The Power of the Unconscious

BarroMetrics Views: The Power of the Unconscious

As the curtain draws down on the BarroMetrics Blog, I wondered what I could leave you with that you would find worthwhile.

One fact stands out: somewhere between 75% to 92% of retail traders lose money. And despite the modern advances in technology, learning theory and psychology, that number has not changed. Those were the numbers when I started trading in the 60s, and little has changed.

So, what needs to happen to make a difference?

A spate of books I recently completed suggest that the remedy lies in two areas:

  • our commitment to self-awareness of our belief systems and
  • to the commitment to do whatever it takes to succeed i.e. to have the necessary grit. Surprisingly, it also includes the ability to quit. If you aren’t willing to do what is needed, you’re better off quitting.

The success formula is well known:

  1. Gather what is known about successful trading.
  2. Identify our current reality and our end game.
  3. Identify what is missing and what needs to be changed.
  4. Plan the actions to make the changes.
  5. Execute our plan.
  6. Review the actions – throw out what is not working and keep what is.
  7. Loop 3 to 6 until we attain our goal.

The process includes being aware of the beliefs that serve us and those that don’t. Once we’ve identified them, we accept the existence of our limiting beliefs, then reframe or substitute them for empowering ones.

The process is not an easy one. It takes self-honesty, work and dedication. Most traders would rather lose money than do what is necessary to change – hence the abysmal success stats for retail traders.

My hope: you are among the winning 8% to 25% winners, if not now, then tomorrow. All the best and thank you for reading my blog.

I have attached the books I referred to in paragraph 4. I’d recommend reading Insight.

Book List

 

GBPCAD 8:50 07-15 Update

BarroMetrics Views:  GBPCAD 8:50 07-15 Update

Final blog in the series of updates.

The bottom line: if short, I’d be looking to exit Monday morning. The ideal scenario for an exit:  an early morning pullback to the Primary Buy Zone of Figure 1 (bottom of LRB -exit shorts).

Then a move to new highs that provides momentum divergence in the LRBs – this provides a setup for new shorts.

Figure 1 shows the 60-min Linear Regression Band. It suggests we’ll probably see new highs after a pullback. This scenario will be proven wrong:

  1. if we see new momentum highs without a retracement or
  2. if the pair accepts below 1.6435 without making new highs.

If we do see new highs, what is the next resistance zone?

  1. Figure 2 has a Primary Sell Zone at 1.6670 to 1.6654
  2. Figure 3 has an FTP zone 1.6565 to 1.6690

So, at this stage, I’ll be looking for a sell zone around 1.6654 to 1.6690. As the Monday price action develops, the 15-min will provide an extension zone. I’ll be looking for the 15-min to provide confluence to confirm the 16654 to 1.6690 zone.

Unless the price movement fits one of the LRB exceptions, when prices enter 1.6654 to 1.6690, I’ll be looking for momentum divergence and then a sell trigger. The initial stops will be above 1.6690.

The above completes the analysis update for the July 12 presentation.

I received a query that fits this context. If I am looking to sell again, why don’t I just hold onto current shorts?

Because: the reason for the current shorts is gone. The price action is suggesting higher prices. I’d rather cut and then see if I a sell-setup takes place at higher levels or (if no new highs occur) upon a breakdown.

FIGURE 1 60-min GPBCAD

FIGURE 2 60-min GBPCAD

FIGURE 3 290-min GBPCAD

 

 

 

GBPCAD 21:11 07-14 Update

BarroMetrics Views: GBPCAD 21:11 07-14 Update

I now have a possible sell setup. A bearish conviction close below 1.6518 on a 15-min bar will trigger a sell signal. If done, the initial stop is 1.6623.

A move above 1.6618 without first moving below 1.6518 will negate the bearish scenario.

If the trade is triggered, I’ll be aggressively managing the trade. Update tomorrow.

GBPCAD 20:10 07-14 Update

BarroMetrics Views: GBPCAD 20:10 07-14 Update

It looks like we’ll see, tonight, the 1.6530 to 1.6565 zone.

Figure 1 shows the 15-min chart with the sideways zones. Usually, a bearish conviction bar below 1.6509 will suggest the high is in.

However, Figure 2 (the 15-minute with Linear Regression Bands) suggests we’ll see new highs before the end of this minor up move.  For this reason, I am expecting to see a pullback to the Primary Buy Zone of the LRB (bottom zone marked by the red and black lines); followed by a new high into the 1.6530 to 1.6565.

Acceptance below 1.6464 will negate the new high scenario for today.

I’d prefer not to sell unless I see a setup in the 1.6530 to 1.6565 area.

I’ll do another update tomorrow morning.

FIGURE 1 Zones Sideways

FIGURE 2 LRB

A Goodbye

BarroMetrics Views: A Goodbye

Has it been ten years?  Almost, I first started publishing this blog on November 1, 2007. I’ll stop publishing on Tuesday, July 19, 2017.

That said, the blog articles will be available until December 10, 2017. This will give you time to download any articles you may want to keep.

Thank you all for stopping by. I have made some good friends here, Baz, Chris, Jason, Thomas and too many others to mention. All the best with your trading, every success.

Turning to today’s entry: I’ll finish the commentary on the GBPCAD trade. At the July 12 presentation, I started the analysis, but we couldn’t see the beginning of the trade because the BoC’s figures came out at 22:00 Singapore just as the presentation concluded.

Those of you who attended will know I was looking for the BoC not to raise rates. I mapped out a strategy for the expected ensuing rallying. I also mapped a strategy if it did. In the latter case, I concluded that:

  • given where the pair was trading ahead of the number; and
  • given that I expected the daily range to be between 190 – 300 pips, I was not prepared to sell the pair on the news.
  • Instead, I said I’d wait for the rally.

The BoC did raise rates. The GBPCAD then fell; we saw 315 pip range for the day. So, yesterday I was looking for a rally.

Figure 1 shows provide two important bits of information:

  1. Acceptance above the blue 120% (1.6789, I’ll round that to 1.6790) tells me that the current structure, the 5-day swing downtrend, is probably over; breach of the 5-d swing high at 1.6975 will confirm).
  2. The red lines show the 5-day resistance levels.

Figure 2 shows the 60-minute chart with resistance levels. Yesterday, the GBPCAD moved into the bottom of my preferred zone, and I took the trade at 1.6473. My initial stop (hard) is above 1.6616; my soft stop is above 1.6577.

Yesterday, the GBPCAD moved into the bottom of my preferred zone, and I took shorts at 1.6473. My initial hard stop is above 1.6616; my soft stop is above 1.6577.

(By ‘hard’ I mean ‘the stop order is resting in the market’; by ‘soft’, I mean I’ll be looking to exit should I see acceptance above 1.6577)

I believe there is a 50-50 chance will see a test of 1.6530 to 1.6565 today to establish a congestion high on the 60-min. The congestion low is at 1.6354.

I’ll publish an update at 20:00 tonight Singapore time.

FIGURE 1 GBPCAD Daily

FIGURE GBPCAD 60-min

S&P Confirms the NASDAQ Signal?

 

BarroMetrics Views: S&P Confirms the NASDAQ Signal?

A 10% correction in the wind?

Before I begin – if you are planning to take part in Singapore, a caution: we have only 18 seats left. I expect these gone today. Do register early or you may miss out. If you do miss out, register for the live-streaming. (I prefer being present, but it would be better than missing out!)

Turning to today……..

An important event occurred: the S&P took the first step, of a two-step confirmation, to confirm June 29’s NASDAQ sell signal.

Let’s turn to Figure 1, NASDAQ, showing the 13-week swing (black line, quarterly trend). It shows that line will turn down at 5295. It also shows the S&P 13-week swing; its line turns down at 2315 (both basis cash)

Figure 2 shows the 18-day swing and 5-day swing (blue line, weekly trend). The 18-d shows no change in trend, whereas the 05-day shows the breach of the uptrend. There is a Normal Change in Trend pattern. But, the filters, momentum, time and price have yet to be triggered. Consequently, we may still see a rebound in the 5-day generate buy signal.

Figure 3 shows that the 18-day correction will nudge into 13-week corrective territory at 2366 Penetration of 2323 will confirm that we are seeing a 13-weeek correction. A move into the the ’80-120′, 13-week correction band (grey lines) is important. Why?

Because a 13-week correction suggests an 18-day impulse move. Of course, an  18-day impulse move encompasses a 05-day swing trend down.

By combining the two, the stats suggest a minimum 10% correction, giving us a price target of around 5300 to 5310.

In the two-step confirmation, the second step will be a tandem, bearish conviction-close (of at least normal range and volume).

Will we see that tonight? We may, we have NFP at 8:30 EST. Expectations are for a figure of 170K with the unemployment rate coming at 4.3. The consensus ranges:

  • NFP 140k to 200k
  • Rate 4.2% to 4.4%

Let’s see what happens.

FIGURE 1 13-week NASDAQ & S&P

 

FIGURE 2 05-day and 18-day NASDAQ & S&P

FIGURE 3 18-d ’80-120′ Band

Last Call – July 12

BarroMetrics Views: Last Call – July 12

One last call for our July 12 event in Singapore. The in-person registration link is:

http://www.barrometrics.com/avoid-3-biggest-mistakes-traders-make-july-2017

The registration fee of SGD 20 (about USD 14-15) is refundable on attendance on July 12.

Not living in Singapore or can’t make July 12? No problems, we are live-streaming and providing a video to the event.

Here’s the rego page:

http://www.barrometrics.com/avoid-3-biggest-mistakes-traders-make-july-2017-livestream

The registration fee of SGD 20 (about USD 14-15) is non-refundable.

What do you get for attending?

Firstly, we’re looking to change the abysmal success-trading stats. By attending, you’ll acquire a model for trading success. But, note this is a partnership: we provide the information, you provide the action.

If you are looking for a no-work, get-rich approach, don’t come. July 12 is grounded in reality – what I have found works in over 30 years trading.

Secondly, this is a value-rich offer. Here’s one of many emails:

hello Ray,
no issue with me. you can place me for the live stream. the cost is trivial for the knowledge shared.
thanks.
best regards.
eddie

We needed to postpone the event from July 5 to July 12 because July 5 was a public holiday in the US. (We will be trading the FX markets, so we wanted a day whose volatility was not circumscribed by holidays).

Eddie had registered for the July 5, in-person, presentation and could not attend July 12. We had to move him to the live-stream.

Why did he consider the cost trivial? Well, he has attended one of my courses. So, he knows how much effort we put into our side of the partnership – and the results he secured when he lived up to his.

Secondly, there’s the super value package you receive by attending:

  • Video of July 12
  • The Rule of 3Ms for Preparation, Execution and Review of Trading Mindmap (includes Free Viewer or HTML)
  • Equity Spreadsheet + Video
  • Mechanical system + Video
  • Video for Psych template in Evernote:
  • Deliberative Practice Material
    1. The Beginners Guide to Deliberative Practice
    2. The Making of An Expert
    3. Beyond the 10,000 Hour Myth – How We Really Acquire Skills

The in-person event is limited to 100 registrations. Our joint-venture Oanda began its staggered mail out yesterday. If you are planning to register for Singapore, best do it as soon as possible to avoid disappointment.

http://www.barrometrics.com/avoid-3-biggest-mistakes-traders-make-july-2017

There is no limit to the live-stream.

http://www.barrometrics.com/avoid-3-biggest-mistakes-traders-make-july-2017-livestream

We’ll close registrations for both on Monday, July 10th, 23:00 Singapore.

NASDAQ – Sell Signal?

BarroMetrics Views: NASDAQ – Sell Signal?

A friend of mine, Tom Wong (fund manager in NY), dropped me a line to say I was focusing on the wrong index. I ought to be looking at the NASDAQ: this index that will lead the decline because it’s been the one leading the rise.

He’s right.

Figure 1 shows a comparison since the last quarterly swing low. The NASDAQ has risen 26.77% while the S&P only 17.76%.

Figure 2 shows the current NASDAQ; Figure 3, the current S&P.

[The red lines represent the 18-day swing (monthly trend), the black ones, the equivalent of the 13-week swing (quarterly)].

Neither chart has generated a change in trend pattern. So, at this stage,  if we see a decline, I’m taking the view that we’ll be seeing a correction either in the 13-week or 18-day swings. Because of the Ray Wave count, I lean towards a 13-week correction.

If that proves true, what percentage correction are we likely to see?

Figure 4 shows the NASDAQ calculations. The sample size is too small to be reliable. Working with what we have, I’d say 13% to 19% (S&P around 10% – the sample size there is reliable).

What would I need to see to say that a correction is on the way? A bearish conviction-close in the S&P below the June 29 low (2405) by Monday, July 10. By ‘bearish conviction-close’, I mean:

  • an open no lower than in the top third of the day’s range.
  • a close no higher than in the bottom quarter of the day’s range.
  • with a true range of not less than 60.

The S&P bearish conviction-close would confirm the NASDAQ heads up generated on June 30, 2017.

I’ll look to trade the 18-d correction following the first 13-week leg down. The strategy means I’m sidelined for the 18-day, first leg down.

Image credits: safehaven, optuma

FIGURE 1 NASDAQ & S&P

FIGURE 2 NASDAQ

FIGURE 3 S&P

FIGURE 4 NASDAQ Stats

Using MindMaps

BarrosMetrics Views: Using MindMaps

Nothing to do with trading or finance today. Occasionally, I come across an offer that I’ll pass on, simply because I consider it great value. Today is such a day.

But first: Happy July 4 to all my US readers!

Those who know me, know that I am passionate about improving my skills. Many moons ago, I adopted Mindmapping. I apply this skill to all areas of my life – reading, memory, planning, etc.

Last year I took a course called Mindmap to Kanban by Faizel Mohidin.

You’ve never heard of Kanban? At the time, neither had I. But, with Mindmap to Kanban, I learned and am now applying it daily. It’s has improved my personal effectiveness by 50% or more. If you want to learn more about personal Kanban go to:

http://www.personalkanban.com/pk/.

Figure 1 has an overview of the course contents.

Faizel has gone on to develop quite a few other programs. Another I took was his Learning Management Program. Again I found it useful and beneficial. Figure 2 for course contents.

So why am I telling you all this?

Faizel has a special offer open to Thursday – all his courses (USD 1282.00) for USD 279 (4.61:1 Reward: Risk!)

  • 6 Week MMK High Performance Coaching ($497 Value)
  • MMK High Performance System ($197 Value)
  • Learning Management Program ($197 Value)
  • Personal Business Model ($97 Value)
  • Worker’s Guide to Using Mind Maps ($97 Value)
  • Premium Webinars ($197 Value)

To view the offer, go to

http://usingmindmapsacademy.com/p/using-mind-maps-academy-lifetime-membership-special/

If you have questions, please write to Faizel at

fmohidin@usingmindmaps.com

Usual disclaimer: I am not an affiliate and don’t receive a commission if you sign up. I’m recommending the offer because I have taken two of the courses; I consider the $297 great value.

FIGURE 1  MindMap to Kanban

FIGURE 2 Learning Management

July 15 Topping Scenario S&P

BarroMetrics Views: July 15 Topping Scenario S&P

In two weeks, we’ll be entering that time zone when a possible top in the S&P may take place: July 15 to August 11.  It doesn’t look like my price targets will be met; I was looking for a high around 2560 to 2640. If in fact, we fail to attain the price targets by the time window, what would that mean?

  1. The top won’t take place; or
  2. If it does, it’s likely to be top marking a correction of around 10%. Assuming the 2454 high is not exceeded, 2208 would mark the end of the 10%  correction.
  3. The correction would then be followed by new highs. I have some dates in mid to late October. Under this scenario, the October dates may mark a long-term, bull market top.

If the corrective top scenario is correct:

  • I’d like to see a drop into the Linear Band Buy Zones (bottom red and black lines in Figure 1). The red vertical lines mark the corrective time window from which the rally into July 15 – August 11 will come. The corrective price zone comes in at 2322 to 2290.
  • The rally into the July 15 high will be on low volume and range.
  •  Ideally, the topping pattern will form below the Linear Regression midline. Given the position of the Linear Regression Bands, the July 15 cycle high will come in below 2454.
  • My best guess for the topping price range is around 2400 to 2435.
  • In summary:
  1. The S&P drops to 2322 to 2290 from July 3 to around July 11.
  2. It rallies to 2400 to 2435 by July 15 to August 11.
  3. It then drops 10%.

Will the topping picture turn out as I expect? Probably not. But, by having a clear picture in mind, I have a better chance of working out if a top is likely as we move into July 15.

Let’s see how events play out.

Image credits: Scenariosusa

Figure 1 S&P Cash 19-day and 73-Day Swing

(Chart courtesy of Optuma)