This blog will primarily consist of technical analysis of various commodities such as; e-mini futures, gold, crude oil, and silver. From time to time I will add a chart of a popular stock, a popular stock would be Apple (AAPL), Crox (CROX), or a popular oil company receiving a lot of attention.
There are many indicators and art forms to technical analysis and since everyone has a different personality, they see things different in the marketplace. I prefer to use candlestick analysis, basically I look at the bar of the trading day/week/month and determine the current market psychology. Market psychology is very crucial for a few very simple reasons – price is determined by supply and demand and nothing else. Different candlesticks show different emotions in the market, for example a doji in a bullish trend would tell me that market sentiment is shifting and bears are starting to take control. That alone won’t always make me go short, but I would strongly consider exiting my long position.
Now for a brief history about myself and my trading career. I started watching the stock market when I was 14, I quickly learned about fundamentals and stared picking various stocks out of the business section in the newspaper. I really didn’t know what I was doing, but I liked it and that’s all that mattered. Soon after I realized the internet was more about Yahoo! and e-mail, I found a few websites where I could hold a virtual portfolio. This was great because I could buy and sell my stocks and see how much money I could make if it was real money. I pushed myself to learn even more, and dragged my friends into the mess by setting up competitions and making it a point to win.
When I was 17 I entered into the e-commerce business plan event for DECA. I wrote a business plan centered around a stock market education website- still though I was ignorant and had no clue that I didn’t really know what I was doing. A quick glimpse of foreshadowing occured when I met with a account executive in Denver, he told me that the difference between real money and virtual trading is quite different. Since I didn’t believe him and I was confused I went to a close mentor, and he told me the same thing. Since I was young and thought I knew all, I blew them both off and continued on my quest to master the markets.
Early 2007 (I was 19) I got my first shot at trading with real money. I quickly figured out I really had no idea what I was doing – the markets weren’t the same, my indicators weren’t working, I didn’t see things the same way. You know what it really was? It’s a simple one word explanation: emotion. I had no idea this was affecting me until my mother pointed it out to me several times. I decided I just didn’t know enough, I quickly pushed myself to 13 hour days studying various technical analysis charts and ultimately went on a search for the holy grail. I never found it, but I found a book that changed the way I looked at the markets. It was called Mastering the Trade by John Carter, the attitude of the book and the new look at market psychology changed the way I looked at markets. I realized I had to find a style that fit my personality, and that I shouldn’t make thing’s so complex. I found that futures my personality very well because they were so technically based, and the pyschology behind the price movement posed as an intellectual challenged I craved for.
Within a month I went from a chart with at least 4 indicators, to one that used price alone. Everything became simple, and thats when I found candlestick trading. I always used candlestick charts because they were easier on my eyes, but then I realized the pyschological meaning behind each candle. I could see the fight between the bulls and the bears, and I loved it.
Here I am, 8 months from when I bought my first stock. Things have changed extremely fast, and I’m lucky to be where I am. I found that day-trading doesn’t work with my personality and I’m sure it has a lot to do with how my brain sees things differently in real-time compared to after the fact. But since at this moment I haven’t figured out how to conquer that problem, I will focus on swing trading. In this blog I will post various commodity markets, primarily the ones I listed at the beginning. If they come across as complex, don’t worry I try to explain it as easily as possible. Feel free to e-mail me and ask me questions or leave me comments.
I am not a licensed professional and I am not offering advice. I am simply sharing with everyone my current viewpoint on these various markets.
