Technical Analysis of Stocks & Commodities

I purchased the December issue of "Technical Analysis of Stocks & Commodities" this weekend at Barnes and Noble. 

I want to mention some key points contained in the magazine interview with Barbara Rockefeller.  She is a trader specializing in foreign exchange, with more than 20 years of institutional experience.  

What She Reads

Wall Street Journal, Financial Times, Reuters, MarketNews, Bloomberg Market News, The New York Times, The Economist, ForeignAffaris, Business Week, Forbes

When She Works

Barbara prepares 2 newsletters a days that are purchased by big institutional firms.  She takes price data at 5 am, which is the most liquid time of day in FX, and prepares her charts.  Her morning report includes charts with 2 moving averages, a linear regression channel, relative strength, and momentum, plus any obvious hand-drawn support and resistance lines

Read more to find out why she isn’t a good trader. 

Why She Isn’t a Good Trader

She admits that trading is a special skill and she is too undisciplined.  She wants to prove why she is right and the market is wrong — the classic amateur’s mistake.

Other Interesting Observations

 Barbara gives an example of how traders in different markets interpret news and conditions and then influence traders in the next time zone.  If you are watching the FX market at 4-5 am in New York, which is 10-11 am in London, and you see the EURO/DOLLAR move 80 points, which is about two-thirds of the daily average true range.  Let’s say it also breaks a upside resistance line.  By the time New York gets in, these technical events have set the stage for the next set of traders to repeat the behavior, even if the original trigger for the move is not all too compelling

Indicators that work better in trading range: oscillators; a technique that works well is to get MACD and stochastic in agreement on both 15-minute and one-hour charts, watch for tick volume to peak, then take the opposite direction trade. 

Money Management: use stops!

{mos_ri}

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