Today's Ideas:

    IMPORTANT : Below is what we're looking at currently, but pay attention to our UPDATES on the side of each page for actual entry/exit times and prices. Refresh pages often! You will witness our winners AND losers; something that is rare in our business.    TO VERIFY ACTUAL PRICES AND TIMES, PLEASE CLICK ON  A TICKER ENTRY TO THE RIGHT.  ALL TRADES, WHEN THEY OCCURED, ARE VIEWABLE.  Whenever possible, we have included the ETF symbol for those who are not experienced trading futures, etc.

    Wednesday, June 11, 2008

    $CAD trade getting traction

    Regardless of the instruments I trade, readers can benefit from watching how I add to a winners, or cut losers. You don't have to know anything about the Canadian dollar to learn effective trading decisions. My most recent trade (long $CAD futures) is getting some traction, and I'm now looking to step up the size. I don't add just because I'm profitable, rather I take the next buy signal to increase position size. This is also an effective way to initiate a trade if you haven't already gotten involved. If I was flat, and missed the first buy signal, I would just "add" to a zero position. This visualization helps me ignore the fact that I'm adding at a higher price, which is essential to great trading. You must be able to buy more, if you get a signal, regardless of the price.

    Regarding today's potential setups, I'm waiting for some resolution before getting involved in stocks. Specifically, I have a short bias in mind, yet I'm seeing several issues close to flashing a "buy". These include FXI, EWZ, IFN, and possibly MTU (Japanese investment bank). I'll inform via the ticker on the right when/if I take a trade in these names. On the short side I am nearing entry in IYR (or SRS long), and the ZB futures (30 year bond). Several other ideas are forming, and I hope that I can increase my expected hold times, as those trades offer the largest potential returns. For now, I'll manage my current position to optimize gains or minimize possible loss, by managing the size of the position. Look for me to trade around the core $CAD holding, selling spikes (w/signals) and buying declines (again, w/signal only). I am comfortable being short the $USD via $CAD long, and I do not care about all the talk of a bottom in the dollar. Perhaps it's already bottomed, or will bottom next month, but for my timeframe it's irrelevant. It's a much higher probability bet to go with the strong trend ($USD lower), and trading is a game of probabilities. Let's see what happens.

    I'll take a moment to mention two interesting sites: The first is Rob Hanna's "Quantitative Edges". Every trader should have an understanding of statistics, and Rob does the work for you.

    The second site, Maoxian's, is short and concise. Today's post is especially relevant here, as I've discussed many, many times why oil is not a short.

    Relevant articles:
    • No end is sight for real estate decline if these guys still need to move.


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