Henrique Simoes'  Instablog

I am getting more and more interested in the currency markets. The US Dollar is forming a big trading range since November when it traded at 1.25 against the Euro currency. A month later, in December after the FED meeting where the Quantitative Easing was first mentioned the dollar crashed in a few days and traded at 1.44 against the Euro.

This is the tighest trading range I have seen in the S&P 500 for a long period of time. The market has been perfect for my S&P trading style, selling when it spikes up and makes multiday highs and closing short when it approaches multiday lows. The market is stuck between 930 and 950 for 10 trading days now.

I have bought and read dozens of trading and investment books through out the years. Some are very good and some are nothing but pure garbage. I have many people asking me in my website about which were the best trading books, so I have decided to post about the ones I think are a must have, and should be read and re-read.

Its a long list and I will rank them from 1 (pure garbage) to 10 (a book to read and re-read):

Reminiscences of A Stock Operator, by Edwin Lefevre: 10, the best book ever written about speculation;

I am using my profits in my last S&P short position to short again. Bonds are weakening again and I think that will propel a sell-off in stocks.

Even if it doesn`t, I think it is a reasonable, not perfect, shorting spot. 

Its much easier to trade when we are winning and way up for the month isn`t it?

Consumer confidence was much stronger then expected and it might fuel the rally even further. But Consumer Confidence has been influenced by the Green Shoots the media has been shouting about and the strong equity market.

If it were a real economic indicator I would be a lot more conservative and I could even go long instead of short. Take care. Don`t let them beat you.

 I have just closed my S&P Futures position at 878.50. The financials opened strong and I fear that they might rally. Bank stocks are tricky and we never know what to expect. Maybe the upbeat moves in banks are related to this Bloomberg news, "JPMorgan Chase & Co. stands to reap a $29 billion windfall thanks to an accounting rule that lets the second-biggest U.S. bank transform bad loans it purchased from Washington Mutual Inc. into income". The usual mess.

Well, well, well. Futures are underwater and I hear the sound of cash ringing.

It will be a very easy trading session because if I want to I can close all my positions and end the month prematurely, unexpectedly early. It will be a very good month, although as I told you, it did not begin so well. But patience paid and I am never impatient with my trading positions when I know I am right.

But these positions still have plenty of room on the downside, so the smart move is to close half and let the remaining part do the work. We can go to 850 in the S&P`s pretty soon and maybe 57 USD in the Crude Oil Futures.

And now, I will give the best trading advice you can ever get. When you close a good trade with a big profit, withdraw half of the money from your trading account to your bank. That is your insurance. If something goes wrong with any position you will have some more bullets to play in the future.