Something to read

Candlestick charting Explained : Gregory L. Morris



Empower your trading with Japanese candlestick charting

Japanese candlestick charts dramatically improve your understanding of short-term (less than a week) market sentiment, making you a much more informed and focused trader of stocks, futures, and indices. The bestselling Candlestick Charting Explained focuses on the patterns themselves and highlights the key facts you need to know to apply each pattern to your trading. For each of 89 distinctive candle patterns, its standardized format provides you with:

Commentary--Description of pattern and significance of its name, insights into unique features, and other concise explanation
Rules of Recognition--Simple rules for quick, accurate identification along with precise, day-by-day descriptions of pattern development
Scenarios and Psychology Behind the Pattern--Trading scenarios that could have led to the pattern's development, with general discussion of the psychology of each
day's action
Pattern Flexibility--Situations that change the pattern's effectiveness with explanations of allowable deviations from the classic pattern
Pattern Breakdown--Instructions for reducing the pattern to a single candle line and whether or not outside confirmation is suggested or unnecessary
Related Patterns--Patterns that have similar formations, could be considered variations, or are a part of this pattern
Example--A graphic example of the pattern to both aid in recognition and eliminate costly confusion in pattern identification

Additional information and insights present different interpretations of candlesticks based on intraday instead of end-of-day events and action, improving signal reliability. The author's unique candle pattern filtering concept, instrumental in answering the "how" question, is updated to utilize today's larger universe of stock data. An all-new chapter provides practical application and perspective traders need to view candles in the context of today's computer-driven marketplace.

For millions of traders, candlesticks have become a key tool in creating and verifying trading signals. Candlestick Charting Explained is the only book you need to start integrating their proven versatility and effectiveness into your technical trading program.

Tactical Trend Trading : Strategies For Surviving and Thriving In Turbulent markets- Robert Rubbens



Conventional wisdom has long insisted that the best—if not the only—stock market strategy worth employing is the traditional buy-and-hold model. But buy-and-hold investing is no match for today’s turbulent markets, where real change happens every day and companies and entire industries are stamped out in the blink of an eye. Fortunately, there is a better way, one that enables market participants to preserve their capital while increasing their net gains in even the most volatile of markets. That way is trend trading, and with Tactical Trend Trading as your guide, you will be better prepared than ever before to tackle—and profit from—every curveball that today’s topsy-turvy markets throw your way.

Written by hedge fund manager and trend trader Robert Robbins, Tactical Trend Trading starts out from the basic premise that if market participants learn to embrace change, they will be better able to harness its ability to unlock profits in every corner of the markets. To that end, Robbins equips you not only with the technical trading tools you need to analyze the market backdrop and identify and trade with market-prevailing trends, but also psychological guidelines that will enable you to blast through the emotional obstacles that stand in the way of profit generation and risk control. Rich in detail yet easy to digest and implement, Tactical Trend Trading covers:

The basics of trend trading, including what it is, its primary benefits and drawbacks, what type of commitment it entails, and how you can use it every day to profit from market volatility;
How to leverage technical analysis and sentiment indicators to pinpoint profit-generating stocks, sectors, and trends, predict market corrections, and execute perfectly timed trades;
Mental strategies for surmounting the ingrained psychological and emotional habits that prevent traders from realizing true financial success;
Techniques for developing a systematic approach to the markets that will enable you to survive and thrive in up, down, and sideways markets;
And much more.

Along the path to becoming a successful trend trader, your technical acumen and mental fortitude will be tested every step of the way. Prepare yourself for the brave new world of today’s ever-changing financial markets with Tactical Trend Trading, which provides you with all the moneymaking insights you need to capture trends, trade with the flow, and pull in profits, regardless of whether market conditions are good or bad.

What you’ll learn

Why today’s turbulent markets have rendered buy-and-hold investing obsolete and how trend trading can help you thrive in even the most volatile of market conditions
Techniques for identifying and trading in concert with the primary trend of a market
How to select the most profitable bullish and bearish stocks and set your entry and exit prices
Specific tactics for profiting from a wide variety of chart patterns, from rectangles and rounding bottoms to flags, wedges, head-and-shoulders formations, and more
Why risk control and discipline are the two most important tools in any trend trader's arsenal
Psychological guidelines that separating winning traders from the rest of the pack and tips for staying in the trend trading game

Trading Price Action Trading Ranges : Al Brooks



Divided into five comprehensive parts, Trading Price Action Trading Ranges skillfully addresses how to spot and profit from trading ranges—which most markets are in, most of the time—using the technical analysis of price action. Along the way, it touches on some of the most essential aspects of this approach, including:

Trading breakouts, which are transitions from trading ranges to trends, and understanding the gaps they create

The two types of "Magnets," Support and Resistance, and what they mean once the market breaks out and begins its move

Pullbacks, which are transitions from trends to trading ranges

The characteristics commonly found in trading ranges—areas of largely sideways price activity—and examples of how to trade them

Honing your order and trade management skills so that you can make more informed entry and exit decisions

And much more

Throughout the book, Brooks focuses primarily on 5 minute candle charts—all of which are created with TradeStation—to illustrate basic principles, but also discusses daily and weekly charts. And since he trades more than just E-mini S&P 500 futures, Brooks also details how price action can be used as the basis for trading stocks, forex, Treasury Note futures, and options. For your convenience, a companion website, which can be found atwiley.com/go/tradingtrends, contains all of the charts provided in the book.

Trading is a rewarding endeavor, but it's hard work and requires relentless discipline. To succeed, you have to stick to your rules and avoid emotion—and you have to patiently wait to take only the best trades. Understanding, and utilizing, the information found in Trading Price Action Trading Ranges is the next logical step to achieving this goal. With this guide, and the other two books in the series, you'll discover how to develop the patience and discipline to follow a sound system, and reap potentially huge financial rewards in the process.

The Sensible Guide To Forex : Safer, Smarter Ways to Survive & Prosper From The Start : Cliff Wachtel



The Sensible Guide to Forex: Safer, Smarter Ways to Survive and Prosper from the Start is written for the risk averse, mainstream retail investor or trader seeking a more effective way to tap forex markets to improve returns and hedge currency risk. As the most widely held currencies are being devalued, they're taking your portfolio down with them—unless you're prepared.

For traders, the book focuses on reducing the high risk, complexity, and time demands normally associated with forex trading.

For long-term investors, it concentrates on how to hedge currency risk by diversifying portfolios into the strongest currencies for lower risk and higher capital gains and income.

The usual forex materials don't provide practical answers for most retail traders or longer term investors. Virtually all forex trading materials focus on time-consuming, high-leverage, high-risk methods at which most traders fail. Materials about long-term investing in foreign assets rarely take into account the prospects of the related currency. A falling currency can turn an otherwise good investment into a bad one.

Throughout the book, the emphasis is on planning and executing only low risk, high potential yield trades or investments and avoiding serious losses at all costs. Packed with richly illustrated examples every step of the way and including additional appendices and references to online resources, the book is the ultimate guide to forex for retail traders and investors seeking to tap forex markets for better currency diversification and income.

Provides traders with safer, smarter, less complex and time-consuming ways to trade forex with higher odds of success. These include the use of such increasingly popular new instruments like forex binary options and social trading accounts that mimic expert traders.
Shows investors how to identify the currencies most likely to hold or increase their value, and provides a wealth of ideas about how to apply that knowledge to a long-term, low-maintenance portfolio for both income and capital appreciation.
Helps anyone seeking an asset class with low correlation to other markets by explaining how the very nature of forex markets means that regardless of market conditions there's always a playable trend somewhere, regardless of what other asset markets are doing, and how to find and exploit it for a short-term trade or a long-term investment in a currency pair, stock, bond, or other asset

The Sensible Guide to Forex is only book that teaches mainstream risk averse investors and traders how to build a portfolio that’s diversified by currency exposure as well as by asset class and sector, via a variety of safer, simpler methods to suit different needs, risk tolerances, and levels of expertise.

Written by Cliff Wachtel, a 30+ year financial market writer, advisor, and analyst, The Sensible Guide to Forex offers practical solutions to the above dilemmas faced by every serious, prudent investor.

Evidence Based Technical Analysis : Applying The Scientific Method & Statistical Inference to Trading Signals



As an approach to research, technical analysis has suffered because it is a "discipline" practiced without discipline. In order for technical analysis to deliver useful knowledge that can be applied to trading, it must evolve into a rigorous observational science.

Over the past two decades, numerous articles in respected academic journals have approached technical analysis in a scientifically rigorous and intellectually honest manner, and now, Evidence-Based Technical Analysis looks to continue down this path. Organized into two parts, this valuable resource first establishes the methodological, philosophical, and statistical foundations of evidenced-based technical analysis (EBTA), and then demonstrates this approach—by using twenty-five years of historical data to test 6,400 binary buy/sell rules on the S&P 500.

Evidence-Based Technical Analysis examines how you can apply the scientific method, and recently developed statistical tests, to determine the true effectiveness of technical trading signals. Throughout these pages, expert David Aronson details this new type of technical analysis that—unlike traditional technical analysis—is restricted to objective rules, whose historical profitability can be quantified and scrutinized.

Filled with in-depth insights and practical advice, Evidence-Based Technical Analysis provides you with comprehensive coverage of this new methodology, which is specifically designed for evaluating the performance of rules/signals that are discovered by data mining. Experimental results presented in the book will show you that data mining—a process in which many rules are back-tested and the best performing rules are selected—is an effective procedure for discovering useful rules/signals. However, since the historical performance of the rules/signals discovered by data mining are upwardly biased, new statistical tests are required to make reasonable inferences about future profitability. Two such tests, one of which has never been discussed anywhere heretofore, are described and illustrated.

If you want to use technical analysis to navigate today's markets, you must first abandon the subjective, interpretive methods traditionally associated with this discipline, and embrace an approach that is scientifically and statistically valid. Grounded in objective observation and statistical inference, EBTA is the approach to technical analysis you need to succeed in your trading endeavors.

An Explanation Of Fed Tapering And Its Impact On The Markets

What is Fed Tapering?

“Tapering” is a term that exploded into the financial lexicon on May 22, when U.S. Federal Reserve Chairman Ben Bernanke stated in testimony before Congress that that Fed may taper - or reduce - the size of the bond-buying program known as quantitative easing (QE). The program, which is designed to stimulate the economy, has served the secondary purpose of supporting financial market performance in recent years.

While Bernanke's surprising pronouncement led to substantial turmoil in the financial markets during the second quarter, the Fed has not yet begun to taper QE. The decision to adjust the program is based on incoming economic data, and the economy has not yet become strong enough for the Fed to feel confident in reducing the level of stimulus. As a result, the Fed's bond-buying program remains fully intact at a pace of $85 billion per month.

Currently, the consensus estimate is that the Fed will begin to reduce the size of its QE program at some point in 2014, most likely near the end of the first quarter. However, the range of potential outcomes is wide given that 1) the program is data-dependant and 2) both the Fed chairmanship the several board positions will change early next year. As a result, both the timing and extent of any tapering remains very much up in the air.

("Data dependant" means that weak growth would lead to a continuation of QE, improved growth and/or rising inflation would prompt the Fed to pull back).

Origin of the "Tapering" Discussion

The issue of tapering first moved into the public consciouness when Bernanke, asked about the timing of a potential end to the Fed’s quantitative easing policy in his May 22 testimony, stated, “If we see continued improvement and we have confidence that that's going to be sustained then we could in the next few meetings ... take a step down in our pace of purchases.” This was just one of many statements made by Bernanke that day. However, it was the one that received the most attention because it came at a time that investors were already concerned about the potential market impact of a reduction in a policy that has been so favorable for both stocks and bonds.

That same day, the minutes of the Federal Open Market Committee – or FOMC, the committee that sets monetary policy – revealed that support for QE is by no means unanimous:

“Participants also touched on the conditions under which it might be appropriate to change the pace of asset purchases. Most observed that the outlook for the labor market had shown progress since the program was started in September (2012), but many of these participants indicated that continued progress, more confidence in the outlook, or diminished downside risks would be required before slowing the pace of purchases would become appropriate. A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth; however, views differed about what evidence would be necessary and the likelihood of that outcome.”

Bernanke followed up his previous statements in the press conference that followed the Fed's meeting on July 19. While stating that the quantitative easing policy remains in place for now, the Fed Chairman also the policy remains dependant on incoming data. Given the improvement in the U.S. economy, he expects this data-driven approach will prompt him to begin to taper QE before the end of 2013, with the program ending entirely in 2014.

With this as background, the markets expected the tapering to occur at the Fed's September 18, 2013 meeting. However, the central bank surprised the markets by electing to keep QE at $85 billion per month. This shift was likely caused by two factors: 1) a string of weaker economic data that had been released in the prior month and 2) the prospect of slower growth stemming from the oncoming government shutdown and debt ceiling debate.

Tapering Shouldn’t Come as a Surprise

The potential for tapering has existed since QE began. Quantitative easing was never intended to last forever, since each bond purchase expands the Fed’s “balance sheet” by increasing the amount of bonds it owns. Also, in past communications Bernanke had made it clear that the continuation of the program was dependant on incoming economic data.

Bernanke in fact maintained this approach in his May 22 testimony, saying “A premature tightening of monetary policy (i.e., a tapering of quantitative easing) could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further” and “I want to be very clear that a step to reduce the flow of purchases would not be an automatic, mechanistic process of ending the program. Rather, any change in the flow of purchases would depend on the incoming data and our assessment of how the labor market and inflation are evolving.”

Market Reaction to Tapering

While Bernanke’s tapering statement didn’t represent an immediate shift, it nonetheless frightened the markets. In the recovery that has followed the 2008 financial crisis, both stocks and bonds have produced outstanding returns despite economic growth that is well below historical norms. The general consensus, which is likely accurate, is that Fed policy is the reason for this disconnect. Once the Fed begins to pull back on it stimulus, the markets may begin to perform more in line with economic fundamentals – which in this case, means weaker performance. Bonds indeed sold off sharply in the wake of Bernanke's first mention of tapering, while stocks began to exhibit higher volatility than they had previously.

How Will a Tapering Look?

Tapering isn’t an immediate, dramatic event. Instead, it is likely to take place over an extended period of time so as to create minimal market disruption. Also, as Bernanke says, it is going to be dependent on economic conditions. The Fed may pull back slightly if the economy continues to strengthen, but it could also increase the program again if the economy slowed or the financial markets were shocked by an unforeseen crisis.

The takeaway is that tapering doesn’t represent a sudden end to QE, nor is it likely to be a steady, predictable decline. Instead, it will be a longer process that takes place over a period of a year or more once it finally begins.

China Says It Can't Accept New Deposits for Bitcoin Trading - Bloomberg

BTC China, the nation’s largest Bitcoin operator, stopped accepting customer deposits amid a central bank clampdown on use of the digital currency, sending prices plunging as much as 35 percent.

YeePay, a third-party payment provider, gave notice today that it would no longer provide deposit services to the company, Bobby Lee, BTC China’s chief executive officer, said in a phone interview. TenPay, a payment provider owned by Tencent Holdings Ltd. (700), also halted business, Lee said. Bitcoin traded as low as 2,551 yuan ($420) on BTC China from as high as 3,918 yuan before the company announced the suspension on its official microblog.

“We think this is due to government regulation,” he said. “We have to play by the rules of the government of China.”

Lee’s comments came less than two weeks after China’s central bank barred financial institutions and payment companies from handling Bitcoin transactions. The ban reflects concern about the risk the digital currency may pose to China’s capital controls and financial stability after a surge in trading this year made the country the world’s biggest trader of Bitcoin, according to BTC China.

Chinese central bank officials told third-party payment service providers to stop offering clearing services to online Bitcoin exchanges, China Business News reported yesterday. The newspaper is affiliated with the Shanghai government,

Companies currently offering services must end them by the Chinese New Year, a weeklong holiday that begins on Jan. 31, the newspaper cited Zhou Jinhuang, deputy director of payment clearance at the People’s Bank of China, as saying at a meeting with more than 10 third-party payment service providers.

‘More Clarity’

Bitcoin withdrawals are unaffected by today’s announcement, according to BTC China’s microblog.

“We’ve suspended customer deposits,” Lee said. “It is unfortunate but we apologize for that inconvenience.”

People can’t transfer money into BTC China any more, said an YeePay employee who answered the company’s customer service hotline, declining to give her name.

PBOC said on Dec. 5 that financial institutions and payment companies can’t give pricing in Bitcoin, buy and sell the virtual currency or insure Bitcoin-linked products.

“The PBOC statement on Dec. 5 was somewhat vague and there is more clarity now,” Zennon Kapron, managing director of financial consultancy Kapronasia, said in an interview yesterday in Shanghai. “The way it’s reading now is that after the Chinese New Year, you won’t be able to get your money off the platforms.”
Bitcoin Prices

The value of Bitcoin, which is not regulated by any country or banking authority, soared 80-fold from a year ago and traded at $1,000 apiece on Dec. 2 on BitStamp, an Internet-based exchange where Bitcoins are traded for dollars, euros and other currencies. Prices fell to $479.90 at 6:09 p.m.

The currency has rallied on growing interest from investors, while merchants are starting to accept Bitcoins and U.S. officials have told lawmakers such payments could be a legitimate means of exchange. The jump in Bitcoin prices prompted former Federal Reserve Chairman Alan Greenspan this month to call the market a “bubble.”

Speculation that authorities in China may halt trading in Bitcoin surfaced after police arrested three people on suspicion of stealing money from investors through a fake online exchange.

GBL, a Bitcoin trading platform in China that began operating in May and had 4,493 registered users at the end of September, abruptly closed on Oct. 26, the official Xinhua News Agency reported Dec. 3., citing police in eastern Zhejiang privince’s Dongyang city.

The Little Book of Currency Trading: How to Make Big Profits in the World of Forex (Little Books. Big Profits)
by Kathy Lien

An accessible guide to trading the fast-moving foreign exchange market The foreign exchange market, or forex, was once dominated by global banks, hedge funds, and multinational corporations, but that has all changed with Internet technology and the advent of online forex brokers. Now, hundreds of thousands of traders and investors around the world can participate in this profitable field.

Written by forex expert Kathy Lien, The Little Book of Currency Trading will show you how to effectively invest and trade in today's biggest market. Page by page, she describes the multitude of opportunities possible in the forex market, from short-term price swings to long-term trends, and details practical products that can help you achieve success, such as currency-based ETFs.

• Explains the forces that drive currencies and provides strategies to profit from them
• Reveals how you can use various currencies to reduce risk and take advantage of global trends
• Examines financial vehicles that can help you make money without having to monitor the market every day

The Little Book of Currency Trading opens the world of currency trading and investing to anyone interested in entering this dynamic arena.

The Master Swing Trader by Alan Farley



Today’s top market players understand that our "efficient" markets are actually highly inefficient, driven by insiders with hidden agendas and an irrational pack mentality that has little to do with underlying value. Fortunately, this constant imbalance generates repeated, high-probability trade setups—and Alan Farley’s The Master Swing Trader reveals how you can find and profit from these difficult-to-spot opportunities before they disappear.

Farley’s innovative system is based on Pattern Cycles—shifting market stages that repeat in an orderly, predictable process through all price charts and time frames. These classic Pattern Cycles:
* Describe the machine language within market opportunity
* Reveal the origin of the trade setup
* Explain how to capitalize on inefficiency through every bull and bear phase
* Show exactly where to uncover consistent profit opportunities
* Offer natural methods to shift tactics quickly as conditions change
* Predict the impact of the emotional crowd on trend, range, and price development

The Master Swing Trader will help you apply Pattern Cycles to your advantage, over and over again. By encompassing virtually all market action, and revealing how price moves in a highly predictable manner, its powerful tools will give you the edge you need to take other people’s money before they take yours.

The Trend Following Bible : How Professional Traders Compound Wealth & Manage Risk by Andrew Abraham



Profiting from long-term trends is the most common path to success for traders. The challenge is recognizing the emergence of a trend and determining where to enter and exit the market. The Trend Following Bible shows individual traders and investors how to profit from this approach by trading like today's top commodity trading advisors.

In this book, author Andrew Abraham stresses the importance of a disciplined, consistent methodology, with stringent risk controls, that allows you to catch big trends, while limiting losses on unprofitable trades. By trading in this manner, he shows you how to successfully achieve market-beating returns over the long term and multiple your trading capital along the way.

Reveals exactly how top commodity trading advisors operate and how individuals can incorporate these methods into their everyday trading endeavors
Addresses key issues like position sizing and risk control, which are critical to trading success, but often underemphasized in other trading literature
Highlights how to effectively execute the trading strategies outlined

Engaging and accessible, The Trend Following Bible will put you in a better position to profit as you make more informed trading decisions.