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Maximizing Your Trading Years

I discovered Adam Hamilton in late 2002 and since have read his weekly essays without fail every week.  I have incorporated his theory on market cycles into my trading strategy.  His research has shown that throughout history markets tend to move in great cycles, long bulls followed by long bears.  These cycles are around 34 years long – resulting in a 17 year up cycle followed by a 17 year down cycle.  Obviously no market goes straight up or down, so within those major cycles are minor counter-cycles to keep everyone on their toes. Our last major up cycle ran from 1982 to 2000.  So, we are now 7 years into the down cycle.  If you entered the market in 2003 – it doesn’t feel like a down cycle.  However, if you bought tech stocks in 2000 you are still down 50%. 

Why am I mentioned this?  Continue reading “Maximizing Your Trading Years”

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Getting Started in the Trading Game

I received a couple of emails about getting started in the trading game.  Here is some insight into my development and a couple of recommendations.   

My trading career has undergone two distinct phases.  Phase 1 where I made a lot of money, but didn’t get to keep it.  Phase 2 where I am making a lot of money and at least so far being allowed to keep it.  Unfortunately, everyone must pass through Phase 1.  It’s the rites of passage.  The key is to minimize your time in Phase 1.  So, how do you that?

Continue reading “Getting Started in the Trading Game”

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Nailed Subprime Trade w/Help From Napoleon Hill & Donald Trump

Last week, the week of the 400 point DOW meltdown, was the worst week I have had trading since the Internet collapse of 2000.  On Tuesday, I woke up to Bloomberg discussing China’s 9% fiasco and the concerns of it carrying over to our markets.  Certainly stops would be triggered, at the opening, which would set off a domino effect.  Where would the market stop for a breather?  It was anyone’s guess.  Not being a fan of hard stops – I thought that my mental stop strategy would work in my favor.  My preference is to set mental stops and close out positions at the close if triggered.  This is a technique that I use to take the intra-day emotions out of my trading strategy.

Continue reading “Nailed Subprime Trade w/Help From Napoleon Hill & Donald Trump”

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Understanding the China Stock Market Meltdown

Here is a great article I found.  The author is quoting from Strafor . com.  He refers to the Strafor website as like having your own CIA.

Source: The Kingsland Report

The Chinese government has become increasingly concerned about levels of investment in its economy or, more accurately, the sheer amount of money that is chasing projects. State firms with limitless access to subsidized capital from state banks have used that access to launch thousands of nonprofitable firms. This glut in “investment” money drives up the cost of commodities and adds industrial capacity without actually producing anything of much use, making life more difficult for the average Chinese and unduly harming relations with foreign powers that face a glut of otherwise noncompetitive Chinese goods. This penchant for over investment has now spread to the stock market in two ways.

Continue reading “Understanding the China Stock Market Meltdown”

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How to Survive Getting Hit by a BRIC

Now I know what it feels like to get hit by a BRIC: Brazil (EWZ) -8.81%, Russia (TRF) -8.2%, India (IFN) -7.5% and China (FXI) -10.7%.  It may take a few days or weeks before our bells stop ringing, but it will.  Unless Goldman Sachs grossly miscalculated the economic potential of these countries, February 27, 2007 will simply be a blip in a long term profitable cycle.  However, hard hats will be standard issue going forward.

I believe this action lends credence to my quest of developing indirect methods for investing in the BRIC economic cycle. Continue reading “How to Survive Getting Hit by a BRIC”