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  • Being Steve Wynn

    Trading has often been compared to a Casino and for good reason. Most investors throw their money in the market without any real thought or plan. Might as well go to Vegas, at least you'll get free drinks. The best Traders in the world are only concerned about Risk/Reward and putting the odds in their favor. They are also not worried about being right on every trade as newer Traders are. Here's an example of two different Traders and their last 10 Trades. Which one would you rather be?

    Trader 1 Trader 2

    1)$150 1)-$175

    2)$175 2)$425

    3)$125 3)-$150

    4)$150 4)-$200

    5)$125 5)$450

    6)-$375 6)-$150

    7)$150 7)$525

    8)$150 8)-$175

    9)-$650 9)$225

    10)$175 10)$400

    Success Rate: 80% Success Rate: 50%

    Profit:$175 Profit: $1175

    Trader 1 might feel as if he is doing well as he is 'right' 80% of the time but only manages small profits and the odd bigger loss.

    Trader 2 is only 'right' 50% of the time, which in school is an F. But when the market proves him right he let's profits run to pay for his losers and then some.

    The odds on most Casino games are just over 50% in favor of the house and so they know over a large number of hands dealt they will profit. Don't expect to profit on every trade. Just expect that your strategy will be profitable over a large sample size.

    Evan Poechman

    Elite Round Table

    Apr 15 2:05 PM | Link | Comment!
  • Sayonara Japanese Stocks

    Most of the leading Japanese ADR's (American Depository Receipts) have been coming under some severe selling pressure since the start of the 2014. What is the cause of the decline in the leading Japanese stocks since the Bank of Japan is printing more money than the Federal Reserve (central bank of the United States)? The reason the leading Japanese stocks are falling is because the Japanese Yen has strengthened despite all of the efforts by the Bank of Japan to try and dilute the currency. Traders and investors can easily look at a chart of the USD/JPY (U.S. Dollar vs Japanese Yen) and see how the currency pair has been making lower highs on the chart. This tells us that the Japanese Yen is strengthening and that is a huge negative for the leading Japanese stocks. You see, exports increase when a currency is kept artificially low. Unfortunately for Japan, the easy money policies worked very well in 2013, but they are not working in 2014 so far.

    Some leading Japanese stocks that are highly affected by the stronger Japanese yen includes Toyota Motor Corporation (TM), Honda Motor Co., Ltd. (HMC), Sony Corporation (SNE), and Canon Inc. (CAJ). Believe it or not, it is not just the Japanese stocks that decline when the Japanese Yen strengthens, the U.S. stocks market indexes will also fall on the back of a stronger Japanese currency. This happens because the countless financial institutions are betting on a weak Japanese Yen, so when the Japanese Yen strengthens it actually removes liquidity from the financial system. Just look at the stock market when the USD/JPY chart declines, the major stock market indexes follow that currency pair very closely, sometimes tick for tick.

    Nicholas Santiago

    Tags: TM, SNE, CAJ
    Apr 15 12:09 PM | Link | Comment!
  • Copper Drops Like A Rock

    This morning, the important industrial metal copper is coming under some heavy distribution. Copper futures (HG-K14) are declining lower by 2.02 percent. Traders that follow the iPath DJ-UBS Copper TR Sub-Idx ETN (JJC) are seeing a decline of 1.62 percent. So regardless of which copper vehicle you follow it is a very bearish sign for copper. At this time, the copper futures weekly chart indicates a decline down to the $2.77 level, today copper futures are trading around $2.98. The highly followed and traded JJC is indicating a decline down to the $32.50 level before reaching any meaningful support.

    Many investors are blaming the poor Chinese economic data for the weakness in copper prices. Some leading copper mining stocks that are coming under distribution today include Southern Copper Corp (SCCO), Freeport-McMoRan Copper & Gold Inc (FCX), Rio Tinto plc (RIO), and BHP Billiton Limited (BHP). All of these stocks could see further downside in the near term as copper should continue to decline.

    Nicholas Santiago


    Tags: JJC
    Apr 15 11:36 AM | Link | Comment!
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