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Interview with Paul Rotter: The Most Successful Trader

4 Mar

The biggest trader on the Eurex Paul Rotter is said to be one of the most successful traders of all time, and he does it as a flipper.

Here is a feature story from Trader Monthly magazine in 2004 on Paul Rotter, sadly the magazine has since been discontinued.

You can read more about trading extremely profitable and futures trading for a living over at the EminiMind blog.

The Short Squeeze

28 Jan

Short squeezes are something that happen A LOT and they define the professional trader from the inexperienced trader. Once a stock starts to break out or make a move the retail traders begin to chasing the move (because they feel they “missed out”), but the professionals are already in the move.

At the point that the professionals are selling, the stock is just making news in the media and CNBC is talking about how this stock is a “great time to buy.” The professionals begin dumping their position and all the chasers start getting their stops hit which sends a massive sell off, or in the case of a short squeeze all the shorts are forced to cover and a rally occurs. The professionals in the meantime have already taken profits and are more than likely trading in the direction of the squeeze.

The Super Bowl Indicator

24 Jan

It has been deemed a Steelers/Packers showdown in Super Bowl XLV.

As economists and authors struggle to find a relationship for even the most unrelated items, such as in the book Freakonomics, and Outliers it shouldn’t surprise you that a relationship between the Super Bowl winner and the stock market has emerged over the past 50 years.

What Does Super Bowl Indicator Mean? This indicator is based on the belief that a Super Bowl win by the old AFL (AFC division) leads to a decline in the stock market for the coming year, and a win by the old NFL (NFC division) means the stock market will be up for the year.

Surprisingly (or unsurprisingly depending on how you look at it) the super bowl indicator has an accuracy rate of around 85% correct over the past years. That being said, we’ll continue our bets with our current methodology. Go Steelers!

Understanding Federal Spending and the Budget Deficit

14 Jan

Here’s a cool video I found over at JackHeald.com. It puts in perspective how little the federal government’s tax cut programs really affect the overall picture.

Day’s You Should NOT be Trading

5 Jan

Being a trader doesn’t mean you MUST trade every single day. You’ll probably find the bulk of your trades take places on Tuesday, Wednesday, and Thursday and that when you enter your first trade late in the day it tends to not go so well. There is a reason for this. Look to the first 30-min bar of the ES for clues.

Below is a list of day’s to watch out for when trading. You’re better off taking the day off and doing something more enjoyable than watching the market go nowhere.

Day’s NOT to trade:

Future’s Rollover Thursday (primarily if you’re trading futures)

Future’s rollover takes place on the second Thursday of every third month (March, June, September, & December). This day is dangerous because volume moves from the current contract month to the next month (new front month) So, for example, Dec. 9, 2010 was our last futures rollover. Volume transferred from the December contract to the March contract, thus allowing for a less liquid market in both contracts. The days between rollover Thursday and options X (the following Friday) we see two different sets of prices making it harder for technical traders to trade. Typically moving to the new current month is the safest way to trade during this time (i.e. on Dec 10th move to the March contract).

Half Day Holiday’s

This includes day’s such as Black Friday. These day’s will be low volume and the pit will be extremely thin, very low liquidity.

Bank Holiday’s

A couple times during the year we have a bank holiday and the markets are open. As you can probably tell the them to day’s to stay away from, this is another low liquidity trading day and should be avoided.

Manias Panics and Crashes

24 Nov

The Book Manias Panics and Crashes can be found at amazon.

Politics Explained – In Cow Terms

21 Nov

SOCIALISM: You have two cows.
The state takes one and gives it to someone else.
COMMUNISM: You have two cows.
The State takes both of them and gives you the milk.
FASCISM: You have two cows.
The State takes both of them and sells you the milk.
MILITARY DICTATORSHIP: You have two cows.
The State takes both of them and shoots you.
BUREAUCRACY: You have two cows.
The state takes both of them, accidentally kills one and spills the milk in the sewer.
CAPITALISM: You have two cows.
You sell one and buy a bull.
PURE DEMOCRACY: You have two cows.
Your neighbors decide who gets the milk.
REPRESENTATIVE DEMOCRACY: You have two cows.
Your neighbors pick someone to decide who gets the milk.
AMERICAN DEMOCRACY: The government promises to give you two cows if you vote for it. After the election, the president is impeached for speculating in cow futures. The press dubs the affair “Cowgate”.
ANARCHY: You have two cows.
Either you sell the milk at a fair price or your neighbors kill you and take the cows.

The Mayonnaise Jar and 2 Beers

26 Oct

When things in your life seem almost too much to handle, when 24 hours in a day are not enough, remember the mayonnaise jar and the 2 Beers.

A professor stood before his philosophy class and had some items in front of him. When the class began, he wordlessly picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full.

They agreed that it was.

The professor then picked up a box of pebbles and poured them into the jar He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full. The students responded with an unanimous ‘yes.

The professor then produced two Beers from under the table and poured the entire contents into the jar effectively filling the empty space between the sand. The students laughed.

‘Now,’ said the professor as the laughter subsided, ‘I want you to recognize that this jar represents your life. The golf balls are the important things—your family, your children, your health, your friends and your favorite passions—and if everything else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter like your job, your house and your car. The sand is everything else—the small stuff. ‘If you put the sand into the jar first,’ he continued, ‘there is no room for the pebbles or the golf balls. The same goes for life.

If you spend all your time and energy on the small stuff you will never have room for the things that are important to you.

‘Pay attention to the things that are critical to your happiness. Spend time with your children and grandchildren. Spend time with your parents. Visit with grandparents. Take time to get medical checkups. Take your spouse out to dinner.

Play another 18. There will always be time to clean the house and fix the disposal. Take care of the golf balls first—the things that really matter. Set your priorities. The rest is just sand.’

One of the students raised her hand and inquired what the Beer represented. The professor smiled and said, ‘I’m glad you asked.’

The Beer just shows you that no matter how full your life may seem, there’s always room for a couple of Beers with a friend.