Forex Is Crazy

This market still has plenty of bids to keep it moving higher. Monday we got a much needed move lower to work off some overbought conditions and finally had some volatility come back into the market for the first time in a long time. On the dip I added a few more long positions to my portfolio as I tend to believe this market has an agenda to the upside for the year. We are within a $1 of all multi year highs made just the other day. The question is whether we will trade sideways for a while before resuming the trend higher. Ultimately I think we will get a test of all time highs this year around the $157 handle. So for know I will continue mostly with covered call positions. Good Luck Trading! And 1 favor that we ask:  If you like the hard work we put into our blog posts and videos, PLEASE help us out by sharing them. Click the share links below and share them on FB, twitter, etc. It really helps us get more exposure and grow IN THE MONEY TRADES!

We finally have a two sided market. It is kind of funny how markets will stair step there way higher and just fall off a cliff when they need a break. But it is healthy for a market to have corrections and consolidate moves. I don't think anyone was surprised that the market finally traded lower, what surprised most people is how fast it happened. You would think we would know this by now that markets always seem to fall much faster then they rise. I still don't think this changes anything with respect to the overall trend of the market. But I do however think that we could see some price consolidation for the next few weeks in the $147-$153 range. With that being said I may look into trade ideas for some iron condors that may look attractive now that we finally have some volatility back in the market. I will also be searching for opportunities to add some more high yield covered call plays. The first place I will be monitoring is the Dow 30 stocks for what you may call accide...

After hitting another new multi-year high last week the markets were seen taking a bit of a breather as volatility came back into the market. We traded down from a high of 153.28 on the SPY to 149.94. I still believe that this market remains in an uptrend and that dips will likely continued to be bought. The big level I am watching to hold as support is around $147 where the SPY broke out after several attempts and failing. I used last weeks pullback as an opportunity to take profits on my long volatility play and to close my short callspread on the SPY. All in all it was about a wash between the two positions. I also closed out my long position in PBI. I was the owner on record for the ex-dividend date, so I will be getting the dividend of about $300 sometime in the first few weeks of March. CLF has had a nasty fall after reporting earnings and cutting the dividend and took a hefty portion of my gains for the year. I was up close to $1,500 for the year, but am only up about $350 as I ...

And 1 favor that we ask:  If you like the hard work we put into our blog posts and videos, PLEASE help us out by sharing them. Click the share links below and share them on FB, twitter, etc. It really helps us get more exposure and grow IN THE MONEY TRADES!

First let me start off by admitting that I am not the biggest fan of the limited options that you have in an employer 401k. However there are many other advantages that I am going to go through in this post. Here are the top 3 benefits to maxing out your 401k: 1) Reduces your taxes. Contributions to a 401k are deducted from your pay before taxes are calculated. In 2013 the individual contribution limits are $17,500 or $23,500 if you are 50 or older. Not only will you not pay taxes on your contribution, but it may also put you in a lower tax bracket for the remainder of your income that will be taxed. 2) Free money with an employer match. Now most companies will not match 100% of the money you put in. But a typical match is 50 cents for every dollar you put in for up to 6% of your salary. So if you are making $100k a year your employer would match half of the first $6k of your contributions ($3k in free money from your employer). 3) Tax deffered growth. Since you don't pay taxes on ...

So yesterday I was sitting in a local coffee shop working on a financial model for my day job, when a gentlmen asked me if I was studying. That question led to about an hour long conversation about what I do and a lengthy discussion about the financial markets. Michael was his name and he is a retired pilot trying to figure out what to do with his idle cash. From our conversation I gathered that he had been trading bonds from the long side had been recently raising cash as he realizes that bond prices likely don't have much room to the upside. We talked about interest rates being near zero, with no room to go lower. Although neither of us know the timing, eventually interest rates are going to go up. At the very least we agree that they can't go any lower. After we talked through a few different ways and trading vehichles to play out this thesis I reccomended to him two resources that I reccomend to everyone. That is the Think or Swim trading platform by TD Ameritrade and Tasty...

When it comes to trading options I have to admit that I have a pre-disposition to selling option premium vs buying it. My brain goes to great lengths to prevent me from buying option premium. Now this has not always been the case. When I first started trading options I was mostly a buyer, except for the old covered call strategy. Now theoretically you can find an option strategy that you pay for that has the same risk profile and probability for success. For example, you could buy a callspread vs selling a putspread. So why do I prefer to sell options? The first reason I prefer to sell option premium is because of theta or time decay. Every option that trades is a decaying asset. By selling an option I get paid for everyday that goes by. Additionally I am selling an option that has no real or intrinsic value, based on the way I choose what to sell. What I mean by this is that lets say I sell a $25 put on MSFT for $1 when MSFT is trading for $27. The option has no intrinsic value becaus...

Yesterday I just had a deposit on one of the brokers, and the same day my money was not left out. What is the cause? What made my account was left devastated? I still do not believe it will as soon as it is exposed to a margin call. Well maybe this is my bad experience, and hopefully I will not repeat it again. I'll tell you, and hopefully useful to you all. Long story short, I made a deposit at one of the brokers that I've previously learned through a demo account. Indeed, the amount is not much, because my intention is only for my learning only. Then I chose to use the leverage of 1: 1000. Finally I played with so many transactions transaki open positions. Besides lots that I use also vary some large some small. Some time later I had a lot of profit, but I did not close my position was profitable at the time. Since I still wanted more. Finally I decided to leave my computer and started to break without closing the first account of my transaction. I was then awak...

As I have been talking about over and over for the past few weeks. Right now the market direction is up and  I am trying to sit on my hands and not add to any new long positions. The risk/reward to adding new positions with markets at the upper end of their range and at 5+ year highs is very hard to justify. The SPY is possibly starting to show signs of getting a bit tired. With that Volatility (VIX) is at the lower end of its range and is currently in the 13% percentile. With that, this morning I sold the Mar '13 $22 put @ $1.28. In other words I collected a $1.28($128 bucks), betting that volatility is not going much lower and could go higher between now and March Expiration. By break even is at $20.82. I really like the fact that my Theta is about $2.33/day. After adding this to my overall portfolio I am net long about 42 SPY deltas. Additionally this week PBI will be paying its quarterly dividend. /The covered call I sold against my stock position is about $2 ITM. So I wil...

Forex trading is the trading of foreign currencies or so-called foreign exchange. Foreign currency trading is the largest market in the world measured by total value of the transaction. Thus, the prospect of investing in forex trading is very good in terms of liquidity. Forex trading is now very easy to do by anyone and from anywhere. With capital computer connected to the internet, we are able to do forex trading online. Both of the home, office, cafe, and where all that matters is the internet connection facilities. Trading forex can provide a substantial and rapidly in just a short time. However, keep in mind that to get the most profit in forex trading is not as easy as turning the palm of the hand. Forex trading is one of the businesses that have a high risk investment and high profits as well.. Like business in general, all businesses must contain risk. Likewise with forex trading. However, the question is how can we minimize the risk. Risks can not be avoided but c...

I know one question that I get frequently is how to find what to trade. Its a hard question to answer because the answer really depends on a lot of variables. But there is probably one universal rules to follow: 1) Make sure the stock is liquid. My rule of thumb is that the stock trades at least 1 million shares a day on average. You want a liquid stock because you want to make sure you can get in and out of the stock easily. But on top of the stock being liquid you are going to want to make sure the options are liquid as well. I like to look at open interest to gauge this. If you look at the 8 closest strikes you should see a couple thousand contracts in open interest. Other than that the sky is the limit. There are so many sources of ideas out there. They range from free to paid services. It really depends how active you want to be and what you cash flow situation is like. I personally like to come up with my own ideas, and I honestly don't like to pay for trade ideas. So I navig...

After a few weeks I learned forex, I feel very happy and confident can earn money from forex business. The feeling that often comes when I can achieve even a small profit. However, when I suffered a loss, a sudden sense of excitement was gone instantly. Feelings were initially pleased that later turned into a feeling of sadness and despair. Maybe feeling like it natural. Or maybe because I was only a beginner in forex trading. Maybe if I categorize the feelings that I often experience when playing forex trading there are only two: the first is feeling happy or confident and the latter feeling sad or scared. Both are always conflicting feelings will always be there when I started to open the chart and make transactions. Then, why the feelings of anxiety and fear I experienced more often ...? My answer may be because the percentage rate of loss in playing the forex greater than the benefits. When executing either BUY / SELL happened the first time to our account is minus, beca...

The markets continue to move higher. I thought for sure we were finally set for a decent correction of 5-7% after Fridays move lower of more than 1% on the S&P 500. But mine along with all the hopes and dreams of the market bears were crushed after Fridays gains were all but a distant memory as the bulls came in to support the market back near 5 year highs. As tempting as it is to get short, I am fighting the urge and sticking to what has been working...and that is to remain long. I have a short hedge in place, that is very small compared to my long position. But I also have the downside protection from the calls I have sold agains my positions, as well as the extra cushion I am receiving from the dividend from those positions. All in all I am protected in the tune of a 15-20% down move in 2013 based on the positions I have on. So I feel pretty comfortable with the positions I have on. As I have no expectations of a move so sever this year. I am conscious every day I check into the...

To make a buy or sell decision in forex trading, it should do an analysis of both technical analysis or fundamental analysis, or it could be a combination of both. From the analysis of that, then I took a conclusions that ultimately will determine whether I will do the buying or selling or not do both. Principles in technical analysis, so far as I'm concerned is as follows: See chart Determining the type of trader, the type of game I wanted to use. Is scalping, intraday, mid term, long term. Determine and analyze the big picture of what is happening in the big picture and make the scenario. Determine the time frame that is smaller than the big folder and perform more detailed analysis to see the price movement is happening and making scenarios. A decision whether to buy, sell or just wait (waiting for the right time to make a buy or sell). Obviously based on scenarios that have been made previously. Observe the price movement after the transaction. Is the price moves a...

The markets continue to ride this bull run higher. As we all know, the market is just one big auction where buyers and sellers take turns being in control. But there are times when it seems like one side or the other takes a longer term than they deserve. It is times like these where the market seems one sided. But as they say, the trend is your friend and being long is working in this market. As I have been saying over and over again the last few weeks since I started blogging again, the only real positions that I have been able to initiate in this low vol environment are long dated high yield dividend plays with covered calls. I am slightly short some SPY's via a short call spread, but my short delta exposure here is very small. I don't plan on adding to this position until we get signs that the market is ready to let the bears into the driver seat for a while. This morning we are going to see markets gap higher as the overnight markets trade higher and a well accepted US job...