25 things to improve next year

1. Be comfortable with being uncomfortable in trading. The best trades are the most difficult to make.
2. You have to have an edge that you can explain to your mother.
3. Making money is important and not being right.
4. Profit is the objective, but not the sole measure of trading quality especially when drawdowns are taken into account.
5. Maintain your mindset after a row of losing trades.
6. Trade aggressively when you do well and modestly otherwise.
7. Don't only watch the markets be participant even if with very small position size.
8. Stop thinking about the market being cheap or expensive.
9. Be very flexible in changing your opinion if market tells you so.
10. There will be opportunities every day. 
11. Prices very often lead the news. 
12. Trade the reaction but not the news.
13. Be patient with winning trades and enormously inpatient with loosing trades.
14. One or two trade in a month make up the profit, but you must do the rest to be able to do these winners.
15. Try to keep your charts as naked as possible focusing on the support and resistance zones.
16. Try to anticipate the right side of the chart and do not be bogged down in the left side.
17. Study chart to figure out where traders are lining up to buy or sell and where people are stopped out.
18. Before entering into a trade you must know exactly where (Profit Target) or how  (Trailing Stop) you will exit. 
19. Don't try to pick tops and bottoms.
20. Stop loss must be wide enough to absorb the chart noise.
21. Be patient with entries to improve payoffs.
22. Improve self talk. Talk as a trading coach talks to a novice trader. This should improve responsibility and help detach from thinking about money.
23. Focus on making a lot of small profits rather to find the big trade.
24. Focus on fine tuning the daily and weekly routines and tasks, define each task in details and also their timing.
25. Don't even think to fight the trend, fight the sideways only!

Jobs and Automation

This is a great post by John Mauldin on the topic. It is based on a McKinsey report downloadable here.

German - US 2Y Spread at new low

Whereas EUR/USD off the low.

Global Market Cap and CB Balance Sheets

It was in the mews recently that Global Stock Market Capitalization has reached $80 Trillion. 

This is a huge amount, but it is only five times the Central Banks' Balance Sheets that reached $17.5 Trillion. 

But the real point is that from 2017 the CB BS increased by some 10 trillions, whereas SM Cap by some 20 trillions only. 

Week Ahead 51

Equities
The SP500 bull trend is still very strong, it didn't even retest the previous breakout before making a new swing higher low.

DAX is trading in a range bellow the 13.5k high. 

Bonds
The US 2Y yield is making new highs trading above the 1.8% level. 

It sent early last week both the US 10Y and the German 2Y spreads to US 2Y to new lows. We saw a bit of bounce back by the end of the week.

Commodities
In general commodities exhibit bearish reversal signs.

Agriculturals are close to previous low.

Gold
Glold had broken an important resistance around 1206 and now heading to 1200 level maybe before retesting the previous resistance.

FX 
USD was recovering and it is now in the middle of a range.

Anticipate your trades

There is a great post by Nial Fuller about anticipating our trades rather just be reactive to market moves. A lot of wisdom is baked in this approach. In order to be able to anticipate market moves, we have to have a good understanding of the underlying market drivers let them be fundamental or technical in nature.  

Stock Valuation Data

Useful data on P/E ratios and other valuation metrics by Strar Capital.

Week Ahead 48

Equities
There isn't much to report on US equities as they remain in the range where they were last week. DAX correction seemed to bottom on Thursday but it retraced on Friday making a lower swing high. 

Bonds
US 2y yield is making new highs, whereas 10y remains in a range flattening the curve.

German 2y is still in a range.

Gold
Gold made a very strong bull price action Friday (so did other metals especially platinum). We should see how strong the 1300-1300 resistance area would be, but the strong Friday move suggest that it might not hold.

FX 
The much better than expected German GDP data pushed the EUR higher, but he 1.875 resistance held firmly for the time being.

Frustration

I do believe that the biggest psychological enemy in trading is frustration. Frustration comes hand in hand with perfectionism as it is triggered by the conflicts in our expectations and the achieved results. Frustration is that can quickly derail us and push into either an under-controlled or and over-controlled state of mind. When frustration shifts into anger that could result in really stupid decisions we would never ever make in a controlled and balanced state of mind.. 

Handling frustration is one of the most valuable tool a trader might have. There are a number of very useful posts on TraderFeed  by Brett Steenbarger on this topic. 

Week Ahead 47

I've been away for a few weeks (and could be away in the coming weeks) due to my back problems, so there is a slight disconnect with my previous weekly post.

Equities
SP500 is still around the measured move level with a few pinbars that is now might not be the sign of strength.

NQ made a few measured moves particularly helped by Amazon having a 7.5% weight in the index.

DAX like SP500 is almost where it was four weeks ago. Though, it had a significant retracement from the 13500 new high (btw it is 50% of the measured move target). The much weaker than expected German Industrial Production (-1.6% vs. -0.7%expected) might have been the trigger of the selloff. I don't feel that this data has such a particular importance, therefore, I would rather believe it was a technical correction, so I would look for buying opportunities after some sort of consolidation.On the other hand the previously mentioned SP500 perceived weakness and this selloff could make the DAX more vulnerable to any meaningful global stock market correction.

Sectors
Technology and Industrial are still leading, up slightly more than a measured move.

The key driver was AMZN that gained more than 15% after its earnings report.

Industrials show more signs of weakness a HS like pattern.We might see the retest of the 70 area.

Consumer Staples made a big comeback.

Metals and Mining are also bearish.

Financials might be a good buying opportunity at the support level. 

Utilities is at a strong resistance.

Health Care is at a strong support.

Consumer Discretionary looks to be before a breakout.

Commodities
Commodities moved up significantly in the last four weeks.

Gold
Gold still looks weak.

Perfectionism

This is a great post by Brett Steenbarger on how perfectionism can hurt your trading. 

"In a very important sense, perfectionistic traders are not seeking to make money.  They are trying to not lose money.  Their intolerance of loss keeps them moving from method to method in search of a certainty that markets cannot provide."

Cognitive Biases

It is a must to understand how cognitive biases work in trading. This is a great article by Allen Cheng on Cognitive Biases in general.

This post by Galen Woods is particularly about biases in trading.

Week Ahead 43

Equities

SP500 was a few cents from the measured move target of 2560. 

NQ is around 50% in the measured move channel. 

DAX is in tight range around 13k which is a major technical and also psychological level. We can identify two measured level targets. 

Sectors

Technology and Industrial are leading the rally.

Consumer Discretionary and Metals and Mining are struggling with making a new high.

Utilities and Health Care show some signs of weakness.

The oil driven Energy sector is in a narrow channel and exhibits two big bearish bars.

Consumer Staples technically is mixed.

Bonds

The US 2Y yield is making new high whereas the 10Y shows some sign of weakness.

The  German 2Y yield - unlike the US - is still not in a breakout mode that results in a pressure on EUR/USD.

  

Commodities

Commodities in general failed to close whereas Base Metals succeeded to close at a new high.

 Agriculture and in particular Grains and Coffee are still weak.

Gold

Gold seemingly can't  break the 1330 level that acts as a resistance now.

FX 

Dollar Index could not break the resistance and the 50 day SMA provided some support.