Something to read

Advanced Swing Trading Strategies : John Crane



The essential ingredients required for swing trading have been around for decades. The fact is that as long as human behavior remains the same, market behavior will be the same. As a result of this natural phenomenon, every market–whether it be stocks or commodities–offers swing trading opportunities. But finding these opportunities and capitalizing on them can be a daunting task if you’re unprepared.

In Advanced Swing Trading, John Crane, a veteran trader and cofounder of Traders Network, discusses his work with Action/Reaction trading theory, and illustrates a whole new way of using time, price, and patterns to predict, identify, and trade future market swings. Chapter by informative chapter, you’ll be introduced to the concepts that encompass this proven method, including:

Market behavior
Reaction swings
Swing trading reaction swings
The Reaction cycle
Action and reaction lines
Entering and exiting trades
Reversal dates
Long-term versus short-term trends
And much more

Advanced Swing Trading deals with Action/Reaction theory by combining price levels, timing methods, and confirmation patterns that strengthen the predictability of future market moves. This practical and revealing book takes a step-by-step look at the Action/Reaction theory and shows you how to profit as markets go through a complete and predictable cycle that is known as the Reaction cycle. Using this technique, you’ll learn how to predict the beginning of a new trend and then project the time and price of the center and end of new trends.

By using unique techniques such as action lines and reaction lines within the Reaction cycle, you’ll also discover how to predict the time and price of major market reversals. With this knowledge in hand, you’ll know whether the market is going to make a major turn or if it’s only going to make a small correction against the prevailing trend.

Packed with proven strategies from a respected veteran, real-world examples and clear-cut charts, Advanced Swing Trading provides an in-depth overview of the art of swing trading. This comprehensive book offers you the step-by-step guidance that will allow you to apply powerful swing trading techniques to any portfolio–without making it a full-time job–and gives today’s investors fresh new methods needed to consistently improve their bottom line.

Trades About To Happens : A Modern Adaptation Of The Wyckoff Method



While Richard Wyckoff's search to develop a "trained judgment" for trading began decades ago, his method—which has been modified to account for changes in market conditions, but remains true to his original work—continues to draw great interest from traders around the world.

Author David Weis is a trader and market analyst with nearly forty years of experience in this field. A recognized authority on the trading methods of Richard Wyckoff, he understands how to utilize the principles behind Wyckoff's work and make effective trades with them. And now, with Trades About to Happen, he skillfully reveals how to adapt Wyckoff's techniques to excel in today's volatile markets.

Engaging and accessible, this reliable resource looks at Wyckoff's approach from a more modern perspective and shows how you can logically interpret bar charts and wave charts to find trades about to happen. By studying the chart examples in this book, you'll gain tremendous insight into reading what markets are saying about themselves and develop the ability to locate turning points of different degrees. Page by page, Weis facilitates your learning by:

Comparing efforts of buying or selling with the reward—volume versus upward or downward progress
Considering the meaning of the close within the range of a price bar
Looking for shortening of upward or downward thrust as well as follow-through, or lack of follow- through, after penetrations of support resistance
Exploring the interaction of price with trend lines, channels, and support/resistance lines—which often highlight the price/volume story
Watching for tests of high-volume or "vertical" areas where price accelerates upward or downward
And much more

Along the way, Weis introduces the adaptations he has made to Wyckoff's original tape-reading tools—which are better suited for the enormous volatility of today's stock and futures markets—and can be applied to intraday and daily price movement.

When it comes to Wyckoff analysis, it's easy to forget that the world of chart reading is not black or white, but gray. One has to have an open mind rather than a fixed, pre-conceived ideal. Trades About to Happen will help you achieve this goal as you discover how to develop the feel and intuition of a successful trader and become better equipped at adapting the Wyckoff method to today's dynamic markets.

Cycle Analytics For Traders : John F Ehlers



Cycles are a unique kind of trading analytics, being one of the few types of market data that can be accurately measured. But understanding what the cycles mean and which trades to make based on them is an extremely complex process. Cycle Analytics for Traders is a technical resource for self-directed traders that explains the scientific underpinnings of the filters and indicators used to make effective and profitable trading decisions. Rather than simply using cycle analytics on blind faith, this book explores and explains the how and why of cycles.

Though technical in nature, Cycle Analytics for Traders emphasizes simplicity rather than mathematical purity, taking a pragmatic real-world approach to attaining effective trading results. It allows traders to think of indicators and trading strategies in the frequency domain as well as their motions in the time domain, letting them select the most efficient filter lengths for the job at hand. Traders with little mathematical background will learn how to assess general market conditions to their advantage while technically astute traders will be able to create indicators and strategies that automatically adapt to measured market conditions using the computer code described here.

Additionally, author John Ehlers explains several vital concepts all traders should understand: how to eliminate or use Spectral Dilation to their advantage; how to use Automatic Gain Control to normalize indicator amplitude swings; the fact that all indicators are statistical rather than absolute; how to use advanced cookbook filters; several different methods for estimating market spectra and sifting out the Dominant Cycle; and how to use transforms to improve the display and interpretation of indicators.

Cycle Analytics for Traders shows traders how to approach trading as a statistical process that should be judged from the long-term view, rather than a small sample set of just a few trades—no matter how profitable those few are. With this practical and informative book as a guide, any trader can master cycle analytics, letting statistics and science light the way to long-term trading success.

Bernanke Unique Rescuing U.S With Acts No FED Chairman Embraced : Bloomberg

As Federal Reserve Chairman Ben S. Bernanke shuts the door to his office for a final time in two days, he can say he took actions that were the first or the biggest of their kind in the central bank’s 100-year history. Some will probably also be the last.

Bernanke was the first to devise a monetary policy that focused on lowering credit costs by suppressing longer-term interest rates after the short-term policy rate hit zero. His strategy, involving direct purchases of agency mortgage-backed securities and longer-term Treasury debt, left the Fed with the biggest balance sheet in its history, $4.1 trillion.

He was the first chairman since the Great Depression to use emergency lending powers to rescue businesses in almost every corner of the financial system -- from banks, to corporations, to bond dealers. And he might be the last: Congress, leery of the Fed’s sweeping powers, removed the central bank’s ability to loan to individuals, partnerships and non-bank companies.

“He was incredibly creative in the different steps and programs he took to prevent a free fall of the global economy,” said Kristin Forbes, a professor at Massachusetts Institute of Technology’s Sloan School of Management in Cambridge and a member of the White House Council of Economic Advisers under President George W. Bush. “During a crisis, you have to make decisions with highly imperfect information. He was willing to do that.”

Goals Achieved

The 60-year-old Bernanke leaves a Fed vastly different from the institution he took charge of on Feb. 1, 2006. At that time, the former Princeton University professor had a few goals. He said naming an inflation target would help boost accountability and policy effectiveness. He also wanted to push power out of the chairman’s office down into the policy-making Federal Open Market Committee, in effect, to dilute some of the mystique his predecessor Alan Greenspan created.

Eight years later, Bernanke achieved those goals. The Fed declared an inflation target of 2 percent in 2012, and the FOMC is more democratic. The Fed chairman encouraged more open debate at policy meetings, allowing colleagues to interrupt the format if they wanted to make a point. Unlike Greenspan, Bernanke voices his policy view last.

Among other Bernanke innovations, central bankers publish their economic forecasts, including their outlook for the policy interest rate they set, four times a year. The chairman holds a press conference quarterly.

Extraordinary Actions

The crisis response also transformed the institution in ways that defy any near-term conclusion because nobody knows whether extraordinary actions, like purchasing $1.5 trillion in mortgage debt or creating $2.4 trillion in excess bank reserves, can be retracted, shrunk and unwound successfully.

The Fed is more extended politically as it engages in policies such as suppressing mortgage rates, and the size and influence of its open-market operations have involved it in financial markets as never before.

“The legacy is still open,” said Vincent Reinhart, a former top Fed official and now chief U.S. economist at Morgan Stanley in New York. “We survived. The question is what are the consequences?”

U.S. central bankers meeting today will probably announce a second $10 billion reduction in the pace of monthly bond purchases, bringing them down to $65 billion from an original $85 billion. That means Bernanke’s successor, current Fed vice chairman Janet Yellen, will inherit a balance sheet that is still growing.

Fed’s Footprint

Those purchases from Wall Street dealers add to the level of reserves in the banking system, requiring the Fed to plant a huge footprint in money markets to manage them. Yellen’s Fed will need to use new tools such as paying interest on these reserves or pulling them out of the banking system with reverse repurchase agreements. Otherwise, the central bank would have a difficult time stabilizing its policy interest rate as banks dumped reserves into the overnight market. That could lead to higher inflation.

“I think it is very intrusive,” Tad Rivelle, who oversees about $84 billion as chief investment officer for U.S. fixed-income securities at TCW Group in Los Angeles, said of the Fed’s operations under Bernanke. The outgoing chairman’s legacy “will ultimately be negative” as policies used during the crisis and slow recovery lead to future instability, he said.

Social Instability

That instability may be social and political as well as financial, he said. Banks are still wary lenders, so the Fed’s low-rate policies are providing what Rivelle calls “preferential access” to a privileged group of borrowers: the government, corporations and consumers with the highest credit scores.

The bond-buying policy, known as quantitative easing, has helped boost asset prices. The Standard and Poor’s 500 stock index rose 30 percent last year, and home prices rose a projected 11.5 percent in 2013, according to an index tracked by CoreLogic, an Irvine, California, data and analytics company. Yet earnings per hour for private-sector workers have climbed just 2 percent a year on average since 2011 compared with a 3.2 percent gain in 2007, the last year of the previous expansion. Adjusted for inflation, they’ve barely grown at all.

Meanwhile, the Fed’s retreat from quantitative easing is slowing capital flows to emerging markets, roiling local stock markets. The MSCI Emerging Markets Index is down 6.8 percent year-to-date.

Safety Net

The Fed’s rescues under Bernanke also left an expanded safety net around financial institutions and markets that Congress and regulators are busily trying to shrink.

Fed officials, such as Richmond Fed president Jeffrey Lacker, warn that if the perception of government guarantees against financial risk isn’t reduced, it will set the stage for another crisis. Richmond Fed economists estimate that the proportion of the total liabilities of U.S. financial firms covered by an implicit or explicit federal safety net increased by 27 percent over the past 12 years.

Bernanke helped increase the perception of government support by rescuing Bear Stearns Cos. and American International Group Inc. during the crisis. He further contributed to that notion when Goldman Sachs Group Inc. and Morgan Stanley came under speculative attack and he let them convert into banks, which granted them access to backstop credit from the Fed.

Bailout Backlash

The bailouts triggered a backlash, stiffening resolve on Capitol Hill to prevent taxpayer support from helping Wall Street again.

Even one of Bernanke’s predecessors, former Chairman Paul Volcker, was surprised by the actions, which, he said in an April 8, 2008, speech before economists in New York, took the Fed “to the very edge of its lawful and implied powers.”

The 2010 Dodd-Frank Act, the most sweeping rewrite of financial rules since the 1930s, contains the phrase “to end too-big-to-fail” in its preamble, a message to regulators that no bank should be so big and risky that it would have to be saved again. To put a point on it, Congress limited the Fed’s power to lend emergency funds to non-bank corporations to a broad-based facility that could only be accessed by several institutions. The message was that singular bailouts of firms such as Bear Stearns were over.

Right Direction

Bernanke said in a hearing in February that regulators were “moving in the right direction” to end too-big-to-fail with the new tools given to them by the Dodd-Frank Act.

Phillip Swagel, who helped manage the government’s bank bailout fund known as the Troubled Asset Relief Program during the George W. Bush administration, said legislation is only part of the solution.

“We won’t know if too-big-to-fail has been solved until the next crisis,” said Swagel, now an economist at the University of Maryland in College Park. “The tools are there” to take down a troubled bank, he added. “The unknown is the will of the government.”

Among the unresolved questions as Bernanke exits: Can the Fed operate indefinitely with a multi-trillion-dollar balance sheet? Is the flow of credit to the economy constricted with the banking system under intense regulatory scrutiny? Has the economy downshifted to some slower pace of growth that the Fed can’t change?

“This is a Fed that’s intervening in the yield curve, it’s intervening in liquidity markets, it’s intervening in many asset classes,” said Julia Coronado, a former Fed board staff economist who is now chief economist for North America at BNP Paribas in New York.

“The book is still open, the last chapters have yet to be written, and it’s way too soon to say, ‘Ah, this is his legacy,’ because history is the judge, and there’s still a lot of risk.”

Deutsche Bank Suspends Currency Trader

(Reuters) - Deutsche Bank has suspended the head of its emerging markets foreign exchange trading desk in New York in connection with ongoing investigations into the alleged manipulation of the global currency market, a source familiar with the matter said.

Diego Moraiz, who has been with the bank since 2004 and has specialized in trading the Mexican peso, was told by the bank on December 18 that he was suspended, the source said.

Moraiz's suspension came after an external consulting firm hired by Deutsche Bank examined emails and communications in chatrooms going back seven years, the source said.

The specific reason for the suspension is unclear. Reuters couldn't determine which consulting firm had been retained.

The source did not know whether Moraiz was still being paid or when the investigation will be completed. Moraiz, who is from Argentina, remains in the United States, the source said.

The source spoke on condition of anonymity because the investigation is an internal bank matter and is continuing.

Moraiz did not respond to several phone calls from Reuters.

Deutsche Bank spokesman Sebastian Howell said the bank does not comment on individual staff.

Global financial regulators are looking into allegations that traders at some of the world's biggest banks, including Deutsche Bank, colluded to manipulate benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, or the so-called WM/Reuters "fix".

Previously, a separate source had told Reuters that several Deutsche Bank currency traders had been suspended at the bank's New York office.

The investigation by the consulting firm is ongoing, the source said, and it is still sending questions to the bank's traders around the world.

Last year, Britain's Financial Conduct Authority began a formal probe into possible manipulation in the global foreign exchange market. The U.S. Justice Department is also engaged in an active investigation of possible manipulation of the market, the world's largest.

Earlier this month, U.S. banking regulators from the Federal Reserve and Office of the Comptroller of the Currency visited Citigroup Inc's (C.N) London offices in connection with the investigation.

A spokesperson for the Fed declined comment. While market manipulation isn't the Fed's remit, it does have enforcement powers in safety and soundness matters, an issue raised by this investigation.

The Office of the Controller of the Currency and the U.S. Department of Justice both declined to comment.

Benchmark foreign exchange rates, often referred to as fixes, are a cornerstone of global financial markets, used to price trillions of dollars worth of investments and deals. They are relied on by companies, investors and central banks.

Deutsche Bank has been the biggest FX trader in the world for nine years running, seeing 15.18 percent of global daily turnover in 2013, according to Euromoney magazine.

The bank previously said it has received requests for information from regulatory authorities investigating trading in the foreign exchange market, and it is cooperating with these probes. It added that it will take disciplinary action with regard to individuals if merited.

As a result of the investigation, Deutsche has restricted the use of chatrooms, another source familiar with the issue said, only allowing conversations between two participants and banning multi-party chats.

Analysis : Emerging Markets Buffeted By Bipolar World

(Reuters) - Ailing emerging markets are caught between a rock and a hard place - Washington and Beijing to be more precise.

For much of 2013, the investor narrative was that currencies and stock markets from Mumbai to Moscow and Istanbul to Johannesburg were running aground as Federal Reserve largesse ebbed away.

As the Fed slows its printing presses and reins in global liquidity via higher U.S. Treasury yields and a rising dollar, those markets that gained most from the swell of quantitative easing would suffer from its withdrawal, it was argued.

And so it played out. Many of the frothier and most exposed emerging markets shook as 10-year U.S. yields surged more than 100 basis points last year to top 3.0 percent as 2014 dawned and the Fed, finally, embarked on its first 'taper' in January.

Yet the odd thing about the stampede out of emerging markets this year - which sent Turkey's lira, Argentina's peso, Russia's rouble and South Africa's rand all plunging last month - is that it's happened just as Treasury yields went into reverse. They have dropped almost half a percentage point since January 1.

The burst of Treasury buying was all the more remarkable given that the Fed has been buying fewer bonds and foreign central banks - many needing hard cash reserves to intervene in defense of their currencies - were selling more than $20 billion of Treasury securities in the week to last Wednesday.

The causality goes a little haywire at this point.

Did the start of the actual Fed bond taper last month feed such volatility on emerging and western equity markets as to prompt a counter-intuitive flight to safety in U.S. Treasuries?

It makes sense if you watch parallel gains in gold and Swiss francs, for example, and a surge in seismographs such as Wall St's equity volatility index, the Vix .VIX.

Or has the financial shock and currency-supporting interest rate rises in developing economies been bad enough to darken the economic outlook everywhere?

AMERICA'S ROCK, CHINA'S HARD PLACE

That's why attention turns from America's rock to China's hard place - or maybe China's 'hard landing' more pertinently.

"Emerging markets should be much more concerned about the 'China taper' than the Fed taper," said Crossborder Capital Managing Director Mike Howell.

While long-standing China slowdown fears eased somewhat late last year, business surveys in January indicate another stall as authorities push on toward a more consumption-driven model and aim to tame the recent credit boom by squeezing the lending activities of its 'shadow banks'.

Apart from monthly data from Beijing, a halving last month of world shipping prices .BADI - often seen as a play on Chinese demand - reveals some considerable alarm on that front.

And to the extent that Chinese sovereign credit default swaps are any proxy for systemic and debt-related concerns, their resurgence over the past two months is also revealing.

So while the fall in U.S. Treasury yields this year so far could act as some automatic stabilizer of emerging markets, the return of China angst pops up to replace it.

"The two big threats facing EM have turned upside down," said Citi strategist David Lubin, adding that the dance between both influences could end up depressing world growth at the margins and make it increasingly difficult for many developing countries to export their way out of trouble.

"The growth model, once so reliable and impressive, is in flux," Lubin said.

This is not going away easily. If there's a rebound in growth in China after its new year celebrations, the likelihood is reduced global stress and repeated Fed tapering will lift Treasury yields again. If not, pressure may mount anyway.

To be sure, there appears to be little panic among long-term investors who still insist cheaper emerging market equity will pay off over time in economies with higher growth potential, better demographics and better balance sheets than much of the developed world.

"The long-term investment case hasn't dramatically changed," Franklin Templeton's veteran emerging markets investor Mark Mobius said last week.

There are good reasons at least why full-blown sovereign and systemic crises can be avoided, unlike the late 1990s of rigid exchange rates and modest hard cash reserves.

But the chillier international winds will expose any deeper structural and political flaws in capital-hungry emerging economies. And less patient mutual funds - where net $14 billion of outflows last month alone exceeded 2013 as a whole - may not want to hang about for that long.

One choice may be to switch between interest-rate sensitive markets of the 'Fragile Five', Turkey, Brazil, India, Indonesia and South Africa, and those more hip to global growth at large, such as South Korea, Russia and China itself.

"I'd be more wary of the latter group right now," said Deutsche Bank emerging equities strategist John Paul Smith. "It may not be the time to turn incrementally more bearish but the outlook for the year ahead is just not positive."

MT4 New Build 600 (how to upgrade to build 600)

Fed chair Janet Yellen promises 'continuity,' further stimuls reduction

New chairwoman of U.S. Federal Reserve addresses Congress for 1st time

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U.S. Federal Reserve Chair Janet Yellen says that if the economy keeps improving, the U.S. central bank will take "further measured steps" to reduce the support it's providing through monthly bond purchases.

In her first public comments since taking over the top Fed job last week, Yellen said Tuesday that she expects a "great deal of continuity" with her predecessor, Ben Bernanke. She signalled that she supports his view that the economy is strengthening enough to withstand a pullback in stimulus but that interest rates should stay low to fuel further growth.

Yellen's remarks, prepared for a House of Representatives committee she addressed Tuesday, signal that the Fed will keep its key short-term rate near zero for a prolonged period. That message could be a reassuring one for investors.

In her remarks, Yellen said the Fed is monitoring volatility in global markets but doesn't think it poses a serious risk to the United States.

"Since the financial crisis and the depths of the recession, substantial progress has been made in restoring the economy to health and strengthening the financial system," Yellen said in her testimony for the House Financial Services Committee. "Still, there is more to do."

Short-term rates to remain low

Yellen, the first woman to lead the central bank in its 100 years, is delivering the Fed's twice-a-year report to Congress a week after being sworn in to succeed Bernanke. He stepped down Jan. 31 after eight years as chairman.

Many economists think the Fed bond buying, which totalled $85 billion a month during 2013, will be reduced in $10 billion US increments this year until the purchases are eliminated in December.

After the two $10 billion cuts in December and January, the level of bond buying stands at $65 billion. The purchases of Treasury and mortgage bonds are aimed at stimulating the economy by keeping long-term borrowing rates low.

Yellen repeated the Fed's assurances that it intends to keep its key short-term rate near zero "well past" the time the unemployment rate drops below 6.5 per cent as long as inflation remains low. Many economists don't expect short-term rates to be increased until late 2015.

The unemployment rate in January fell to 6.6 per cent, the lowest point in more than five years. Still, in her testimony, Yellen said the unemployment rate remained "well above levels" that Fed officials think are consistent with its goal of maximum employment. She said the job market still faces problems.

"Those out of a job for more than six months continue to make up an unusually large fraction of the unemployed," she said. "The number of people working part time but would prefer a full-time job remains very high."

Little departure from Bernanke

In her testimony, she stuck closely to the positions taken by Bernanke. She noted that she had served on the Fed's policy committee and worked with Bernanke in developing the central bank's policies.

"I strongly support that strategy which is designed to fulfil the Federal Reserve's statutory mandate of maximum employment and price stability," Yellen said.

She said the Fed expects the economy to expand at a moderate rate this year, with unemployment continuing to fall and inflation moving up toward the Fed's 2 per cent target.

Yellen's testimony comes before she has had a chance to preside over her first meeting as Fed chair. That will not occur until March 18-19, after which she will hold her first news conference.

The Fed's three rounds of bond purchases have driven the central bank's holdings above the $4 trillion mark — four times its level before the financial crisis struck with force in 2008.

Bond pullback rattles emerging economies

The bond reductions, and even the hint of future reductions back in the summer, have had an outsize impact on financial markets. They have triggered concerns that many emerging market countries won't be able to withstand the withdrawal of foreign capital.

Investors have yanked money from emerging economies from Turkey to Argentina. They've done so in part because they fear that a pullback in the Fed's stimulus will send U.S. interest rates up and draw investor money from overseas in search of higher returns.

The U.S. stock market, which finished 2013 at record highs, has had a tough start to the new year as investors have grown concerned about a string of bad reports calling into question the consensus view that 2014 will be a turnaround year in which economic growth finally kicks into a higher gear.

Yellen's testimony came after a Labor Department jobs report last Friday showed the economy added only 113,000 jobs in January after an even more disappointing 75,000 jobs were added in December.

Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game

Trading is a battle between you and the market. And while you might not be a financial professional, that doesn't mean you can't win this battle.

Through interviews with twelve ordinary individuals who have worked hard to transform themselves into extraordinary traders, Millionaire Traders reveals how you can beat Wall Street at its own game.Filled with in-depth insights and practical advice, this book introduces you to a dozen successful traders-some who focus on equities, others who deal in futures or foreign exchange-and examines the paths they've taken to capture considerable profits.
With this book as your guide, you'll quickly become familiar with a variety of strategies that can be used to make money in today's financial markets. Those that will help you achieve this goal include:

• Tyrone Ball: trades Nasdaq stocks almost exclusively, and his ability to change with the times has enabled him to prosper during some of the most treacherous market environments in recent history.
• AShkan Bolour: one of the earliest entrants into the retail forex market, he trades in the direction of the major trend, rather than trying to find reversals.
• Frank Law: a technician at heart, identifies a trading zone, commits to it, and scales down as long as the zone holds.
• Paul Willette: has mastered a method that allows him to harvest some profits right away, while ensuring that he can still benefit from an occasional extension run in his favor.

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Kathy Lien :

An Introduction to Probability Theory and Its Applications, Vol. 1, 3rd Edition
by William Feller

"If you could only ever buy one book on probability, this would be the one!

Feller's elegant and lateral approach to the essential elements of probability theory and their application to many diverse and apparently unrelated contexts is head-noddingly inspiring.

Working your way through all the exercises in the book would be an excellent retirment diversion sure to stave off the onset of dementia."
Dr. Robert Crossman

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