Teach Talk Trade Day Trading & Technical Analysis

Traders love to talk about their trading.

It’s much more comfortable for most traders to talk about what COULD BE rather than WHAT IS.

They love to talk about some chart setting up, their view of the political situation surrounding the stock or market…. whatever.

We all know that talk is cheap.

Intellectually, we know that the chart says everything we need to know, but as emotional beings, we are always looking for the “insight” or the “intuition” to put us a step ahead of everybody else who are all looking at the same charts we are.

If we don’t have the “eye to the future”, maybe a trading friend has it.

Sometimes all you have to do is call up a trading buddy and say, “Hi, how are you today?” What you’ll get in return will be, “Boy, have you seen the ’so-and-so’ chart today?

If that breaks the XY level, it’s going to really take off!” He continues, “And with that unstable political situation, this could really be a big trade.”

Why should we care?

We shouldn’t.

I guess we could take a look at the suggested chart and apply our trading parameters to it….. and if it passes scrutiny, well, that would be alright to trade, right? Yeah, OK.

You have to watch yourself, though. You see, you can have a tendency to want to MAKE a trade fit.

After hearing all about the great fundamentals, you can (subconsciously) view the chart with “I wanna buy” eyes, meaning that you can tell yourself that an almost-confirmation is close enough (with all those fundamentals going for it!).

That’s the danger.

It’s always best, I think, to come across a trade yourself. You see a price falling….. and falling….. gosh, when will it bottom? Your system says, “Don’t guess, be patient”.

Here’s one of my favorite expressions:

“I’d rather be out of a market (or stock) wishing I was in, than in a market wishing I was out.”

So, the market has a nice reversal day…. new low during the day with a higher close. Getting close to a buy, but not yet. The price goes higher for a few days and then starts to come back down.

It’s looking good.

The low holds, the market breaks the rally high and BOOM, we pull the trigger and we are in.

The system rules.

THAT’S the way to take a trade.

Every trader (you, included) has his or her own agenda. Only you know what works for you, system-wise and emotion-wise.

Trust in your tested trading system. It will serve you if you stick to it.

People think I’m crazy when they hear me talking to myself.

My close friends know that I’m just getting good trading advice!

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Energy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

T8 Retracement Trading: A series on technical trading with moving averages in the futures markets. (Part 8: 30-Year Bond)

For the next few weeks, we will examine opportunities in the futures markets that are dictated by price movement and an exponential moving average: the T8. In each example, we will be reviewing previous opportunities and speculating on how to become involved in the near future. All charts will be presented in the form of weekly candlesticks and will feature three moving averages and one momentum oscillator. As you will see, these simple tools can unlock the door to profits.

Part 8 features a chart of the continous 30-year Bond contract, using weekly time frames. We define “trend” as the direction of the T8. As we can see, the trend of 30-year Bond is definitely up. Our rules are simple. We only want to initiate trades in the direction of the trend. Therefore, rule #1: Initiate trades in the direction of the trend. Secondly, we want to buy weeks that open below the T8 when it is in an uptrend and sell weekly openings that are above the T8, providing the T8 is negative. Rule #2: Buy opening retracements to the moving average in the direction of the trend. That’s it. A simple approach to trading the futures markets.

Using this strategy, you could have bought the opening price during the third week of September at 110.375 and then again, the third week in December at 114.156.  At the time of this writing, the US 30-year Bond  was trading at 118.34. These two opportunities have turned out to be big winners since the first signal in September. The Bond is not unique to this situation. Currently, over fifteen commodity futures contracts have demostrated similar patterns.

During the next few weeks, we sill see over a dozen examples of the same trading set up. THIS IS NOT A MAGIC TRICK. These specific circumstances happen again and again. We will examine precious metals, interest rates, grains, currencies and other interesting commodity futures for exactly the same set up.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

T8 Retracement Trading: A series on technical trading with moving averages in the futures markets. (Part 6: Ten-Year Note)

For the next few weeks, we will examine opportunities in the futures markets that are dictated by price movement and an exponential moving average: the T8. In each example, we will be reviewing previous opportunities and speculating on how to become involved in the near future. All charts will be presented in the form of weekly candlesticks and will feature three moving averages and one momentum oscillator. As you will see, these simple tools can unlock the door to profits.

Part 6 features a chart of the Ten-Year Note using weekly time frames. We define “trend” as the direction of the T8. As we can see, the trend in the Ten-Year Note is definitely up. Our rules are simple. We only want to initiate trades in the direction of the trend. Therefore, rule #1: Initiate trades in the direction of the trend. Secondly, we want to buy weeks that open below the T8 when it is in an uptrend and sell weekly openings that are above the T8, providing the T8 is negative. Rule #2: Buy opening retracements to the moving average in the direction of the trend. That’s it. A simple approach to trading the futures markets.

Using this strategy, you could have bought the opening price during the following weeks at the prices stated: 10/13/07 @ 108 24/32 and 12/22/07 @ 112 4/32. At the time of this writing, The TYH (March Ten-Year Note) was trading at 116 10/32 (with a recent high of 119 3/32). These two opportunities are enjoying nice profits at the current level. The Ten-Year Note is not unique to this situation. Currently, over fifteen commodity futures contracts have demostrated similar patterns.  You might want to read other blogs that discuss Crude Oil, Cocoa, the US Dollar, the Japaneses Yen and Coffee.  These previous postings show the same circumstances and the subsequent profits resulting based these simple rules.

During the next three weeks, we sill see over two dozen examples of the same trading set up. THIS IS NOT A MAGIC TRICK. These specific circumstances happen again and again. We will examine precious metals, interest rates, grains, currencies and other interesting commodity futures for exactly the same set up.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

 TY: Play Now | Play in Popup | Download (536)

T8 Retracement Trading: A series on technical trading with moving averages in the futures markets. (Part 5)

For the next few weeks, we will examine opportunities in the futures markets that are dictated by price movement and an exponential moving average: the T8. In each example, we will be reviewing previous opportunities and speculating on how to become involved in the near future. All charts will be presented in the form of weekly candlesticks and will feature three moving averages and one momentum oscillator. As you will see, these simple tools can unlock the door to profits.

Part 5 features a chart of Coffee using weekly time frames. We define “trend” as the direction of the T8. As we can see, the trend in Coffee is definitely up. Our rules are simple. We only want to initiate trades in the direction of the trend. Therefore, rule #1: Initiate trades in the direction of the trend. Secondly, we want to buy weeks that open below the T8 when it is in an uptrend and sell weekly openings that are above the T8, providing the T8 is negative. Rule #2: Buy opening retracements to the moving average in the direction of the trend. That’s it. A simple approach to trading the futures markets.

Using this strategy, you could have bought the opening price during the following weeks at the prices stated: 1/08/08 @ 130.60 and Tuesday morning’s opening (1/22/08) @ 130.20. At the time of this writing, Coffee was trading at 134.25. These two opportunities are enjoying nice profits at the current level. Coffee is not unique to this situation. Currently, over fifteen commodity futures contracts have demostrated similar patterns.

During the next three weeks, we sill see over two dozen examples of the same trading set up. THIS IS NOT A MAGIC TRICK. These specific circumstances happen again and again. We will examine precious metals, interest rates, grains, currencies and other interesting commodity futures for exactly the same set up.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

 KC: Play Now | Play in Popup | Download (562)

DOW Directions 01-22-08 (Tuesday): A Daily Technical Analytical View of Stocks, Furtures, Eminis and Forex for online and day traders.

DIA (Dow ETF): World markets crash as Fed tries to save the day (week, month, year).

Capitulation definition: Webster’s defines capitulation as a giving up after offering resistance. In the markets: capitulation happens after the market has taken a beating and then, finally, there is a breathtaking directional bottom. 

 Certainly, the DJIA was headed to capitulation on Tuesday.  Major markets, from around the world, were down 4 to 8 percent on Monday.  The US markets were on a holiday Monday, but they were trading down over 500 points in the futures contracts before the Fed came in and cut rates by 3/4 of a point Tuesday morning.  This caused the market to rebound 300 points in early futures trading.  Prepare for Tuesday to be a memorable day on Wall Street.

The StoRSI, our momentum oscillator, has continued to come down for the past week.   Yet, the StoRSI still has room to drop. It has not reach its lower trigger level during this current slide to the downside.  Usually, issues traverse from top to bottom and back again….many times  penetrating the upper and lower trigger levels.  In this case, the StoRSI could put additional pressure on prices as the it slides to its lower trigger.

As stated: any rallies to the T8, our preferred exponential moving average, would be terrific opportunities to sell. Unfortunately, we are now a very long way away from the T8.  What seems like a tall order for this market (the ability to rally back to the downtrending T8) might not be out of reach.  Volatility rules and volatility could gyrate prices back to the downtrending T8.  The T8 indicator dictates our thoughts on the direction of the trend. As the T8 begins to decline at a steeper angle, the T8 is even a more powerful resistance.

Friday’s candle continued to feature black bodies and we see no particular features in the candles. The only distinguishing feature is that we continue to post negative, black candles…day after day. 

Please keep and mind and read the following thoughts on volatility. We have been preaching about volatility since August and we don’t believe that things will calm down for many, many months.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

 DIA: Play Now | Play in Popup | Download (511)

Mechanical Trading Systems and You, Trade your Plan

Traders love to talk about their trading. The love to talk about what could be than rather what is.Intellectually, we know that the chart says everything we need to know, but as emotional beings, we are always looking for the “insight” or the “intuition” to put us a step ahead of everybody else who are all looking at the same charts we are.

Sometimes all you have to do is call up a trading buddy and say, “Hi, how are you today?” What you’ll get in return will be, “Boy, have you seen the ’so-and-so’ chart today?If that breaks the XY level, it’s going to really take off!” He continues, “And with that unstable political situation, this could really be a big trade.” Why should you care? You shouldn’t.

I guess we could take a look at the suggested chart and apply our trading parameters to it….. and if it passes scrutiny, well, that would be alright to trade, right? Yeah, OK.You have to watch yourself, though. You see, you can have a tendency to want to MAKE a trade fit.After hearing all about the great fundamentals, you can (subconsciously) view the chart with “I wanna buy” eyes, meaning that you can tell yourself that an almost-confirmation is close enough (with all those fundamentals going for it!).

That’s the danger.It’s always best, I think, to come across a trade yourself. You see a price falling….. and falling…..

gosh, when will it bottom? Your system says, “Don’t guess, be patient”. So, the market has a nice reversal day…. new low during the day with a higher close. Getting close to a buy, but not yet. The price goes higher for a few days and then starts to come back down.It’s looking good. The low holds, the market breaks the rally high and BOOM, we pull the trigger and we are in.

The system rules. THAT’S the way to take a trade.Every trader (you, included) has his or her own agenda. Only you know what works for you, system-wise and emotion-wise. Trust in your tested trading system. It will serve you if you stick to it.

Please take advantage of the FREE 7 DAY TRIAL to title=”The Morning Call”>The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & title=”Mechanical Monkey”>The Mechanical Monkey where we discuss our mechanical trades.
 

T8 Retracement Trading: A series on technical trading with moving averages in the futures markets. (Part 4)

For the next few weeks, we will examine opportunities in the futures markets that are dictated by price movement and an exponential moving average: the T8. In each example, we will be reviewing previous opportunities and speculating on how to become involved in the near future. All charts will be presented in the form of weekly candlesticks and will feature three moving averages and one momentum oscillator. As you will see, these simple tools can unlock the door to profits.

Part 4 features a chart of the Emini Japanese Yen (an electronic contract) using weekly time frames. We define “trend” as the direction of the T8. As we can see, the trend of Yen is definitely up. Our rules are simple. We only want to initiate trades in the direction of the trend. Therefore, rule #1: Initiate trades in the direction of the trend. Secondly, we want to buy weeks that open below the T8 when it is in an uptrend and sell weekly openings that are above the T8, providing the T8 is negative. Rule #2: Buy opening retracements to the moving average in the direction of the trend. That’s it. A simple approach to trading the futures markets.

Using this strategy, you could have bought the opening price during the following weeks at the prices stated: 10/13/07 @ .86100 and 12/22/075 @ .88480.  At the time of this writing, the Yen was trading at .93990. These two opportunities have turned out to be big winners in the last few weeks.  The Yen is not unique to this situation.  Currently, over fifteen commodity futures contracts have demostrated similar patterns.

During the next three weeks, we sill see over two dozen examples of the same trading set up. THIS IS NOT A MAGIC TRICK. These specific circumstances happen again and again. We will examine precious metals, interest rates, grains, currencies and other interesting commodity futures for exactly the same set up.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

Repay Loans????

When a loan isn’t repaid and is only followed with another, larger loan… it’s not really lending, is it? Besides, even your grandchildren would be able to calculate this rate of interest (3.95%) is less than the present, official rate of inflation and far less than any bank could borrow money with in the markets today – that is, if they could borrow at all. Don’t you wish there were an entire federal agency dedicated to erasing all the mistakes you’ve made as an investor with collateral-free, below-market-interest-rate loans, which need not ever be repaid?

 How long can this game continue? We don’t have a crystal ball, We only know as long as the Fed continues to pump huge amounts of money into the banking system at interest rates far below the market rate, buying hard commodities – especially gold – is very likely to be a great bet.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

T8 Retracement Trading: A series on technical trading with moving averages in the futures markets. (Part 3)

For the next few weeks, we will examine opportunities in the futures markets that are dictated by price movement and an exponential moving average: the T8. In each example, we will be reviewing previous opportunities and speculating on how to become involved in the near future. All charts will be presented in the form of weekly candlesticks and will feature three moving averages and one momentum oscillator. As you will see, these simple tools can unlock the door to profits.

Part 3 features a chart of the US Dollar, using weekly time frames. We define “trend” as the direction of the T8 (the maroon, thick line on the chart). As we can see, the trend of the dollar is down. Our rules are simple. We only want to initiate trades in the direction of the trend. Therefore, in a downtrending market rule #1 states: Initiate trades in the direction of the trend. Secondly, we want to sell weeks that open above the T8 when it is in an downtrend (and buy weekly openings that are below the T8), providing the T8 is positive. Rule #2: Sell opening retracements to the moving average in the direction of a downtrending T8. That’s it. A simple approach to extracting profits from some high-stepping futures contracts. 

Using this strategy, you could have sold the opening price during the following weeks at the prices stated: 1/13/08: 84.43; 3/17/08: 84.22; 6/02/08: 82.30 and 8/25/08: 81.27; 12/15/08: 76.29. The most recent quote in the dollar is 75.66. Each whole number in the dollar is worth a thousand dollars.  Adding up the various opening week opportunities, we have a sum of 30.21, based on a close of 75.66.  30k is a nice profit in a single futures contract (one year to obtain…following the above scenario).

With this set up, traders are not forced to make swift decisions. If the market opens below a positive T8, in the weekly charts, traders have all week to position themselves at a better price (providing price cooperates). Multiple time frames are preached by many outstanding technicians. We are also big believers in examining weekly time frames and letting the larger time period dictate the direction of our trades. Once the weekly charts create a buying opportunity we can then drill down to daily time frames and try to catch a reasonable retracement to position ourselves long.

During the next three weeks, we sill see over two dozen examples of the same trading set up. THIS IS NOT A MAGIC TRICK. These specific circumstances happen again and again. We will examine precious metals, interest rates, grains, currencies and other interesting commodity futures for exactly the same set up.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

 DX: Play Now | Play in Popup | Download (610)

T8 Retracement Trading: A series on technical trading with moving averages in the futures markets. (Part 2)

For the next few weeks, we will examine opportunities in the futures markets that are dictated by price movement and an exponential moving average: the T8. In each example, we will be reviewing previous opportunities and speculating on how to become involved in the near future. All charts will be presented in the form of weekly candlesticks and will feature three moving averages and one momentum oscillator. As you will see, these simple tools can unlock the door to profits.

Part 2 features a chart of Cocoa, using weekly time frames. We define “trend” as the direction of the T8. As we can see, the trend of cocoa is definitely up. Our rules are simple. We only want to initiate trades in the direction of the trend. Therefore, rule #1: Initiate trades in the direction of the trend. Secondly, we want to buy weeks that open below the T8 when it is in an uptrend and sell weekly openings that are above the T8, providing the T8 is negative. Rule #2: Buy opening retracements to the moving average in the direction of the trend. That’s it.  Sometimes, the simple approaches outshine the complicated paths to profits.

 Using this strategy, you could have bought the opening price during the following weeks at the prices stated: 2/03/08: $1566; 5/05/08: $1782; 6/09/08: $1873 and 10/13/08: $1812. This week, cocoa has appreciated to $2175.  It’s easy to calculate the profits in these positions.  It’s even easier to trade this approach.  With this set up, traders are not forced to make swift decisions.  If the market opens below a positive T8, in the weekly charts, traders have all week to position themselves at a better price (providing price cooperates).  Multiple time frames are preached by many outstanding technicians.  We are also big believers in examining weekly time frames and letting the larger time period dictate the direction of our trades.  Once the weekly charts create a buying opportunity we can then drill down to daily time frames and try to catch a reasonable retracement to position ourselves long. 

During the next three weeks, we sill see over two dozen examples of the same trading set up. THIS IS NOT A MAGIC TRICK. These specific circumstances happen again and again. We will examine precious metals, interest rates, grains, currencies and other interesting commodity futures for exactly the same set up.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.