by Larry Levin
Below is the second journal entry from a new Trading Advantage Student who agreed to chronicle her losses, frustrations, anger and success as she learns to trade with Larry Levin and the Trading Advantage team. We believe she represents everything a new/ veteran/ struggling trader encounters as they attempt to find success and consistency in their trading. Our hope is that you can identify with her ongoing story, and learn from it…
If you missed the first entry click here
Clip clop, Clip clop….WHO GOES THERE?
Fear. Discouragement. Insecurity. Low Self Esteem. Anger.
BE BANISHED! I Jeanne d’Arc order you retreat at point of my sword, lest you be torn to shreds and my army trample your entrails!
Hi, Joan here. I hope by now you have fully committed yourself to trading. This is no game or hobby for dawdlers! Remember, I told you to put on your armor and focus.
We are building our Trading Advantage Army to fight back against the oppression of Big Government and the Banksters robbing our financial futures. We will take back control of our 401K’s, our life savings and our job security. Let no Government cajoled stock market and controlled Great Depression keep us asunder. We are Capitalists, and we take responsibility for ourselves!
I’m writing today to share what happens when you’ve got the ‘urge’ and no plan. I did have a goal. It’s on my flag. But I had no plan to get there. I had no idea the level of commitment in learning how to trade it until ‘The Box’ arrived.
I thought I was fully committed to this special opportunity at Trading Advantage when I handed over my credit card. Then I opened the box. It was chock full of books, binders, DVD’s and ‘good luck’ wishes from the nice Consultant who signed me up. Oh, and I have a computer too so I received a friendly ‘welcome aboard’ email with directions on how to access the online classroom.
I looked at the reams of paper in The Box and thought; the consultant didn’t tell me Evelyn Wood’s Speed Reading Course was a prerequisite to ‘trading’! How the hell am I going to read all this stuff and be ready for class in 2 days? This sounds like a 6 month program, not 30 days!
I started leafing through one binder. Algorithms?! But I hate math! Pivot Points, Engulfments and Point of Control? This course sounds like mathematical Tai Kwon Do!
Wait a minute. Ohh I get it. I don’t have to do the math. They’ve already done it for me! The software Trading Advantage developed simplifies the process of trading by ferreting out the risk, and directing you to more probable wins. Now that I like! It’s not as complicated as it sounds.
But still, this is a totally different language to me. Although I traded equities for four months, nothing is similar. I traded shares of stock. In futures, you trade lots. I’m still not sure what constitutes a ‘lot’. They have so many acronyms for their unique system that I feel like I’ll need to learn Chinese before I can go forward.
Let’s see here… there are instructions to get into the Virtual Trading Room. They call it the VTR. Check it out! There are lots of new students in there with veterans as well. OK. I’ll just take a peak…
Wow- this is pretty neat! I’ve never been in an online trading chat room before. Everyone is friendly and nice. One guy was talking about Tax Cheatin’ Timmy. I should fit right in.
I don’t understand what the calls are, but the people in the room are obviously happy because they are making winning trades. They even play good music during the break! I wonder what IDVA means?
Oh, cool. They included a ‘cheat sheet’ for the VTR in one of the binders. IDVA? This means Intra-Day-Value-Area. I already know the Cheat Sheet will help a lot. I can get up to speed faster with this. But, I have to remember: Rome was not built in a day!
But this Manual will take me two weeks to read! There is so much information. Can I really do this? How much time do I have to allocate to this?
And then I tell myself; Joan, YOU CAN DO IT! You really want to learn this stuff! Remember what the Progressives always say; The Ends Justify the Means. Just do it.
First day in class: Where do I start? To Be Continued…
Until next we meet again,
Jeanne d’Arc
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The market rallied again today - on no news again. Well, there was some news, but it wasn't good for the economy. Bah! Who needs good news, or any news for that matter, when there is a rally afoot?
The first of today's two economic data points were the weekly jobless claims. The market cheered the news because it showed that unemployment claims had dropped markedly from the prior week. The weekly figure dropped 21,000 from the prior week's revised claims, while the "insured unemployment" data showed a shocking drop 224,000 jobless.
Sounds good right? Isn't that how the dunderheads in the media portrayed it? Yes sir, somehow 224,000 people miraculously found a job - just last week. Uh-huh. Hmm, what else happened recently? Hmmmmmm, nothing seems to comes to mind. Any major job announcements from corporate land? No. Massive hirings at the State level? No. Oh wait; there was a development in Congress recently that demanded companies hire hundreds of thousands of folks to dig holes and fill them up again - right? No!
Oh, I remember. Congress did not extend the unemployment benefits for the 1,000th time. Do you know what happens then? You fall off the "unemployed" list. Does that mean you have a job? No, of course not. But that doesn't stop the media from lying to you about it, claiming that you do.
You'd have to be as dumb as an economist to believe this data equates to an improving job market.
The afternoon data came by way of the consumer credit report. In the past when this had shown an increase of credit for the gullible to buy stuff from China with money that they don't have on junk that they don't need, the market would rally. Today's data wasn't just bad, but shockingly bad when one considers this is a consumption economy.
The government report read in part...Consumer credit decreased at an annual rate of 4-1/2 percent in May 2010. Revolving credit decreased at an annual rate of 10-1/2 percent, and nonrevolving credit decreased at an annual rate of 1-1/2 percent.
The market had expected a decline of $2.3 billion, but it was a $9.1 billion decline. Moreover, the prior month's so-called increase of $1 billion in credit was revised lower to negative -$14.9 billion! WOW!
With this horrific economic news the Dow and S&P500 exploded to new daily highs.
These are some serious numbers and issues that the economy has to deal with: declining job base, and massively reduced purchasing power. Both of these developments are very deflationary.
The lower job base leads to less tax revenue for the IRS yet more government handouts for individuals and bailouts for States and municipalities (that are coming). The shrinking credit equates to a shrinking base of money and thus less purchases at local stores and online (etc), which leads to a much lower GDP and a much lower stock multiple, thus a much lower stock market.
You'd have to be as dumb as an economist to believe that this data is good for GDP growth and a little inflation. (I love using that new phrase!)
Previous Day's Trading Room Results:
Trade Date: 7/8/10
E-Mini S&P Trades*
(before fees and commissions):
1) IDVA buy @ 11:15am = +.75 & +1.75 (2 lots)
2) Algorithm positions (12)
3) “Reading the Tape” positions (11) combined Secret’s, Algo, & “Reading the Tape” total… +6.50
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