A client story – Geoff King

A long-time subscriber to the room, Geoff King, sent us this to our blog. It is his journey into trading.

Thank you Geoff.

 

I am now a full time financial trader. You could argue that that has been the case for the last 20 years but now I work for myself and so get all the profits but also have to provide the capital, cope with the risk etc which makes it a whole load different from working for an institution.

By way of background, I’m a bit older than Tom and a lot younger than Larry and have worked for banks for most of my working life. For the last five years of my career, I worked for Sportingbet, an on line bookie, before they kindly made me redundant.
I say “kindly”, only partly tongue in cheek. My aim for a long time had been to become a full time trader on my own account and had planned to start this all at the start of 2016 when I felt that I would have sufficient savings to provide the capital required and also some sort of financial security. Sportingbet’s closure of their office made me bring this forward 2 years with the compensation of a few months redundancy package. My wife worked as the Health and Fitness Manager at the local leisure centre and was offered voluntary redundancy at the same time which worked very well for us and pretty much covered the first year of the two years extra I was planning to work.
I used to be a half decent runner (32 minutes for 10k if that means anything to you) and my wife has been an international sportswoman and so sport is very important to us, although nowadays it is more about staying in good shape as opposed to being really competitive. The really compelling thing about trading full time was to give us the opportunity to live in locations with better weather and having a more flexible work schedule to allow time for plenty of aerobic exercise in a nice enviroment.
Back in the days when I had a proper job, I spent most of career in Treasury of one sort or the other. Whilst I am sure there are lots of people who really earn their money, one thing I learned is that there are also an awful lot of people who get paid silly money to do jobs that are relatively easy. I worked at many banks, as diverse as Barclays Capital to Bank of Butterfield and latterly Bank Julius Baer.
Treasury sales, is generally exactly what it says and this is what a huge amount of “traders” do – selling products at a margin to their customers and the requirements are selling techiniques and product knowledge, as opposed to trading markets. When I was proprietary trading, foreign exchange was difficult but it is easier when you aren’t putting up the capital or responsible for the losses. Fixed income markets prior to 2008 were relatively easy, with steep yield curves and it was easy for banks (this is prior to the financial crisis) to borrow large amounts in the overnight market and so exploiting the yield curve was very easy money.
As I said my last job was running the Sportingbet Treasury. I enjoyed immensely the involvment with the Sports Betting and spent hours talking to the Sports Traders. I would have loved to have had a job in that area but it is a single person’s game, as you need to work weekends and evenings, which is probably a quick way to divorce, from your wife and children! Managing the cash was part of the role, the remainder being managing the foreign exchange. As a business we earned large amounts of Euros and as a UK company we were a constant seller of EUR/GBP.
I remember talking to David Paul about my experiences and saying that I found this so much easier to do this for work than for my own account. He helped me realise that this was because the pressure was actually a lot less, although it seemed greater.
The purpose of all this rambling is to say that, certainly in my experience, trading for your own account is much, much more difficult than working for someone else. I messed around for around 10 years, losing money before I found Tom Hougaard’s original live trading room. Through him, I learned a huge amount about trading and David preached to me about the physchology and money management. In my mind, those first two aspects are actually the key to success and trading strategy will probably dictate how successful you will become, rather than whether you are profitable.
In the last few years, I have moved to profitability, although I still have plenty of learning to do. I am still susceptible to large, unnecessary drawdowns, I spent spring and autumn of 2014 in Portugal, whilst spending the summer in Guernsey where I was born and raised. I’m currently in Mexico for 4 weeks and so I really am living the dream.
As I said before, I have a good capital base and so successful trading is the difference between a life of luxury and a comfortable one but it has also become a huge personal challenge to me. One I am determined to succeed in.
Make sure you always have enough capital for the next day and never, ever give up!
Geoff King

2015 – Welcome Back

Happy new year everybody and welcome back to the WWT live trading room.

The start of another year and hopefully a successful one following 2014 where we were +140% and a grand effort by all led by our Danish hero in between his rubbish jokes and impressions.

This year we aim to repeat but cannot promise that type of performance but we will be trying our very best rest assured, couple that with education on a daily basis by all with the pearls of Broadsword and wise words of David and DT.

Also this year we launch our fund which provisionally goes live on Feb 2nd Thomas and I have put in a lot of time and effort into making this as its been a dream of ours for a while now and finally it will happen.

We are constantly looking at ways to improve the room and welcome all feedback going forward and through this we have reduced our prices significantly for 2015 and introduced one three and six month subscriptions.

So with that all that remains is for me to wish you all the very best and good luck.

Lawrence

Performance Chart of 2014

Thank you to the subscribers who make it fun to come to work every day. Without you we wouldn’t be inspired to dig deep when the going gets tough. You support us through thick and thin. In return we give you 136% for 2014.

THANK YOU ALL!!!

performance 2014

Larry Pesavento Newsletter 7th December 2014

Our nestor and trading guru Larry Pesavento has sent me this market analysis for the coming week. I have not attached the charts that are mentioned in the newsletter below. If you want to subscribe to Larry’s daily newsletter and charts and educational videos, then please contact us via the contact form.

Enjoy

 

A trip down memory lane!

One of the news letters that I read each week comes from my friend Ed Carlson from the Seattle technician advisors. You can reach Ed at www.Seattletechnicaladvisors.com.

This letter focuses on the work of Charles Lindsay who is famous for his “three peaks in a domed house pattern”. Charles was famous during the 1960s 70s and 80s on Wall Street. Ed Carlson resurrected his fine works in his book about Lindsay’s life and methods.

Over the past several months specifically since July there has been a slow deterioration in the stock market. This past week may have seen the culmination of this deterioration just proceeding a sharp correction. With the Dow Jones, S&P 500 making new highs there were actually more new lows being made on the New York Stock Exchange then were new highs.

This can be seen on the enclosed chart where you see the four circled areas each portending a stock market drop which in fact it happen. I was very fortunate to know the gentleman who named this signal the Titanic signal.

Bill Obama was a Japanese-American technician who lived in Southern California during the time that I was in Los Angeles i.e. 1960s and 1980s. Bill did his work long before there were any fancy computers or indicators. It was a pioneer! We used to meet at monthly meetings where technicians would get together and discuss their methods.

This indicators showing that although the 30 stocks in the Dow Jones and some of the 500 stocks in the S&P 500 are making new highs this is not what is actually happening in the stock market. Even the NASDAQ was unable to make a new high this week.

There is a lot more selling going on the stock market that our financial press would like us to believe. Stocks making more new lows than new highs is a very bearish indication. The exact opposite was happening when the market was making a bottom. There were less new lows as the market was going lower indicating that selling was drying up.

Records in the stock market are being broken each day as what one would expect as new highs continue. These charts certainly show the momentum is beginning to wane. The New York Stock Exchange index for the third time in the last six months is showing divergence by not making a new high. The triple top is now in place! The Russell 2000 w has also been unable to make a new high. The VIX index of volatility is also approaching new low ground as it broke below 12 this past week forming a small three drive to the bottom pattern very similar to what occurred near the July high in stocks.

Treasury bonds and treasury notes completed a 38.2% rally of the previous high and then proceeded to break sharply. A strong indication that interest rates are ready to go higher. Quantitative easing should be coming to an end as the Federal Reserve Board has no other excuse for this program as they have seen the reports that the unemployment rate is now dropping down to a normal rate of 5.8%. Anyone who believes this rate should do so at their own risk. These unemployment numbers are massaged to make them look the best they possibly can much like they do with the inflation numbers. But these are the numbers that we live and die by each month.

The dollar yen cross rate closed above the 121 level shattering the 61% retracement level from the 1998 high. The euro, British pound, Australian Dollar, all look like they want to go to lower levels as the trend is so strongly to the downside which has been the case for the past weeks and months. The Russian Ruble which is very thinly traded has been in a catastrophic parabolic move to the downside and their currency has collapsed with lower oil prices imminent.

Gold and silver have held most of their gains from the previous week’s lows but were unable to bring any new buyers into the market as was shown by the open interest figures from the CME. When no open interest occurs as markets go higher it usually means short covering which makes the market susceptible to lower lows. This is a condition that we have in the market at this time. Last week reported on the low in silver at $14 per ounce which was a three drive to the bottom pattern on the long-term weekly charts. My friend Bart did a great job predicting that low months in advance. Silver has continued to hold these gains! Gold must hold above $1130 an ounce if it is to remain bullish. .

Crude oil is held up above the 61% retracement at $64 a barrel this past week. However, the heating oil and gasoline futures continue to break down below the key fib numbers shown on the enclosed charts. It will be difficult for crude oil to hold up much longer without some buying going in to the by-products of crude oil! Trading below $64 a barrel will cause more pressure to the Russian Ruble that is already in great distress.

International markets continue to higher as the German DAX index was able to make new highs very close to completing an ABCD pattern. Japanese stocks continued higher and are approaching five-year highs but still in a very long term bear market. Even the Chinese market was able to move sharply higher this past week i.e. 9.6% as shown by the Shanghai index.

This brings us to an interesting subject which is how the markets react to the ETF’s that they are supposed to mimic. As you can see by the enclosed chart the ETF for the Japanese Dow EW J is done very poorly as compared to the Nikkei Dow itself. This would frankly scare the hell out of me if I were long this ETF. What is it going to take to get it to go higher if it’s not following what is actually going higher?

The same can be said about the Chinese ETS X FI which is also lagging badly behind the Chinese market shares. One should really study the basis of these ETF’s before going into them as many of them have certain caveats that you need to be aware of before entering.

Thank you Larry

The Rocket Ship Stock Market

In my first post for the new web site I thought I would give a brief over view of the market as it stands.

After the Japanese QE on the back off a dire GDP print seeing them fall into recession and the Chinese adding more QE with more to come we are told  the pressure is now on Mr Draghi to follow suit – will he ?  all eyes will be on Dec 4th the next ECB meet.

Todays bullish IFO report gave the DAX another shot in the arm making it 8 straight up days and stands 250pts off record highs and no longer looking jealous at its American cousins.

So what will take these markets lower and awake these bears that have been in a long hibernation ? Short term I see nothing we now approach the US Thanks Giving holiday traditionally the strongest time of the year for the market and then xmas so seasonal factors bolster a bullish case – coupled that with central bankers around the globe throwing money as fast as they can at already elevated stock markets it all points to short term gain – but for what – long term pain ??

In closing I’d like to add this quote:

”Here we have a bit of safety net, solid economic fundamentals and favourable monetary policy, so it’s not surprising the U.S. continues to be the best performing market. There is an equilibrium playing out with monetary policy and global fundamentals: if I get growth I’m good, If I don’t, I’ll get accommodative policy. In 2015, at some point, that equilibrium will be broken.
Ronald Sanchez, chief investment officer at Fiduciary Trust Company

 

 

 

 

Welcome to WhichWayToday live trading room

Welcome to the live trading room we call WhichWayToday.

The name of the room came from the morning meetings that we attended as traders The head trader would ask each of the desks attending: so….. which way today guys and girls?

The name is more than just a catchy phrase from a time gone by. It also represents the ethos of the room, the ability to wipe the slate clean every morning and start afresh.

We attack each day as it comes. We are not “buy-and-hold” investors. We are not permanent “bears” or “bulls”. We are flexible in our approach and as such we aspire to live and breathe a vital component to successful trading: the ability to change our minds in the face of changing circumstances.

We use this approach to all the products we trade, be it forex or stock indices or commodities.
The room is blessed with 5 traders, who each have their own home grown trading style. You can read all about the traders under http://www.whichwaytoday.com/bio/

My name is Tom Hougaard. I started this room with my friend Dr David Paul. David is still around but he now focuses on the development of the stock selection software Vector Vest and only stands in when the crew needs a break. In his place I have my trusted partner in crime Lawrence, who acts not only as a trader in the room but as the consigliere of the establishment. Without him the room would have died a year ago.

The newest member of our room is “Dow Trader”, who I have known for more than 10 years. His ability to wait for the right setup is only rivaled by his ability to see the future through the charts.

Our guru in the room is a man with nearly 50 years of active trading experience. With more than 10 trading books to his name, I am honoured beyond words to count Larry Pesavento as a friend and also a trader in our community.

It is a community. We have clients/friends in the room who have been around since day 1. Of course people come and go, and come back again for their own personal reasons, but the steady performance of WhichWayToday makes this trading room a permanent feature of our many clients who are looking for a combination of trading calls and social interaction.

Whether you are dropping by for a free trial or you decide to make the room a permanent feature in your trading strategy, I want to extend you a warm welcome, and I hope your time with us is both profitable and enjoyable.

Kind regards
Tom Hougaard