Nick has been trading since 1985 and is a professional trader, analyst and author. He worked on the trading floor of the Sydney Futures Exchange, worked for international banks in London, Sydney and Singapore. He regularly consults with financial planners and accountants and is a keynote speaker for ATAA, AIA, ASA, Traders Expo and SKY Business. He resides in Noosa with his wife Trish and 3 teenage children.
Quick update on Gold and Dow Jones Index, then Emotion-Talk starts from 6:00 min and covers the concept of “I don’t know”, being humble and the creative process trading really is. Also talking a little bit about all the contradictory info you get when researching trading online and listening to various podcasts (Covel, BetterSystemTrader, ChatwithTraders).
Other Sources mentioned:
This GBPCAD example is the continuation of the How to trade using Fractals video. The indicated divergence and combination of minor and major corrections in between lead to a sharp drop in this market. Two fractal breakouts got you short, now the downmove seems to come to an end, during week 18 of this trading year GBPCAD closes above the trend ending moving average, making trendfollowers pull their stop tight.
While the european Indices saw quite a turnaround this week, the Dow Jones Index retraced slightly from a weekly perspective. Even though a long breakout had been hit before, the current retrace does not negate that breakout and should rather be considered an internal correction. New all time highs are still not far away and the upwards directed momentum overall supports a continous upmove scenario. This of course includes pullbacks on the way, no one knows how long they might last, so patience is important again before this market turns up again.
Here goes a short overview of several markets that I analyzed over the weekend. We do see some interesting market behavior in WTI, NZD and Gold is actually about to move out higher on the daily chart. Let’s see how it pans out.
Some markets really moved this past trading week, however, there doesn’t seem to be much going on for trendfollowing on the higher timeframes. All trades underway (JPY, GBP, USD) have been going on for weeks now, but nothing new showed up on the trend horizon this last week. The NZD, EUR and Indices are still in a major correction on the weekly timeframe, while Gold and Silver have just entered one again. More updates on those developments will follow as soon as the markets have had more time to develop throughout the coming weeks.
Let’s therefore take a closer look at the USDCAD since it has reached an interesting price level.
(Audio is a little bad on this one, hopefully you can still understand everything.)
“Victor Ricciardi is an Assistant Professor of Financial Management at Goucher College. Professor Ricciardi is a leading expert on the academic literature and emerging research issues in behavioral finance. He is the editor of several eJournals distributed by the Social Science Research Network (SSRN) at http://www.ssrn.com, including behavioral finance, financial history, behavioral economics, and behavioral accounting.”
When major markets go back into correction mode, i.e. trading into the balance zone where they can breathe to make a decision where to go next, there are not many new trends unfolding on a nice long-term trendfollowing timeframe for a while. It’s impossible for significant moves to take place all the time – just imagine what kind of world it would be if the prices of butter, milk and coffee move dozens of % each week.
Have a look at this very interesting video from Acorn Global Investments. They are pointing out one important part of the trading process – which does not have in focus the getting-rich part that is everyone’s reason for wanting to trade. Instead a good trading process ensures a sound and robust trading approach including all vital components.
That World Indices are not collapsing during the next trading days as was assumed during the beginning of the year, should be clear by now. So far trendfollowing has taken care of us well in 2016, no matter if markets are up or down, no matter how much they are up or down. Looking at the Nasdaq chart we can see some new developments that are worth mentioning in this regard.
As you can read here, very often people wanting to trade financial markets do not have optimal prerequisites to be successful doing it, which basically isn’t their fault, but it becomes their fault as they move along their trading journey without improvements. That many of us will experience an entire personality change in the search of trading profits, explains the following article.