YTE Jan/Feb 2018

DaviD Burton: the CyCles of religion

riDe the WilD Bull of BitCoin

TRADING IN THE BIG LEAGUES

NO BULL

Jan/Feb 2018 Jan/Feb 2015

CryptoCurrenCies EDUCATION: WHY YOU THE and RENMINBI BitCoinWANT TO BE INVESTED IN AUSTRALIA’S ON THE VERGE Where Charts BIGGEST NEW EXPORT INDUSTRY. OF MAJOR andA Fundamentals BREAKDOWN Collide www.YTEmagazine.com Y

TE JAN/FEB SPECIA

L:

THE BITCOIN BOOM

AUD 8.95 EUR 8.00 GBP 4.95 USD 8.95 NZD 9.95 SGD 12.90 MYR 20.00 HKD 79.00

Volume 20, Volume 23,No.1 No.1

do you have an arChetypal trade?

WHY VOLATILITY inFiniteISWealth and the A GOOD THING psyChology BitCoin FORoFOPTIONS unChartered territory For u.s. marketsTRADERS? What’s on the taBle For 2018?

Trading approach of The MosT profiTable ellioT Wave [W3]

R ISK M A NA G E ME N T I S A C OP O U T

The self-esTeeM Triangle

TAKE YOUR BRAIN TO THE GYM

Contents Jan/Feb 2018 VOLUME 23, NO.1

30

COVER STORY

SHARES AND TRADING

62. The Self-Esteem Triangle

30. Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

40. Unchartered Territory for U.S. Markets- What’s on the table for 2018?

66. Your Three Key Resources

By David Hunt

MARKET COMMENTARY 7. Market Wrap With Janine Cox

9. Market Snapshot With Hemal Pandya

12. Currency Corner With Chris Weston

14. Commodities Corner With Gary Burton

BITCOIN BOOM 19. 11 Cryptocurrencies You Have Probably Not Heard Of

By Ashley Jessen

22. Infinite Wealth and the Psychology of Bitcoin

By Van K. Tharp, Ph.D.

26. Ride the Wild Bull of Bitcoin

By Cameron Buchanan

2

YOURTRADINGEDGE

By Jodie Nolan

44. Trader's Story

Get to know your fellow traders.

YTE speaks to trader Bamby Neilsen

Technical Analysis 48. How do ABC Patterns work in the market?

By Mandi Rafsendjani

By Sinan Koray

68. Do You Have an Archetypal Trade?

By Louise Bedford

70. Why Most Traders Live A Life Of Quiet Desperation

By Mandi Rafsendjani

74. Marketplace

By Lachlan Elsworth

51. The Cycles of Religion

By David Burton

56. Trading Approach of the Most Profitable Elliot Wave

By Dr Mircea Dologa

TRADER'S MINDSET 58. What Does Your Partner Need to Know About Your Trading?

By Doug Dew

62

JAN/FEB 2018

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Editorial Jan/Feb 2018 VOLUME 23, NO.1 DaviD Burton: the CyCles of religion

NO BULL

CryptoCurrenCies

Jan/Feb 2018 Jan/Feb 2015 www.YTEmagazine.com YTE

EDUCATION: WHY YOU THE and RENMINBI BitCoinWANT TO BE INVESTED ON THE Charts VERGE BIGGESTIN AUSTRALIA’S Where NEW EXPORT OF A MAJOR and Fundamentals INDUSTRY. BREAKDOWN Collide

AUD 8.95 EUR 8.00 GBP 4.95 USD 8.95 NZD 9.95 SGD 12.90 MYR 20.00 HKD 79.00

Volume 20, Volume 23,No.1 No.1

JAN/FEB SPECIAL:

THE BITCOIN BOOM

do you have an arChetypal trade?

WHY VOLATILITY inFiniteISWealth and the A GOOD THING psyChology oF BitCoin FOR OPTIONS unChartered territory For u.s. marketsTRADERS? What’s on the taBle For 2018?

Trading approach of The MosT profiTable ellioT Wave [W3]

RISK MAN AGEMENT IS A COP OUT

The self-esTeeM Triangle

T AKE YOUR BRAI N T O T HE GYM

W

elcome to YTE Jan/Feb 2018. I would like to take this opportunity to wish each and every reader a very Happy New Year from the team at YTE! Here’s hoping you had an enjoyable holiday and are now geared up for another year of personal growth and success.

As you must have been following in the financial news, the last couple of months have been fueled with reports about the surge in Bitcoin and cryptocurrency demand. In light of this development, we are excited to announce a special category for our Jan/Feb 2018 edition where we discuss and analyse the ‘Bitcoin Boom’ and the opportunities that come with it.

I would also like to introduce technical analyst David Hunt. David has joined the YTE team as a columnist. His article entitled Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide is our cover story and a thought provoking read for all, regardless of whether or not you are enchanted by the so-called crypto craze!

As always, I am proud to feature and welcome back all our regular columnists from Market Commentary, Shares and Trading, Technical Analysis and Trading Mindset. Over the years, each one of our writers have partaken in critical discourse, adding value to the lives and success of innumerable traders.

On that note, as part of the YTE community, I encourage you to email me on editor@eospublications.com.au and tell me about your trading goals for 2018. I would be keen to publish them in an up-coming edition so that fellow traders can help motivate and draw inspiration from each other.

Happy Trading!

Kritika Seksaria

4

YourTradingEdge

riDe the WilD Bull of BitCoin

TRADING IN THE BIG LEAGUES

YOURTRADINGEDGE

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JAN/FEB 2018

EUR 8.00 GBP 4.95 USD 8.95 NZD 9.95 SGD 12.9 0 MYR 20.00 HKD 79.0

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Market Wrap With Janine Cox Market Snapshot Currency Corner Commodities Corner

Market Commentary 6

YOURTRADINGEDGE

JAN/FEB 2018

Market WRAP With Janine Cox

Let’s recap on what’s occurred on our market Firstly, Happy New Year!

The Australian market has finally traded into the target zone between 6,200 and 6,400 points, which is cause for celebration. While it took longer to reach the target than the analysis indicated was likely, this move is nonetheless an important milestone for our market from a technical analysis perspective. In breaking just above the lower level of the range of the zone, the market is nearing an important level of resistance and will soon confirm its next move.

Regardless of whether you believe that the market is likely to continue to rise above this zone or to turn and fall soon, it is important to consider that the All Ordinaries Index (XAO) is now trading at around 10 per cent below its all-time high at 6873.2 points in November 2007.

On reflection, I’m sure you will agree that it is justified to say ‘what a year!’ You may recall that initially the market had a good start as it rose strongly into the first week of the New Year, however, shortly after it fell by around 4 per cent. Then the All Ordinaries did something it hadn’t displayed in its long history. Although the market has traded sideways for periods of time, the way it unfolded in 2017 was quite different.

The market began 2017 at 5,746 points and tracked largely sideways to the end of the first quarter before we saw some gains; the XAO traded up swiftly in April above the 2015 high of 5,963.5 points, but this was short-lived as instead of continuing to rise, the market reversed strongly back down to levels traded in January and then it continued sideways.

Each time the XAO pushed up, it was sold back down.

Eventually, buyers and sellers create a disequilibrium in price and so you’ll then see a rise or

JAN/FEB 2018

fall. But as big financial institution money was in control, the market remained in equilibrium for longer than I suggest is ‘normal’.

While I do enjoy conspiracy theories, I’m trained to let the charts tell me what’s most likely to occur and to be flexible.

So I’m not as interested in researching what is causing the move, but rather how to manage shares while preparing for more than one scenario to unfold; leaning to a preferred view but not being blinded by it is very important.

Of course, this activity made the Australian market look like the poor cousin against the U.S., however, the protracted sideways move also made it behave like a rubber band and when it was finally released in October-

YOURTRADINGEDGE

7

Market Wrap - Janine COx

the rise was strong. The charts indicate that our market is now playing catch-up with other markets, so enjoy the rise.

Now each year, the financial industry tells you to watch out for the so-called ‘Santa rally’!

Firstly, while you may perceive that a Santa rally would occur in the lead up to Christmas, you may not be aware of the original theory behind it. Research conducted between 1950 and 1972 on the U.S. market by Yale Hirsch found that the S&P500 averaged a 1.5 per cent gain for 7 days, typically from the last week of December through to the first two days of the New Year.

But a few days up on any market or a 1.5 per cent rise doesn’t fit my definition of a market rally. I’m sure Santa wouldn’t be Ho, Ho Ho’ing about a short-term rise either.

Short-term rises are nothing to get excited about, as they can easily be wiped out if the market falls the following week.

So who does all the talk of a Santa rally really benefit?

Remember that trading volumes fall between Christmas and the New Year, so perhaps a Santa rally is less about spreading the festive cheer and more about the industry encouraging you to transact. A true rally on the market is a rise that can be sustained over many weeks or months.

It is interesting how in the past ten years, the market has experienced these true rallies in the lead up to or through the festive season in only three out of ten years. Also, the data indicates that you’re more likely to see a solid rise towards the end of the year if the market has been rising in the second half.

We had the rise in the last quarter and to the delight of many traders, the market continued to rise through the festive season.

Where is the Australian market headed?

You will recall in my last report I talked about business confidence as being the most important area to observe, based on some of my own well-respected sources, and with this goes investment spending. However, the financial industry seems hell bent on making us believe it is still retail spending we should be watching.

The reality is, the landscape for retail spending has changed in Australia with many shoppers moving online and off-shore. That doesn’t mean you won’t find opportunities in retail stocks as I believe you will. It’s just that we need to look more broadly.

Investment spending in Australia has been at historically high levels for much of the past decade, attributed largely to the resources sector. Spending in this area has been at

8

YOURTRADINGEDGE

multi-decade highs. This topped in around 2013 and has since fallen back to historical norms. Iron ore exports have doubled over the last decade.

However, non-mining investment has been low and this is the case globally. Given the spending cycle for mining has turned, we may see more companies offer special dividends and buybacks to shareholders this year. For greater growth we need to see investment rise. There is a lot of cautious optimism, but sentiment can be fickle in this part of the cycle.

Over the past couple of months, Trump tax cuts continued to push the U.S. market higher. Moreover, with rising oil prices there has been a flow-on effect to the Australian market with higher prices in Energy and Materials stocks.

The market is now headed into a two or three year top, counting from the low in February 2016.

History indicates that January can be a volatile month on the market, so expect a dip, however, typically the market tends to rise into February/March or around April/May if the market is really buoyant. I am currently expecting a rise into February/March, however, I am waiting for a short-term low to form in January and then I will observe the strength of the rebound to fine tune the likely period for the next significant turn.

Overall, I am excited about how the market has unfolded and what this means longer term as I believe it has set the scene for a further move up to challenge the all-time high in 2018.

As mentioned in a previous report on oil, resistance exists between U.S.$60 and U.S.$64 and this is the range expected for 2018, with the potential to continue towards $70. Oil has recently traded to around U.S.$62 and therefore it is heading towards the upper level of the target where I see the next potential turning point. Remember that if oil prices keep rising, think about the impact on inflation and the flow on effect to interest rates.

If you haven’t yet set your New Year’s resolutions or goals for 2018, now’s the time to do so. I would be happy to discuss them with you via the email address info@ wealthwithin.com.au.

Janine Cox is Senior Investment Analyst at Wealth Within www.wealthwithin.com.au

JAN/FEB 2018

Market SNAPSHOT Hemal Pandya

Hemal Pandya: EUR/USD: The calm before the storm.

W

see a defined break above 95.00, the high elcome to the latest issue from November 2017. of YTE Chart Watch and Given the above mentioned state of the a Happy New Year from USD, I think it would be prudent to establish the team at Alpha Trading a few options for trading the Greenback as Floor! I hope you had a we move into 2018. First, let’s follow up with wonderful festive break, the GBPUSD, then we’ll take a look at the enjoyed some quality EURUSD currency pair. time with friends and family and looking For those following our GBP/USD forward to what is set to be an incredible year ahead. Personally, we’ve been very busy throughout the festive Figure 1 USD Index Daily Chart period with the arrival of Mya, elloourand welcome to the baby girl born just before Christmas and of course I look forward tolatest setting issue of YTE Chart Watch.

I hope you have up her trading platform very soon ☺ It’s also been a busy few months in had a great few months the markets. Let us start by looking and are looking at the state of the USD Indextrading Weekly Chart (Figure 1), which is currently forward to the second half trading just below 92.00. As we can of the trading year. With a combination of see, the market has been under erratic volume the downward pressure duringinthe lastFX market and global few weeks of 2017 having now equities remaining buoyant, traders have breached below the 92.30 low from been forced to adapt to market conditions late November 2017. Looking to the on opportunities. left, it in is order evident to thatcapitalise the index has respectedMany this area for some time European traders have been on given the failure to break below since the sidelines ahead of the recent ECB late 2015. It’s fair to say, the 92.00 regionannouncement is a fairly significantand regionare now looking for for thefresh USD Index.

Having said that, opportunities. we did see a temporary blip to test this article we’ll 91.00 in In September 2017, but this be continuing from analysis, we are very much aware of the was quickly met with bullish volume.

This Chart the YTE May/June edition Snapshot fact that we have maintained a bearish is a common technical formation in that we and will take a close look at the EUR/USD stance on the pair for some time. However, often see an immediate break of support, a currency pair in an attempt near market has not been ready to break small recovery before a continued decline. totheidentify south yet. Whaton we have seen is a re-test If this term was totarget be the levels case onthat the USD we’re monitoring of 1.35-36 area, which is previous support Index, we would like to see a clear break of the ‘trading floor’. to now offer resistance and coincides with the last line of defence on the USD Index, In the previous article, the retracement level from the 38.2 Fibonacci namely 91.00 before a further decline and I mentioned high atacting 1.6 to the swing low at 1.19. substantial weakness of is tothe be 1.33 expected. importance & 1.4thelevels As long as the pair remains below the Alternatively, if the Index fails to break back as key support and resistance.

If we take a previous high at 1.3660, we are looking below 91.00, we see limited downside look EUR/USD 1) for on the the next daily opportunity to short. In order potential on at thethe Greenback as we (Figure move to trigger short we would like to into the first few months of 2018.

In fact, chart, it appears that the pair has failed positions, to see evidence of bearish price action below we would be inclined to maintain a sluggish break stance out ofif the thismarket range athefew months Monthly 20 EMA and ideally also below but supported fails with to 1.3 psychological break of south.

We would only betaking compelled consolidations placetheclose to the level and rising trend line support. That should open the door for to change this to a long bias if and when we

H

psychological 1.4 level.

JAN/FEB 2018

a southern continuation towards the 1.2 level. Alternatively, if the pair breaks above 1.3660, we would expect to see a further retracement towards the 50% & 61.8% Fibonacci levels at 1.4 and 1.45 levels, which may offer short-term opportunities for those looking at long positions on shorter timeframes.

In contrast, looking now at the EURUSD

CHART 1

currency pair, we can see the pair has attempted but has been unable to break below the 1.04 level throughout 2015 & 2016. In fact, the last time the pair was trading below the 1.04 level was in 2002, some fifteen years ago! As mentioned, the pair has attempted to break below this area on a number of occasions throughout the last two years but has failed to establish any bearish momentum below 1.04. Most recently, we have seen a rally towards the 1.21 level to form an immediate higher high followed by a small retracement, the market is now supported above the Monthly 20 & 50 EMAs which are also likely to cross- a bullish sign for many analysts and traders.

It’s worth noting that the 1.21 area is also

YOURTRADINGEDGE

9

Market snapshot

a previous level of significant support which was very well respected between 2008 and 2014. From a technical perspective, should the pair break back above 1.21, there’s little reason why we shouldn’t expect to see a momentous rally towards the 1.4 region which is the previous resistance from March / April 2014.

The alternative scenario requires a case of monitoring the 1.15 immediate support level from November 2017. A break of this level is likely to invalidate any long positions and in fact call for a stop and reverse stance with a view to then be looking for short entries to re-test the 1.04 previous support.

As we can see, both GBP/USD short & EURUSD long has the potential for significant profit potential towards their respective high/low targets. However, rather than entering with incredibly large stops, we’ll be looking for entries on lower time frames to provide a more appealing risk/reward ratio. Once the direction is established, we will also be looking at retracements and opportunities to add positons, as we do not expect the targets to be met without a series of pullbacks.

As always, plan your trade and trade your plan!

Figure 2 - GBP/USD Weekly Chart

Figure 3 – EUR/USD Daily Chart

Hemal Pandya is an independent forex trader specialising in shortterm and medium-term trading opportunities. As managing director of Alpha Markets, Hemal runs various Forex training courses and mentorship programs, and operates the Alpha Trading Floor: www.alphatradingfloor.com

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Currency Corner Chris Weston

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e close out of the final quarter of 2017 with a resurging greenback, as the USD finds solid gains against all G10 FX, notably the ‘Skandies’ (NOK and SEK). EUR/USD has held in well and looks to close out the quarter largely unchanged. I think it should perform well in the New Year and is poised to break into $1.2000 in Q1, where I think the market (in 2018) will start to price in a move from the ECB away from emergency policy settings, even if the Central Bank try their best to convince them otherwise.

(Source: Bloomberg) I also think it’s important that despite some excitement about the front-loaded fiscal stimulus from the Trump tax cuts and higher USD funding costs, USD/JPY cannot break the ¥114.40 triple top and 2015 downtrend resistance currently seen at ¥114.00. Any market that struggles to rally when the stars are aligned is a genuine red flag and USD/ JPY is a pair that divides opinion for 2018.

The forecasts for year-end range from ¥127 down to ¥105.

USD/JPY DAILY CHART

2018 – The year ahead It’s the time of year where we can look back at the major themes in markets and look to identify the currencies that will potentially outperform in the quarters ahead. Of course, forecasts can be useful for investors with a global balanced mandate and, of course, exporters. However, for short-term traders, it just creates a bias which rarely helps with obtaining an edge. As we look forward, and this is obviously only relevant if one focuses on fundamental drivers, it can pay to have an intermit understanding of not only each currency’s key characteristics and price drivers, but also the likely upcoming catalysts and triggers.

There are many ways we can think about a currency, but one way I feel makes sense is to look at its key defining characteristics.

These being a cyclical, a political and a funding currency.

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Cyclical status The first characteristic or status is to assess whether the currency is a ‘cyclical’ currency.

This is perhaps the status most can identify with and is also the most logical. This is where the exchange rate is driven by the economic data flow, the perception of future inflation trends and how active a central bank will be in either raising interest rates or pulling back on emergency monetary stimulus. As it stands, this would include the majority of G10 currencies and we can immediately think of USD, AUD, NZD, CAD, SEK, NOK and DKK. In a cyclical world, the Federal Reserve (Fed) dominate the market’s thought process and rightly so, given it is by far the dominant force in most cross-border capital

flows. There was once a school of thought that it was the market that dictated the Fed. That regime has now shifted and the Fed beat to their own drum and have effectively detailed to markets in the 14th December FOMC meeting that they no longer see a hot labour market resulting in runaway inflation.

They have also made it perfectly clear they are happy to allow growth to overshoot, with full employment unlikely to result in rampant wage pressure. This is a headwind for any cyclical currency, as it means slow and steady when it comes to interest rate hikes, when USD bulls really want to see four hikes in 2018.

The AUD has traded in a range of $0.7897 to $0.7501 this quarter and this has been driven, most prominently, by bond yield

JAN/FEB 2018

CURRENCY CORNER

differentials. Here we can see the yield premium demanded to hold Aussie 10-year Treasuries over US Treasuries come from 61bp in September to 8bp in November – the lowest premium since 2000. This has removed a lot of fundamental support for the AUD. The weekly chart of AUD/USD is interesting and gives strong perspective, with price holding the uptrend drawn from the 2016 low and mitigating a bearish outside week reversal on 4 December. One to watch in the quarters ahead, but just as the market was sensing a key technical break of the longer-term trend, the Fed removed a massive USD driver and we are going to need to see US inflation expectations really head higher to get us excited about the USD.

A ‘funding currency’ The EUR has some cyclical qualities of its own as the European economy is the success story of 2017 and on the ECB’s own forecasts should push 2.3% growth in 2018.

However, Mario Draghi has made it perfectly clear that the ECB are still in the market with deposit rates expected to remain at

cylinders and the MSCI World Index pushing to all-time highs. The Japanese economy is taking part in the global growth story and there are some bullish factors in play in Japan in a number of their data points. That said, the BoJ, like the ECB, take monetary policy accommodative to a different level and while there is some speculation the BoJ

AUD/USD Weekly Chart

A ‘political’ currency We can often define the GBP as a political currency. Despite inflation running above target at 3.1% and the economy humming along fairly well, FX and gilt (UK bonds) traders are more concerned with what the economy looks like in 18 months’ time and the penitential for clarity about the UK’s relationship with the EU and how business may be impacted by a potential customs border and trade tariffs, not to mention the impact on the City of London and whether businesses leave for other European destinations like Paris or Frankfurt. Not only have traders shown a poor track record of predicting outcomes in political events and pricing risk accordingly, but they also react to each headline out on the wires, which makes trading much harder.

That’s exactly where the GBP is now, but we are seeing signs that perhaps Theresa May can actually pull a rabbit out of a hat, in which case the GBP should have good upside in 2018. But that is a massive ‘if’ and if you don’t have a strong strategy of managing risk, you could be found out pretty quickly. That said, we have seen GBP/ USD print a series of higher lows and highs throughout 2017 and despite being beholden to headlines, GBP has actually been one of the better performing G10 currency in Q4. In fact, looking at the daily or weekly chart, it feels that on balance there is an argument that GBP/USD could be headed for $1.4000 or even higher in 2018.

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-40bp and further balance sheet expansion (through Quantitative Easing) expected through much of next year. So while the Fed are focused intently on inflation and allowing other economic variables (such as growth) to overheat, the ECB do this to the power of two. They take the overshooting to a whole new level, although as I say, I think the market will start to price in a move away from emergency settings in 2018 and this is one of the reasons why I like the EUR in 2018. While forecasts are seldom accurate, I see EUR/ USD testing $1.2500 in 2018, although that will be determined by a smooth outcome in the Italian election (expected on 4 March).

Another status assigned to a currency is that of being a ‘funding’ currency and specifically, we can lump the JPY and CHF in this list. In times of subdued volatility, upbeat sentiment and positive trending equity and credit markets, traders seek out yield and therefore use the JPY to fund this trade. Interestingly, we can actually see the JPY actually modestly higher on the quarter despite the global economy firing on all

will look to steepen the yield curve in 2018 by targeting 5 or 7-year JGB’s (Japanese government bonds), on the whole the market is seeing attractions in owning the JPY. .

Chris joined IG in 2006, having previously worked at Morgan Stanley, Credit Suisse and Merrill Lynch, gaining exposure to both institutional equity and fixed income trading. After accruing 16 years' experience in financial markets in both London and Melbourne, Chris now heads up the research team, using his extensive knowledge of capital markets and trading strategies to provide real-time insights.

Chris also worked on IG’s premium client desk. Chris is an established figure in the media, discussing global macro-economic trends and the impact on financial markets across a range of global television and radio channels, including Sky News Business and Bloomberg TV. He also writes regular articles for a number of daily newspapers.

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COMMODITIES Corner Gary Burton

C

hina's commodity imports roared back in the final months of 2017. Supply worries due to winter factory cuts stoked buying for copper. Steel mills scooped up iron ore on expectations of resurgent demand for rolled product for 2018. Iron ore traders started stockpiling product as prices fell last quarter in anticipation of stronger demand after the winter months. Steel mills have been restocking more iron ore since October as prices hit as low as $50 (a tonne).

Crude oil imports hit their second-highest ever and natural gas shipments jumped to a record as buying picked up in all areas, rebounding from a slowdown in October 2017 due to the Communist Party Congress holiday.

Strong data underscored the resilience of China's heavy industry, even as many steel mills, aluminium producers and other manufacturers in the world's top consumer of industrial raw materials prepared for deep production cuts as part of Beijing's blitz on winter smog and a continued crack down on illegal smelters.

Unwrought copper arrivals hit their highest since December 2016, concentrate and ore shipments were their highest on record.

Only coal remained subdued, however, it also recorded strong year-on-year gains, suggesting that this year's seasonal downturn has been short.

Overall, trade data showed that China's exports and imports unexpectedly accelerated in the last months of 2017. Most producers are preparing for brisk business once factories reopen in March.

U.S. producers were encouraged during 2017 to increase activity as crude prices started recovering from a multi-year price slump after the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers, including Russia, agreed to production cuts a year ago.

Australia will produce its smallest wheat crop for a decade as weather hampers the early summer grain harvest.

Overall, the commodities space is putting in some solid price action for traders.

Oil West Texas Weekly Chart As of early December 2017, the Baker Hugh’s Rig count of 751 is almost double from 12 months ago.

Rising U.S output threatens to undermine efforts led by the Organisation of the Petroleum Exporting countries (OPEC) and a group of non – OPEC producers, most importantly Russia, to support prices by withholding supplies.

Russia has openly supported production cuts, but continues to expand its energy output from northern Siberia.

OPEC have spent most of 2017 withholding supplies looking to see the price per barrel rise, and as a result are expected to continue throughout 2018.

Last Comments: In coming months the $65.00 OPEC designated target will not be a consideration unless the $55.38 resistance is broken with some momentum.

The Weekly Chart of West Texas Intermediate has broken out above the $55.38, and importantly out of the 2016 - 2017 trading range. The current retest underway of the $58.30 levels show signs of holding with a short-term ascending line being respected. This weekly chart now suggests higher prices ahead with the OPEC target of $65.0 bl now in play. The $58.38 level is extremely important going forward and traders will use this support level as a gauge of price strength going forward.

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COMMODITIES CORNER

Iron Ore Continuous Contract As China’s crackdown on mills gathered pace, holdings of reinforcement bar fell 9.4 in December to the lowest level in data that stretches back to 2010. At the same time, spot rebar prices rallied to a multi-year high, and futures in China advanced into the end of 2017. Those trends are aiding steel mills’ profitability in a country that accounts for half of worldwide steel production. Buoyed by such strong margins, mills have gone on to restock in earnest, which has played a part in pushing prices up as a result. Due to the China-led flight to quality in the global iron ore market, it is punishing producers of the lower-grade material, with the minnow miners in India facing an increasing battle to find buyers for their cargoes as demand dwindles and shows a structural change in the market.

Last Comments. “Only a closing price above the $50 level would give this commodity a bullish picture in the short term.”

The weekly chart of iron ore futures currently shows a new retest developing from a second lower high. An outside range price bar is a high probability reversal signal. From here the expectation is a final retest of the trend line before a continued rally back to test the exhaustion high of 1st Quarter 2017. The primary trend measured in weekly time frames remains up, a break of the lower high would be extremely bullish into early 2018.

Zinc Weekly Zinc has been the standout commodity for the second half of 2017 with earlier drawdowns in the Shanghai stocks and the London metals exchange holding low levels of inventory. This has translated into higher prices for the final half of 2017 and the highest prices since 2007.

In early 2018 the only concern would be Chinese consumption in the near term as stringent pollution control measures would likely hurt the bullish story. Demand disruption can be expected as major Chinese zinc galvanizing regions would come under the radar in the winter months. The National Bureau of Statistics data showed that Chinese Zinc production has jumped to near three year high levels in late 2017 to 577,000 tonnes. As electric cars gather momentum, the use of zinc in light weight component manufacture is likely to provide continued strong demand, along with rising steel production- as zinc is used for the galvanising and surface protection processes.

Last comments: Following the very directional trend during 2016, consolidation is taking place.

Price trend is expected to continue as the Weekly Chart of Zinc shows the new support level of CNY 24,900 following the breakout during Q3 2017. The inflection area is noted on the chart, as the longer term trend line (4) is being tested, as is the important support level. Price support at these levels would be very affirmative for further gains in 2018.

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COMMODITIES CORNER

Copper In 2017, China's manufacturing activity grew at the fastest pace since 2012 in September, which continued in the final quarter as factories cranked up output to take advantage of strong demand and high prices. The continuing crackdown on illegal smelters adds the potential shortage for the material.

This has led to the metal’s 24 percent rally since the start of January against a bullish backdrop in Shanghai in December as traders met to provide analysis for 2018. Weaker supply growth is at the heart of copper’s long-term bull case, with more frequent labour based disruptions and a dearth of mines moved to slower output on lower ore grades.

The chart structure is very bullish as the weekly up close ranges are very strong. A move into the $3.20 level could be expected as a continuation of the current trend.

These comments from last quarter have played out into the shooting start rejection at the new high of $3.25. Overall, the trend remains UP, however the current retest is leading copper lower into the consolidation zone developing between new support at $2.90 and resistance in the $3.20 to $3.25 range. Historically, the Q1 and Q2 of the year see subdued price ranges and consolidation. Only a significant break of the UP trend line would offer a bearish scenario. Favoured is the retest of the current trend line and a further rally back into the developing price channel.

Gold Continuous Weekly Gold prices have moved to a four-month low on track for continued weekly falls following progress on U.S. tax reform fueled optimism about the U.S. economy.

Stronger-than-expected U.S. employment data in early December also demonstrated healthy economic growth and suggested the Federal Reserve will be raising rates into 2018.

The presumption of Gold as a safe haven in global uncertainty was tarnished again this quarter, not only by its failure to react at all positively to Trump's contentious Jerusalem announcement, but also the ongoing tension on the Korean peninsula as Kim Jong Un continues to launch potential nuclear strike missiles.

Reserve will raise interest rates next week, as expected.

With the retest now underway, a break down from this level would target the $1200 level once again. This would represent a significant 12% swing from the September high.

From a long-term perspective, the 2017 primary trend in the Gold price remains UP, until a lower swing high is in place.

From the comments from last quarter above, the Weekly Gold chart has now put the lower swing high and further price weakness would be expected. The outside range has followed through with an expanded weekly range to the downside. In the short-term, the $1200 support level is in play.

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COMMODITIES CORNER

Wheat There is potential for a sustained wheat rebound next year, but the market is yet to find reasoning for any upside. If bullish factors are scarce, the current dry episode hitting the region of Kansas may keep the long side traders on the sidelines.

A climatic incident in any part of the world could support prices as U.S. wheat acreage is recording another drop. Dry conditions in Argentina were also supporting prices, although weather forecasts calling for some rainfall in the next two weeks have tempered concerns. The Australian wheat harvest for the past quarter has shown a high protein quality wheat, but crop yields have been lower.

The Weekly chart of Chicago wheat has reflected the news surrounding the soft commodity.

The rejection of higher prices at the $550 level ‘shooting star’ has followed through with a break of the $465.00- a bushel level to retest the $400 level from Q3 and Q4 2016. This represented a good technical set up for support going into the final quarter for 2017.

From last quarter’s comments, we can see the $400 has been achieved from the second ‘shooting Star’ retest of the $465 level, however, the price has failed to hold with a further breakdown in the first week of December. The unfolding pattern is now a clear “Head and Shoulder” topping pattern. This type of technical setup will often see a break of the neckline with a following retest, in this case $392 levels. The final candle period shows an expanded range from the previous weeks, often very bearish in the short-term. Looking forward, consolidation at this level should be the best outcome with key support at $360- a likely target on further price weakness.

Gary holds IFTA accreditation CFTe and ADA 1&2. With over 20 years of private trading including 7 years as a private client advisor with Macquarie Bank, RBS Morgans and Wilson HTM. A regular on Sky Business 602 and a published author in Stocks and Commodities magazine in the US. Gary has authored the Haguro method inside Metastock software and is the director of the Australian school of Technical Analysis. ASTA.

Twitter.com/YTEmag

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YOURTRADINGEDGE

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11 Cryptocurrencies You Have Probably Not Heard Of Infinite Wealth and the Psychology of Bitcoin Ride the Wild Bull of Bitcoin Cryptocurrencies and Bitcoin - Where Charts and Fundamentals Collide

BITCOIN BOOM

11 Cryptocurrencies You Have Probably Not Heard Of

Cryptocurrencies You Have Probably Not Heard Of

By Ashley Jessen

B

itcoin, Bitcoin Cash and Ethereum. Not a day goes past where you don’t hear about these mainstream cryptocurrencies. Not least for the fact their price in 2017 has exploded in value, with Bitcoin starting 2017 at $986, then jumping 1682% to $17,575 by 17 December 2017.

But what about the lesser known cryptocurrencies?

In this article, I’ll be running through 11 lesser known cryptocurrencies and provide a little bit of background and some history on their prices throughout 2017.

1. Ripple (XRP) Ripple’s tagline is ‘One Frictionless Experience to Send Money Globally’.

Ripple suggests that the 3 billion people connected to the internet globally are using a worldwide banking system built on technology created before the internet. The old format suffers from extremely slow settlement, which is unreliable more often than not. RippleNet is the connection point between banks, payment providers and corporates to exchange money, fast. Ripple is not some pipedream idea but instead a service the largest banks in the world rely on today.

Price action from January 2017 to December 2017: $0.0065 to $0.75.

2. Dash (DASH) Dash keeps their motto simple. ‘Digital Cash You Can Spend Anywhere’.

Sounds simple enough. In fact, their CEO, Ryan Taylor, is focused on

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making digital currencies so easy to use that even your grandmother would use them. As for speed, their infrastructure and Masternode network is so fast, it can handle eight times the amount of transactions per second to Bitcoin, and the price to transact has been reduced by a factor of ten relative to Bitcoin’s transaction costs.

Price action from January 2017 to December 2017: $11.59 to $1,149.

3. IOTA (MIOTA) IOTA is a unique offering that goes beyond the blockchain through one of its core inventions, the blockless Tangle. As a result, IOTA can offer zero-fee transactions with an incredibly scalable solution allowing no fixed limit on how many transactions can be done per second. IOTA’s focus is on the communications and payments between machines on the Internet of Things (IoT), which is rapidly becoming an integral part of our everyday lives. To give some scale, experts believe that IoT will consist of more than 30 billion pieces of technology by 2020.

Price action from January 2017 to December 2017: $0.63 to $3.56.

4.Monero (XMR) Monero is being positioned as the most secure and private cryptocurrency with their transactions suggested to be untraceable.

Basically, your wealth is yours, and you should be able to spend on whatever you like with total privacy. Monero uses a range of proprietary technologies to ensure every transaction is anonymous including Ring

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11 Cryptocurrencies You Have Probably Not Heard Of

signatures and Stealth addresses to name two. If the idea of Swiss Banks and Offshore organisations sprung to mind, then you would be correct. They are already using Monero.

Price action from January 2017 to December 2017: $13.74 to $362.25.

5. Verge (XVG) Privacy is at the core of the Verge cryptocurrency. Verge has a focus on bringing cryptocurrency into everyone’s life by simplifying the process and ensuring all transactions are fast, decentralised and have a high level of privacy. They use something known as Simple Payment Verification (SPV) which means transaction confirmation times are usually less than 5 seconds. Their secure wallets are available across a wide array of operating systems with mobile anonymity one of their unique features.

Price action from January 2017 to December 2017: $0.000021 to $0.0575.

6. ChainLink (LINK) Smart Contracts are one of the most exciting developments of the blockchain. Ethereum has gained the mantle as the key Smart Contract player in the blockchain. ChainLink is decentralised and allows external data to inform smart contracts. Smart Contracts are going to be essential and are already used across Insurance, derivatives, airlines and many levels of the financial services industry. ChainLink is in the firing line to get involved with SWIFT, which is the leading financial messaging service. This will be a huge development for this cryptocurrency.

Price action from September 2017 to December 2017: $0.189 to $0.426.

7. Cardano (ADA) Cardano’s approach comes from a scientific philosophy, and they have developed their decentralised public blockchain and cryptocurrency on a fully open source platform. Their uniqueness is that their blockchain project is built on peer-reviewed academic research, which is where their scientific philosophy comes from. If security is paramount for you, their smart contracts are said to have more advanced features and security than any other previously developed protocol. A big claim, but one worth checking out.

Price action from October 2017 to December 2017: $0.021 to $0.397.

8. Cosmos The Cosmos launch date is December 2017, so there isn’t a price history to provide at this early stage. Their mandate is more technical than some of the others. They focus more on solving the issues around the Blockchain. The Blockchain is comprised of public blockchains and private blockchains. Cosmos looks to solve the issue of scalability, interoperability and developer experience while at the same time providing a modern blockchain ecosystem for the financial system of the future. Out of all the cryptos spoken about here, Cosmos is one of the more technical offerings.

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9. Rupee (RUP) Rupee has the simple mission of becoming the number 1 cryptocurrency for people in South Asia. As you likely already know, the original Rupee started trading in 3rd Century BC, and so the creators of the Rupee cryptocurrency were keen to create a coin based on this rich history. With many people from South Asia living and working around the world, having a convenient way to transact while cutting out the traditional middlemen like the banks, Rupee would seem to have a bright future.

Price action from July 2017 to December 2017: $0.0010 to $0.211.

10. Electronium (ETN) Grab your cup of tea and take a seat. Electronium is the first British cryptocurrency. Electronium is focused on disrupting the current crypto marketplace by having more of a gaming slant, allowing users to mine their coins via an app. Their app is considered more secure and anonymous compared to the likes of Bitcoin. Anyone who has your public Bitcoin wallet address can see your Bitcoin transaction history, whereas this cannot be done with Electronium. Electronium has developed an offline wallet that is 100% secure and very simple to use. Having said all that, it is one of the few cryptocurrencies that has fallen in value since they began trading.

Price action from November 2017 to December 2017: $0.094 to $0.060.

11. Salt (SALT) If you have owned property in the last 20 years and been to a financial planner, there is a high certainty they would have suggested you use the equity in your home to borrow against and purchase more property. SALT allows you to leverage your blockchain assets to secure cash loans. You no longer have to sell your favourite collection of cryptocurrencies, but instead, you can borrow against them and get the cash deposited directly into your bank account. Consider SALT the next evolutionary leap for the lending industry.

Price action from September 2017 to December 2017: $6.86 to $10.30.

Cryptocurrencies have been running hot in 2017, and many of the world’s leading analysts are suggesting this is a bubble similar to the Nasdaq Tech Boom and the Tulip mania of 1637.

One thing we can count on is the extreme volatility provided across each cryptocurrency. Hopefully, for those who are brave enough to jump in, the snapshot above helps shortlist your research and uncovers a few hidden crypto gems.

Ashley Jessen is the author of CFDs Made Simple and runs LearnCFDs.com. Ashley is the CEO and Co-Founder of ProfileBooster. com.au, a company dedicated to helping finance and professional services companies drive more leads, convert more sales and boost their authority through intelligent PR, content and media distribution.

Ashley Jessen is the author of CFDs Made Simple and CEO & CoFounder of ProfileBooster.com.au, a company dedicated to helping finance and professional services companies drive more leads, convert more sales and boost the authority through intelligent PR, content and media distribution.

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COMPLIMENTARY

BONUS GUIDE

Infinite Wealth and the Psychology of Bitcoin

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Infinite Wealth and the Psychology of Bitcoin

Infinite Wealth and the Psychology of Bitcoin

By Van K. Tharp, Ph.D.

I

n 2017, Bitcoin increased from $997 on January 1st to as high as $18,000 in December. That’s a 1,700% increase. (Note: all prices in this article are quoted in USD.) And if you add in the price of the various forks in the currency, the increase is more than 18-fold. Now Bitcoin is traded as a futures contract but the media is saying things like – • It is a bubble.

• It’s not real money.

• It’s dangerous and people will be hurt.

Are these doomsters correct? First, let’s look at the history of Bitcoin. It had several years in which the price increased by 100-fold … those were from July 2010 to July 2011 when Bitcoin went from 8 cents to $31. That’s an increase of 38,650%.

This was followed by the first big drop and Bitcoin went down to $2.00. That is a drop of 93.5%.

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From December 2011 to April 2013, the price rose from $2 to $66, so that is a 132-fold increase in 16 months.

And this was followed by a price decrease to the $70 range in June 2013. That’s a drop of about 73.5%.

This was followed by another high of $1,242 in November 2013. That’s a 17.7-fold increase in value.

With the collapse on the largest cyptocurrency exchange at that time, Mt. Gox, the price fell to $550 in February 2014 and eventually went as low as about $200 in March 2015. The decrease from $1,242 to $200 was an 84% drop.

In September 2017, we saw a drop in Bitcoin prices from $5,000 to $2,900 – a decrease of 42% in about 12 days.

This is normal for Bitcoin. There are now several applications into the U.S. Securities and Exchange Commission to establish ETFs and now that there are

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Infinite Wealth and the Psychology of Bitcoin

futures contracts so that institution clients can hedge, Bitcoin could easily go to $40,000.

The dollar amounts are getting very large, but the percentage increases are getting much smaller. Could it have a 75% drawdown on its way to $40,000? That’s quite possible.

Let’s look at what’s going on here. First, central bankers are saying that Bitcoin has no real value. It isn’t real. That’s an interesting standpoint. I teach a workshop called Infinite Wealth and one of the primary concepts that we teach is that no money is real. Everyone needs to understand that money is not real.

Not Bitcoin, not the USD, not the Euro, not the Aussie dollar – they are all made up.

Money was invented from nothing and it only has value because people believe in it.

All of the major currencies in the world are now fiat currencies. That means that a government has declared that currency to be legal tender but with no kind of physical commodity such as gold. Nothing backs the paper. For example, the U.S. government borrows money and uses the debt instruments it creates to back its currency.

The USD has value because the government

sell it for $15. And if you sold five per day, you would create about $2,250 per month out of nothing. When you understand this kind of thinking, the possibilities are endless.

Virtual or digital currencies are money – also created out of nothing. People have given them value. There are thousands of merchants all over the world who are willing to accept Bitcoin as payment and that gives it a real status as money. It’s not that stable, but it continues to go up in value (it’s a deflationary currency) against goods and people see that as being desirable. We are all accustomed to inflationary currencies that will buy less and less goods each year. A deflationary currency like Bitcoin is somewhat refreshing.

Bitcoin is also a symbol of Blockchain technology, which is a game-changing technology.

Blockchain technology decentralizes everything and has the potential to give control to everyone as opposed to a few centralized people. It has the potential to stop ID theft, hacking, and all sorts of ills that now plague the internet.

That being said, Bitcoin is only one of many digital currencies using Blockchain

major form of money. Or some other digital currency could take over that role. The main point is, Bitcoin proves what we’ve been teaching for some time – money is not real.

Money is made up and people just need to believe in it to give it value.

The huge gains made by legendary traders and investors are made because they were in the right situation at the right time, which gave them a huge edge. That edge plus a solid enough psychology not to make any mistakes is what made them legendary. For example, Ed Seykota was a computerized trend follower who totally understood the ‘market’s money’ form of position sizing strategy in the early inflationary days of the commodities markets. That was a huge edge at the time, but it doesn’t exist today because today nearly anyone can be a computerized trend-follower. In addition, anyone who understands the material in my book, The Definitive Guide to Position Sizing Strategies, can use the market’s money position sizing edge.

Today, the edge is understanding how to play the crypto-currency game. 100% gains

MONEY ISN’T REAL. IT’S MADE UP. IT’S INVENTED FROM NOTHING AND IT ONLY HAS VALUE BECAUSE PEOPLE BELIEVE IN IT. uses its power to enforce its value. Now, even though money is made up, counterfeiting is not allowed. In other words, you cannot print your own money and try to use it like the government’s money. But the government’s money is not real – it’s still made up and it only has value because people believe in it.

When you have a belief that money is real, you will find that you cannot create it out of nothing. As a result, you will find yourself struggling with the inner game of wealth. But when you understand that money is not real, that it’s invented out of nothing, then you can make your own – and I don’t mean printing it illegally. For example, say you write an e-book on some topic that you know a lot about that other people would be interested in. It costs nothing to produce, but let’s say you could

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technology. Many of the other currencies are far superior to Bitcoin in terms of transaction speed, scalability, anonymity, and many other desirable factors. Thus, 20 years from now we may be talking about a whole different set of digital currencies. And perhaps governments might have to face up to the possibility that humanity has created its own universal currency that people prefer to any form of fiat money.

This article isn’t about predicting any outcome for virtual currencies or anything else. I have no idea what will happen in the future. There is a good chance that Bitcoin will go much higher in price. It’s also highly likely that we will see another huge decline (70%) in the value of Bitcoin sometime soon.

Bitcoin could take over the world as the

(and much more) are possible. But huge, costly mistakes are also part of the game as well. For example, all of the following could go wrong with someone playing the cryptocurrency game: • Perhaps as much as 70-80% of cryptocurrencies are scams. Thus, if you are not careful, you could invest in coins that will go to zero. Many already have.

• Governments can (and will) change the rules of the game on you. And if you are not aware of their rules, you could run into a disaster.

• It’s easy to send virtual currencies to the wrong digital address and watch it disappear – instantly and forever.

• The few big crypto exchanges around the world set their own prices for Bitcoin.

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Infinite Wealth and the Psychology of Bitcoin

In today’s market that could vary by $1,000 or more per coin. This matters a lot because you will transact all of your crypto trades either from Bitcoin to the other currency or from the other currency back into Bitcoin.

• Perhaps the most dangerous situation happens when not much happens. If something goes from $1 to $20. Right now, people want to hold their cryptocurrencies which helps make the price go up. But when (and it will happen) everyone panics and wants to sell, there will be no buyers. Everything could disappear quite quickly. Which means only expose what you can afford to lose.

Money is just a game. People tend to think that those who accumulate the most money win the game. A famous wealth commentator once said, “I get up each morning and I look at the Forbes 400 list and if I’m not on it, then I go to work.” But this is the version of the game that most people play and it enslaves them.

When only 400 people in the world can win a game, everyone else that tries to play it only experience struggle and ultimately lose. ‘Big Money’ realized this so they invented another set of rules. You can ‘win’ the money game if instead, you have the most toys. Luckily, you can afford any toy you want if the down

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payment is small and the monthly payments are low enough. This new set of rules created masses of people who have become slaves in the new version of the game – financial slaves with massive credit card debt. Are you one of them? You are if you don’t pay your credit card off every month but carry credit card debt instead.

Once you realize that money is made up and it’s just a game, then you can make up your own version of the game. We have a great version of the game called the infinite wealth game. Income comes in two forms – earned income and passive income. Earned income is money that you work for at a job. I define passive income as money that comes in regularly, which doesn’t require you to work a lot of hours to get it. The e-book example given earlier allowed you to create (without much work) a passive income of $2,250 per month. There are many ways to create passive income now through cryptocurrencies or Blockchain technology. It just requires a paradigm shift on your part.

Understanding that money is made up and just a game, you can now create a new game and define winning as having more monthly passive income than your monthly expenses.

This could mean that you never need to worry about earned income again. You would never need to have a job.

Only one person can be at the top of the Forbes 400 list. Only 400 people can even get on the list. Do you want to play that game?

On the other hand, having the most toys is a financial slavery game. Have you been playing that version of the money game? If your liabilities are bigger than your assets, then you have. The infinite wealth game is one in which every single person in the world could actually win. Think about it.

Dr. Van K. Tharp has been coaching traders since 1982. His Ph.D. is in psychology and he is an NLP Modeler and has modeled the trading process, the process of creating a trading system that fits you, the process of meeting your objectives through position sizing strategies, and the wealth creation process. His company, The Van Tharp Institute, supports trader development through many products, workshops, and Dr. Tharp’s famous Super Trader program. He has written 11 books, including his famous Peak Performance Course for Traders and the recently published Trading Beyond the Matrix. He writes a weekly email newsletter called Tharp’s Thoughts and can be reached through his web site and www.vantharp.com.

To take a quick evaluation on your trading system biases, go to www.vantharp.com/ products/mini-evaluation.asp

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RIDE THE WILD BULL OF BITCON

By Cameron Buchanan

T

he most hyped up and talked about instrument in the markets of 2017 would have to be Bitcoin. The second half of 2017 has seen the price of Bitcoin go from around U.S.$1939 to a high of over U.S.$19,343. Before I go further, all prices are quoted in U.S. Dollar (USD). The biggest run happened from 14 September to 16 December, where price moved from $3226 to $19,343. That is just around 6x.

Interesting to note that the threemonth parabolic price curve came after a 2 week sell off from a high on 1 September of $4950. In that 2 weeks it came off 35% of its value. Only recently we have seen price fall again sharply in 2 weeks with a 3-wave corrective structure from the 16 December High of $19,343 to the recent low of $12,629 on 30 December.

Once again, a 35% drop has occurred in 2 weeks. So, if you like buying the pullback, this could be the perfect time to buy, if a pattern cycle is forming. However, what if it keeps falling back to its early 2017 lows? There may be an alternative way to not only take advantage of the speculation up, but also burst of the bubble down, as we have seen recently with the 35% devaluation in 2 weeks. How can you trade this market down?

There are couple of ways I know. As a futures trader, I will be highlighting the futures path. https://www.coindesk.com/price/ The Chicago Mercantile Exchange (CME), which is the largest Futures Exchange in the world did not want to miss out on the Cryptocurrency mania, and has created a market for Bitcoin Traders. BTC Futures launched on Monday 18 December, 2017.

Our members have been asking us about trading Bitcoin futures. Here are the answers to the most common questions we have been asked, and other important information you need to know if you are wanting to trade Bitcoin.

Do you need to own Bitcoin or need a digital wallet to trade it?

No, because Bitcoin futures is cash settled and does not involve the exchange of Bitcoin. As it is a futures contract, you must open a futures trading account with a futures broker who will guarantee your trades. In the futures business, brokerage

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firms are known as futures commission merchants (FCM) or introducing brokers (IB).

How much will it cost to trade Bitcoin futures?

Firstly, to trade on the futures exchange the trader requires money in their trading account that meets the required margins of that market. If you are an intraday trader (in and out in day) you need to know the intraday margin. If you intend to hold the trade overnight or for a few days or weeks, you need to understand the initial and maintenance margins. This is typically a higher amount due to the higher risk of overnight or longer term positions.

FCM’s and IB’s will make it more attractive for intraday traders to participate and will offer lower initial margins. However, this is not the case with BTC futures due to its infancy stage. An IB we use has set the intraday margins at $50,000, with maintenance margins at $31,584 (43% of the contract value). How do we work this out? Let’s say Bitcoin is selling at $18,000 on the futures market, the contract value of Bitcoin futures is actually worth 5 x $12,000, equalling $90,000. The margins can change daily due to price fluctuations. The margins for BTC are enormous compared to more established markets like E-mini S&P 500 futures and Euro or Japanese Yen futures at $500 for initial margins and $2,250 - $4,500 for maintenance margins. Based on these margins at current prices, Bitcoin will be unaffordable for many retail traders with small accounts. The price of Bitcoin will need to drop or the margins will need to reduce to encourage retail traders. At current prices, Bitcoin futures will be limited to large institutional traders, until a mini contract is released.

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With the market being only very young, we will be paying close attention to its trading activity, watching daily volume and tracking price movement, as we our normal markets.

How does it work and how do I make money trading futures?

Here is a typical example. Let’s say, BTC futures is selling at 13,000 and you wish to buy one contract as you think the price is low and it will go up at some point in the future. If your target price is 15,000, that is $2000 gain in the cash (spot price).

The actual profit gained for the futures contract is 5 times the difference, being $10,000.

What are the likely brokerage fees and charges?

At this present stage fees will be around 3 times more than most markets we trade. That is approximately $15 per round turn transaction (in and out).

In conclusion, the crucially important information to understand about trading Bitcoin futures is the regulation and security of the asset. Regarding governance, the trading and clearing of Bitcoin futures will be regulated by the Commodity and Futures Trading Commission (CFTC). This being the regulatory body with exclusive jurisdiction over Bitcoin futures markets. If you have questioned regulation over Bitcoin and have been tainted by stories of hacking of digital wallets, however still want to be part of the hype, Bitcoin futures offers traders a huge amount of security over holding the physical asset or trading it on a crypto exchange.

With the market being only very young, we will be paying close attention to its trading activity, watching daily volume and tracking price movement, as we our normal markets. We feel it is early days and will be watching from the sidelines. The margin requirements will keep most private and retail day traders out of this market, until a mini market is introduced, which can offer lower margins and hence easier entry. Just like what happened with the inception of the E-mini S&P 500 futures market in 1997, being 15 years after the introduction of the full S&P 500 futures contract, if the Bitcoin futures market takes off, then I am sure the mini market is not far away. So watch this space!

Live Market Trading Room Trial, simply email him here: info@idta. com.au Attention – Cam for a FREE LTR trial.

To hear more from Cameron, refer to the insert in this magazine, or go to the International Day Trading Academy website www. idta.com.au Authorisation. Cameron Buchanan is the Co-Founder of the International Day Trading Academy. The International Day Trading Academy (ACN 165 005 550) is a Corporate Authorized Representative (CAR Number 001250922) of Beyond Capital Asset Management P/L (ACN 610 259 179) (AFSL 484045) for the purpose of FUTURES Trading Education. The information in this article is General Information Only. Any advice given or implied is General Advice Only. Neither your personal objectives or financial situation or needs have not been taken into consideration.

Accordingly, you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. All content if this article is the opinion of the individual writer and constitutes General Advice only. The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance. For further information please refer to our FSG at www.idta.com.au.

Article Sources: http://www.cmegroup.com/education/cme-bitcoin-futuresfrequently-asked-questions.html https://ninjatrader.com/PDF/ninjatrader_futures_contract_ details.pdf https://www.rcmalternatives.com/2017/12/how-much-moneydo-you-need-to-trade-bitcoin-futures/ https://www.coindesk.com/price/

Cameron Buchanan is the Co- Founder, a Trading Mentor and Trading Moderator at the International Day Trading Academy, based on the Gold Coast of Australia. To join Cam for a FREE

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AU S T R A L I A N P R O P E RT Y P R OJ EC T S

Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

Cryptocurrencies and Bitcoin Where Charts and Fundamentals Collide

By David Hunt

B

itcoin! It’s an emotionally charged subject polarising everyone that I have spoken with about the cryptocurrency.

In conversations with hard-nosed finance professionals, I have seen complete fear in the eyes of people when the subject turns to Bitcoin.

I’ve also seen massive amounts of scepticism and fear in the eyes and words of a 24-year-old engineering graduate and many people under 30 years old. Yet, these are the people you and I would expect to be heavy supporters of cryptocurrencies and Bitcoin.

Some of my stockbroker Profit Hunter Group members are trading Bitcoin and other cryptocurrencies using my advice. Recently, one stockbroker PHG Member admitted to me that he is making more trading Bitcoin than he gets in brokerage as a stockbroker - suffice to say he loves it!

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My brother was inspired to buy some Bitcoin after his 23-year-old son turned a few hundred dollars into $30,000 by owning Bitcoin.

The intention of this article is to help you understand Bitcoin, cryptocurrencies and the benefits and risks of cryptocurrencies.

Now for the people who have learnt a bit about Bitcoin, the following paragraphs may be something you have seen before, and you may skim over them. But if you have not ever traded Bitcoin or not learnt too much about it, the following is a boiled down version about Bitcoin and cryptocurrencies. Forgive the jargon, I have tried to make it simple!

Bitcoin was the first successful digital currency that was created based on the encryption process of SHA 256 (invented by the CIA!) and the Blockchain (which is an ever-expanding list of records or blocks of information connected and secured using cryptography).

So, the crypto part of cryptocurrencies comes from enCRYPTion.

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Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

‘Satoshi Nakamoto’ created Bitcoin using encryption so that: • There would be no duplication of Bitcoin.

• The Bitcoin system could not be broken or controlled by governments.

• There was name privacy on ownership, but public information on Bitcoin holdings in addresses via the Blockchain is public record.

Reportedly, the first commercial Bitcoin transaction was the purchase of two pizzas worth $30 for BTC10,000 at the time.

At the time of writing, Bitcoin is at AUD 18,435, which makes for a costly couple of pizzas.

Computer experts have lauded the 2008-9 program code for Bitcoin as very clean. However, there are some issues with the program code: • The code only has 1 MB of information carried with payments, and • The system that it uses can be slow and slowing in this case means

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an extra 5 minutes when it gets crowded!

Payments can be sent and received in minutes or at least on the same day as opposed to current Internet Bank Transfer between different banks that can have a 2 or 3-day delay. In effect, the banks are holding your money and earning interest on it before paying the recipient – called ‘the float’. Now, this is a lot better than what we used to have, which was a TT (telegraphic transfer) that took at least three days.

That’s a little bit of a preamble on Bitcoin. There is more I could tell you, but I might leave that for another article. However, suffice to say, Bitcoin and Blockchain success has spawned a raft of • Cryptocurrencies or Alt Coins (also known as alternative coins or currencies) to Bitcoin, e.g. Litecoin, Ethereum, Dash, Bitcoin Cash.

They exist on separate Blockchains.

• Tokens

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Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

In the world of cryptocurrencies, a token is a share of an asset or something of value, e.g. a business or set of services.

Tokens are typically created using the Blockchain technology of a cryptocurrency. Tokens are like shares issued in Australian dollars that you could swap for goods and services.

The Ethereum platform has a template where you can quickly and easily create tokens based on a model.

Tokens can be traded or used to pay for goods and services usually within the domain of the token issuer. Token issuers may be specific companies or somewhat related groups of individuals that are working on projects.

• Initial Coin Offerings ICOs ICOs are kind of like the IPOs (Initial Public Offerings) that we see in the ShareMarket. ICOs are funds for organisations to use.

An ICO creates a pool of tokens.

The difference is that stockbrokers and investment banks arrange IPOs in return for substantial fees and costs to the company whereas ICOs are sold directly to the investor and the company without the need for a middleman.

Now, if that was heavy reading, you may be comforted by my following confession…

Back in 2011, I got interested in Bitcoin.

Now, it has been nearly 33 years since I was introduced to the late and great Dawn Bolton-Smith. I am privileged and honoured to say that Dawn was my first mentor in technical analysis and charts. As a reader of YTE magazine, I am sure you will miss her as I do. Dawn was a beautiful lady, and I owe her a lot.

Vale Dawn Bolton-Smith.

One of the reasons for my above confession is because I had a background in foreign exchange. So, when I looked into the Bitcoin market in 2011, I had zero idea as to what was going on! Why? Because the Bitcoin market was very different to what I was used to - I got worried! It was not like the commodities markets, Forex markets, the Australian share markets or the international futures contracts that I was used to trading.

It was completely different. Run by “propeller heads” (this is what we used to call rocket scientists and programmers when I was in Macquarie Bank trading Forex on the bank's money). Price quotes on the exchanges were very strange to me. I had no clue how to pay for the Bitcoin. However, I did learn that you could mine Bitcoin using your computer and with me being a visual pattern analyst/chartist, I decided computer programming was just too hard.

Now, why is the title of this article “Cryptocurrencies and Bitcoinwhere fundamentals and charts collide”?

My original training was in economics, so I have a background in fundamentals.

Sadly, at the time of my first foray into Bitcoin, I did not know one fundamental feature. It wasn’t until May/June 2017, when a wealthy young fellow asked my view on Bitcoin and I started

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looking at my charts and said: “Wow! Great Chart! Bitcoin is going a lot higher”!

The game-changing information I missed was: Only 21,000,000 Bitcoins are ever going to be mined, i.e. created.

As I write this article, Bitcoin number 500,214 has been mined, which means that there has been a total of 16,752,650 Bitcoins created on 20 December 2017.

The creator of Bitcoin has never touched the BTC 1,000,000 that he first mined.

That leaves: • A free float of some 4,248,000 Bitcoins only to be created in the future.

• At least 1,700,000 Bitcoins lost.

• Early adopters of Bitcoin holding on since Bitcoin was $100, $200, $300, $500, $1000 with extreme reluctance to sell.

• Questions such as ‘with the founder’s 1,000,000 Bitcoins locked up or lost, is Satoshi Nakamoto alive or dead’?

In my estimate, there is a population of some 200 million to 1 billion people with the financial ability to buy at least 1 Bitcoin. What this means is a lot of people could own 1 Bitcoin, and that’s a lot more than $21,000,000. And what this really means is that the supply constraints and potential growth in demand for Bitcoin fundamentally gives an upward trajectory for the price over time if Bitcoin maintains its role

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Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

emotionally as the dominant coin, kind of like the CBA in banks or Gold in the Precious Metals complex.

Bitcoin and new cryptocurrencies’ demand is exacerbated by the fact that they give individuals freedom over how they store, move, value and trade their own money.

And the world’s only waking up to this right now.

Bitcoin has produced some babies, and they call them ‘forks’.

Forks are merely where other cryptocurrencies are created with different characteristics to Bitcoin, but based on Bitcoin’s underlying architecture and structure.

Most notable forks are Bitcoin Cash (BCH) and Bitcoin Gold (BTG).

Before I write more about fundamentals and technicals, let me explain a couple of my beliefs and show you an example that may help you.

My Belief # 1: Technical analysis works best in a freely traded market.

My Belief # 2: Before I commit money to anything, I look at the chart because the chart can quickly give me the following information: • Should I be buying or should I be selling or should I wait? i.e. when and what to do.

• Where to buy, i.e. entry levels.

• Where to sell, i.e. expected targets and profitability.

• How to manage the trade to reduce risk, i.e. put my stop losses on.

floated the Australian dollar.

Once floated and freely traded, the Australian Dollar became a dream to trade and hedge currency exposures allowed me to benefit my company to the tune of $55 million between 1986 and 1990.

And that was including a loss of some $10 million in a six-month period when the Reserve Bank decided to step in and manage the currency, i.e. intervene. So, you now know I have 10 million reasons not to like intervention by government authorities in the markets.

What we are experiencing now with cryptocurrencies is a freely traded market with no real government intervention.

Yes, China has shut down Bitcoin exchanges on the mainland of China. But the Chinese government loves manufacturing. Bitcoin and cryptocurrency mining is manufacturing, and so the Chinese government has not banned cryptocurrency mining. The reason cryptocurrency mining is so prolific in China is that they use cheap coal (including Australian) to power their power stations. Therefore, their electricity is very affordable thus making it profitable to mine cryptocurrencies in China. The majority of Chinese crypto exchanges simply moved either to Hong Kong or overseas. So no big deal.

The same has applied to South Korea’s attempts to regulate cryptocurrencies.

Why is a freely traded market so important?

In 1944, the Bretton Woods conference set the price of Gold at U.S.$35 per ounce. The Gold price remained fixed at U.S.$35 per ounce by the intervention actions of a limited number of countries until 1971, when Richard Nixon ended the on-demand convertibility of the U.S. dollar into Gold at the price of $35.

Once that happened, a previously regulated market, possibly the biggest regulated market we have ever seen in the free world was opened up.

By the first trade in Gold futures at the end of 1974, Gold was trading at $190.

At Dawn Bolton-Smith’s funeral, I met Bob McGregor who I had seen speaking early in 1992. Bob was a highly regarded expert on the Gold market.

Did you know that between 1944 and 1971 they were not allowed to own Gold in the U.S.?

Once Gold had become a freely traded market, it soared in a rally from 1976 below to 1979 high- a factor of some 773%.

Increased price growth and volatility is what happens when markets become freely traded – Bob McGregor was an Australian Gold legend who rode the bull run in Gold and nailed the top getting out a few days after the top. He was part of Dawn’s generation of Technical Analysts who studied at the Mosman Evening College in the late 1960s.

Topic 1: Comparison with the Gold chart The U.S. Bitcoin Investment Trust (GBTC:OTC) has rallied some 16,502% since late 2015- far outweighing Gold’s rally.

Freely traded markets allow very fluid trading because the natural laws of supply and demand work beautifully.

For many years, the Australian Dollar was pegged to the U.S. Dollar in a dirty float managed by the Reserve Bank of Australia.

In December 1983, Treasurer Paul Keating and PM Bob Hawke

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Market Trading John Maynard Keynes referred to animal spirits in his General Theory of Economics. W.D. Gann waxed lyrically as to the emotions of fear, hope and greed.

The current crypto markets have animal spirits and the emotions of fear, hope and greed embedded in and driving them constantly.

While from time to time there are some magnificent manipulations by some very experienced cryptocurrency manipulators, all this means is the price charts and technicals are working in a way that I have not seen since the foreign exchange markets during the 1980s and 1990s.

Once the Euro was created in 2000, the foreign exchange markets lost their shine and buzz for me like many other forex traders because there were fewer alternatives to trade.

For example, at Macquarie Bank, I was trading the: • Deutschmark versus the French Franc

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Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

• French Franc versus the Italian Lira • Swedish Krone versus the Deutschmark • Deutschmark versus the Spanish Peseta • Portuguese Escudo vs Dutch Guilder (also known as Florin) Chart of coinmarketcap.com Now, as you can see from the above chart with 1369 listings on coinmarketcap.com, there are many markets to trade in the cryptocurrencies.

Many of these are highly risky, small and dubious and yet amongst the 20 or 30 reputable ones, I can now trade crosses. For example: •B itcoin Cash (a Bitcoin baby created by a Fork) to Bitcoin BCHBTC. •E thereum (an Alt coin) to Bitcoin Cash ETHBCH. • Ripple (a token) to Bitcoin XRPBTC. • And a thousand or more cryptocurrencies and tokens.

These are not without risks. The cryptocurrency market is like the Wild West because it is unregulated and many players openly admit to manipulating ICOs and tokens in a pump and dump fashion. I remind you that many fortunes came from the Wild West including the Rockefeller fortune, which started from Rock Oil Medicine, aka snake oil sales.

One side benefit of being the Wild West means that you can trade cryptocurrencies 24/7. Also, there are some very interesting trades that you can have based on weekend price movements.

So, you need to be very careful with these ICOs and tokens. They must have a good business case and honest promoters so they do not just disappear.

For that reason, for my Profit Hunter Group members and their clients, I am very cautious to make sure that they do not get into the wrong thing- and if they do, they have the ability to find out where to get out and when to get out of that ICO. From 1996 to 2006, I had the fortune of working closely with the legendary Larry Williams who traded $10,000 into $1.1 million in just a year to win the Robbin's World Trading Cup championship in 1987.

Larry said, “trend is the basis of all profits”.

Excellent technical analysis helps us identify strong market trends so that we can let the market unfold and do the work for us. How many times have you taken profit on all your investment or trading position at an excellent target or fundamental valuation, only to see the market keep moving up? I share your pain because in the past I‘ve had that feeling myself.

Another mentor of mine, Bryce Gilmore said: “Freely traded markets are, the best to trade and use technical analysis on.”

The cryptocurrencies are new markets with no vested interests, old positions and/or government intervention. Such markets trade freely and trend well.

We have seen this in vast abundance in cryptocurrencies, especially Bitcoin over the past 5 or 6 years.

Good trends also mean that strong pullbacks happen.

Premise # 1: Freely traded markets are the best for making money because they have an expectation of blue sky embedded in them and pure emotions of fear, hope and greed without an 800 pound gorilla in the room.

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Premise # 2: Because Technical Analysis and Chart patterns are based on: * Trend (a mechanistic way of trading), and * Pattern Analysis (identifying the probable positions of significant market players).

Therefore, Technical Analysis will work well on a freely traded market.

Premise # 3: Bitcoin has both limited supply and game theory built into it. In that: • Only 21 Million true Bitcoins will ever be created.

• The rate of increase of the money supply of Bitcoin reduces every 4 or so years according to a formula pre-set.

• The difficulty of mining Bitcoin increases over time as well.

• If the whole world wants a piece of Bitcoin, then prices will rise unless an alternative takes the hearts and minds of the general public.

• Many countries in Africa and the Middle East have bad economies and scary currencies. So, people want to use a commonly accepted money quickly sent and received from an easily found modern mobile phone, i.e. Bitcoin.

• There is natural demand for Bitcoin for investment in the minds

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Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

of young people used to it.

Therefore, there will be a tendency for an uptrend in Bitcoin over time because supply is limited and demand is increasing.

Premise # 4: The general public tends to get excited at the wrong time and depressed at the wrong time.

When U.S.-based Coinbase.com (which in my opinion is a rudimentary exchange) became one of the most popular apps on both Google Play and the Apple Store, it was very close to the high.

It was a great example of the masses moving into Bitcoin at the wrong time because Americans who seemed to think they could only use Coinbase piled in at the top of Bitcoin, which was U.S.$19,891 on Bitfinex on 17 December 2017.

As the public got in like a rabid herd, it only took 5 days to crash down to $10,700- a fall of some 47% as you can see from the chart below.

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That seems very dramatic – but when I zoom out on the Monthly Charts, I merely see a monthly uptrend that needs to churn sideways to burn up some time and have a rest like many other bull markets.

Source: Bitfinex via Tradingview.com Plus, look at the volume rising as price rises in a Trend Line. As long as Bitcoin does not close below U.S. $9000, it still appears to be in a strong position, albeit correcting at this point. So, eventually we should see higher prices.

Running one of Dawn’s favourite tools over the monthly chart – we see it's an old bull that needs a rest, not a dead one. In 1985, Dawn went away to Carmel California. Soon after, she revealed to me the Harmonic Moving Averages she learnt from Gann Angles’ Phyllis Kahn.

At the time of writing, it is 31st December 2017, and I am reading an article that says: “US Dollar Will End 2017 as Worst Year Since 2003, While Bitcoin is Up 1,372%” (Source: https://cointelegraph.com/news/us-dollar-will-end-2017as-worst-year-since-2003-while-bitcoin-is-up-1372) Yet, Bitcoin is down some 10%. Bitcoin has fallen in a range of some $2800 U.S. in price at the time of writing. You can see from the graphic that it is trading at U.S. $12,856 and has had a range as low as U.S. $11,651 to a high of U.S. $14,417.

In the more extreme cryptocurrency community discussions,

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Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

they talk about fiat or country based currencies being destroyed by cryptocurrencies. Now, this remains to be seen and it would be a long time off, but undoubtedly the U.S. dollar is having a hard time against Bitcoin!

Premise #5: Cryptocurrencies are so volatile; you can expect significant moves in one day. A subset of this premise is that two weeks is a long time in cryptocurrencies. Trading these is not for the fainthearted or overleveraged!

Premise # 6: As with all emerging technologies, fads and bubbles, public interest moves quickly from one shiny new object to the next.

And what this means is that there are very few old positions of existing interests that may limit price increases because they sell their positions.

In the middle of this year, Bitcoin was the shiny new object - albeit some 8 years old.

Then along came Bitcoin Cash and Ethereum, both of which had some dramatic moves and captured the minds, ears, hearts and mouths of many commentators.

Right now, on 31st December 2017, almost the whole cryptocurrency complex has fallen some 10%. Yet, a banking related token called Ripple XRP has rallied some 1174% in a few weeks and 162% over the holiday period.

Notice a few things about the XRPUSD Ripple chart: 1. There was a long time spent in basing between $0.28 and $0.20 throughout November.

2. Often volume on the days up in that base was increasing and much higher than the occasional price fall.

3. Once it broke from the base which was clearing through the $0.30 area, volume stepped in aggressively between the 11th and 15th of December.

My recommendation to anybody trading any market is to observe volume.

Now, my sons have been trading Ripple, and just today on 31st December, I have been telling my sons to take some profit.

See Chart XRP-Ripple-Target-2, which shows you that the projection targets of that triangle range are still in play: • Ripple had a goal of the Fibonacci projection target of 2.618x of the prior range which was $2.59.

• In the last 24-hour period we see that Ripple has hit $2.56.

• So now is an excellent profit-taking area and volume has increased on the push down, even though the 24-hour period is not quite complete at 8:21 AM in the morning AEDT. Premise # 7: In highly charged emotional markets that are new and fresh, even the classic technical analysis principles work like magic!

Not only that, they are probably the only tools that you can use

Now, let’s put this Ripple move under the microscope of technical analysis for clues you could use to determine a trade in Ripple.

Edwards and Magee in The Technical Analysis of Stock Trends popularised the use of chart patterns. Studies have shown over the years that the most reliable chart patterns for a continuation of the trend are the triangle family.

You will notice that from the 14th to 21st December, a protracted confused triangle was formed.

Once it broke out of the triangle, there was a strong move in the direction of the prior trend.

You will also notice that the triangle had decreasing volume and the breakout had increasing trading volume.

A few TA theories, e.g. Elliott Wave says that a breakout of a triangle (or a pennant) may see a price increase of equal to the previous movement - giving a target at $1.37 U.S. dollars. The high for Ripple, a few days after the breakout was $1.36. See chart XRP-Ripple-Target.

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Cryptocurrencies and Bitcoin- Where Charts and Fundamentals Collide

for trading short and medium term rather than investing in these types of coins.

Often when I go on the Sky Business Foxtel program- Your Money Your Call, stockbrokers and fundamentalists openly criticise me live on camera for using charts. Once before we went on camera, one of them explained to me that this is a marketing technique they use to polarise opinion and attract customers. But what I can tell you is, with limited information in fresh, new and freely traded markets, a good chart is your best friend. And finding a market that is trending can be an enjoyable experience and the best way to make some money in the markets with reduced risk and increased expectancy!

Let us shift our focus to Bitcoin.

Bitcoin has been the emotional epicentre of the cryptocurrencies. In fact, most people had not heard of other cryptocurrencies until about a month ago. That was when Ethereum became the flavour of the month because Bitcoin had issues with payment processing.

Now, look at volume. Volume is the fuel that drives the market's moves.

The green bars of the Monthly Charts show that the monthly trend is still up as long as U.S. $9,000 is not taken out.

The Weekly Chart shows confusion, as we would expect in a Normal Wave 4 correction (for details on my Simple guide to Elliott Wave see the video resources on http://profithunters.com.au or attend one of my occasional Free Elliott Wave Educational Webinars on Australian Bank Shares and Gold).

I liken the Bitcoin and cryptocurrencies to the initial days of carmakers. When Carl Benz invented the car, no one honestly thought it would take on, and then a few people gave up their horses and buggies and bought some of his cars. Then other entrepreneurs decided that they might also want to make a car and profit from the new changes.

Henry Ford created a massive innovation with the production line, and in the 1920s, Wikipedia says, “There were over 1,800 automobile manufacturers in the United States from 1894 to 1930.”

Eventually, in the U.S. this was whittled down to three big manufacturers- Ford, General Motors and Chrysler. The companies of Studebaker, Lincoln, Oldsmobile, Buick etc. all disappeared.

Many choices can create confusions and eventually we will see some of the cryptocurrencies remain while many will be just too hard to handle.

At the moment, we are in the explosive growth stage, and I compare Bitcoin, i.e. the original with Mercedes-Benz. No matter what problems they have with the payment system, it still has an incredible store of value.

Predictive Guess # 1: The current explosion in the number of cryptocurrencies will eventually contract to less than 10 primary players as we see in the mobile phone markets and car manufacturers.

Predictive Guess # 2: Late adopters need to be very careful about where they get in and how they manage their trades.

Predictive Guess # 3: There is still great money to be made in cryptocurrencies as long as you manage the risks and make sure you select the right vehicle.

Predictive Guess # 4: We will see many promoters of ICOs taken to task by regulators. And this may cause financial pain for those who

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get into the wrong ICO. Predictive guess # 5: As more institutions move into cryptocurrencies, initially there will be in an increase in volatility.

However, eventually volatility will calm down, especially in the chosen 10 or fewer cryptocurrencies that become the most important. Check out the CBOE Bitcoin futures Code XBT chart.

Once it started trading on 11th December, Bitcoin seemed to back off a little bit and churned sideways. This is fantastic news for me because it is now a regulated market. Therefore, I can advise on it in my new Cryptocurrency Report. But I am sad that the volatility and the strong market uptrend have slowed since mid-December and will probably continue to be more subdued with more and more substantial institutional orders coming in once their compliance teams allow them to be involved.

With a good set of technical analysis and charting tools, you have everything you need to manage your known risks in the cryptocurrencies while letting trends run. Be sure to bank some of the cash at appropriate times, but understand that sometimes these markets run a lot further than we can ever imagine. So, keep some in the kitty for the blue sky trade!

And as Dawn Bolton Smith so cheekily said to me, “if you have to ride a bull… ride young bull” Dawn Bolton-Smith called David Hunt one of the Top Three Technical Analysts in the World. He is the past Vice President of the Australian Technical Analysts Association (http://asn.com.au). A Top Market Timer, David predicted the end of the Global Financial Crisis publicly 3 months in advance in his 2009 Forecast – calling the bottom in “The Australian Financial Review” two weeks prior.

Independent Stock Market Authority, David Hunt is a favourite regular panellist on Sky Business News "Your Money Your Call".

Over 30 years Corporate Market Experience for CIG Ltd, AUSSAT, Macquarie Band, Qantas and Assorted Funds Management. Proprietary and Strategic Trader Macquarie Bank Forex Treasury Manager Qantas.

Feel free to contact David on david@profithunters.com.au or david@ australiansharesreport.com.au.

JAN/FEB 2018

Unchartered Territory for U.S. Markets - Whats on the table for 2018?

Trader's Story - Bamby Neilsen

SHARES AND TRADING

Unchartered Territory for U.S. Markets

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Unchartered Territory for U.S. Markets

Unchartered Territory for U.S. Markets What’s on the table for 2018?

By Jodie Nolan

S

omething very unusual has been happening in the U.S. markets. The S&P 500 hasn’t seen a real pullback for nearly a year! It’s been a dream run for the American stock market, creating a

new record.

The USA hasn’t seen a 3-5% fall in their markets for a year and this is unusual given it would historically fall every 2 to 3 months on average. At the time of writing, just prior to Xmas 2017, the current running streak without a significant pullback makes this the longest rally ever! The duration of the equity rally without a large downturn makes it the longest continual run since WWII. The Dow’s highest closing record is 24,792.20 set on 18th December 2017, with investors encouraged by President Trump’s tax reform plan. Foreign investors are buying U.S. stocks at the fastest rate

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since 2012 and a weaker USD and global growth are boosting exports. It’s all good news for U.S. markets. But for how long?

There is potentially one old-school market theory that could predict when the

next correction will occur.

Todd Gordon, founder of TradingAnalysis. com says that while the S&P 500 has more room to rally, it will ultimately fall once it reaches a certain level, something he

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Unchartered Territory for U.S. Markets

refers to as the ‘Elliott wave’ theory.

The framework (invented by Ralph Nelson Elliott), puts forward a position (as fact) that each bull market rally goes through five different ‘waves’ before a pullback, with the first, third, and fifth waves moving upward while pullbacks happen in the second and fourth waves.

According to Todd Gordon, the market is currently in that 5th and final upward wave.

"At the current angle of ascent, I'm not

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calling a top [in the short term]," he said on CNBC's Trading Nation. "We could have a bit more of a rally, potentially reaching the 3,000 mark in the S&P 500."

While the S&P 500 continues to climb, as it did in the first and third waves, once it finishes its current ‘trend channel’, the market will begin to fall.

Gordon believes that once the S&P does reach 3,000, the index could be set to come crashing down to 1,800, representing a

40% drop from those peaks.

At the time of writing, the Trump administration had just passed tax cuts, and it brought rise to the correlation of the 1981 Tax Act – the biggest cut in U.S. history (as a % of GDP). The day the tax cuts were signed and enacted, it started a 23% correction in the market.

With the U.S. markets at record highs, and given it is also the longest stock market rally since WWII, analysts were left wondering if the tax cut announcement would trigger a similar result? Only time will tell.

After almost 9 years of nothing but ‘up’, there has been many a prediction of when the market will turn and to what extent.

Sam Stovall, Chief Investment Strategist of CFRA- one of the worlds’ largest independent investment research firms advises, “it’s been said that bull markets don’t die of old age, they die of fright; and what they are most afraid of is a recession”.

He goes on to outline the projections for U.S. economy in 2018 citing, “our baseline forecast assumes modest GDP growth and mid-single digit share price appreciation, based on the continued recover from 2016’s ‘earnings recession’ combined with the effects of potential tax cuts in 2018.”

While Stovall’s forecast doesn’t consider the unpredictable nature of President Trump, or the current stability of both the U.S. and global economy, there are some wary investment strategists who believe that any serious breach from the president on economic or foreign policy could shatter the bullish scenario and send markets into a tailspin.

George Brooks who has 52 years of investment experience and is the author of ‘investorsfirstread.com’ publication sees volatility increasing after the historic bull run which cumulated in a 25% rise in S&P500 in 2017 alone. Brooks isn’t alone when he predicts an initial surge during the start of January 2018 followed by two major corrections, ranging from 1015%, in January and mid-year. “The risk is real”, he says and follows up with talk

JAN/FEB 2018

Unchartered Territory for U.S. Markets

place 2017 into the stellar year category, and with very little volatility in the mix, the S&P500 has notched 62 record highs at the close of year.

The last time the S&P 500 had a correction of 10% or more was Feb 2016.

In 2017, the biggest single day drop was only 2%.

Some analysts believe the market is over-valued and looking expensive with the S&P 500 trading at around 18 times forward earnings. The historical average is 16, which suggests stocks are potentially expensive. Incessant buying has pushed valuations to levels that are stretched to a historic extent. LPL Financial noted recently that the relative strength index, an indicator of technical momentum, is at its highest level since 1995 and would indicate the S&P 500 is at its most overbought level in 22 years.

So, with the S&P Dow Jones delivering a ‘perfect year,’ the first going back since 1928 in a rally propelled by stronger earnings growth and the prospect of significant tax cuts to corporates, the aging bull market is like a vintage wine, it just keeps getting better.

Jodie Nolan MBA (Applied Finance) Economist, Investment Adviser & Author EQUIS Group Wealth Management jodie@ equisgroup.com.au This article contains general information only and should not be construed or relied upon as legal, financial or professional advice. Accordingly, the recipient should note a) that the information has been prepared without taking into account the recipients objectives, financial situation or need; and b) because of that, the recipient should, before acting on the information, consider the appropriateness of the information, having regard to the recipients objectives,

of “expected volatility in the face of results from the Mueller probe and military action in North Korea.”

The U.S. equity markets have demonstrated it can rise above political distractions and geopolitical uncertainty, riding out many negative headlines in

JAN/FEB 2018

2017, but for how long? Just as sure as the markets will rise, they will also fall.

In 2017, investors drew confidence from a rebound in global economy, a steady U.S. economy, strengthening job market and strong corporate earnings growth. These factors could very well

financial situation and needs, and obtain individual professional advice on this matter.

Authorised

Representative

no

001258785

of

Australian Capital Financial Planning Pty Ltd AFSL No. 380552

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TRADER'S STORY Get to know your fellow traders. YTE speaks to trader Bamby Neilsen

Bamby Neilsen has been a trader for 18 months and is currently undertaking the Advanced Trading Strategies Course. She managed the financial side of commercial cattle property for over 25 years in Central Queensland. She also worked outside of the office, raising orphaned or sick calves, driving machinery, fixing and maintaining fences, mustering, checking water pumps and weed control. She trades some ASX Top 200 and Top 50-100 Mid-Cap stocks.

Bamby says, “In 2013 my life was in a state of change as I left the rural enterprise I had helped build. I got divorced, moved to a new town and basically started a new life with a completely new outlook and a new relationship. I have always been a person who thinks outside the box and challenges in life are a way of pushing me to the next level. From that time, my life took a holistic and spiritual path of self-discovery, to healing, well-being and mindfulness, which has allowed me to accomplish anything I put my mind to�.

website and it looked too good to be true. In the past I had been harassed by other companies trying to sell me a trading platform where they would be in control of the software and the trades: I didn't like that idea, but I did like what I read on the Wealth Within Institute’s website and so I enrolled in Diploma of Share Trading.

Doing this was a way to keep my mind focused on where I wanted to be in the future. I was finally being able to make sense of the market and the terms you hear all the time, but don't really understand until you start becoming educated.

The hardest part for me was getting myself back into a study routine, doing assignments and exams, which was quite a challenge for the first 6 months. Nevertheless, it was also rewarding because this process really helped me understand what I was learning and how to properly apply it.

Did you make mistakes when first starting out?

How and when did you first become interested in the markets?

I started becoming interested in shares and the market when I felt that I needed to invest my money. I found the stock market in the mid 1990's but was being coaxed by financial investment speculators and fundamental stats, and I read too many financial articles. Having a Self-Managed Super Fund (SMSF) which was monitored by an advisor, sparked an interest in keeping track of my portfolio and watching it grow.

And then what happened?

I was able to attend a couple of weekend workshops in the town of Emerald, Central Queensland, which were run to assist rural people in investing money into the stock market and provide advice on property and other investments. This was around the time when Ansett Airlines had crashed. The fallout was, we suddenly had access to the information that was given to the redundant airline staff to help them invest their money. This was done very professionally and it sparked a desire in me to learn more about where to invest.

I have always been a person who likes to be in charge of her own finances and have my finger on the pulse.

How have you been able to learn and educate yourself about the markets?

I did what most people probably do, i.e. read newspapers and the Money Magazine and mostly listened to radio stock reports. I had no idea about what books or courses were available. So, most of the stocks I purchased were based only on fundamental figures, gut instinct and some financial advice.

I was trying to find some way of learning about stocks, as I was making some good trades. However, I was missing the important details of how to exit a trade at the right time.

It was not until 2014, that I came across the Wealth Within Institute

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Mistakes are a part of learning and I made some, but luckily mine were not big losses. Patience is a big thing, when you have this new found information- you get very excited. You want to dive in headlong before you have enough experience or knowledge behind you. I have learnt how important it is to know your stocks inside-out and how you need to know the personality of each company so you can identify patterns, reversal signals and important price levels that can indicate what the stock is likely to do next.

When I have a loss, I study the trade and see why it happened. As long as I can work out how I could've prevented it, I believe I have learned from it. With my current knowledge, I can easily do this and continue improving.

Would you define yourself as a discretionary trader, a mechanical trader or a combination of both?

I probably lean more to the discretionary side of trading but with all the skills I have on hand, I am confident in knowing I have the mechanical side of the trading as a tool, which I still use on stocks.

Who have been some of your mentors and role models?

What impact have these people made on you personally as well as on your trading style?

In doing the Diploma, the assessors Kay and Jennie were there all the way, supporting me when I got bogged down. The pep phone calls from Carl were just the thing to pick me up too, he always rang at the right time, i.e. when I was feeling a little overwhelmed. Then when Dale Gillham spoke at the first trading workshop, I was in awe of him. He is such a positive inspiration!

Since starting the Advanced Trading Strategies course, Janine has also become my mentor and confidante in this journey. Each of these people have reinforced the concept that if you stick to your money management rules and back test your stock, the sky is the limit.

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TRADER'S STORY

Can you give us a brief overview of your trading style?

I am an aggressive trader, which is why I like the Mid-Caps so much. Sometimes there are other stocks in the Top 200 that are a bit predictable and slow, but these stocks are still great to have in the portfolio. I am more of a short to medium term trader and my average trade is around three months.

I also have a small SMSF portfolio in which I trade medium to long-term stocks, so I have to switch the way I think when trading such stocks. When I trade short to medium term, I enter a trade as early as I can and then exit on a daily chart.

The technical side of trading has me hooked, I enjoy it so

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much that I spend around 2 or 3 hours analysing a new stock. I write lots of notes about what I observe in preparation to trade.

I have my trading logs with each stock listed alphabetically and it allows me to keep tabs on the stock’s history and add notes from trading reports.

Is there any one trade (win or loss) that had a profound effect on your development as a trader? If so, what did you learn from the trade?

When I first started trading seriously about 12 months ago, I had all my rules in play and placed a trade on FMG and HVN, exiting

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with profits of 40% for FMG (Fortescue Metal Group) and 35% for HVN (Harvey Norman). This boosted my confidence and made me realise that I had finally become a trader! I did have some minor losses, but I’ve always stuck to my stop losses and appropriate parcel sizes.

need to have all my facts and details and record everything I do. I think it is important to keep things simple, don't over complicate things and have no emotional attachment to the trade. I see it as an equation that has a formula, which requires a result through calculation of analysis.

Can you tell us about your best and worst trades?

Do you have a favourite trading rule?

The best trades are when you simply follow your rules and the trade goes to plan without any hiccups and you exit at the right time and you know it’s right because the next day the share drops, so it reinforces your skill base constantly.

For me any trade that makes a profit is a great trade. In the early months of learning to trade I learnt to focus on producing a trade that I exited in profit rather than being focussed on how much I would make out of it. The worst trades I have experienced were those where I was hesitant in my entry or when I didn’t have all my technical analysis done.

When I am trading, I like to use Gann’s 50% rule and trend lines if the rule suits the stock. I have found they are simple and effective.

Would you classify yourself as a short-term or a longterm trader? What advice would you offer to people getting started as traders on the relative merits or otherwise of each?

I am becoming more of a short-term trader since I am more confident now, having gained the experience and skills to pick stocks more suited to my personality. In my SMSF, I am inclined to stick to the ASX Top 50-100 stocks. The more I practice the techniques, the more confident I become in selecting the right stocks to trade.

The best advice I have ever been given is, not to listen to advice from others when they offer you a tip on which stock to buy. If they do, I will have a quick look and then I can see why I would not even want to consider buying the stock recommended based on my own analysis.

What markets do you trade and which markets do you prefer? Do you have a favourite, and why?

I like trading ASX shares, particularly the Mid-Caps as they are more volatile and have higher volumes. Analysing them challenges me, though I will still have a couple of the top 50 stocks in my portfolio. Currently, I have three resource stocks in trades and I like these stocks. Now that I am familiar with how they move; I find them easy to trade.

Ed Seykota says, “Everybody gets what they want from the markets.” What do you ‘get’ from the markets?

Trading is exciting. I love it. It challenges my brain and provides the income for us to live comfortably and do all the things we want to do. What more could I want?

How has trading affected your lifestyle?

Trading has brought me together with other like-minded people and I can share the trials and tribulations of their trading journey. I am now more confident that I will be able to have a very comfortable lifestyle well into my older years.

What books, seminars and courses have you read or attended and which would you recommend?

Of course, I recommend the Diploma of Share Trading and Investment, and I have read all the books Dale has recommended and some of W.D Gann’s books like 'The Tunnel Through The Air'.

I don't read psychology books; I prefer to read books which relate to Conscious Awareness as I believe this is the quantum way to change one's behaviour. It requires consistent attention and observation on one's own self: it is a confronting and uplifting achievement when you decide to do this. I attend workshops which connect and fine tune the brain for higher thought processes.

What does the future hold for you?

The future is there and I am excited about it. As soon as I complete the Advanced Trading Strategies course I will also do the CFD course.

I will become a trader who will place a few trades a year and then for the rest of the time enjoy life and the adventures it offers.

What makes your trading style different from others?

What sets you apart from other traders?

I do not know exactly what other traders know, but I do know that I have a proper education behind me and I think that would be a big point of difference as most traders think they are educated when the statistics indicate otherwise.

I feel that everyone is different in their trading and it is a combination of your personality and how you approach life, which defines you as a trader. I am a very organised person and

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How do ABC Patterns work in the market?

The Cycles Of Religion Trading Approach of the Most Profitable Elliot Wave

Technical Analysis

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How do ABC Patterns work in the market?

How do ABC Patterns work in the market?

Learning how to identify ABC Patterns in the markets will enhance your ability to go for some big targets regardless of the markets that you trade!

I

am super excited to have been asked once again to write an article for my favourite trading magazine ‘Your Trading Edge’.

This time around I would like to write an article that applies to all traders and that will assist in forecasting long-range targets and taking advantage of the markets move into 2018.

In this article, I want to focus on one of the most powerful pure price movement patterns that I use in my trading and I’d like to teach you how to do the same.

Image 1 – ABC Signal Structure Long that highlights Seller Failure in the Market

What is an ABC Pattern?

An ABC Pattern is a ‘Stair Step’ Pattern in the market that may enhance your ability to read the market significantly and hence take advantage of the market moving both up and down. The power of the ABC pattern is derived from the fact that we have two teams in the markets, namely the buyers and the sellers, and ultimately the stronger team will always win. If the buyers are in command of the market, traders globally are likely to see this and want to join the buyers and push the market up. If the sellers are in command, traders globally will be wanting to sell the market down and hence take advantage of the potential fall in the market. Spotting these ABC Patterns could be one of the biggest shifts you have made in your trading, so let me show you what I mean.

The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

ABC Signal Structure In Favour Of The Buyers When we are seeking to trade an ABC Pattern, or use it to set longer range targets, we need to follow a highly defined signal structure

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How do ABC Patterns work in the market?

like in Image 1 opposite.

When seeking to use an ABC Pattern approach to buy into the markets, we focus on the size of the Buyer Leg (Leg A in Green) in relation to the size of the Seller Leg (Leg B in Red). In this graphic, Leg B is smaller than Leg A, signalling that sellers are failing in the market and the only reason they are failing is that buyers are simply too strong. It is this ‘simply too strong’ that we seek to take advantage of. Please also note that we also have a highly defined ‘Seller Failure Point’ (circle) that other professional traders globally are highly likely to see and take advantage of. Let’s look at a live chart so that I can show you a real one in real time!

The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

If we refer to the current European Currency Weekly Chart (Image 2) we can see that we have a strong buying leg (green arrow) that we will consider Leg A and a smaller selling leg (red arrow) that we will consider Leg B. The only reason that the sellers are failing in the market right now (black circle) is that the buyers are too strong.

What we need to do as traders, at the time of writing this article, is buy the Euro using our extant trading strategies, understanding that the ABC Pattern has established 2 x high probability targets we can use as part of the trade.

Target 1 for this pattern is the ‘Signal Point’ identified by the Blue Square with a target price of 1.20500. Target 2 is the extension of the original A Leg off the base of the ABC Pattern, which establishes a longer-range target on the Euro of 1.2200 identified by the Black Square. I am happy to suggest this is a mid to late January 2018 target provided the Signal Point can be broken to the high side by the buyers.

ABC Signal Structure In Favour Of The Sellers When we are seeking to trade an ABC Pattern in favour of the sellers, we simply inverse what we have done in the previous example like in Image 3.

When seeking to use an ABC Pattern approach to sell into the markets, we focus on the size of the Seller Leg (Leg A in Red) in relation to the size of the Buyer Leg (Leg B in Green). In this graphic, Leg B is smaller than Leg A, signalling that buyers are failing in the market and the only reason that buyers fail is that sellers are simply too strong. Again, it is this ‘simply too strong’ that we seek to take advantage of. Please note that we now have a highly defined ‘Buyer Failure Point’ (circle) that other professional traders globally are likely to see and take advantage of. Let’s again look at the Live Euro Chart so that I can show you another Live Chart example.

To find a valid ABC Pattern Short, all I have done is wound the chart backwards from the Buy ABC Pattern we discussed above.

In the case of the selling pattern that I have also identified, you will find that the same ABC principles apply.

In the case of the sell pattern on the left-hand side of Image 4,

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Image 2: Current EURO Weekly Chart as at 21 December 2017.

The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

we have a large selling campaign (red arrow) followed by a smaller buying campaign (green arrow). You may note that the buying campaign is significantly smaller than the selling campaign, which suggests to us that the buyers are failing in the market. The only reason the buyers fail in the market is that the sellers are too strong, so we want to be joining the sellers as soon as we get the chance.

This Sell ABC example allows me to show you a slightly more advanced target setting method where we can project your ‘A Leg’ off the bottom of the ABC Pattern with the intent of setting an even more ambitious target. This projection (dashed red arrow) allowed all traders to set a target of 1.7400 on the Euro. This target was over 500 Tics (Pips) away from multiple potential entry points and offered a very significant potential reward from an otherwise very low risk trade. This target was hit exactly 5 weeks after the original Buyer Failure Point was established and the ABC Pattern started to show its strength. To put that into context, if you trade a $10.00 Tic, and you get 500 of them, that’s 5000 reasons why you might want to understand and trade ABC Patterns well.

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How do ABC Patterns work in the market?

Image 3 – ABC Signal Structure Short that highlights Buyer Failure in the Market

Image 4: Current EURO Weekly Chart as at 21 December 2017.

The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

What Conclusion can we draw?

In both cases, the ABC Patterns on the Euro Weekly Chart have proved to be a powerful tool to read market direction and hence set brilliant trading targets. Please note that the success of the pattern is based on the ‘Two Team Premise’ which is a key advantage of trading currencies using a Futures Contract. As a Futures Trader, we will only ever have two teams in the market we trade, as we do not have a potential third team, called ‘Brokers’, potentially manipulating the markets while we trade them. More on this topic in my Live Market Webinars that occur weekly and are 100% free to join!

What I am most excited about is that this ABC pattern style of trading can be used on Daily Charts, 4 Hour Charts and 60 Minute Charts simultaneously. This means that we can get a lot of trades on a weekly basis and combine very effective risk control with some very large trading targets. I suggest that this may be a great way to start your trading in 2018!!!

Have an amazing trading day.

Lachlan Elsworth

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Lachlan Elsworth is the Founder and Trading System Architect at the International Day Trading Academy, based on the Gold Coast of Australia. To join Lachy in a FREE Live Market Webinar, simply register here: https://www.idta.com.au/webinar Authorisation. Lachlan Elsworth is the Founder of the International Day Trading Academy. The International Day Trading Academy (ACN 165 005 550) is a Corporate Authorized Representative (CAR Number 001250922) of Beyond Capital Asset Management P/L (ACN 610 259 179) (AFSL 484045) for the purpose of FUTURES Trading Education. The information in this article is General Information Only. Any advice given or implied is General Advice Only. Neither your personal objectives or financial situation or needs have not been taken into consideration. Accordingly, you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. All content if this article is the opinion of the individual writer and constitutes General Advice only.The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

JAN/FEB 2018

CYCLES OF RELIGIONS

THE CYCLES OF RELIGION

By D.K.Burton

JAN/FEB 2018

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W

.D. Gann said that he got all his cycles from the Bible. All religions are based on either a solar cycle, a lunar cycle or both. When studying the methods of Gann, it is important to not use Fibonacci numbers because there are no numbers that match astrological cycles. People that are mixing the two together don’t understand what Gann was doing.

In Gann's book The Tunnel thru the Air, he mentions a cycle of 19 years. Most people know this as a Moon/Sun cycle called the Metonic cycle, which is very important in ancient astronomy.

On page 82 he said, “To those who understand numbers, ‘266’ reveals some remarkable events that follow the election of the new Pope”. The number 266 is 19 x 14, 5 x 266 = 1330- very close to 1335 days or years in the Bible. Page 197 of TTTTA of “Robert Gordon’s great campaign in major motors” says that the stock would be 19 years old. The words in the chapter including the number 19 is 76, which is 19 x 4. Page 197 if 1 x 9 x 7 = 133 or 19 x 7. On page 152 (19 x 8) is the number 7 written seven times. Add 19 to 152 page, you get 171,190, 209 (half the pages in the book), 228, 247, 266, 285, 304, 323, 342, 361 (the square of 19) 380, 399 and 418 (last page in the book). The rest of the title of the book, “looking back from 1940” 19 x 40 = 760 (760 / 5 = 152), 1 x 9 x 40 = 360.

From Daniel we know TIME is 360, so Times, Times and half Time is 1260 days or years.

Double 1260 is 2520, which is 7 years. 2520 is the lowest number you get when you divide it by whole a number from 1 to 10 with no fractions left over.

Many religions use the Moon/Sun at the Vernal (21st March) or autumnal equinoxes (20th September)- start of the creation date as both Solar and Lunar New Years.

The Islamic calendar only uses the Lunar New Year, which loses about 11 days every year, as it’s only 354 days long versus 365 days.

It then fits into a 33-year cycle repeating (not exact, as it takes 1040 years be exact). Every religion worships some planetary god, such as, Sun God, etc. Because everything is vibrations, humans are brain-washed in all facets of life through the vibrations of planetary movements. The vibrations are very low in humans compared to most of the animal world. In fact, vibrations in humans are lower than that of a dog. I guess that’s why they say, ‘dog is a man’s best friend’.

The creation of man goes back to 23rd September 3996 B.C, which was the fourth day of creation.

The old Chinese New Year was the new moon after the sun had hit 15 degrees Aquarius, which is 4th February each year.

The Hindu New year starts with the Sun at zero degrees Aries, which is about 14th April each year.

The orthodox religions start on 7th January; this is 3 days after Earth is a Perihelion, which is 4th January, and the closest to the sun.

4th January is opposite of 4th July, which is when the Earth is at Aphelion, i.e. furthest away from the sun. The day of U.S. independence is 4th July 1776.

Half of 1776 is 888, which is the number for Jesus Christ. 7th November and 6th March make up the triangle, which is when the elections take place. In the old days, it was when the President took office.

Ezekiel in TTTTA is on page 50. Chapter 5 (5 is the number of ascension) talks about the four faces of man, lion, ox and eagle.

These are the fixed signs of Aquarius, Leo, Taurus and Scorpio. On

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23rd September 3996 B.C, the Sun and Saturn were at zero degrees

Scorpio (sidereal). You can’t tell me that it was just luck. I think it’s simply more proof that religion was set up to control the masses.

The Vatican behind the world banks and government. Do some research? https://mainerepublicemailalert.com/2016/03/21/untoldtruth-vatican-is-behind-worlds-top-banks-governments-globalcompanies-your-mortgage/ The date repeating cycle of solar eclipses also start at the year 0 AM. The date of 5877 is the year 1843, next is 5895, which is our 1897 on 1st February. The eclipses run in 649 years of 18 years and 10 to 11 days. After 3 eclipses, they have moved 30 degrees being 54 years and 1 month. The eclipse in 1843 was on 21st December, i.e. when the Earth is at the same degree in declination for 3 days before it rises and goes north.

Behind every religion is astronomy, as they have always prayed to the planetary gods. By knowing the matrix of the vibrations of the solar system, you can control the world and religions.

David has been studying the methods of W.D. Gann since 1983. He has also studied weather methods of Inigo Jones. W.D. Gann also studied sunspots cycles and their effects on commodity markets.

W.D. Gann also went to India with Sepharial, so he clearly knows a lot about Hindu astrology. He has been using the Hindu methods for weather, markets and horse racing as written about in previous articles.

NEW SOFTWARE W.D. Gann Trader Stage One Software will be ready at the end of February 2018. More stages will be added as well, such as, horse racing and weather. The software will be the only “Pure Gann” software in the world to date.

Facebook: https://www.facebook.com/WDGann360/ https://www.facebook.com/inigo360/ https://www.facebook.com/hedge360/

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Trading Approach of the Most Profitable Elliot Wave

Trading Approach of the Most Profitable Elliot Wave

By Dr Mircea Dologa The following is Part II of Dr Mircea Dologa’s article on the ‘Trading Approach Of The Most Profitable Elliot Wave [W3].

For Part I, refer to YTE Nov/Dec 2017 edition.

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Trading Trading Approach Approach of of the the Most Most Profitable Profitable Elliot Elliot Wave Wave

P

ART II

2. Trading plan:

Figure 6 wave W(3)

Trading wave W(3) is one of the most profitable transactions concerning Elliott waves. The Figure 6 chart synthesizes in real time the imperative procedural tasks: • Related to the Precedent Corrective Wave / Pattern - refer to Fig. 6 - The previous corrective pattern is terminated (internal structure 5-3-5 complete and each subwave must have Fibonacci proportionality principle fulfilled) guided by the relation W(2)= 0.382*W(1). The study of its internal structure reveals a failed wave C: W(2) guided by the relation C = 0.786*A instead of the equality C=A. This situation will have an impact on the degree of development of wave W(3). As we already mentioned, a shallow wave W(2) with a failed subwave-C will induce a high-powered momentum of wave W(3).

– Apply a Fibonacci price ratio (k) grid of calculating the relation W(2)= k*W(1). In this situation, the classic value 0.666 of parameter k will be replaced with k= 0.382.

- Apply a trend oriented tool to entire wave-W(2) in order to reveal its behaviour.

Fig. 6 - In the above chart we have selected the trend oriented tool - descending pitchfork - in order to do the monitoring of wave W(2) with its terminal level.

• Related to Nascent Wave W(3) - refer to Fig. 7, Fig. 8 and Fig. 9 The precedent chart of Fig. 6 reveals the optimal choices of entering wave W(3): • Aggressive entry, two ticks above the 12700 key level corresponding to the market bounce off the upper median line (UML) of the descending pitchfork. This entry is pre-arranged at the moment of multiple testings of the upper median line (UML) of the pitchfork.

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Figure 7

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Trading Trading Approach Approach of of the the Most Most Profitable Profitable Elliot Elliot Wave Wave

Figure 8

Figure 9

•C onservative entry, two ticks above the 12707 key level corresponding to the market bounce off the upper trigger line of the descending pitchfork. This entry is pre-arranged at the moment of testing the descending trigger line of the pitchfork.

• Add-on entry, two ticks above the 12707 key level identical

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with the above conservative trade, if the trader has decided to practice an aggressive entry at the 12700 key level.

• Second conservative entry, two ticks above the 12698-12701 cluster zone corresponding to the market bounce off the cluster level. This entry is pre-arranged at an eventual bounce at the 0.382, 0.50, 0.618 or 0.666 retracement levels of wave W(2) with regard to wave W(1). The occurrence of the reversing candle pattern at the 0.382 retracement ratio sealed the Long trade opportunity with an entry just above the price cluster.

The Figure 7 chart shows the occurrence of a cluster, which marks the Long trade entry. Wave-W(3) reached the 12888 key level corresponding to relation W(3)= 1.333*W(1). Its magnitude has a failure development degree, being inferior to the value of the classic relation W(3)= 1.618*W(1). This type of a failed W(3) development associated with a shallow correction of W(1) will influence the development of the next two impulsive waves.

The chart in Figure 8 illustrates the use of the height rectangle expansion technique, which can be drawn right after the breakout of the 12752 key level corresponding to the breakout of the terminal level of wave-W(1). Its association with Fibonacci alternate price projection [W(3) of W(1)] and will create a confluence at the 12888-12890 zone responsible for the reversal of wave-W(3).

In the precedent chart (refer to Fig. 9) we described the circular expansion technique drawn from c1 circle centre [W(1) origin] and the circular alternate price/time projection of radius R from the c2 circle centre [W(3) origin]. Thus, we obtained a strong enhancement of the already created 12888-12890 cluster zone with two other confluent levels guided by two circular relations: W(3)= 2.236*W(1), using radius 2.236*R from centre c1 and W(3)= 1.125*W(1) using radius 1.125*R from centre c2. Radius R is a measured segment of the magnitude of wave W(1).

Everything begins with the hard work of learning and assimilating the basics followed by a progressive assimilation of different

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Trading Approach of the Most Profitable Elliot Wave

advanced trading modules. This will certainly bring the trader’s learning curve to high limits. Once this is implemented, continue with conceiving a trading plan which includes the risk and money management, then follow it scrupulously in the process of trading that plan.

Avoiding to strictly follow up this process is like trying to find your way in a labyrinth without the Ariane’s thread..

Mircea Dologa, MD, CTA, began his investment and trading career in 1987 as a Commodity Trading Advisor and a Registered General Securities Representative. He subsequently moved into teaching practical aspects of trading using techniques he developed. He is a contributor to several magazines around the world; the author of seven books published in several languages, and the publisher of the monthly World Charting Report, which covers international indexes, commodities and forex charts. He is a member of several technical analysis associations (ATAA & STA) and an MTA associate member. He may be contacted at mircdologa@yahoo.com or via his website at www.pitchforktrader.com. The following two videos describe his work over a period of 25 years of experience: https://www. youtube.com/watch?v=6NE3JIk8mzE and https://www.youtube.com/ watch?v=dpjyuw1Lylo&t=190s

SUGGESTED READING Dologa, Mircea [2006]. “The Third Wave”, Technical Analysis of STOCKS & COMMODITIES, Volume 24: May. Dologa, Mircea [2006]. “Trading the Trend in Wave 3”, Technical Analysis of STOCKS & COMMODITIES, Volume 24: June.

Dologa, Mircea [2006]. “Trading Wave 3”, Technical Analysis of STOCKS & COMMODITIES, Volume 24: September Dologa, Mircea [2008]. Integrated Pitchfork Analysis – Basic to Intermediate Level-I, John Wiley & Sons Inc., London,UK Dologa, Mircea [2008]. Integrated Pitchfork Analysis – Advanced Level-II, Pitchforktrader.com. Paris, France Dologa, Mircea [2009]. Integrated Pitchfork Analysis – Advanced LevelIII, Pitchforktrader.com. Paris, France

Dologa, Mircea [2017]. “Trading Elliott Waves Using a Top-Down Approach”, Technical Analysis of STOCKS & COMMODITIES, V. 35:13 (36-42), Bonus Issue, February 2017 Dologa, Mircea [2017].

World Charting Report – Monthly Periodical, http://pitchforktrader.com/reports.html , Paris, France Dologa, Mircea [2016-17].]. Elliott Waves Trading – 4 Volumes (2200 pages) A Nuts–and-Bolts Professional Approach, Paris, France (Excerpts below) http://pitchforktrader.com/EXCERPTS/ Excerpts_EW_Volume_1_v2.pdf Jenkins, Michael [2012]. “Square de Range Trading System”, www. stockcyclesforecast.com Neely, Glenn [1990]. Mastering Elliott Wave: Presenting the Neely Method, Windsor Books

Dologa, Mircea [2013]. “Missing Link between Time & Price–Part I ”, Technical Analysis of STOCKS & COMMODITIES, 09/2013 Dologa, Mircea [2013]. “Missing Link between Time & Price–Part II”, Technical Analysis of STOCKS & COMMODITIES, 10/2013

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What Does Your Partner Need to Know About Your Trading?

The Self-Esteem Triangle Your Three Key Resources Do You Have an Archetypal Trade?

Why Most Traders Live A Life Of Quiet Desperation

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Trader's Mindset YOURTRADINGEDGE

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What Does Your Partner Need to Know About Your Trading?

What Does Your Partner Need to Know

About Your

Trading?

By Doug Dew

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What Does Your Partner Need to Know About Your Trading?

D

oug Dew talks about the importance and benefits of sharing your trading plan with your partner. Doug has been trading on his own account for a number of years. He has a special interest in trading psychology and holds a Master’s degree in Mindful Leadership.

Let’s imagine that you know absolutely nothing about trading. You have seen the charts on CNN and heard the commentators talking in a weird language which is gobbledegook to you. You have heard about booms and busts and the Wall Street crash with people throwing themselves out of windows, but that’s about it.

One day your partner tells you they are taking up share trading. Your alarm bells go off immediately. Are we going to lose our superannuation or the house?

Your partner disappears into the study and spends increasing amounts of time staring at the screen. Every so often, they emerge, to tell you that they just made 6R profit on JHA. This is encouraging, but you have a nagging feeling that you are only hearing about the wins and not the losses, and anyway, who or what is “6R” or “JHA”?

You can’t help thinking that if everything is going so well, how come there is no Audi R8 Spyder sitting on the driveway and you are still taking your holidays at Merimbula?

These are the thoughts and fears your partner might be having about your trading obsession!

I hope this warns you about the perils of not being open and honest with your partner about your trading, and the anxiety it might create.

I want to show you that a full and frank discussion with your partner is a better strategy.

I have just been through this discussion myself, although in my case, I had been trading with success for a few years and my partner is very familiar with the stock market and holds shares herself. I had a Eureka moment one day and realised I had never told her what I was actually doing. I felt that it was wrong to use our money without her knowing what was going on. I will describe her reactions later.

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What Does Your Partner Need to Know About Your Trading?

The process starts with your trading plan.

You do have a written trading plan, don’t you?

If not, you are not only kidding your partner, but yourself as well. I use Louise Bedford and Chris Tate’s trading plan template. (You can get it for free from www.tradinggame.com.au) The discussion should begin, not with: “By the way, I am going to start share trading”, but with: “Darling, I am considering share trading, but before I start, I want to discuss with you what this entails, so we can make a decision together.”

You need to prepare carefully for this discussion, and think about what their concerns might be, so you will be ready to hear and address them. Don’t forget this is the one person in the world who knows when you’re talking bull dust, before you do!

So, what sort of questions might your partner ask? Here are some examples: Why do you want to do this?

You need to think about what your objectives are, and try to make them measurable so you can both measure progress towards them, e.g., • I want to generate income to meet our school fees as the kids get older, say $X per annum.

• I want to generate money to add to our superfund, say $Y over ten years.

• When we retire, I want to fund our overseas trips, say $Z per year.

• I want the intellectual challenge of learning how to trade and then putting my knowledge into action.

• I hope to build up a circle of fellow traders and enjoy the interaction with them.

What makes you think you are capable of doing this?

This is a hard one.

You can talk about the generally held view that successful trading is 90% psychological, and what psychological strengths are required, (there is plenty of information available on this).

You can give an honest appraisal of your own strengths and weaknesses. Your partner will

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give you valuable input on this.

You can describe how you will use training resources and/or your past experience.

You can describe how your trading plan fits your personality.

If we do make money, won’t we have to pay tax?

This is a high-class problem. You will need to talk to your accountant about how to structure this. You also need to discuss what will happen if you become sick or pass away and how to get access to your trading account.

How much time will you allocate to this?

You have to come to an agreement about this. If you are spending twelve hours a day, trading every pip, this might not be good for your relationship. You might have to choose weekly trading instead… much more civilised.

You will also need to factor in the time you will spend on training and interactions with other traders. What will happen to your trading when you are on holiday? If you are trading overseas markets, you may be up late at night.

How much of our money are you going to risk?

This the ‘bottom line’; whatever else your partner is interested in, this will be of absolute importance. You will need to spend time explaining all elements of your capital management scheme, (you do have one, don’t you?) e.g.: • Your number one objective is to preserve capital.

• The capital you want available for trading is $xK (subject to negotiation).

• At no time will more than 6% of this capital be at risk.

• You will never have more than 1% risk on any position.

• All your positions will be protected by guaranteed stops, (need to explain what these are).

• If we ever get to the point where we have drawn down more than 25% of our capital, we will stop trading until we are both happy to recommence.

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What Does Your Partner Need to Know About Your Trading?

What markets are you going to trade?

Your trading plan will set this out, e.g. ASX or Timbuctoo Coconut Futures, or both. will need to explain what a ‘market’ is, in context. What time of the day or night will be trading?

200 You this you

What will you do every day/week/month?

This is a chance to demonstrate what you are actually doing when you are locked away in the study, e.g.: • Running explorations • Buying • Selling • Setting stops • Pyramiding • Keeping records I would advise showing these processes on the computer, rather than just talking about it.

When will we take profits and losses?

Explain this carefully. It can be the most counterintuitive part of your plan. You need to explain your plan for holding and selling positions, e.g.: • Sell only when trailing stop is hit.

• Pyramid after break-even is hit.

• Do not take profits in any other way.

• Always sell if the stop is hit… no hanging on to losing positions.

When do we see some cash?

Another high-class problem. Do you want to see the Audi on the drive way or be trading with more capital? You two will have to work this out. It links back to why you are trading in the first place.

How do you decide which shares to buy and how do you set stops?

Answering this depends on how interested your partner is. The answer can get technical. I think you should take the time to explain in as much detail as your partner will tolerate. At least you will be able to show that you have an organised methodology and why you have chosen it. It is a good time to explain that no one can see the future.

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What records are you keeping and how will I know how things are going?

You can show your spreadsheet for recording trading history, and agree that once a week you will sit down with your partner and show them what has happened. You can also track how you are going against your objectives. This will give confidence that you are both in control.

These are the questions that I identify as important. You can use them as a structure for your discussion with your partner. They might well have other questions and you need to be receptive to that.

I do understand that this process might be difficult. You are opening yourself to the risk of criticisms, which maybe entirely valid. Maybe your partner doesn’t want you to do this at all.

Maybe the amount you are risking is too high for their comfort.

Whatever the outcome, it is better than the old ‘hide yourself in the study’ routine.

I mentioned above that I have just been through this experience with my partner.

Her reactions were very helpful. She was impressed that I had a carefully thought out and comprehensive plan. She liked the idea of quantitative trading objectives and the emphasis on capital preservation.

She was happy that I was following a passion from which I obtained so much satisfaction. To her, this was almost as important as possible monetary gains.

The key factor for her was how much money we are putting at risk and how are we managing this risk? Clearly this would be a matter of priority for anyone. We discussed this carefully and came to agreement.

She now takes a positive and enthusiastic interest in my trading, which is very gratifying.

As a final thought, if you follow this advice, you may not only be setting up a harmonious environment for your future trading, you will also be subjecting your trading plan to a very rigorous appraisal by the person who has just as much to lose or win as you do.

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The Self-Esteem Triangle

The

Self-Esteem Triangle

By Mandi Rafsendjani

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The Self-Esteem Triangle

A

ny experienced trader would have realised by now that trading is not simply a discovery of how to make money. Trading is so much more than that, it is in many ways a discovery of what we are made of.

It is often believed that finding success in trading is simple: your risk and money management needs to be solid.

The recommended risk reward ratio of 1:2 is based on statistical calculations with a profit loss ratio of 65%. Most losing traders I work with have a RR of at least 60%.

The reality is, almost every trader battles with their inability to stop themselves to let losses run out of control.

There are mainly two reasons for it: 1.

Humans don’t naturally have behavioural patterns required to do well in trading. For example, our bodies are not designed for ballet, so ballet dancers need to train their body and mind to perform in ways that do not come naturally to a normal person.

2.

None of us have emerged from childhood unscathed. Our self-image and self-worth are affected and can cause the pesky, self-sabotaging behaviors we all battle from time to time. Taking losses, being rejected, not achieving our dreams becomes somewhat personal.

Let me explain: Lack of patience and discipline is caused by this constant subliminal feeling of not being enough, of not being capable. The little voice inside that whispers: ‘why did I do that again, I can’t be good enough, I am never going to be good enough, I am not going to be capable enough…’ whatever that enough-ness is that seems missing is an epidemic of what is missing within so many traders.

Every Trader’s Deep Desires On the surface, we get into trading for profits. Secretly though, we all crave to be loved, we want to experience a sense of individuality, live in emotional and physical stability, no matter what life throws at us.

We all want to know that we matter in this world.

Most of us grow up believing that we have to DO something special to be loved, we only experience a sense of individuality if we DO something special that we get attention for. Emotional and physical stability is intertwined with financial security, and we believe

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that we only matter if we have found our purpose in life. All this seems suddenly possible when we discover the wonderful world of trading.

But then all the hopes crash very quickly when trading turns out to be a source of pain, rather than a source of everlasting freedom.

And that is when it becomes apparent that trading is so much more than we ever envisaged. This is where we have to choose: do we go on a journey of self-discovery, learn to master ourselves, or do we give up?

The Pathway to Trading Success The pathway to trading success starts with focusing on what is within us that we need to re-connect with. That is what trading is about, it is a re-connection, it is a journey back to our true congruent self.

The journey back to our congruent self involves looking at three vital components that we needed during our formative years.

If we weren’t given these components, and I can say, I have never seen anybody who was, then as adults, as traders, if we don’t achieve the profits we are aspiring to, we must do the healing for ourselves.

This is not about healing our past, we need to heal and claim ourselves. That is what my work with traders is all about and I will now share a little snippet with you on how to achieve this.

We currently have this huge movement in the world about how we

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The Self-Esteem Triangle

have to fight low self-esteem, talk positively, be confident, patient and disciplined.

If you have tried this ‘willpower’ approach, you know this can only get you so far, because underneath, at the core, there is this huge void. It’s the place, where the old habits, the old choices, the old beliefs haven’t been dealt with yet and keep interfering with your winning trading decisions in the form of self-sabotaging behavioural patterns.

How is this Void Created?

The greatest wound a child can receive is experiencing some form of rejection or abandonment. For example, an event happens where either the child’s boundary is crossed, its needs not met or acknowledged and/or the child isn’t allowed to live through the emotional spectrum. The child experiences this event as rejection, neglect, abandonment, abuse, isolation and feels wounded.

In that very moment, the child makes a secret mental pact promising never to feel such pain again. And so, it starts to develop coping mechanisms with the sole goal to avoid vulnerability, to be protected from future pain, and to survive life.

These coping mechanisms are helpful when we are children and lack the emotional maturity or the language to articulate. But as adults, these unconscious coping mechanisms are the very strategies that interfere with our desire to experience deep fulfilling relationships, and creating financial success. These unconscious coping mechanisms cause our inability to take losses swiftly and let profits run.

When we were little, we were depended on others, but now we depend on ourselves.

In my opinion, trading is a quest for finding our inner treasures and reclaiming who we choose to be.

The Triangle of Self-Esteem We go into trading with the best intention, and we have moments of break-throughs where our trading feels amazing and works well, but in reality, nothing has changed because the foundations aren’t put in place.

Without these critical foundations, we keep getting wounded, thus creating the same trading scenarios over and over again.

So, it’s never the patience or discipline, it’s simply the fear to cope with the future and experience pain.

This shows a lack of self-trust where needs are not being met

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and trading is ruled by internal emotional turmoil. You won’t be able to embrace everything trading has to offer because you are too concerned about how you are being perceived by your peers.

But once you start healing, what you look for in your trading starts to change as well. Therefore, you take on the responsibilities and standards of a true professional, and with that your trading experience changes.

Every single one of these components are critical for disciplined trading. If any of the components are not in place, it leads to a selfesteem that causes self-destructive trading behavior.

Let’s take a closer look at this triangle:

Boundaries: To become a fully functional trader, boundaries need to be in place.

Setting and adhering to a stop loss is nothing but setting a boundary.

If you feel bad saying ‘no’ to people or setting your boundaries when something feels uncomfortable, it will reflect in your ability to take losses, as you most probably have been trained to hide from confrontation rather than dealing with it head on.

Our boundaries are like invisible force fields.

•W hen our boundaries are violated as a child, we decide that we can’t trust others. Not knowing how to trust others is really not knowing how to trust ourselves. We become so busy attending to the needs of the outside world to keep ourselves safe that we don’t get a chance to develop a strong and healthy sense of self.

•W hen we don’t know how to trust ourselves, and don’t have a strong sense of who we are at our core, we can either fear abandonment, or fear being engulfed by another- either way we don’t trust the world.

•V ulnerability becomes difficult if you have no sense of self and lack trust. Ask yourself, if all the external factors are taken away from you, who do you know yourself to be?

Traders who say they can’t take their losses, tell me they lack internal boundaries.

People who avoid conflict have been taught to go into ‘people pleasing mode’. They become walking doormats and everything is okay, there is no boundary that says ‘stop’.

Setting a stop loss is like setting a boundary. If we find it hard to set and keep a stop loss with the people around us because we are concerned how we will be perceived by others, we will find it hard to set and keep a stop loss in trading.

This is why discipline can’t be taught in trading. We must work on what is okay with us in a conversation, what is okay with us physically, what is okay with us intimately, what is okay with us in terms of our possessions and our material world and learn how to say no in a constructive resourceful way.

What are your rules and boundaries around these criteria?

Example: Your friend invites you to dinner, but you feel you need to go to the gym and take care of your health. Rather than making up an excuse, you comfortably tell the truth. Your friend respects your decision and loves you regardless.

Needs: The second component helps eliminate impulsive and compulsive behavior: It is understanding what our needs are and

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The Self-Esteem Triangle

still think objectively and fully function in our day to day life, rather than withdrawing from family and friends because we had a loss, is normal behaviour.

Self Assessment:

how to get them met resourcefully. Most of us don’t even know our own needs, all we know is that we have a constant craving for food, drama, shopping and/or other addictions. Not knowing our needs and how to meet them creates another void that we try to fill through trading. Feeling depleted fuels impulsive and compulsive behavior.

The 3rd component is your emotional soup. This gets really messy for many traders.

If we were raised in a critical environment where mistakes were ridiculed, we become terrified of being perceived as making mistakes.

This is because mistakes are catastrophic for those who have no healthy sense of self, lack boundaries and/or live in emotional turmoil.

Such people need trading to feel good, because they can’t do that for themselves, and trading becomes something very personal, rather than a simple business transaction.

A lot of people grow up to be emotionally shut down. During their childhood, they were most likely never allowed to express their anger, their creativity and were probably not even allowed to demonstrate their full range of emotions.

If you feel frustrated with your self-sabotaging behavior, you avoid being vulnerable. You are feeling the hurt and the pain of your emotions being denied as a child and you don’t know how to connect with them.

Our ability to tap into emotions that are appropriate to the context of the situation and that are healthy is crucial to trading success.

Being dramatic and feeling hopeless, helpless, and despondent is not healthy. Feeling annoyed or angry to an extent where we can

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How are you with different people? Do you find yourself intimidated, and shut down?

What is it that worries you about people?

Do you feel you can’t trust them?

Do you love a good challenge because you feel secure, have healthy boundaries, and can express them safely and constructively?

Are you getting your needs met and do you validate the needs of the people around you equally?

Do you feel secure and stable no matter what challenges life throws at you?

And I wonder how you relate to the following: - Do you feel safe to express your feelings and your needs to the people close to you?

- Do you trust that your needs are being validated and taken care of?

Once you can answer ‘yes’ to these questions, you will be amazed at how your trading performance will change.

As you can see, positive thinking and willpower is not enough, you must dig deep and do the healing! In a nutshell, this is simply taking care of what’s most important: YOU! By reclaiming our self-esteem, we don’t need to hide and mask up anymore, as we start living closer to our congruent selves.

When we have worked on our boundaries, needs and emotions, we feel stronger in situations that have previously shaken us.

As our level of self-esteem goes up, our emotional response to trading losses goes down.

Also, our relationships begin to deepen. As our relationships become deeper, more honest and lighter, we don’t take losses so personally anymore. Our capacity to take on challenges go through the roof, as we are more rational and less emotionally charged.

Is the trading journey hard? Yes, but it’s harder to live with the struggle of protecting ourselves and covering up the internal pain.

Mandi Rafsendjani has been an active trader in the financial markets for over a decade. She has been trading a variety of instruments such as Australian equities, options on equities, Futures and CFD’s (SNP500, Dow Jones [Emini], XJO, DAX, Commodities and Forex). Today she is not only a successful professional trader, she is also recognized as one of Australia’s premiere authorities in “The Psychology Behind Peak Trading Performance”.

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Your Three Key Resources

Your Three Key Resources

By Sinan Koray

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Your Three Key Resources

W

e have three resources that we constantly juggle to achieve the results we want, and to be happy.

You can also think of them as three separate assets or three different currencies. One is not better than the other, in fact you need all three,

in abundant supply.

The first one of these resources is money.

When you consider doing something, going somewhere, moving to a better residence, buying something, you consider how much is it going to cost and whether you have enough money. You may have what the item or activity requires, but you may also think you need a lot more money than that so you can only use up a portion (of what you have). When you suggest to a friend, a colleague or an associate to do something, they may decline by saying, “I do not have the money.” It goes beyond the personal level too. You may be leading a project and need your organisation to allocate funding.

The management may come back and say, “we do not have that kind of money for this project”.

You make money, you spend money, you save money, you invest money, you trade with money, you win money, you lose money. Money comes and sometimes money goes.

What is the second resource? To understand this, put yourself in a sales situation. Let’s say you are selling an education program for traders and investors.

What are the two common objections you may get? 1) “I do not have the money” 2) “I do not have the time”.

Time is the second resource we all have.

Some people are born into money or get lucky and have a windfall that brings a lot of money into their life.

However, we are all equal when it comes to time. We have the same number of hours in a day and how we use this is almost totally under our control.

I am sure you have heard the expression- “Time is money”. You may agree with this sentence, you may not.

There is at least some truth in it. Warren Buffet said: “The poor invest their time, while the rich invest their money”.

In other words, poor people trade their time in for money.

They give eight, nine, ten hours a day to do some kind of work and in exchange they get a salary. What do the rich do? Instead of doing chores and activities they do not like (or don’t want to do), they pay someone buying their time. They exchange money for time.

Unlike money, which can come and go, can be earned, won, spent or lost, time, once gone cannot be regained.

What is the third resource?

It gets quite interesting at this point! Do you know people who have more money than they need and have a lot of time on their hands, yet they are unhappy? I am not saying everyone who has abundance of money and time are

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unhappy, but some are and some aren’t. What makes the difference? What is the third component? It is energy.

You can also call it, enthusiasm, motivation, health, wellbeing, life force or drive. Without energy, without the motivation, throwing more money into someone’s life or carving out more time makes no difference to their state of mind.

Some pursue financial goals, giving their pursuits all the time and energy they have, only to lose their health, their wellbeing.

It is a worthwhile pursuit to aim for and do whatever it takes to reach for your goals. However, be mindful of the exchange. What might you be spending, exchanging in order to get there.

I wish there was a formula like “Force = Mass x Acceleration” to help us compute the balance between time, money and energy. What I can suggest is to take time to regularly check how resourceful you are in each one of these three areas.

As one’s circumstances change, as your family grows, or shrinks, as your needs increase and decrease, the ideal balance point will shift. What was once very important may fade away and some other priority take its place. It is important to be aware of how much money you have, and want to have, how much time you have and want to have, how much energy you have and want to have, and constantly adjust the exchange between these three resources. This is almost like GPS (Global Positioning System) in your car or your phone, which takes input from a number of satellites and adjusts your course on a regular basis.

As a trader, one might spend a lot of time and energy studying different indicators, back testing, optimising and forward testing. We do that in order to be rewarded financially in due course. We are investing time and energy to make money. This is no different to any education process (studying in order to make money in our profession). I know some traders that never turn the corner, constantly researching, studying, testing, optimising, studying more, testing. Sooner or later that investment of time and energy has to be converted to the third resource: money.

Which one of these three resources do you have more of, which one/s do you need more of? How can you convert (or exchange) one for another?

Sinan Koray is an internationally acclaimed speaker, author and trading coach who is reshaping trading psychology and transforming the lives of tens of thousands around the world. As a professional trader and trading coach, he is considered a leading expert on emotional control and mind mastery. He actively trades Foreign Exchange, Equity Index Futures and Metals since 2003. Sinan has addressed audiences in Australia, New Zealand, Philippines, Middle East, India, Singapore, Hong Kong and USA. He is the founder of TradingStressFree. com

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Do You Have an Archetypal Trade?

Louise Bedford

W

hen you close your eyes, can you picture your perfect trade? Can you visualise it?

What does it look like?

Unless you can articulate exactly what you’re looking for, I can guarantee that you won’t recognise the next ‘triple your money’ trade when it shows up in your scan.

What you’re after is something like an archetype. You know… the type of chart that you come across that makes your heart beat a little faster, because it’s so perfect. When it crops up again in its early stages on your computer, you can practically sense its potential.

Here’s an example of a chart (ALL – weekly) that has such a happy little, easy to grasp trend. What clues does this give you in its early phases that it was going to go forward and triple your investment?

Yeah… I know it’s hard. I know it’s confusing… but stop what you’re doing and really look at the chart. It’s giving you clues. LOTS of clues. Can you describe in words what your eyes are seeing? If you can, you’re more likely to recognise it when it reappears in the disguise of another chart.

If you’re worried that your trend detection and candlestick pattern knowledge is a little rusty, I have good news. I’m giving away my ‘Special Report – Candlestick Pattern Summary’ to the first 200 people who register here: https://reports.tradinggame. com.au/candles/. It’s a quick, free crash course - so, hop to it and pick up your copy now. It will help you analyse charts with skill, so you can borrow from my 28 years as a trader.

Remember when we were kids and we used tracing paper? If you could trace the shape and indicator action on a perfect chart, you could proverbially use this to apply over the top of other charts, and replicate what you see. That’s when you know you’ve found an effective archetype, i.e. when you can use it to discover other similar looking charts that can lead you to riches.

A lot of people respond visually… but you might be the type of person who needs it all spelled out in words. So here’s my:

Checklist for Success In order to trade effectively, it is important to be as mechanical as possible. By writing down all aspects of your entry and exit methods, you will be able to follow these commands to the letter.

Rather than provide you with a definitive list of entry and exit signals

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that may not suit your own personal trading requirements, I have prepared some questions to help you establish your own set-ups and triggers. Go and find a blank piece of paper and a pen, and get ready to formulate your own rules.

Entry Signals To actually enter a position requires a set-up, and then a trigger.

The set-up may alert your attention to a possible trend, but a trigger is required for you to actually enter a position. Describe some of the key set-up signals that you would look for that indicate that a share is in an uptrend and the conditions that would trigger your entry. List as many as you can: If you mentioned any of the set-ups and triggers listed here, then you are on the right track: - Share prices are predominantly above a 30-week exponential moving average (Set-up) - A golden-cross with two moving averages of different time durations e.g. a 30- week exponential moving average and a 15-week exponential moving average (Set-up) - A rising momentum indicator at a historically low level (Set-up) - An upwards sloping trend line (Set-up) - A momentum histogram showing higher highs while the share price is also displaying higher highs (Set-up) - Heavy relative volume when a share moves upwards in price (Set-up) - Low relative volume when a share moves down in price, compared to when it moves upwards (Set-up) - A predominance of white candles compared to black candles (Set-up) - Longer white candles compared to black candles and/or a

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Do You Have an Archetypal Trade?

series of candle tails pointing downwards indicating buyers moving into the market (Set-up) - Ease in the share’s ability to break through round dollar value figures e.g. $5.00, $5.50, $6.00 etc (Set-up) - A series of higher lows and higher highs (Set-up) - Buy when a share breaks out from a base formation on a white candle or a gap (Trigger, i.e. a breakout trade) - Buy when a top reversal pattern that fails (Trigger) - Buy when a gap hurdles a previously established level of resistance, particularly on heavy relative volume levels, during an existing uptrend. (Trigger, i.e. a breakout trade) - Buy when there is a breakout through a significant resistance line on heavy relative volume, preferably initiated with a white, bullish candle, or a gap (Trigger, i.e. a breakout trade) - Buy on a confirmation of a recovery (e.g. white candle) from a period of retracement (Trigger, i.e. a retracement trade) - Buy when a resistance line that becomes a line of support (Trigger, i.e. a retracement trade) You may have added in a few more, if you’re writing out your own list - which is terrific. The key is to put into writing the setups signals and the triggers to ensure your entry into a particular share. Make the wording unambiguous, and define each signal as carefully as possible. In times of trading pressure, you will need to have some simple methods to ensure that you are thinking clearly.

So… now… what are you looking for in order to jump into that trade? What specific conditions would reach out in a new chart and confirm themselves as satisfying the requirements of your archetype?

Your job is to replicate your findings. Find five charts that trended like crazy-things and look at the preceding conditions.

What did the early setups look like? What did the triggers look like?

What can you replicate moving into the future? How does this influence your trading plan, so that the next time you see a chart like this you’ll act?

Once you have been able to express in writing your exact entry and exit signals, then you may be able to program these parameters into your trading software package. This will help you search for buy and sell signals that fit your own unique trading style. You need to spell out your search requirements precisely or the results derived will be useless.

There’s so much unconscious competence that can be gleaned simply by looking at charts and observing… really observing.

The market will tell you all you need to know… if you listen. But – be careful about becoming distracted by listening to the news…

The bad news The bad news is that ‘bad news’ can wreck your day. So, watch what you let into your life, your mind and your living room.

Just three minutes of negative news in the morning can increase your chances of having a bad day by 27%. This means that the negative mood you might experience while catching up on the news first thing in the morning can stick with you throughout your day.

Letting in negativity can lead to horrendous self-doubt. Plus,

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it’s not going to help your trading results at all.

But can you do this?

It’s one thing to know the specifics about how the markets operate. It’s another entirely to combat that enemy within that whispers to you: “You can’t do this… You’ll never make money…

What makes you so special?”

Often, our enemy within is our own worst critic. Listening to the news and hanging around toxic people only feeds into this mindset.

Are you: •T oo self-doubting to stand tall when those around you search for a weakness?

•T oo timid to step forward when upstaged by those you feel are more worthy?

•T oo uncertain to feel you can really make a go of this?

You can lean on my shoulder and tell me everywhere that feels raw.

The pink places that have been sand-papered by the markets.

Your head, your heart, your pride.

And I will understand, at a deep level... because I have been there. I have experienced the pain of a losing trade, and the exhilaration of a winning trade. The grind of following your plan when the markets aren’t co-operating. The pleasure of the hope for a brighter future.

Remember the prize.

Remember why you’re playing this crazy, irritating, rewarding, exciting, delightful trading game.

Go forth loudly and boldly into the trading sunlight this month.

The floodgates of your emancipation are about to open.

Whoever you feel you are in your heart is who you are - so guard your thoughts as they determine your actions. And the way you feel right now, in the depths of your gut... well... it may not be the way you feel forever.

One thing is for certain - You will flounder, struggle and grow.

Then you will flap, strengthen and then soar.

This quote from Nelson Mandela's inauguration speech was never more relevant: "We ask ourselves, who am I to be brilliant, gorgeous, talented and fabulous? Actually, who are you not to be? As we let our own light shine we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others."

Let your light shine as a trader.

You never know what ripple effect this will create not just in your life, but also in the lives of those who are watching from the sidelines.

Louise Bedford (www.tradinggame.com.au) is a full-time private trader and author of The Secret of Writing Options, The Secret of Candlestick Charting, Charting Secrets and Trading Secrets.

Download her free trading plan template from her website now and you’ll get her bonus 5-part audio course called ‘Trading Made Simple’.

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Why Most Traders Live A Life Of Quiet Desperation

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Why Most Traders Live A Life Of Quiet Desperation

Why Most Traders Live A Life Of Quiet Desperation

By Mandi Rafsendjani

W

hen I ask traders, “What do you think could improve your trading?”, many respond with: “I should be doing more, I should work harder”. When I ask why, the typical response is, “If I worked harder, I would do better”. But no matter how ‘hard’ they work, they still hold themselves back, procrastinate and self-sabotagethus limiting the level of success their trading will ever reach.

Before becoming self-conscious, self-doubting and fearful traders, we were actually born naturally curious, adventurous and self-expressed with full access to the whole range of emotionsfrom sadness and anger, all the way to happiness and love, naturally knowing how to be abundant and successful.

How The Seed Of Self-Doubt Is Planted While visiting a friend, I observed an interesting interaction: Her little son was drawing a house. You can imagine how important that is for a 4-year-old, it probably means the world to him. So, he started drawing the house without any instructions, and frankly it was a pretty weird drawing.

So, his grandma, who was sitting next to him offered to fix the drawing for him. I watched it all unfold: she moved his drawing to the side, took a new sheet of paper and ‘taught’ him how to draw a house ‘properly’. Even though the little boy protested, his grandma was determined to teach him how to do things ‘the right way’.

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Why was Grandma so determined to teach him ‘the right way’?

I think it’s because as a child she had been taught that there is a right way and a wrong way and that it is important to do things the right way because doing it the wrong way could have painful consequences.

We carry those experiences into adulthood; thus, impacting how we feel about ourselves as adults and as traders. It effects our self-confidence and we tend to become very self-critical, constantly worrying about what others think of us, which severely impacts our ability to create success, the quality of trader we can become and the life we can have.

So, if you have ever heard any of those phrases growing up, you will find the following article very insightful and useful: “Be quiet and sit still! Children are to be seen, not heard”.

“I’ll give you something to cry about”.

“Just wait till your father/mother comes home!”

“Go and give your uncle/aunty a hug”.

“Be a nice boy/girl and share your toys with the other kids”.

The rebellious child may dare to say: “How come we have this rule”? Most of the time the answer is: “Because we do!”; “Because I say so!”; “You do this, or else [insert threat/repercussion/ punishment here] will happen!”

If the above sounds familiar, you have probably been brought up in a patriarchal family dynamic.

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Why Most Traders Live A Life Of Quiet Desperation

The Influence of Patriarchal Societies on Traders Typically, in most societies, parents/ caretakers/teachers are the rulers- the big magical people, the godlike creatures. This thinking is called patriarchal thinking. There is a ruler and everyone else is subservient to them.

Now, from a patriarchal point of view, grandma was trying to help her grandson because she needed him to get it right, without even understanding what she was doing to the little boy.

The drawing was weird, so she tried to take care of him, save him and protect him from the hurtful world- something she couldn’t protect herself from.

As a child, there may have been a number of events where she may have been shamed, made to feel guilty, belittled etc.

Therefore, she will do anything she can to protect herself from ever feeling that way again.

This is all unconsciousness because the grandmother really does love her grandson.

But in that moment, by moving his drawing to the side, she crushed him. At this moment, he might start becoming selfconscious and concerned about what other people think. Perhaps he decides he isn’t good enough, or that he is powerless because the ‘big’ people come and interfere anyway. Or, he may go the other extreme and start rebelling against any authorities. Both behaviors have the unconscious purpose of trying to protect the self from ever getting humiliated again.

In some form, this is what almost everyone experiences growing up. But this is not about blaming our parents or our upbringing. Blame is not allowed for my traders. Blame is a dead end; it means there is no choice.

Rather, this is an exploration into self-awareness and about knowing where our weakest links, trading pitfalls and gaps lie.

Realising our weaknesses can help us crawl out of it and become successful traders.

The patriarchal world is very much about right and wrong, black and white. It’s very judgmental. A lot of fear, guilt and shaming is used as leverage to make kids behave a certain way in patriarchal families. Compliance is very important. There is no room allowed for self-expression in a patriarchal family. Therefore, it immediately shuts down curiosity, self-expression and freedom to explore, i.e. all traits crucial for trading success. It causes the child to fear mistakes and consequently leads to absolutist ‘black and white’ thinking.

As a result, the child feels he/she deserves love only if he/she acts a certain way.

This squashes people. Moreover, it rears its ugly head in trading, as we all know that in trading we are wrong more often than we are right.

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Essentially, patriarchy breaks away the will and stops people from truly being themselves. Their willpower to say ‘no’, which essentially taking a loss is, had been stripped away from them as a child. They are also unable to stand up for themselves as the right to do so was taken away from them when they were told to be a good kid and act subordinate to the patriarchal system.

Thoreau described it well: “Most men and women live a life of quiet desperation”. And we wonder why we have such awful gambling and drug problems in our society!

People Pleaser, Rebel Or Anything In-between?

As we grow up, we either become people pleasers because we are worried about being judged; or we are highly self-critical due to a fear of abandonment. Alternately, some of us become rebels and tell society to ‘get lost’. Rebels tend to go against church, police and/or any authority figure that represents the patriarchal world.

They feel pain around authority because authority told them what to do, and they resent being told what to do. They are usually less self-critical and don’t understand how it can be so hard to take a loss. They want to win; they want to be the king.

They are often the ones who have a greater chance to succeed in trading, but face challenges in other areas of life.

So, people pleasers can learn a lot from rebels on how to succeed in trading, and rebels can learn from people pleasers on how to have more loving and intimate relationships.

More often than not, traders with ‘people pleasing’ tendencies tend to struggle in their trading. Now, here is the good news: We aren’t the ones incompetent in trading, it is merely our tools, our thinking tools, our trading tools. And tools can be upgraded, new skills can be learned!

Struggling traders have internal blockages that can sabotage their ventures in early stages. They sabotage it by having unrealistic expectations, taking things personally, by being overly self-critical and therefore not handling the stressful world of trading effectively. Often, they are people focused, concerned about what other people will think of them and are therefore afraid of failing and/or being perceived as a disappointment.

Being stuck in a losing trade is proof to them that they are not good enough. It triggers subliminal feelings of shame and guilt that were planted in them as children.

Since most traders don’t understand their internal world, they can’t recognise these subliminal feelings. They don’t feel in charge of their emotions, and consequently of their behavior.

Often, they are unable to curb impulsive, compulsive trading and overcome their lack of patience and discipline. It seems to bottle up and come out of nowhere.

Therefore, since they don’t know how to control their internal world, they try to control their external world. They say, “I shouldn’t be this way! I should have stayed in this trade! I shouldn’t be so stupid and jump in this trade! I should work harder, do more, learn

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Why Most Traders Live A Life Of Quiet Desperation

more, it’s never enough!”.

Taking A Glimpse Into Your Internal World When you say, “I should be/do better!”; How do you feel? A twinge of guilt? A hint of anger?

Think about it, have you ever thought “I should” and experienced a positive emotion? ‘Should’ leads to a sense of failure along with feelings of anxiety, guilt and shame. ‘Should’ highlights the bar we didn’t reach. For many, that bar is set too high with unrealistic expectations.

Most retail traders say they want to achieve consistent profits and an 80% win-loss ratio. However, in reality, professionals are making multi-million dollar profits with a 60–65% win-loss ratio; or even less. They endure long runs of drawdowns just the same.

What about when you target a ‘should’ towards someone else?

“She should know how I feel.” “He shouldn’t do that.” “The market should have turned here…”

The ‘should’ about other people and occurrences impose expectations and almost always lead to feelings of frustration, or even anger and resentment. If I tell you that you really ‘should’ have done X instead of Y, what message does that send to you?

The unspoken message is that you messed up in some way, that you’re not good enough.

What makes the ‘should’ so sneaky is that they are criticisms and judgments disguised as help. They encapsulate societal or selfimposed pressures that chip away at our confidence and self-trust.

This thinking structure most probably originated in the way our caretakers communicated with us when we were kids. What happens is, our caretakers have grown up with the same experiences, and they think it is normal.

So, they imprint on us their own insecurities, concerns and lack of self-worth. In adulthood, we continue communicating the same way with ourselves and others. This is where we get our so-called “should”.

Akin to the afore-mentioned grandma, most comments from our parents/caretakers come from a genuinely good place or a desire to help. In fact, they would be rather upset to realise the unintended implication of their message.

The Traits Of Struggling Traders Struggling traders seem to have in common a lack of self-belief, constantly worrying and feeling insecure, and doubting if they can ever succeed in their dream of becoming a full time professional trader.

What I observed is, they have the following two traits in common: Absolutist black and white thinking; and non-logical egocentric

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thinking strategies.

Becoming aware and growing out of these traits will have a profound impact not only on the quality of trader you will be, but also on the quality of life you are leading.

Absolutist / Black and White Thinking: If you see the world in absolutist terms, you see the world in extremes, i.e. black or white, right or wrong, good or bad. There are no subtleties, no grades of shades.

A trader who has had a string of losses might immediately think that they are not good enough or that they don’t have what it takes. On the flipside, when they have a string of winners, they believe that they have cracked the trading code and millions of dollars with a lifestyle of riches awaiting them. However, most likely, they fall into despair and disappointment when reality turns out differently.

They take it personally, even though it simply might be that the phase the market is in and/or their style of trading is not suitable.

They either have to wait it out or add additional strategies for different market conditions.

Their thinking is rigid, they don’t see that a certain trading style may be applicable in one context, but not in another. Perhaps they also don’t see that one style of trading might suit one personality, but not another.

Absolutism or black and white thinking is childlike. One major difference I find between struggling and successful traders is that the latter realise that everything is context related. They don’t display this absolutist thinking. They see, adapt, and work with the subtleties in the context of the respective trading environment.

Non-logical egocentric thinking: Last week a trader emailed me asking whether she should let her trades run longer in profits. When I asked, “how do you know you should do this”? She said, “I keep following the trade even after I have closed the position”.

So, I asked if she kept factual statistics, how many of the trades would have continued, by how much, for how long and how many of the trades turned etc. However, she didn’t have any hard facts or statistics to provide that could have either confirmed or debunked her ‘should’.

Most struggling traders confuse their feelings with facts. They don’t filter their feeling through logic. Non-logical thinking is where thoughts, feelings and facts are enmeshed, which also contributes to black and white absolutist thinking.

Most people simply haven’t learned logical thinking strategies to check whether their feelings and fears are factually based on risk parameters or rather an echo from childhood.

Don’t listen to your feelings alone. Make them work as a team with your logic. What are the facts and figures, do they confirm

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what you are feeling?

Sometimes, when traders don’t make profits rapidly, they feel like a failure because they focus on the countless memories of how they stuffed things up in the past. Consequently, they retreat into the safety of feeling overwhelmed without assessing the facts.

However, it is not the past that determines your future. Your future actions determine the life you ultimately create for yourself.

If you want to succeed in trading, you must redirect the narrative in your mind. Learn to redirect your mind from, “this feels bad”, to “hang on- does that mean I can never succeed”? No, it doesn’t.

So, what does it actually mean? “What do my performance metrics show; what is my weakest link; How can I improve today by 1%?”

The fact is, trading is hard. We need to learn new skills that don’t come naturally. We need to learn to understand and manage ourselves better, and we need to learn to understand the mechanics of the financial markets.

How To Start Transforming Your Thinking Now, let’s go back to the so-called ‘should’ we mentioned at the beginning of this exploration. ‘Should’ is one of the tools we use to sabotage any attempts at success.

“You should or shouldn’t have done that”—an after the fact unsolicited should is not helpful nor useful. There’s nothing to do about it now! Your message is simply “you messed up”, or worse, “you are a failure”. The voice of unrealistic standards fuel anxiety, guilt and anger; thus, keeping you stuck in the past, rather than creating a new future.

Therefore, one step closer to creating a future of successful trading is to change your thinking, which will change your feeling, and will in turn help you handle yourself efficiently; for example, replacing impulsive/ compulsive tendencies with logical assessments.

“I should be more patient and disciplined!”; “I should let my profits run longer”- sounds familiar?

Now try: “I wish I were more patient and disciplined”. That is simply replacing ‘should’ with another word. The self-criticism is still strong.

Ask yourself: “Why do I wish I were more patient and disciplined?”

This at least puts you on the path to understanding and considering thoughtful action on how to adjust your behavior. The outcome—fix it and/or let it go—is more helpful than mentally beating yourself up for something you actually can change.

The Solution: Turning Self-Consciousness Into SelfAwareness

awareness, you have choice. When you blame others, including yourself, you don’t have choice.

A useful strategy to start off with is rewording your ‘should’. Use the format “I want ______ because _________.”

“I should not jump into a trade just because it rallies” becomes “I want to do a thorough analysis before I enter a trade, because this is what professional and successful traders do. It will make me more successful and my trading career is very important to me.”

This is much more realistic with much less unnecessary guilt.

Or use,” Next time I will ___ because ____” “Next time I will take my profits when the moving average is breached because my statistics show that the probability of the trade to continue in profits is largely reduced once this line is violated.”

We can think, feel and sense anything we want. Our bodies, our own internal environment, is our kingdom. It is the only thing that we are actually able to control. Now, I am not talking about ignoring every emotion.

However, it is important to learn about your internal world, acknowledge it and validate the feelings instead of pushing them aside. Work with your feelings instead of resenting them. What you resist, persists.

Once you have transformed your thinking from black and white absolutism, you will understand that everything in trading is context related and that nothing and no one is just good or bad.

Good (skillful) traders can do stupid things and bad (unskilled) traders can get lucky. Learn to validate your feelings with facts, keep statistics of your trading performance beyond profit and loss.

Also, maintain statistics on your behavioral patterns in trading, such as, at what point do you start losing your profits again, what proceeded you to not taking your losses after you didn’t have a problem to take your losses in the two trades before?

By establishing this behavior/thinking, you will become the trader who has the right to be confident, not because you are naïve or hopeful, but because you know yourself so well. You know your strengths and your weaknesses, you know you can rely on yourself and you live in line with your values.

You no longer fear the repercussions of being wrong. Instead, you enjoy the magic of discovery because you know you can trust yourself to do what needs to be done to succeed.

At this moment, trading starts happening for you, instead of to you. Trading at its core is about you, discovering your pathway to your own sense of self-worth, self-respect and self-love.

Mandi Rafsendjani has been an active trader in the financial markets for over a decade. She has been trading a variety of instruments such as Australian equities, options on equities, Futures and CFD’s (SNP500, Dow Jones [Emini], XJO, DAX, Commodities and Forex). Today she is not only a successful professional trader, she is also recognized as one of Australia’s premiere authorities in “The Psychology Behind Peak Trading Performance”.

The first step out of this slump is to turn your self-consciousness into self-awareness. This is the space where you can create change in your trading behavior and improve your trading results. With

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Bourse www.boursedata.com.au Bourse DataData

www.boursedata.com.au Easy Forex Pty Ltd. www.easy-forex.com.au Easy Forex Pty Ltd. www.easy-forex.com.au eSignal www.eSignal.com eSignal www.eSignal.com Gecko Software www.geckosoftware.com Gecko Software www.geckosoftware.com GFT - CFDs & FX Trading www.gft.com.au GFT - CFDs & FX Trading www.gft.com.au Market Analyst www.market-analyst.com Market Analyst www.market-analyst.com OptionGear www.optiongear.com OptionGear www.optiongear.com ProfitSource www.profitsource.com ProfitSource www.profitsource.com Seismo Australia Pty Ltd www.seismo.net.au Seismo Australia Pty Ltd www.seismo.net.au Sharewealth Systems www.sharewealthsystems.com Sharewealth Systems www.sharewealthsystems.com ValueGain www.valuegain.com ValueGain www.valuegain.com Vector Vest www.vectorvest.com VectorBROKERS Vest / DEALERS www.vectorvest.com Brokers / Dealers Alert Trader

AlertBell Trader

Commodities Limited Bell Commodities Limited Bell Direct

W.D.GANN HOME STUDY COURSE

By D.K.Burton The foundation of learning is to get the base of knowledge correct.

The study of Gann to his highest level has steps of knowledge that is learnt over years or even decades. Too many people are trying to learn astrology. Gann wasn’t doing astrology the way people teach today; therefore you can waste a lot of time studying rubbish, which won’t help you. You must start off slow and get the basics right. The “HOME STUDY COURSE” does this. You should have all of Gann's books with the home study course and you will be on the right track to the future. You can’t get knowledgeable quickly; humans are very slow learners and it takes time for methods to be memorized.

You can order the Home Study Course through David Burton On 0419 917443 or www.schoolofgann.com

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Commodity www.commoditybroking.com.au CMC Markets Broking Services www.cmcmarkets.com.au Easy Forex Pty Ltd. www.easy-forex.com.au Commodity Broking Services www.commoditybroking.com.au Australia www.etrade.com.au EasyE*Trade Forex Pty Ltd. www.easy-forex.com.au FirstAustralia Prudential www.fpmarkets.com.au E*Trade Markets www.etrade.com.au www.forextrading.com.au First FXCM Prudential Markets www.fpmarkets.com.au GFT - CFDs & FX Trading www.gft.com.au FXCM www.forextrading.com.au Halifax www.halifax.com.au GFT - CFDs & FX Trading www.gft.com.au IBFX www.ibfx.com Halifax www.halifax.com.au I-Deal www.i-deal.com.au IBFX www.ibfx.com IG Markets www.igmarkets.com.au I-Deal www.i-deal.com.au Interactive Brokers LLC www.interactivebrokers.com.au IG Markets www.igmarkets.com.au Macquarie Prime www.macquarie.com.au/prime Interactive Brokers LLC www.interactivebrokers.com.au Marketech www.marketech.com.au Macquarie Prime

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NOV/DEC 2015

JAN/FEB 2018

www.titansecurities.com.au

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