Trading Journal

I’m making a break for vacation and will return in the beginning of September, to continue to analyze the market and publish my posts.

The last few weeks have been really very profitable and markets gave us a few trading opportunities that only occur from time to time.

Wish you all a very pleasant summer holiday.

Happy Trading. :-)

Once, I read an article about 17-year old kid who are trading. 😳 The article was about why we need a trading journal, so I would like to share it with you 😉
'I personally keep a journal to monitor where I am allocating my liquid assets 😄 I use an excel sheet with columns headed: Stock Symbol, BUY Price, BUY Date, SELL Price, SELL Date, Share Amount, Profit/Loss and Trade Cost. You can't get much simpler than that -- precise and to the point. The task of using a journal is free and easy, so everyone should be doing it. With a very volatile market, your journal shows you information of when and what stocks are good to buy, sell and hold. Maybe after a couple months of keeping records you find that whenever you buy stock on Monday and sell on Friday you aren't making as much money as if you were to hold quarterly. So by analyzing your records you are allowing yourself to strategize on specific stocks or market sectors. Trading journals can also be utilized for options, ETFs, bonds and commodities -- basically anything and everything related to your investments.
The most important aspect of having a trading journal is to show your past profit/losses and trading history. That documented experience is not only for your own good; it can be beneficial for establishing your credibility to others as a savvy investor. I am currently 17 and want to pursue the financial industry in the future. Keeping simple records allow me to present statistical information on my trading strategies, techniques and profit margins. You need to show potential investors your ability to invest their money and allow it to grow, just as you did with your personal trades overtime. It is a book to your history. Why would someone give money to a trader who is losing money or doesn't have much experience with the market? Hence the trading journal.'
It seems to me as a very adult approach 😄😄😄

Returning from vacation, I realize the significant changes in the prices of various assets and try to align myself with the market. I can see the strong fall of the EURUSD pair, I realize the strength of the dollar and the weakness of the euro and its implications.
The month of August and the beginning of September pushed the value of the pair to values ​​approaching the prediction I’ve made on 23rd May, which points to 1.27 as the next support.
The long term trend is still down. The weaker euro has it’s fundamentals well established. The ECB has made it’s move to get the pair down and it seems it’s not over yet.
We are getting close to a support zone and we shall have a consolidation before a continuation of the downward move.

After the sharp drop and incredible market recovery seen in August, the main index, i.e. S&P 500, seems to have entered in consolidation.

Despite the easing of tensions among the involved parts in the conflict of Ukraine, investors remain cautious and concerned, since it is not yet in sight a solution to bring peace to the region.

The referendum of 18th September in Scotland is also motive of attention, where the victory of independence may increase instability in the markets.

We should consider the possibility of a profit taking by investors, as we had a very fast rise since August 8th and these overbought levels may lead to a shrinkage in the short term, which wouldn't be bad before pointing to new highs.

Stocks have been consolidating throughout the day but I believe they’ll slide until the end of the session. The daily range of prices have been falling, and the market is getting ready for the next move.

The economic calendar does presents no major news for today but the main issue of concern is whether the Federal Reserve changes its timing of interest-rate moves to the upside.

S&P 500 maintained a string of 14 straight days without a move of 0.5 percent in either direction until yesterday’s decline. We shouldn’t ignore this pattern as it occurred previously to significant corrections in the past.

The way we trade have emotional implications, such as how our emotions impact our decisions.

To succeed in the financial markets there are rules that must not be disregarded. Emotional problems such as depression, anxiety and relationship conflicts, substantially interfere with our concentration and ability to deal the normal ups and downs of markets.

Additive patterns can be extremely harmful to the trader. Many trade of need and impulse, without being identified a real opportunity.

In case you are dealing more with your own problems than the markets, the best deal you can do is invest in your emotional well being, getting the right help.

The S & P 500 index is losing strength and has ended the string of five weeks of gains, with the idea that the Fed will raise interest rates sooner than expected.

The rise in retail sales was in line with the predictions of many economists.

The consumer sentiment index rose to 84.6 in September from 82.5 in the previous month.

The central bank, which meets on September 16-17, informed that the reference rates will remain low for a considerable time.

The S&P 500 closed at historical maximum in September 05, after a rally of five consecutive weeks, the longest streak of gains of the year. The index did not show a single sequence of four days of losses in all 2014, and the last time it fell more than 10 percent was three years ago.

Major industries in the S&P 500 fell today. Oil prices dropped on concern that global oil demand is slowing.

Investors await the disclosure of relevant macroeconomic data on Wednesday (17th September). The perspective of interest rates, to be announced by 19:00h will be crucial to further developments.

The markets are still suffering the effects from the decline in industrial production, and are aligned with the information disclosed through the financial media from last week.

It is speculated that the economy has made the necessary recovery to justify the increase in interest rates.

I am not convinced that the stock market has ended it’s correction, believing that it will keep falling until the the disclosure of relevant key data that may justify the rise to new highs.

The month of September showed us two very different weeks in the European markets, the first was a continuation of the “bullish” sentiment that began after the inversion from August 8th and the second week revealed a corrective movement that followed the strong rally.

As mentioned in the previous publication, and shown by the prices from recent sessions, the correction had not yet reached significant levels to justify any return to the rising of prices. However we may not say that this retraction will be largely expressed, therefore we can easily foresee a new attempt for the market to reach new highs, specially if we have in mind the incredible behavior of the “Locomotive” S&P 500.

Happy trading. :-)

With the aim of boosting the demand for credit and economic growth, the People’s Bank of China will inject liquidity into the financial system. The latest economic data have raised concerns about the growth of the world’s second largest economy.
The central bank of China joined the European counterpart in the decision to inject liquidity to combat weak economic growth, which highlights the divergence of policies among the largest economies in the world, to the extent that the United States is, on the contrary, reducing stimulus.

Chinese government has mentioned an injection of 500 billion yuan (about € 62.7 billion) in the five largest banks in the country.

Discipline – The key to profit from your advantage

The primary goal of the aspiring trader who initiates the first steps in the financial markets, should be to establish a trading strategy whose performance is consistently good.
The ability to create, maintain and improve this strategy, which in turn, will allow us to develop a career in this field, is directly related to consistency. Consistency in performance comes from the control and effectiveness of decision making in times of extreme pressure and emotion in the markets, nowadays very frequent, given the macro economic divergences we currently face.

Find your Edge: The Secret to profitable trading

One of the main characteristics of a neo-trader, who performs consistently good, is the ability to participate in the market when he identifies an Edge, and carefully selects high probability winning opportunities.

It is a priority then, to dedicate time and effort in developing our own Edge. We should then, provide prolonged observation and interaction with markets, in order to identify the techniques, approaches, types of trade, phases of the day, levels of relevant price and most importantly, market behavior that we strongly believe will provide the opportunity for regular and frequent profit, with quantifiable and limited risk.

Knowledge and involvement: Preservation Of Capital

Even if you have identified your “Edge”, one shouldn’t forget is competing in the global financial markets against other participants which can move the markets significantly (Ex: Central Banks, Primary Dealers, hedge funds, pension funds).

Commonly, inexperienced traders adopt an aggressive stance, attracted by the “potential” reward such behavior allegedly provides. In these cases, remaining out of the market, or if you have the knowledge, aligning with these larger “entities” rather than challenging them, will improve the chances of achieving a truly exceptional consistency, which will then increase your talent in the effective implementation of your “trading tools”. It is also recommended to be very cautious with extreme volatility. A “neo-trader” who is trading on the basis of his identified “Edge” has his chances drastically reduced in times of high volatility.

The relevance of Discipline and Self-Control

The essence of the success of this highly effective approach to maximize your “Edge” is the individual discipline in the face of apparently high profit opportunities. Only the repeated practice of self regulated discipline can reduce the tendency to act on impulse. For those who are not prepared to solve this problem, this tendency will never disappear and consistency will remain unreachable. So for the vast majority who were not born with the gift of self control, a powerful technique is to written record in the form of a daily trading plan which clearly define the goals and objectives. A disciplined routine analysis before the markets open, and the structuring of the trading day, are essential to avoid the temptation to trade on impulse. We intend to develop the instincts of profitable trading, that must be present during the selected trading period, so, with advance planning, we eliminate the need to decide on the spur of the moment, and this will previously allow us to know how, when and why shall we place a trade.

Here's a list of my favorite stocks from NYSE:

THE BOEING COMPANY
CATERPILLAR INC.
CHEVRON CORPORATION
E. I. DU PONT DE NEMOURS AND COMPANY
THE WALT DISNEY COMPANY
GENERAL ELECTRIC COMPANY
THE GOLDMAN SACHS GROUP, INC.
THE HOME DEPOT, INC.
INTERNATIONAL BUSINESS MACHINES CORPORATION
JOHNSON & JOHNSON
JPMORGAN CHASE & CO.
THE COCA-COLA COMPANY
MCDONALD’S CORP.
3M COMPANY
MERCK & CO. INC.
NIKE, INC.
PFIZER INC.
THE PROCTER & GAMBLE COMPANY
AT&T, INC.
THE TRAVELERS COMPANIES, INC.
UNITEDHEALTH GROUP INCORPORATED
UNITED TECHNOLOGIES CORP.
VISA INC.
VERIZON COMMUNICATIONS INC.
WAL-MART STORES INC.
EXXON MOBIL CORPORATION

Discipline – Conclusion

For many “neo-traders”, trading in order to generate consistent profitability is an insurmountable challenge .

The knowledge and skills required to achieve consistent performance are very broad, so the relevant experience and achievement of sufficient aptitude, becomes very difficult, especially when such experience does not always result in financial returns at the beginning of your career . However, perseverance and resilient search of your own “Edge”, the self-discipline of the daily advance planning approach and its implementation, will tip the balance in your favor.

Results will not come quickly, and if that happens, they tend not to last. A disciplined approach to trading is an investment in your future that will allow you to reap consistent and enduring rewards if you have the strength of character to implement it.

The stock market have been consolidating this morning and investors are waiting data release on Gross Domestic Product and it’s impact on interest rates measures in the world’s largest economy.

Apart from the main economic release, the US GDP, final figures will show the Thomson Reuters/University of Michigan consumer-sentiment index.

In the U.K., lawmakers will vote today on whether to authorize airstrikes on Islamic State positions in Iraq. Military action may start within days if the proposal is approved.

Pro-democracy protests in Hong Kong induced to the fall of stocks in Asian markets, and in turn produced the same effect in the European market. The economic data release of the German Economy, the U.S Consumer Spending and personal income data, did not change the market sentiment, as it is not presented too far from expectations. In the euro zone consumer confidence declined in September and the value of stocks remained low.

The European economy continues to weaken and the demonstrations in Hong Kong add to uncertainty.

Investors should remain cautious until the next earnings season starts, so in the short term is not expected to emerge signs of strength in the stock market.

The stock market kept falling in the day. EBay earnings failed to offset the decline in consumer confidence.
The uncertainty is large and many investors are waiting for the next catalyst to make their entry in the markets.

Protests in Hong Kong remain as a political concern and also remain the rumors that the Fed may raise the interest rates sooner than anticipated.

The SP500 fell about 1.75% in September, with the Fed on course to end its monthly bond buying program, in October.