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After some great market calls his maiden voyage on PTR in March, Tim returns for his second Appearance. Merlin and Tim take a look at the carry trade prospects with the Kiwi and the negative Euro! Later, the duo take a look at some listener inspired Pound charts against both the dollar and Swiss Franc. And finally a look at interest rates which appear to be climbing for the Kiwi and Pound.



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For months, Merlin has been encouraging listeners to look at their long term investment accounts to get a greater understanding of how they are positioned in these uncertain times. On this show, several listeners seek further suggestions on just how to accomplish this. Merlin walks them through the steps to identify what the fees are with their long term investments and how to improve their personal financial situation.



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Using precious metals and rare coins to ones portfolio can help diversify and protect from volatile market moves. Tyler Reesor of RCW Financial joins Merlin for a look at how to mix rare coins into ones financial portfolio. Tyler also shares with listeners some of the significant advantages as well as tax benefits rare coins provide. Tyler also shares with listeners a coin from 1793 valued at nearly $200,000! The duo also take a look at some of the current macro economic data and how it might shape markets going forward.



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I recently received this question via email and also have heard it repeatedly asked by students in my classes. I thought it would be fitting to answer the question in this forum.

“I have a question with regard to targets. What do you think of having no targets at all? I am considering not to put any target and continue to trail using a technical stop as long as I can on the ITF. Reason behind considering such a thing is because I do not understand targets at all. Please advise.”
Thanks, K

Well K, in our courses at Online Trading Academy, we teach that prior to entering any trade you should know three things: Your entry price, the stop loss price, and the target price. Basically, we call it S.E.T.ting your trade, (Stop, Entry, Target). It is crucial that you set your trade for several reasons.

When most traders enter the markets, their decisions are often driven by fear and greed. Trading or investing with these emotions is what costs most people their chance at success. Let’s examine these emotions and how they deter from our achieving our trading goals. Then we can look at how S.E.T.ting your trade can help combat this emotional deterrent.

People have fear because of the unknown. When we do not know the outcome of something, our minds race with all of the possibilities and much of that is often negative. As a trader or investor, when you put money into the markets, most will hope for a win but they will often allow fear to dominate as they fear losing and not knowing how much they may lose.

But an educated, Rule-Based trader who identifies their entry and stop loss price BEFORE entering the trade has nothing to fear. That trader already knows the worst case scenario for the trade. If their stop loss is hit, then they will lose X amount. If they proceed to enter the trade, they do so knowing the worst that can happen to them and have accepted it as a possibility.

Of course possible is not the same as probable. We enter trades when there is a high probability of the trade working in our favor. So while there is a possibility of loss occurring, the chances of it happening are low.

So why do we need a target then? Why not just enter the trade and let it run until we are stopped out by a trailing stop? Fear and greed once again are the reason. We identify a target at the highest probable zone where price is likely to stop moving in our favor and reverse or pause the trend.

Fear that pervades our trading will often cause us to panic and exit from a successful trade when there is a small move in price against us. If we have not recognized where the trend is likely to end, we do not know if the small movement is the trend reversing (we would need to exit the trade), or simply a correction, (we can hold on or even add to our winners here).

Greed is also something that will hurt your trading. Without a target set on every trade, there is a high probability that you will try to get too greedy and hold on to a trade longer than you should. If you have ever been in a successful trade you may have experienced this.

Imagine you are in a trade where you are profitable Rs. 30 per share. You are still holding while the price corrects down to Rs. 27 a share. Most people are thinking, “I just lose Rs. 3 per share.” They will be tempted to hold on until that gain comes back. Unfortunately it often gets worse. You have to realize in that scenario that you haven’t lost anything. That is greed. You had what we call paper profits. They mean nothing and your still have a Rs. 27 gain!

If you identified your target prior to entering the trade, you would know whether the Rs. 30 per share gain was one you should book by exiting the trade or if you are right to hold on knowing prices are probably heading higher.

The best way for a trader to minimize the effect of emotions on their trading is to trade using a Rule-Based strategy like the one we teach at Online Trading Academy. Come learn the rules for successful trading and join the thousands of graduates who are on the road to thriving in their trading career.


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Big market moves to the upside, pushing some indexes to all time highs today! Exuberance or Justified? Merlin takes a look at today’s moves in the major indexes then shifts focus to the Dollar indexes (yes, both DXY and USDOLLAR). Negativity plagued the dollar while sending other currencies higher. This has broader implications for currency markets and Merlin sifts through this using charts of each currency. He also shares his thoughts on how economic announcements should be played.



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New orders for U.S. manufactured goods fell by more than expected in the month of May, according to a report released by the Commerce Department on Wednesday.

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The emerging markets activity grew further in June at the fastest pace in more than a year, results of a survey by Markit Economics and HSBC Bank showed Monday.

The HSBC Emerging Markets Index, derived from the PMI surveys, rose to 52.3 in June from 50.6 in May. This marked the sharpest increase in activity since March 2013, though the index remained below its long-term average of 53.8. A score above 50 suggests expansion in the sector.

Output in manufacturing sector increased and services activity rose to the highest level in fifteen months in June.

Three of the four largest emerging markets contributed positively to the overall rise in the index with the Chinese output rising at its fastest rate in fifteen months. India's production expanded the most since February 2013 in June.

The Russian private sector output stabilized after declining at the most accelerated pace in five years in May. Brazil's market activity indicated a flat trend in June.

Overall new orders for emerging markets increased at the fastest pace since March 2013. Outstanding business stabilized after a five months of decline.

Input cost inflation reached a four-month high and output prices rose marginally.

The HSBC emerging markets future output index, a measure of perceptions on activity in 12 months, strengthened for the first time since February in June, as three of the four major emerging markets showed improved expectations.

Expectations in the service sector were more positive in June and expectations in the manufacturing sector were least optimistic since September 2012.


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International Monetary Fund Managing Director Christine Lagarde indicated a slight reduction to the institution's global growth outlook as investment remains subdued.

The global economic outlook to be released later this month would be "slightly different" from previous forecasts, Lagarde said at the Cercle des Economists conference in Aix-en-Provence, France on Sunday.

Nonetheless, she said the global activity is expected to gain momentum in the second half of the year and to accelerate further in 2015 after an unexpectedly weak start to 2014.

In April, the Washington-based lender projected 3.6 percent growth for 2014 and 3.9 percent growth for 2015.

Citing investment shortfalls in virtually all countries, Lagarde said public investment took a hard hit during the sovereign debt crisis in many economies, and private investment has not crowded in.

According to Lagarde, public cutbacks in investment are likely to hold back growth prospects. In the emerging market and developing economies, infrastructure constraints are already hurting growth.

However, accommodative monetary polices are helping to reduce cost of capital.

IMF Chief expects a meaningful rebound in U.S. activity after a more disappointing first quarter. At the same time, the euro area is slowly emerging from recession, but the recovery is not strong enough to reduce unemployment and debt, she noted.

In Japan, Lagarde said greater structural and fiscal reforms are still needed for growth to be sustained.

Although the growth in many of the emerging markets and developing economies hit a soft patch earlier this year, in part due to weaker exports, these countries will continue to provide the bulk of global growth, albeit at a slower pace than before, Lagarde said.

Further, she cited three major risks looming on the horizon for the global economy. Low inflation particularly in the euro area, renewed market volatility in emerging markets, and high debt levels in many economies.

"On balance, global activity is strengthening—but could be weaker than we had expected, as potential growth is lower and investment remains depressed, she said.

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Tillie joins the show to talk about current market situations and give listeners a free copy of her DVD: How To Retire With More Money Than You Need. Tillie and Merlin take a look at the current record levels of the Dow, and offer suggestions for those who may have missed the run! They then talk about the bond markets and offer suggestions for using options to generate increased rates of return. Finally, Tillie briefly discusses taking profits and asset allocation concepts for present levels.



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With so many stocks to look at, many traders resort to scans and filters to help whittle down their selection to a select group which meets their specific criteria. Merlin answers a listener question on this and shows how he uses the filter to not only reduce the number of securities he is looking at, but also find trading opportunities. Merlin also talks about how to trade the Harami formation on the Nasdaq 100 and offers a nice trade setup on Texas Instruments.



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