Carley Garner's Blog: What's new on DeCarleyTrading.com, page 54
June 5, 2012
Manage your emotions, then manage the trade
Manage your emotions, then manage the trade
Traders spend countless hours paper trading, studying charts and dissecting fundamentals but they often fail to prepare themselves for 90% of the challenge...emotion. DeCarley Trading believes that success is only minimally determined by strategy and knowledge. As a result, it is critical to be aware of the potential emotional obstacles that come with active trading, attempt to prevent them, identify them when they arrive, and behave accordingly. Join us for a discussion on effectively managing emotions before, during and after a trade.
Some of the topics covered will be:
o Psychological preparation for leveraged speculation
o Steps to keeping a clear mind before, during, and after a trade
o Tips to avoid the feeling of panic while trading
o Examples of emotional trading decisions and how to prevent yourself from making the wrong choices at the worst time
o And more...
View Carley Garner trading education books
DeCarley Trading
1-866-790-TRADE(8723)
info@decarleytrading.com
http://www.decarleytrading.com
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FOREX, FUTURES AND OPTIONS!
May 25, 2012
Option selling discussion with Yorba.tv radio
Option selling can be a challenging, yet rewarding venture...but you MUST make sure to pay attention to market volatility.
Carley Garner of DeCarley Trading recently made an appearance on the Yorba.tv radio show, which was also aired on Clear Channel 1190 AM Dallas-Ft. Worth. Garner spoke with Michael Yorba about market volatility and option selling.
Click here to listen to this 10 minute segment.
1-866-790-TRADE(8723)
*There is substantial risk of loss in trading futures and options!
May 15, 2012
Most think the Euro is doomed, does that mean it is time for a bounce?
**There is substantial risk of loss in trading futures and options.
**Past performance is not indicative of future results
Most think the Euro is doomed, does that mean it is time for a bounce?
Euro Currency Futures
The Euro currency has been in a relative freefall; the currency has closed negative in 10 of the previous 12 occasions with the two positive closes being marginal at best. As a result of the slide, the Euro currency is trading at the lowest level it's seen since mid-January.
Economic data in Europe has been challenged, but that is to be expected. The primary culprit to the sell-off has been Greece's inability to form a coalition government. Today's news that Greece would require another election (most likely to take place in early June) to determine the controlling party, triggered a tailspin in the European currency. Adding fuel to the fire was evidence that the Greek citizens are withdrawing Euro from Greek banks; while this hardly constitutes a run on the banks (yet) traders opted to slightly price in the possibility.
In light of the most recent round of Greek chaos, it seems the majority of analysts (and now investors) are coming to peace with the rather high probability of Greece leaving the Euro. Ironically, the market has determined this to be short-term negative for the Euro currency, but most agree it would be a positive for the conglomerate currency in the long run.
The bottom line is that we've been here before. Throughout the past two and a half years, we've witnessed large plunges in the Euro in which traders have been "trained" to jump on the bandwagon by a plethora of Euro negative headlines in print and cable media. However, in each of those scenarios the currency has resiliently bounced back; therefore being complacently bearish is not a viable strategy. Unfortunately, judging by COT figures published by the CFTC many speculators have fallen into the trap of being "too bearish" the Euro and have been repeatedly punished for being overly confident in their positions by massive short covering rallies.
As of last week, large speculators were holding a net short position of nearly 143,000 contracts; the record is near 170,000. We doubt we are at record levels, but it is conceivable that we are close given the drop we've seen thus far this week. In the past, net positions in excess of 130,000 have been considered a red flag in regards to a price reversal.
Summer seasonal for the Euro tend to be rather directionless; summer months are notorious for choppy trade in currencies. This isn't necessarily a good reason to buy, but it could be somewhat supportive to the currency.
At this juncture, we aren't overly bullish the Euro but we aren't bearish either and the pace and magnitude of the selling appears to be a little too much too fast. Accordingly, we like the idea of playing the Euro to the upside in the short term looking for a retracement toward the upper end of the declining channel (1.3150) with the first significant resistance coming in near 1.3020. In the meantime, support lies near 1.2720, 1.2650 and again near 1.2601. Bulls should look to establish positions near the noted levels (if seen) with the latter being the most reliable level. Position: Clients were advised to sell July Euro 120 puts for about 37 ticks, or $462.50.
DeCarley Trading
info@decarleytrading.com
www.DeCarleyTrading.com
Click here for Carley Garner's Trading Education Books
1-866-790-TRADE (8723)
**There is substantial risk of loss in trading futures and options.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 OR MORE YEARS. THERE ARE USUALLY UNDERLYING, FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR YEAR. WHILE SEASONAL TRENDS MAY POTENTIALLY IMPACT SUPPLY AND DEMAND IN CERTAIN COMMODITIES, SEASONAL ASPECTS OF SUPPLY AND DEMAND HAVE BEEN FACTORED INTO FUTURES & OPTIONS MARKET PRICING. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST, OR WILL IN THE FUTURE, ACHIEVE PROFITS USING THESE RECOMMENDATIONS. NO REPRESENTATION IS BEING MADE THAT PRICE PATTERNS WILL RECUR IN THE FUTURE.
Time to be a crude oil bull?
**There is substantial risk of loss in trading futures and options.
On the radar:
· Time to be a crude oil bull?
Crude oil futures
Crude oil was one of the hardest hit markets in the aftermath of government pressure on speculators (higher floor broker margins and position limits). In fact, the July futures contract fell sharply from the $106 level to $96 per barrel without any other obvious catalyst. However, the fund liquidation was pro-longed by other outside forces, such as the European debacle.
Internal market fundamentals have not been overly bullish; for instance, further signs of a Chinese slowdown imply softened demand for oil. Estimates for April seem to be showing the first year over year decline since 2009. Similarly, the latest IEA monthly report pointed toward an active global production pace; according to analysts, production is currently outpacing demand. Tomorrow we will get the latest weekly crude oil supply figures. Going into the number, analysts are expecting a build of about 1.5 million barrels; if so, this would be the largest since August of 1990.
Although each of these factors justify the nearly $15 correction, it might also signal that most of the "bad" news is already priced in. In addition, we are still in the midst of what the "Commodity Trader's Almanac" calls the best seven months for crude oil bulls (March through September). With crude futures reaching technically oversold conditions, and market sentiment at what seems to be overly bearish sentiment levels, it might be time to consider being an energy bull (even if it is just temporary).
The market might not be able to forge a large rally ahead of the inventory release; it is even possible we see some sort of selling into the numbers, or before. We like the idea of looking for a dip to be bullish. Support in the July contract comes in at $94.20, $93.50 and again near $92.10. Futures traders might look at each of these levels as a place to consider the long side (with the most distant support level being most reliable). Option sellers might be interested in selling deep out of the money puts against a down draft to the noted levels.
DeCarley Trading
info@decarleytrading.com
www.DeCarleyTrading.com
Click here for Carley Garner's Trading Education Books
1-866-790-TRADE (8723)
**There is substantial risk of loss in trading futures and options.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 OR MORE YEARS. THERE ARE USUALLY UNDERLYING, FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR YEAR. WHILE SEASONAL TRENDS MAY POTENTIALLY IMPACT SUPPLY AND DEMAND IN CERTAIN COMMODITIES, SEASONAL ASPECTS OF SUPPLY AND DEMAND HAVE BEEN FACTORED INTO FUTURES & OPTIONS MARKET PRICING. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST, OR WILL IN THE FUTURE, ACHIEVE PROFITS USING THESE RECOMMENDATIONS. NO REPRESENTATION IS BEING MADE THAT PRICE PATTERNS WILL RECUR IN THE FUTURE.
May 14, 2012
Grains in the aftermath of USDA and expanded hours
**There is substantial risk of loss in trading futures and options.
**Past performance is not indicative of future results
On the radar:
Grains in the aftermath of USDA and expanded hours
Corn and Soybean Futures
Corn and soybean futures have suffered in recent sessions on the heels of a stronger U.S. dollar, economic concerns (compliments of European debt issues), and what could be fund liquidation due to government induced margin hikes and position limit increases. Also, fresh competition in futures clearing has lead to new trading hours and this isn't necessarily welcomed by all, and could be playing a factor in the need for funds to exit the grain markets.
However, in our view each of the bearish items previously mentioned could prove to be rather temporary. For instance, new leadership in Greece and France causes a certain degree of uncertainty but it might not change the big picture. In other words, it is quite possible that newly voted officials will find they have little power over the inevitable continuation of austerity and that could divert any major "risk off" plays in the commodity and financial markets.
Similarly, the U.S. Dollar has found itself in favor as of late but there are no guarantees the trend will continue. Currencies are known for being rather directionless during the summer months and that should work in favor of continued range trade in the dollar and the Euro. If so, a trip to the lower end of the trading range in the greenback should support the grain complex.
Chatter suggests that there are significant concerns in regards to the expanded trading hours of CME Group grain futures. The uneasiness arises from the fact that the new trading hours result in active trade at the time of USDA announcements. Unlike economic data that can be assessed rather quickly, grain reports take some time to sift through the details and this has encouraged some traders to lighten positions. In addition, the Obama administration has made a point to implement regulations to limit speculation (primarily in crude oil) through increased margin requirements for floor traders and position limits. Coming into last week, large speculators were holding record net long positions in soybeans (nearly 260,000 contracts). As of Friday's COT Report, the net long position had been reduced by about 23,000 contracts, suggesting we've already seen a considerable amount of liquidation by the so-called "smart money".
We suspect we could see more soybean liquidation, into the $13.80 area, but at some point fundamentals should come into play. After all, Thursday's USDA report was moderately bullish and we doubt the tight supply scenario will be offset by any decrease in demand in the short-term at the hands of European turmoil. Additionally, the seasonal peak isn't scheduled to come in until late May or early June. If a rally ensues, the first area of resistance will be near $14.55 and then again near $14.85. Should global equities and commodities (crude) provide outside support, we could see prices as high as $15.20.
Although corn fundamentals aren't quite as healthy as soybeans, it is quite possible any strength in beans could help revive corn prices. Also, corn likely won't be immune from a lower U.S. dollar. If buyers come to corn futures, we should see a run to the top of the channel near $6.20, or maybe even $6.40. If we are wrong, the next major area of support will be $5.40ish.
DeCarley Trading
info@decarleytrading.com
www.DeCarleyTrading.com
Click here for Carley Garner's Trading Education Books
1-866-790-TRADE (8723)
*There is substantial risk of loss in trading futures, options and FOREX.
May 7, 2012
Your Money Matters Radio Interview with Carley Garner
Carley Garner was recently interviewed by the nationally syndicated "Your Money Matters" radio show!
Click here to listen!
Your Money Matters is hosted by Marc Pearlman, a popular market commentator. On the show, Marc and Carley discuss topics covered in her latest book, "Currency Trading in the FOREX and Futures Markets", along with general ideas on getting started in derivitives trading.
www.DeCarleyTrading.com
www.CurrencyTradingtheBook.com
1-866-790-TRADE(8723)
May 3, 2012
Matt Davio of MissTrade interviews Carley Garner
Carley Garner and Matt Davio recently sat down to discuss the advantages and disadvantages of trading currencies in each of the three venues. In their talks, they also ventured into the brokerage safeguard of funds and the role the MF Global collapse has played in the trading industry.
www.CurrencyTradingtheBook.com
Open a trading account with us to work with Carley or use one of our state of the art trading platforms, click here!
www.DeCarleyTrading.com
info@decarleytrading.com
1-866-790-TRADE(8723)
*There is substantial risk of loss in trading futures and options!
We made the cover of SFO Magazine
Most swing traders utilize the traditional strategy of buying or selling futures contracts at support and resistance levels, respectively, with the use of stop loss orders for risk management. However, I believe the use of stop orders is deeply flawed. Markets have a tendency to cause the most pain to the most people, and that often entails bouts of stop loss running before trend reversals. Nonetheless, there are ways to alleviate the wrath of stop running to give your trades lasting power.
As an alternative to a stop order, traders can effectively purchase insurance against their price speculation in the futures market using long calls and puts. For instance, by definition a put option is the right to sell a futures contract at a specific price (the strike price), at a specific date in the future. Therefore, the purchase of a put option with a strike at or below the entry of a long futures contract is essentially limiting the risk of the trade to the amount paid for the option, plus any gap between the futures entry price and the strike price of the option. Let's take a look at an example....
Click to READ MORE and to view the accompanying video!
www.DeCarleyTrading.com
1-866-790-TRADE(8723)
info@decarleytrading.com
www.CurrencyTradingthebook.com
*There is substantial risk of loss in trading futures, options and FOREX.
April 24, 2012
Diversify currency speculation with the Dollar Index
Currency Option Trading: Diversifying with the Dollar Index
When: May 9th at 3:30 PM Central
Where: Online, hosted by SFO Magazine
What: A closer look at the ETF of the futures trading world and how traders might use it as a tamer speculative vehicle or a means of diversification
How: Click here to register for "Currency Option Trading"
Forex traders have developed creative techniques aimed at hedging their currency holdings, but perhaps the most efficient form of diversified currency trading is through the U.S. Dollar Index traded on the InterContinental Exchange. Join Carley Garner for a brief discussion of FX hedging techniques and the benefits of trading the ETF of the futures markets.
Click here to register for this FREE trading education event
www.CurrencyTradingtheBook.com
DeCarley Trading
1-866-790-TRADE(8723)
info@decarleytrading.com
www.DeCarleyTrading.com
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FOREX, FUTURES AND OPTIONS!
April 15, 2012
Crude holding above $100, are we headed back to $110?
**There is substantial risk of loss in trading futures and options.
**Past performance is not indicative of future results
On the radar:
Crude holding above $100, are we headed back to $110?
Crude Oil Futures
Last month we issued a DeCarley Perspective suggesting that the quiet trading range in crude oil wouldn't last. We were expecting prices to break out of the doldrums on the upside due to emotional aspects rather than fundamental, but the opposite eventually unfolded. Not only were we off in direction, but we were also wrong about volatility. Although volatility has increased substantially in the last few weeks, the market remains quiet relative to what has been the "new normal".
This time around, we are going about things a little differently. Ok...we lied, we are still looking for more volatility and we have not given up on the idea of a crude oil rally (eventually).
Although March is known as a strong month for crude prices, we've seen very little strength. Nonetheless, seasonals aren't perfect; sometimes they are just late. Typically, crude oil has a tendency to rally throughout April and through much of May. Don't forget, March through September is the "best seven months" to be bullish crude oil according to the Commodity Trader's Almanac.
The fundamental backdrop hasn't necessarily improved, but it doesn't always have to for things to turn the corner. U.S. inventories of WTI crude are ample (365.2 million barrels, the highest since June) and the EIA recently lowered its 2012 global oil demand forecasts by 170,000 barrels. Also putting pressure on energies is a stronger (or maybe stable is a better word) U.S. dollar. As we all know, commodity prices have a tendency to trade opposite the greenback.
With these things in play, we aren't convinced the absolute lows of this move have been posted. Analysts are estimating that $100 crude oil still accounts for a $4 to $5 risk premium compliments of the Iranian situation (which has nearly been forgotten). Coincidently, our charts suggest a break of support could land crude in the mid $90's before finding significant support.
We'd love to see the mid $90's print; at this price we'd be comfortably bullish. Also, the increase in volatility would likely give traders a much better risk reward ratio in the implementation of short crude oil strangles.
If you aren't willing to hold out for the "possibility" of better prices well into the $90's, you might want to consider nibbling on bullish positions on a dip to minor support near $100, or better support at $98. Assuming we are right about a rally from the mid to high $90's, the technical projection of the rally is calling for slight resistance near $105, with a $110 target objective. If we are wrong, look for possible support near $94 and then again at $88.
DeCarley Trading info@decarleytrading.com www.DeCarleyTrading.com
1-866-790-TRADE (8723)
**There is substantial risk of loss in trading futures and options.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 OR MORE YEARS. THERE ARE USUALLY UNDERLYING, FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR YEAR. WHILE SEASONAL TRENDS MAY POTENTIALLY IMPACT SUPPLY AND DEMAND IN CERTAIN COMMODITIES, SEASONAL ASPECTS OF SUPPLY AND DEMAND HAVE BEEN FACTORED INTO FUTURES & OPTIONS MARKET PRICING. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST, OR WILL IN THE FUTURE, ACHIEVE PROFITS USING THESE RECOMMENDATIONS. NO REPRESENTATION IS BEING MADE THAT PRICE PATTERNS WILL RECUR IN THE FUTURE.
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