I have said in these pages before that Forex trading is primarily short term, and on a day-to-day basis that is definitely true. That said, for any trader, one of the advantages of familiarity with the FX market is that it can give you a long term view of global shifts in capital.  So, let’s take a step back and look at the long term prospects for the Euro. I am not in the “It’s on the edge of collapse” camp, but I do believe that the currency could be in a long term…
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There's a little known way that you can profit like the most successful hedge funds do, without even having to pay them!  In other words, you can actually generate their returns without having to be "super-wealthy". Today I'll share a secret of how to get around all the restrictions hedge funds have and still reap the rewards. Those who discovered the secret a year ago are up 52%, while the S&P 500 is up 33%.  If you're going to be bullish on the market, why not be bullish…
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It was another clean sweep for the markets yesterday.  The Dow, S&P 500, small-caps, mid-caps, transports and you name it all closed at record highs. The bulls continue to have the run of the house. And we know the driving force behind this rally hinges on the massive liquidity that the Fed is pumping into the system.  Currently, the Fed is buying $85 billion a month in US treasuries and agency-backed mortgage debt. But is the Fed starting to flash an early warning sign that they may…
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Most people who trade start with stock trading. Chances are they own stocks already, in an investment or retirement account, so it is the natural thing to begin with.  Then, after a while, they start to look at other instruments; options, maybe, or futures. These days many start to look at Forex. The dynamic nature of currency trading attracts them, and, like all markets, it can look easy with 20/20 hindsight. For example, I wrote last week about Dollar Yen (USD/JPY) breaking 100 and it shot…
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My friends, you're being fattened up for the kill! I'll explain... Major market tops take months to form.  You would think that's GREAT, considering it gives us time to lock in some hefty profits on our bullish positions.  But the longer it takes, the more euphoric people get... the more leverage they use... the farther away the thought of ever selling gets.  Then, when your position that was up 60% declines sharply, leaving you with only a 40% profit, you say "I'll just wait…
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Last week we tackled the question, Should You Sell in May and Go Away? And if you followed along, the main takeaway to my argument was that I felt that this year would take a much different path than the previous three years, which resulted in meaningful corrections that ensued right around this time of the year. If you recall, we cited three reasons: 1. Investor confidence is still largely damaged, leaving many caught under-invested in equities. 2. The corporate sector is healthier than ever and…
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Somewhere deep in the human psyche we are programmed to seek order in chaos. We desperately want things to fit in a pattern. These philosophical musings were brought on by contemplation of Dollar Yen over the last few weeks. As you can see from the daily chart below, the pair has twice looked all set to continue marching up and burst through 100, only to falter at the level each time. As recently as 2007, Dollar Yen was trading above 120, so it is not as if this is uncharted territory. If we look…
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The stock market has formed a nice channel that you can use to build profits and exit at the right times.  I'll show you how I built the channel, and how you can use it to trade.  More importantly, I'll show you how to know when it's likely signaling a change in direction.  Below is a 1-year chart of the S&P 500.  If you look to the upper right side, you can see that while the S&P 500 is near the upper end of the channel's trading range, it has yet to hit the upper channel…
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The stock market wasted little time in giving you a quick reminder that it’s time to hit the sell button. Yesterday of course was the first trading day in May, and the 1% decline in the S&P 500 was the biggest daily loss to begin a new trading month since last June. And this comes just after the index reached a new all-time high on the last trading day of April.  With last month’s gain of 1.8% in the S&P 500, the index has now put together six straight winning months --…
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