"ALWAYS LOWER YOUR TRADE SIZE WHEN YOU’RE TRADING POORLY."

ALWAYS LOWER YOUR TRADE SIZE WHEN YOU’RE TRADING POORLY.

All good traders follow this rule. Why continue to lose on five lots (contracts) per trade when you could save yourself a lot of money by lowering your trade size down to a one lot on your next trade? If I have two losing trades in a row, I always lower my trade size down to a one lot. If my next two trades are profitable, then I move my trade size back up to my original lot size.
It’s like a batter in baseball who has struck out his last two times at bat. The next time up he will choke up on the bat, shorten his swing and try to make contact. Trading is the same: lower your trade size, try to make a tick or two ‐ or even scratch the trade ‐ and then raise your trade size after two consecutive winning trades. 

"BE DISCIPLINED EVERY DAY, IN EVERY TRADE, AND THE MARKET WILL REWARD YOU. BUT DON’T CLAIM TO BE DISCIPLINED IF YOU ARE NOT 100 PERCENT OF THE TIME."

BE DISCIPLINED EVERY DAY, IN EVERY TRADE, AND THE MARKET WILL REWARD YOU. BUT DON’T CLAIM TO BE DISCIPLINED IF YOU ARE NOT 100 PERCENT OF THE TIME.. Being disciplined is of the utmost importance, but It’s not a sometimes thing, like claiming you quit a bad habit, such as smoking. If you claim to quit smoking but you sneak a cigarette every once in a while, then you clearly have not quit smoking. If you trade with discipline nine out of ten trades, then you can’t claim to be a disciplined trader. It is the one undisciplined trade that will really hurt your overall performance for the day, Discipline must be practiced on every trade.

"THE MARKET PAYS YOU TO BE DISCIPLINED"

THE MARKET PAYS YOU  TO BE  DISCIPLINED. Trading with discipline will put more money in your pocket and take less money out. The one constant truth concerning the markets is that discipline = increased profits.

"You are most likely to find success in markets if you can draw upon the best of who you are–your distinctive strengths–and find ever new ways to apply those to ever-changing markets."

       

? little bounce into Wednesday's FOMC announcement

He started to sing as he tackled the thing That couldn't be done, and he did it.

Somebody said that it couldn't be done,
But he with a chuckle replied
That "maybe it couldn't," but he would be one
Who wouldn't say so till he'd tried.
So he buckled right in with the trace of a grin
on his face. If he worried he hid it.
He started to sing as he tackled the thing That couldn't be done, and he did it.
Somebody scoffed: "Oh, you'll never do that;
At least no one ever has done it";
But he took off his coat and he took off his hat,
And the first thing we knew he'd begun it.
With a lift of his chin and a bit of a grin,
Without any doubting or quiddit,
He started to sing as he tackled the thing
That couldn't be done, and he did it.
There are thousands to tell you it cannot be done,
There are thousands to prophesy failure;
There are thousands to point out to you one by one,
The dangers that wait to assail you.
But just buckle in with a bit of a grin,
Just take off your coat and go to it;
Just start to sing as you tackle the thing
That "cannot be done," and you'll do it.

by Edgar A. Guest

itek

                               fail-safe below today's low

A basket of commodities as represented by the Commodity Research Bureau Index is in danger of hitting lows not seen since the early 1970s

follow up: TLT

tightening up

key market relationships

Light commitments are advisable when a market position is not certain.

Clearly defined moves are signalled frequently enough to make life interesting. Focusing on these moves to the virtual exclusion of others will prevent unprofitable whipsawing and improve overall performance.

? anything is possible...

seen: Bears living town

A chart and quote that explain it perfectly.

LIMIT LOSSES, ride profits ~ regardless of all other rules.

Beware of acting immediately on general public opinion. Even if correct, it will usually delay the move.

S&P cash

weekly view

not there yet, patience

The US markets have had two major corrections since 2009,

it took the markets a number of months of retesting lows before they resumed their uptrends:

2010 = 3 months of backing-and-filling after the correction

2011 = 4 months of retesting/backing-and-filling after the correction

2015 = We are currently at the end of the second month since the end of the last correction was where the market found its low on August 24

The Nine Rules of the Ned Davis Research Group

1. Don’t Fight the [Ticker] Tape The tape provides a stop-loss for “should-be” beliefs. The trend is your friend. Go with Mo (momentum, breadth thrusts, signs of churning). Listen to the cold, bloodless verdict of the market. (Pay special notice to indicators on the leading edge of the market like volume, new highs or lows, the Dow utilities, bonds, relative strength.) Moves with a lot of confirmation are the healthiest, and huge moves are often global in nature.
2. Don’t Fight the Fed Remain in harmony with interest-rate trends (rates dropping is good; rates rising is bad). Money moves markets. Stay in line with monetary trends (money [minus] economic demands equals liquidity left over for financial markets). Economic strains: Inflationary pressures lead to Fed tightness (up commodities, up gold, down dollar, rising real interest rates). Economic ease: disinflation leads to Fed ease.
3. Beware of the Crowd at Extremes Go with the flow until it reaches a psychological extreme. At that point, it pays to take a contrary approach. Liquidity and psychology are inversely related. Extreme optimism equals low cash. Extreme fear equals high cash.
4. Rely on Objective Indicators Rather than using gut emotions to determine the supply and demand balance, use the weight-of-the-evidence approach (computer-derived mathematical measurements).
5. Be Disciplined Our mandate is to follow our models, forcing us to be disciplined. Our benchmark or anchor composite model determines core invested position.
6. Practice Risk Management We are in the business of making mistakes. Winners make small mistakes; losers make big mistakes. We focus on a risk management strategy to keep mistakes small.
7. Remain Flexible Indicators change and data is revised. Scenarios change. Review models on an objective and timely basis.
8. Money Management Rules We are more interested in making money than being right. Be humble and flexible (be ready to turn emotions upside down and thus be open-minded). Let profits run, cut losses short. Think in terms of risks, including the risk of missing a bull market. Buy on the rumor, sell on the news.
9. Those Who Do Not Study History Are Condemned to Repeat Its Mistakes Go back as far as possible. Use bull, bear, and neutral cycles.

LXK ~ possible first cross trade

fail-safe below last week's low, first target around close of the gap down bar

Some stocks are creating some very nice looking bases and with earnings coming up soon...

BE READY