Wealth Creation Hub

With volatility still high this week it’s essential to keep tight stops and be ready for more erratic price movements . Some say it’s a good time to take a break from trading and wait until things settle down a bit , all depends on your appetite for risk.

We’ve seen a major down turn the past five weeks and although it’s been blamed on the European nations of ( P.I.G.S.) Portugal , Ireland, Greece and Spain it’s likely when you look at the technicals that we were due for major correction after more than fifty days of gains .

Regardless whether you use Fundamentals , Technicals the outcome was still anticipated on both sides personally I like to know whats happening with both just to be sure even though price action will show what’s happening it’s reassuring to have a better insight which direction the odds favor so it’s not a total surprise when the expected does happen ,I find it adds conviction and  limits any hesitation before entering a position . 

The S & P 500 is now below the hundred day moving average as well as a one by one geometric angle putting momentum on the down side and making a possible down trend likely if it settles below the Feb 09 level marked .

Regardless of direction we can only trade in the direction it’s travelling , for me down is fine it’s faster and the points build up quicker , happy trading.

YotB

Market Volatility is what makes day trading worth while , when momentum and volume is low it’s much harder to define entry and exit points and therefore easier to make mistakes , when volume and volatility are high Day Traders can pick up more points as markets range wider .  It never ceases to amaze me when I  hear market commentators  lately sound so distraught when there’s a correction or pull back , imagine the leverage the big financial institutions would run up if the markets only went up and also the Bernard  Madoff’s of this world were never exposed , there needs to be a clean out and that gives the market time to breath and the rest of us the oportunity to enter the market ourselves .  Here is the S & P 500 chart Friday 21/may , the past week has seen some of the widest ranges in some time .  Volatility looks like continuing next week with plenty of reports due out .

It’s wise to keep tight stops in place and be ready to act quickly when the market is this volatile .

I was taught that when the market is consolidating and in a low range side ways move it’s time to get  excited and stay vigilant and when it gets volatile is when you need to use caution and tight stops.

The past few months has seen the S & P 500 and other Indices slowly loosing momentum with many of the Indices breaking a geometric angle of 2 x 1  signaling a possible change of  direction or a pull back in the market ,  with Greece’s credit status being down graded and a possible domino effect on the so called PIIGS  countries Portugal , Ireland , Italy , Greece and Spain  , this latest volatility could be a signal that a change in direction is possible  should the contagion spread  . This week  the Dow dropped 1000 points in the one session , one theory being termed the fat finger syndrome , where someone hit the wrong computer key, although if you listen to the commentary on the link below it sounds like the major players Merrill Lynch and others may have just taken out larger than normal positions , regardless of how it happens we must always keep in mind for most of us relying on electronic devices and servers to transmit our orders to the market with just a click of a mouse we should have stops in place as soon as we open positions just in case a server goes down or as happened to me the other night my computer froze and because I had limit orders and stops in place automatically by the time I booted the computer back up and opened the platform I was already out of the market with a profit , had it gone against me I would have still been out without too much damage .

Electronic trading has allowed the market to expand to millions of contracts a day to trade , unlike in the not so distant past when you had to visit or phone  a broker to open and close positions . Have a listen to Ben Liechtenstein in this you tube clip in a once in life time event as he calls the bid ask activity on the S & P 500 on the 6th of may 2010. For anyone that trades the S & P 500 that call by Ben Liechtenstein saw historical moves on average volatility the S & P will move around 8 to 15 points a day this day it was osculating 10 points per trade within a second .

“>Hi I’m Tony Shirren a  husband and father of five , ex shearer, abalone diver and fisherman  ,when my youngest  son was six months old in mid 2002 I was working overseas,  it was 6 month before I saw him for the first time , that six months can never be replaced . I knew I had to reinvent myself if I wanted to change my situation ,  it took another four years and a serious work injury before I was forced  to do more than just wish for a lotto win . From that day because I had made a conscious effort to change my life     opportunities began to appear, I studied technical analysis and charting with Nik Halik having had some experience trading shares in the past that seemed an obvious starting point , then I received a copy of Napoleon Hill’s ” Think and Grow Rich” the more I searched for answers the more  I began to realize to what extent we are all educated to conform and fit into a mold  , my mother still criticizes me for”> ” playing with the internet ” instead of getting a real!  job .

Wanting to find a strategy that suited me and having had experience building a number of homes myself in the past ,I new property would make up  part of my plan for creating capital growth and  some of the income I needed , because of a few bad investment decisions I made some years back I was starting from scratch, and to start a property portfolio I thought required some serious cash flow to get started , until I saw a video with Mark Rolton explaining property options a concept I’d never heard of , so decided to invest in some education and attend the workshop with  Rolton’s Massland Group the workshop was an intensive three day event and crammed a massive amount of knowledge in that the ultra-rich like Donald Trump have used for years to amass great wealth.

Second method came along by chance when a work colleague asked if I wanted to attend a seminar on Day Trading the Futures Markets , already having some limited experience share trading I decided to go along and see what was involved , as soon as I saw the presentation I new day trading was something I would enjoy , it’s not for everyone but once mastered can generate great cash flow .

Thirdly I have been learning from Sean Rasmussen one of Australia’s most successful Affiliate marketers  and advocate of  Napoleon Hill’s  major works that has sold millions of copies ,now in an e-book “Think and Grow Rich” this book is a work created by years of analyzing 500 of the worlds most successful people  and extrapolating the formula that they all shared in attaining great wealth and success in life  ,  a great resource in identify’s and lists personal attributes that  are essential in developing a positive mindset