Market Internals (and Trading Psychology)
There is something to be said about surrounding yourself with better people. I created a local trading/investing club a few years ago and had 2 emails on the list. We now have 120 emails and a monthly gathering of 8 to 20 people. Of these, a few are regulars who absolutely love the financial markets and, between the two of them, bring over 70 years of trading experience.
While living in Chicago, I was able to have this type of banter on a daily basis with my team. Now, trading from a remote location, that "banter" has become less frequent. Many times, not having another opinion from another source or another set of eyes, can lead to poor trading decisions.
Last night's meeting, where I act as the host/moderator and come with some high level topics, was another learning experience for me. I give my synopsis of the fundamental and technical picture and then open it up to others. Most of the talking is done by a few people, but I make sure that the audience is understanding the core concepts and, most of all, TRADING PSYCHOLOGY that these markets demand.
One subject we got onto was the dealings of capitol hill and financial regulation - the conclusion was that this type of regulation could "halt" commerce as it has been done in the past and power seekers may interfere with the normal workings of the markets. All of this is good if you can handle volatility and are prepared to trade it appropriately.
We wrapped up by acknowledging the bull market and realizing that standing in the way of it can be suicidal to your account. Just as important, we agree, providing there isn't some unforseen bearish act, that there is an underlying bid to the equity markets and that "dropping out of bed" doesn't seem realistic. Until this bull market finishes its run, VIX may stay closer to 20 and intraday trading ranges may be a fraction of what they normally are.
On today's "Connect Site", where you can follow me under "thelocalstake", I talked about fading the moves. If equity markets back off a bit, there could be some USD strengthening.
Happy Trading and Be Environmentally Cool
Forex is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Market Analysis Archive
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