August 2010 Volume 2, Edition 8
Don’t forget to join www.toptraderthinking.com as a FREE Member so you can access a whole lot of other great info for Top Traders!
In this edition: • New FX Recommendation Programme - JET FX by Matt Kirk
CONTACT US FOR A FREE EVALUATION OF YOUR SHARE PORTFOLIO OR TRADING HISTORY Matt.kirk@stonebridgegroup.com.au
• The Chain Reaction • Our Spread Recommendations vs. All Ordinaries - Where would you prefer your money?
Jason.achjian@stonebridgegroup.com.au Philip.dooley@stonebridgegroup.com.au William.chien@stonebridgegroup.com.au
Or call us DIRECTLY (in Aust.) 1300 73 66 11 Outside Australia +617 5504 2222
•FUTURES •GLOBAL SHARES •CFDs •FX TRADING •PRECIOUS METALS •RECOMMENDATION PROGRAMS •ONLINE TRADIN G •FREE WEBINARS for members •P ERSONAL SERVICE •DAILY MARKET REPORTS AND MUCH MORE…
• Trade FX with - Matt Kirk • Technical Indicator of the Month: - Jason Achjian • Recommendation Program update - Commodities Basket Recommendations - William Chien's CFDs - Top Trader - Seasonal Spread Trading
New FX Recommendation Programme JET FX by Matt Kirk Announcing Matt Kirk’s new currency recommendation programme - JET FX Trading Details ► Minimum balance $A10,000 ► Trade size per $A10,000 of $US50,000 ► Commission of 2 pips per side ► Max. stop loss 54 pips ie. $A300 ► Average loss per trade 30 pips ie. $A160 ► Average profit target 60 pips ie. $A330 ► Risk Reward ratio target 1:2 ► 50 point stop trailed with position ► Monthly return target 3% net ► 50% profit taken in the 30-40 pip range
JET FX employs Matt Kirk’s ADX TrendCatcher methodology on short term movements in a range of Global Currency markets. Being a short term range breakout system, the time spent in a trade can range from minutes to a few days. Participants need to be contactable by email or phone to agree to each trade. Please email matt.kirk@stonebridgegroup.com.au with “YES, please call me to discuss participating in JET FX ” and we’ll contact you with next steps.
The Chain Reaction
It all starts innocently enough. You open an online trading account. You make a few winning trades, and you find it fun and exhilarating. You're hooked! You make another trade and then another, and the winning streak holds up. You get the hang of it and decide to increase your position size. It works for a few more months, but then you hit upon a slump. The method that worked so well for the past few months has now stopped working. It's a critical point in a potential chain reaction of events that spells doom. Many traders let the chain reaction happen. Their method stops working, but rather than make a careful study of what is going right and what is going wrong, they just keep going. They make losing trade after losing trade, risking money they can't afford to lose, until finally, they end up blown out. They wrongly believe that an optimistic attitude alone will allow them to return to profitability. In the end, however, all they have to show for their efforts is red ink. When you are at a critical point in your trading career, it's vital to know when to go on and when to "fold 'em." Well, temporarily at least. Art Linkletter once said, "Things turn out best for people who make the best of the way things turn out." Humans are eternal optimists, and when you trade the markets, it's hard not to want to make a fortune. It's hard to know when to be optimistic, and make the best of things, and when to be a pessimist and stand aside. One moment it all looks bleak. The next moment, the market opportunities seem endless. A pessimist is less likely to lose money, but runs the risk of watching profits go by while standing aside. A winning trader, in contrast, is always searching for, and trading, the next big opportunity. That said, winning traders are optimistic but skeptical. Sure, they may take losses in stride, but at the same time, they are constantly aware that if they are not careful, they may set off a chain reaction of events that leads to their downfall. When your plan seems to stop working, it is sometimes necessary to evaluate its reliability. You must ask, was there something to learn here? Sometimes there is and sometimes there isn't. A good trading plan can often fail for no good reason. What winning traders don't do, though, is mull over a setback too long. They make the best of it and move on. That can mean executing the same trading plan under more favorable market conditions or it could mean searching for a new trading opportunity. Whatever they do next, though, they do not act blindly. They know what they are doing and are fully aware of the consequences of continuing to use their methods. Self-monitoring is the key to success. A trade diary may be particularly helpful. For example, you might record key features in your trading diary, such as the market conditions for your trades, the specific strategy, your mood, the rationale for the trade, and its outcome. It is vital to record detailed information before and after the trade so you can study it carefully later. Looking at your performance can be difficult. It is useful to set up a time and place to study your performance objectively. A careful examination of the circumstances when you perform at your worst, and your best, can be enlightening. You may find that the time of day matters. Some traders make their worst trades at the open, others find they make the most mistakes toward the close. Yet others find the break before lunch to be the most optimal time of day. The key is to discover what works and what does not in order to constantly improve your approach to trading. All traders have their talents, and winning traders capitalize on those talents rather than waste time trying to do something they are not good at. So rather than go along on your merry way until a crisis happens, be on the lookout for a chain reaction that can spell your downfall. And if you see it coming, don't be afraid to stand aside, regroup, and tackle the markets in earnest with a winning, new approach.
OUR SPREAD RECOMMENDATIONS OVER THE LAST 24 MONTHS Vs AUSSIE SHARES (INDEX) Don’t read this if you’ve made more than 50% net return in the last 24 months trading shares…
Check out the 24 month chart below – this is a chart of our Spread Trade recommendations Vs The All Ords Index (note the Index doesn’t assume commissions). Pretty easy to see the clear winner was our Spread Recommendations. To cut a long story short our clients who did the minimum spread trade (every trade) added around 50% net of all costs to their account. Over the same period, if you’d traded a portfolio of All Ords shares with a beta of 1 you’d still be in the red on your positions.
Apart from just the return some more advantages if you join our Spread Trading Recommendation Program include – 1. You don’t have to watch the markets (trades are emailed or we can call you) 2. You don’t have to listen to the financial news and be spooked by every new Bear in the market or every new Bull in the market (no pun intended!) 3. We manage the trades for you – with your verbal or emailed agreement. 4. We limit losses to around $A1200 a trade. (average loss around $A900). 5. You can learn as you go by asking questions.
There’s a bunch more advantages but you get the picture. Look at the chart again, think about how you’ve gone over the last 24 months and then if your return has been significantly less and the whole process was rather painful and stressful anyway then call Jason now on 1300 73 66 11 or email him at jason.achjian@stonebridgegroup.com.au and let him know you want in! Now it goes without saying that these results are past performance and bear no significance to what may happen in the future. All we can guarantee is that we’ll do our best and if you commence doing our trades and you don’t like it then you can pull out at any time and just do your own thing.
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Spread Trading Recommendation Performance Statistics
Don’t forget to visit the www.toptraderthinking.com home page to see Matt Kirks interview with Guy Bower on Spread Trading
Do you want to receive our spread trade recommendations by email? For more information or to be added to our Spread Trading Recommendation list please email Jason.achjian@stonebridgegroup.com.au or call him on 1300 73 66 11
Trading FX with - Matt Kirk Small traders have shied away from currency trading because of their account size or the belief that the market is only for big corporations or financial institutions. This is certainly not the case. With the technology advancements in recent years, market moving news and prices readily available to all participants - small or large, margin FX is now an ideal trading arena for the private trader. So here's some pre-qualifiers of whether FOREX markets might suit your trading profile. · Are you looking to trade the most liquid market available? · Are you looking for a highly leveraged market? · Are you looking to trade a market where, under normal market conditions your stops are guaranteed? If you answered yes to any or all of the above questions, then Foreign Exchange trading may just be the thing for you.
OVERVIEW The FX market is the world’s largest market by virtually any measure. However, unlike a stock market or a futures market, the foreign exchange market is not located in any single place. Rather, transactions occur via phone/computer screens, between Brokers, Market Makers and Banks. It’s what’s referred to as an over-the-counter market. The market starts trading at 7am on Monday morning (out of NZ) and closes on Saturday morning, tying in with 5pm Friday New York time. Throughout the day, Asia comes on at around 10am (Sydney time), followed by Europe at 4pm, and New York at 10pm. In terms of activity, the Asia/Pacific time zone is the quietest, with activity picking up when Europe comes in and reaches fever pitch when the US join in.
BEGINNERS CORNER Quoting Foreign Exchange Rates An exchange rate is a price: the price of one currency in terms of another. The minimum movement in a currency cross is call a pip or point. For example, the AUD/USD is quoted to 4 decimal places, 0.8870. As such, a move from .8870 to .8871 will be 1 pip, while a move from .8870 to .8970 is called a big figure. Currency rates are always quoted in a two-way price (Bid/Ask), showing the trader at which price they can buy or sell. For example, the AUD/USD would be quoted as: 8870/8875, which means that the trader is able to buy AUD/USD at .8875 (ask price), or sell at .8870 (Bid price).
Trading FX with - Matt Kirk FOREX TRADE SCENARIO · The AUD/USD is trading at .8800 as such we look to go Long $100k AUD/USD at .8805 on-stop. · We then place a stop-loss at .8779, and a take profit at .8855. · Accordingly, we are risking 21 pips (.8805-.8784), to make 50 pips (.8855-.8805). · Given that each pip is worth $10, we are risking $210, to make $500. · Commission on Margin FX is charged in pips per side. Normally, this charge is 3 pips (approx.$30) per side. · Now lets assume the market rallied higher, and we took profit on our long position at .8855. · The profit on the trade is calculated as follows: · Entry: Bought $100k AUD/USD at .8805, plus 3 pips commission, means you are long from .8808 · Exit: Sold $100k AUD/USD at .8855, less 3 pips commission, means you sold at .8852 · Total Profit: 44 pips (.8852-.8808) or US$440. · Now, lets see what would happen had we been stopped out at .8784: · Entry: Bought $100k AUD/USD at .8805, plus 3 pips commission, means you are long from .8808. · The market breaks below the support at .8800, turning sentiment negative. As the selling pressure grows, we are stopped out of our long position at .8784. · Exit: Sold $100k AUD/USD at .8784, less 3 pips commission, means you sold at .8781. · Total Loss: 27 pips (.8808-.8781) or US$270 FOREIGN EXCHANGE PRODUCTS Spot: refers to the exchange rate of a currency that is for settlement in 2 days time. The spot rate is agreed upon today, between the buyer and seller and the trade is settled in 2 banking days. This is the main product traded in the foreign exchange markets and the one both private and institutional traders are involved in. Forward: refers to the exchange of currency to be settled anytime after the spot date. This product is mainly used by exporters/importers, allowing them to fix their exchange rate today, for future settlement. This can also be used by private traders/speculators looking to take advantage of interest rate differentials between 2 currencies. Factors Influencing Exchange Rates As with any other market, currency movements are caused by supply and demand factors, such as: · Imports · Exports · Lending activity · Political considerations · Speculative trading · Market sentiment · Technical Analysis · Commodity prices · Interest rates · Capital Flows MARGIN FOREIGN EXCHANGE As mentioned earlier, to allow private traders to enter the biggest market in the world, brokers have developed the Margin Foreign Exchange product thereby allowing clients to trade foreign currencies on margin, similar to futures, CFDs and shares. For example, to buy $100,000 AUD/USD the trader only needs to have a 3% deposit to trade the AUD/USD. In this example, the margin would be $3000 ($100,000 x 3%). Each 1 pip movement is worth US$10, per $100,000. For more information on trading FX markets please email Jason.achjian@stonebridgegroup.com.au or call Jason on 1300 73 66 11
Technical Indicator of the Month - Jason Achjian
Average True Range What Developed by J. Welles Wilder and introduced in his book, New Concepts in Technical Trading Systems (1978), the Average True Range (ATR) indicator measures a security's volatility. As such, the indicator does not provide an indication of price direction or duration, simply the degree of price movement or volatility. How More specifically, the average true range is the (moving) average of the true range for a given period. The true range is the greatest of the following: • The difference between the current high and the current low • The difference between the current high and the previous close • The difference between the current low and the previous close The average true range is then calculated by taking an average of the true ranges over a set number of previous periods. Care should be taken to use sufficient periods in the averaging process in order to obtain a suitable sample size, i.e. an average true range using only 3 periods would not provide a large enough sample to give you an accurate indication of the true range of the security’s price movement. A more useful period to use for the average true range would be 14
When Extreme levels (both high and low) can mark turning points or the beginning of a move. As a volatility-based indicator like Bollinger Bands, the ATR cannot predict direction or duration, simply activity levels. Low levels indicate quiet trading (small ranges), and high levels indicate violent trading (large ranges). A prolonged period of low ATR readings might indicate consolidation and the beginning of a continuation move or reversal. High ATR readings usually result from a sharp advance or decline and are unlikely to be sustained for extended periods.
You can now place orders, get market quotes and view your eBridge Trader account from your internet enabled mobile phone - Just type the following URL into your mobile phone internet browser and use your standard login details:
mobile.ebridgetrader.com
How to add this to your Charts in eBridge Trader Whilst in your workspace viewing a chart, click this Oscillators >>> ATR Average True Range:
symbol at the top of the chart, then >>>
The default fields that appear can be adjusted at this point for this indicator; you can also adjust them later if you wish. You can also adjust colour and the weight of the line: Click OK once you’re satisfied with the settings. You will now see the indicator added in a pane below the chart. You can later adjust settings by clicking the ‘ATR xx’ at the top left of new pane and then clicking on ‘Properties’, you can also delete the indicator from this menu. If there is any feature of eBridge Trader that you’d like covered in next months newsletter please email your request to: jason.achjian@stonebridgegroup.com.au
To open an eBridge Trader account or get further information on adding technical indicators to charts using eBridge Trader please contact Jason Achjian by Email: Jason.achjian@stonebridgegroup.com.au or Phone: 1300-73-66-11.
service@toptraderthinking.com
Matt Kirk
Jason Achjian
http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42 http://www.toptraderthinking.com/toptrader/shop.asp?i d=42
William Chien: CFD Recommendation Service Trading Objectives
Trader Profile
This program focuses on trading CFDs on ASX shares with a short term view (less than 8 weeks in most cases). William Chien uses technical analysis to zoom in on potentially profitable opportunities and then forwards email recommendations to his distribution list. William is very conservative and will generally do no more than 4 trades in any given month. When conditions are not right William will not trade at all.
Traders with a relatively high risk tolerance and who also want a degree of involvement in their trading decisions would be best suited to this approach. No positions will be entered or exited without prior confirmation from each individual client. If you disagree with Williams view on any particular trade you are under no obligation to enter or exit the position.
Recommendation Perfomance
William Chien
*Balance is in AUD based on minimum quantities and is net of all commissions. Results are unaudited. Updated COB 31-07-10
Conditions If you receive but do not take advantage of 3 consecutive trades you will be removed from the email list. A minimum starting balance of $20,000 is required for this service.
To register your interest, open an account or request further information about this service please contact us: 1300-73-66-11
Philip Dooley William Chien:
william.chien@stonebridgegroup.com.au
Please refer to toptraderthinking recommendation discalimer: http://www.toptraderthinking.com/toptrader/marketnews.asp?id=288&action=viewarticle
Top-Trader - Seasonal Spreads in Futures & Options In Brief Top-Trader is a recommendation program designed to take advantage of historically high probability seasonal opportunities in a wide range of markets using futures and options spreads. On average, one trade per week is generated and the length of time in each trade is approx. 23 weeks. Stop losses are based on closing prices i.e. exits are made the following day if the market closes outside of the stop level.
Trader Profile This program suits those who want to take advantage of opportunities in stock indices, interest rates, currencies and commodities markets. Traders with a relatively high risk tolerance and who also want a degree of involvement in their trading decisions are best suited to this approach. No positions will be entered or exited without prior confirmation from each individual client.
Recommendation Perfomance
*Last updated COB 31-07-10. Balance is net of commissions Past performance is no guarantee of future results
Commissions / Conditions The brokerage rate charged is US $15.00 per side of each trade +GST. If you receive and do not take advantage of 3 consecutive trades you will no longer receive fully detailed email recommendations. Minimum starting balance of $15,000 is required.
To register your interest, open an account or request further information about this service please contact us: 1300-73-66-11 Jason Achjian:
jason.achjian@stonebridgegroup.com.au
Please refer to toptraderthinking recommendation discalimer: http://www.toptraderthinking.com/toptrader/marketnews.asp?id=288&action=viewarticle
RECOMMENDATION PROGRAMS – UPDATE COMMODITY BASKET RECOMMENDATIONS (CBR) OCTOBER 2007 TO JULY 2010 UP 49.03% NET OF COMMISSIONS MINIMUM ENTRY LEVEL $A10,000
WILLIAM CHIENS CFD RECOMMENDATIONS JUNE 2006 TO JULY 2010 UP 110.64% NET OF COMMISSIONS MINIMUM ENTRY LEVEL $A20,000
TOP-TRADER - SEASONAL SPREAD TRADING JUNE 2008 TO JULY 2010 UP 44.97% NET OF COMMISSIONS MINIMUM ENTRY LEVEL $A15,000
Please contact the Futures dealing desk for further information on recommendation programs Phone: 1300 73 66 11 Email: jason.achjian@stonebridgegroup.com.au
NOTE: RESULTS ARE UNAUDITED – PLEASE CALL OR EMAIL TO REQUEST SUPPORTING DOCUMENTATION IF YOU ARE CONSIDERING PARTICIPATING IN ANY OF OUR RECOMMENDATION PROGRAMS
WANT TO RECEIVE OUR RECOMMENDATIONS? To receive recommendations on an ongoing basis you must be a client of StoneBridge Group Gold Coast Derivatives desk. To open an account email matt.kirk@stonebridgegroup.com.au or contact the dealing desk on 1300 73 66 11. Please see our Recommendations & Information disclaimer on www.toptraderthinking.com Click on 'Market News' to read thoroughly prior to entering into any of our trades. There is always a risk of loss in derivatives trading. Past performance is no indication of future results. Do not trade with funds you cannot afford to lose. Seek independent financial consultation before entering any trade recommendation program. All information and recommendations are general advice only and we have not taken your personal financial position into consideration
About Us –
www.toptraderthinking.com
Toptraderthinking.com is THE trusted source of information to assist traders to ‘know more, stress less and trade better’. Acting as a filter to sift the wheat from the chaff so to speak, we bring our members analysis, opinions, products and services provided by credible, professional and industry-committed players. toptraderthinking.com is non-prescriptive; recognising that each trader must find his/her own ‘fit’ to achieve sustainable trading success. To this end we endeavor to represent all products, opinions, commentary, analysis and methodologies in a fair and objective manner. Our site is categorised by not only product type according to the Traders Wheel but also by experience levels and areas of interest. Our inventories provide insightful tools to assist traders in further defining fit and enjoying success in trading. We recognise that our members and contributing alliance partners are critical to the ongoing success of toptraderthinking.com and we seek to build an e-community where all participants can grow and prosper.
uROk 33 DAY CHALLENGE - BRILLIANT FOR TRADERS A complete DIY life management and goal achievement tool the uROk 33 Day Challenge is great for traders as well. We all know that to trade successfully and consistently we need a plan but we also need a balanced life. The uROk 33 Day Challenge will help you reach new heights in all areas including: Health, Wealth, Self, Love, Work, Create and Y (personal purpose and who you really are). The Challenge is ideal for both new and seasoned traders and will help you cement what you've learned and take action to realise the goals you truly desire in the markets and in life in general. Includes: 1. uROk 33 DAY CHALLENGE Dream Your Life, Live Your Dream PERSONAL PLANNING WORKBOOK 2. GUIDED VISUALISATION CD by SARI Dream Your Life, Live Your Dream for Contribution & Achievement Compact Disc. 3. uROk.tv MEMBERSHIP It's easy, it's enjoyable and it actually works. If you're ready to have more, be more, give more, do more, and get more out of life (and trading the markets) then order this revolutionary programme today. PAY ONLINE WITH Mastercard and Visa http://www.toptraderthinking.com/toptrader/shop.asp?id=82
(Aust Only) Call Matt on 0409 208 658 for AMEX orders or email: service@toptraderthinking.com