Throughout our course on futures trading, we have tried to point out to you that there is a difference between having an attitude of investors and be a merchant. There are also many similarities. In a sense, a trader is someone who invests in its own bargaining power. Therefore, in the sense that trade is investment. Trade and investment are interrelated. You realize through this experience.
For the most part, the focus of trade comes from a much shorter term, thinking that the mentality of an investor. Can also be much more based on technical information on critical information. But here again we encounter a dilemma. What exactly is the technical information? What exactly is the basic information? Where the two overlap, is not it? Are they related? Of course they are. But, again, is through experience to learn and develop an appreciation for these concepts.
TECHNICAL VS FUNDAMENTAL?
As futures traders, you get to hear some very strange things, and as writers and teachers in the business of educating people about futures trading. One of the strangest things is the opportunity to listen when people try to separate trade in either technical or fundamental. Why, oh why, everything has to be put in a box? Someone please explain how to separate from each other? Is it possible or is there a middle ground that can not be classified as technical or fundamental?
For example, how to classify trade the news? You would not say that news of fundamental information, right? A friend of ours tells of a time in January when he heard a commentator on CNBC to explain that the price of coffee had risen because of the freeze in Brazil. The only downside to the story is that January is summer in that country. It was news worthy of the basics of name?
What about the trades of the season? Are they technical or fundamental? Certainly not based on facts. Who knows if tomorrow will bring a season like the previous one? Who knows what the weather will be the same this summer as the last?
Rumors say they enter, exit at the facts. Is it technical or fundamental? Or is it just common sense?
This chapter discusses the experience, but here's the catch: You have to survive as a trader enough to gain experience. Experience shows that trade can not be placed in a box. The experience led him to conclude that some of the best trades you will ever make come from experience, gut feelings and common sense. Experience will show you that many large businesses are obtained by paying attention and learning to be an opportunist. The experience will take you to the point where it will be a smattering of what others may call "basics" along with a hint of what some call "technical analysis" and combine it with a spoonful of knowledge to succeed in make your life in the markets.
FUNDAMENTALS
Our understanding is that they have to do with the fundamentals of facts and published and published information on the underlying commodity or instrument you want to negotiate. Because the statistics lie, lie knowingly governments with the statistics, or sometimes do without realizing it, they can afford and also has a need to spend tons of money doing your own research to reach its body of fundamental knowledge. This includes collecting information and statistics about anything imaginable that could affect the underlying. That production research, marketing, culture conditions, financial conditions, etc, all you can find information about the underlying. They can even make personal visits to farms, mines, or financial institutions for discussions on the underlying. Then combine this knowledge with what they find credible as dictated by the various reporting agencies.
Even with real-time data is not economic to compete with these giants with respect to the amount of fundamental knowledge that can afford and are able to muster.
TECHNIQUES
Technical analysis in its purest form it is assumed that everything he knows about the markets affecting the markets may see a price chart. We believe that to be true. But that's where reality and the type of technical analysis that we now act as the company. What we mean is, in general, what technical indicators show that normally can not see with both eyes through reading and graphical analysis of pure? Certainly there are a few things. We have never denied that as an indicator Bollinger Bands can show the location of two standard deviations. You can not tell visually where the amount of deviation in prices would be without the bands. However, most technical indicators wipe away the very things we see. They take your focus away from what is really happening to the price.
By smoothing, which aimed at eliminating "noise." But the noise that we, as traders, and especially as day traders, most want to see. The noise is what tells us the reality of what is happening.
REALITIES
Fundamentals, in the purest sense, are beyond what the individual trader can be treated. Most individual traders simply do not have time to conduct the necessary research. But that does not mean they can not use this information in case of pass to run into him. Technical analysis in the purest sense are fine, but how they have bastardized the indicators virtually meaningless nonsense. The latest craze is the technical indicators of the performance and mechanical trading systems. The use of mechanical systems is the height of the undisciplined mind. That is an admission that no longer has the discipline to exercise self-control, shall be subject to harsh discipline forced on you by an indifferent, unfeeling machine. While trying to escape the trade self-discipline, mechanical strength of a discipline even more horrible about that now you have to sit and grit my teeth through the pain yourself for the mechanical aspect of the system. Mechanical trading is not without discipline, but places the discipline in the wrong profession. Instead of putting the emphasis on planning, organization, direction and control of trade, the trader is in the midst of a mechanical signal and then forced to suffer through trade in order to discipline - a discipline often do not understand based on a system that does not understand and that may have been derived entirely outside the realm of reality.
Market realities are many. The markets are affected by many things that can not be measured by the fundamental or technical analysis is. In addition to seasonality, news, rumors, time and observation of common sense, we must take into account market conditions at the time a transaction is entered. Is the market quickly? The market is thin? Tick size is abnormal? Market makers are moving the market? It's options expiration day? Is the eve of a holiday? It is an important dignitary is going to make a speech? The market has entered a state of hysteria or euphoria? Will you be buying or selling? The sum, the organization and the perception of these and even other criteria that constitute the reality of trading.
Commercial Reality
We believe that the best way to trade should be called "Trading Reality?". In fact, we are so convinced that we have marked the trade name for future use. Trading reality seen in the market as a whole entity, a living, breathing reality that includes the fundamentals, technical analysis, and realities, such as news, rumors, seasonal trends, common sense observations, and market conditions.
Let's look at a possible change based on realities. Let's say this is an operation that has been good almost every year in the last 15 years. Let's say the trade is to buy wheat in March between September and December this year.
First, check to see if March wheat futures behave normally. What does the March wheat futures hits that look as if this trade is going to work?
We started seeing the March wheat futures in the first week of September for the possible entry between that date and the last week of November. We are not particularly interested in what the March wheat futures appear before September, but according to previous models of the season, not to late September in a downtrend. The normal pattern of wheat futures at this time of year is that wheat prices begin to rise or at least remain flat. Falling prices may indicate an excess supply of wheat. The output or the plain may have begun earlier, or it may begin later, but not before the end of September. Most importantly, do not want to see is the price of wheat falls after September. If wheat prices are falling in the period mentioned above, then we have a normal year for these future and want to prevent this trade. Nobody knows for sure what weather will be between the first week of September and the time of the inventory data of wheat known. No one knows if the exports are up, down or flat compared to the previous year. Season is the anticipation of which must support the price of wheat futures.
Obviously, this type of technique could be applied to any goods affordable to expect that experience the greatest seasonal activity.
For the most part, the focus of trade comes from a much shorter term, thinking that the mentality of an investor. Can also be much more based on technical information on critical information. But here again we encounter a dilemma. What exactly is the technical information? What exactly is the basic information? Where the two overlap, is not it? Are they related? Of course they are. But, again, is through experience to learn and develop an appreciation for these concepts.
TECHNICAL VS FUNDAMENTAL?
As futures traders, you get to hear some very strange things, and as writers and teachers in the business of educating people about futures trading. One of the strangest things is the opportunity to listen when people try to separate trade in either technical or fundamental. Why, oh why, everything has to be put in a box? Someone please explain how to separate from each other? Is it possible or is there a middle ground that can not be classified as technical or fundamental?
For example, how to classify trade the news? You would not say that news of fundamental information, right? A friend of ours tells of a time in January when he heard a commentator on CNBC to explain that the price of coffee had risen because of the freeze in Brazil. The only downside to the story is that January is summer in that country. It was news worthy of the basics of name?
What about the trades of the season? Are they technical or fundamental? Certainly not based on facts. Who knows if tomorrow will bring a season like the previous one? Who knows what the weather will be the same this summer as the last?
Rumors say they enter, exit at the facts. Is it technical or fundamental? Or is it just common sense?
This chapter discusses the experience, but here's the catch: You have to survive as a trader enough to gain experience. Experience shows that trade can not be placed in a box. The experience led him to conclude that some of the best trades you will ever make come from experience, gut feelings and common sense. Experience will show you that many large businesses are obtained by paying attention and learning to be an opportunist. The experience will take you to the point where it will be a smattering of what others may call "basics" along with a hint of what some call "technical analysis" and combine it with a spoonful of knowledge to succeed in make your life in the markets.
FUNDAMENTALS
Our understanding is that they have to do with the fundamentals of facts and published and published information on the underlying commodity or instrument you want to negotiate. Because the statistics lie, lie knowingly governments with the statistics, or sometimes do without realizing it, they can afford and also has a need to spend tons of money doing your own research to reach its body of fundamental knowledge. This includes collecting information and statistics about anything imaginable that could affect the underlying. That production research, marketing, culture conditions, financial conditions, etc, all you can find information about the underlying. They can even make personal visits to farms, mines, or financial institutions for discussions on the underlying. Then combine this knowledge with what they find credible as dictated by the various reporting agencies.
Even with real-time data is not economic to compete with these giants with respect to the amount of fundamental knowledge that can afford and are able to muster.
TECHNIQUES
Technical analysis in its purest form it is assumed that everything he knows about the markets affecting the markets may see a price chart. We believe that to be true. But that's where reality and the type of technical analysis that we now act as the company. What we mean is, in general, what technical indicators show that normally can not see with both eyes through reading and graphical analysis of pure? Certainly there are a few things. We have never denied that as an indicator Bollinger Bands can show the location of two standard deviations. You can not tell visually where the amount of deviation in prices would be without the bands. However, most technical indicators wipe away the very things we see. They take your focus away from what is really happening to the price.
By smoothing, which aimed at eliminating "noise." But the noise that we, as traders, and especially as day traders, most want to see. The noise is what tells us the reality of what is happening.
REALITIES
Fundamentals, in the purest sense, are beyond what the individual trader can be treated. Most individual traders simply do not have time to conduct the necessary research. But that does not mean they can not use this information in case of pass to run into him. Technical analysis in the purest sense are fine, but how they have bastardized the indicators virtually meaningless nonsense. The latest craze is the technical indicators of the performance and mechanical trading systems. The use of mechanical systems is the height of the undisciplined mind. That is an admission that no longer has the discipline to exercise self-control, shall be subject to harsh discipline forced on you by an indifferent, unfeeling machine. While trying to escape the trade self-discipline, mechanical strength of a discipline even more horrible about that now you have to sit and grit my teeth through the pain yourself for the mechanical aspect of the system. Mechanical trading is not without discipline, but places the discipline in the wrong profession. Instead of putting the emphasis on planning, organization, direction and control of trade, the trader is in the midst of a mechanical signal and then forced to suffer through trade in order to discipline - a discipline often do not understand based on a system that does not understand and that may have been derived entirely outside the realm of reality.
Market realities are many. The markets are affected by many things that can not be measured by the fundamental or technical analysis is. In addition to seasonality, news, rumors, time and observation of common sense, we must take into account market conditions at the time a transaction is entered. Is the market quickly? The market is thin? Tick size is abnormal? Market makers are moving the market? It's options expiration day? Is the eve of a holiday? It is an important dignitary is going to make a speech? The market has entered a state of hysteria or euphoria? Will you be buying or selling? The sum, the organization and the perception of these and even other criteria that constitute the reality of trading.
Commercial Reality
We believe that the best way to trade should be called "Trading Reality?". In fact, we are so convinced that we have marked the trade name for future use. Trading reality seen in the market as a whole entity, a living, breathing reality that includes the fundamentals, technical analysis, and realities, such as news, rumors, seasonal trends, common sense observations, and market conditions.
Let's look at a possible change based on realities. Let's say this is an operation that has been good almost every year in the last 15 years. Let's say the trade is to buy wheat in March between September and December this year.
First, check to see if March wheat futures behave normally. What does the March wheat futures hits that look as if this trade is going to work?
We started seeing the March wheat futures in the first week of September for the possible entry between that date and the last week of November. We are not particularly interested in what the March wheat futures appear before September, but according to previous models of the season, not to late September in a downtrend. The normal pattern of wheat futures at this time of year is that wheat prices begin to rise or at least remain flat. Falling prices may indicate an excess supply of wheat. The output or the plain may have begun earlier, or it may begin later, but not before the end of September. Most importantly, do not want to see is the price of wheat falls after September. If wheat prices are falling in the period mentioned above, then we have a normal year for these future and want to prevent this trade. Nobody knows for sure what weather will be between the first week of September and the time of the inventory data of wheat known. No one knows if the exports are up, down or flat compared to the previous year. Season is the anticipation of which must support the price of wheat futures.
Obviously, this type of technique could be applied to any goods affordable to expect that experience the greatest seasonal activity.
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