's been a wild week to say the least. I have had some good, bad and just plain ulgy. The ugly would be my Gbp/Usd trade that I posted about earlier in the week. Needless to say, my positions were stopped out as the Pound went on a bullish rampage.

As of today, I only have 2 trades left open and they both involve shorting the yen. There's a great post over at the Forex Blog today that breaks down the current issues with the yen, I encourage you to take a minute and read it. I've had a long USD/JPY trade open all week, which makes up for the GBP/USD loss, and I just bought a little bit of the EUR/JPY.

I really like the prospects of the EUR/JPY trade. The only reason that I bought a little is because I'm slightly jumping the gun...the pair needs to close strongly to give a solid buy signal. There's a little resistance right where it's currently trading (see chart below) and it needs to overcome this resitance and close above it.

One reason I particularly like this trade is due to the current relative strength of the Euro and the weakness of the Yen. The Yen has been weak across the board and the Euro has been picking up steam all week. This could be a great trade if the momentom conitues. Here's a daily chart of the EUR/JPY with some notes on it:

I will follow up with this trade next week and see how it's prospects look after the weekend has passed. Have a great weekend.

TLT

The Taco Liberty Bell?

A little April fools day humor courtesy of the Huffington Post.

The Taco Liberty Bell
In 1996, Taco Bell ran an ad in six major newspapers saying:

"In an effort to help the national debt, Taco Bell is pleased to announce that we have agreed to purchase the Liberty Bell, one of our country's most historic treasures. It will now be called the 'Taco Liberty Bell' and will still be accessible to the American public for viewing. While some may find this controversial, we hope our move will prompt other corporations to take similar action to do their part to reduce the country's debt."

Many politicians' offices were taken in, as the Park Service received phone calls from aides to Sens. Bill Bradley (D-NJ) and J. James Exon (D-Neb).

One More Time With The Same Setup

Once again, I was going through my morning chart scans and the Eur/Gbp caught my attention. The 5m, 15m, and 30m charts were all forming identical sell signals with the same setup that I posted about yesterday. Here's a 5 min chart that shows my entry:As you can see from the chart, the trade quickly went in my favor...usually a good sign. Then the pair bounced back just a little after it almost hit my target. I used the bounce as an opportunity to add to the trade. I like to use a smaller time frame when adding to positions, so I pulled up the one minute chart and waited for a good entry. Here's the one minute chart:As the above chart shows, I added right when the signal line of macd was about to make a bearish cross and the stoch was oversold and beginning to point down. I also placed a stop just above the upper bollinger band channel. This turned out to be a great place to add to the trade and my profit target was quickly hit. Here's the last chart which shows the profit target being hit:Target hit and 45 pips were put in the bank today. The pair continued to decline after my target was hit...maybe I should start leaving a piece of the position on to capture any additional pips. Any of you guys scale out of trades that way? I know that John Carter leaves a little on the table with his forex setups in order to catch extra profit if the trade keeps going after the target is reached. Regardless, I planned the trade and traded the plan and it worked out well. I'm gonna close down the charts and get a little legal work done today.

Good luck out there.

TLT