Archive for the Uncategorized Category

Using Order Flow To Enter Trades

Posted in Uncategorized on 2012-03-14 by Strategesis

From Reven Wood’s blog:

When I was a losing trader I would interpret a large bid coming in as strength and would go long, then have to add, then get stopped out 9 out of 10 times. I did this for 15 years until I realized I was seeing the trade completely backwards. I have to give credit to my trade journal for pointing it out. This trade is against everything we learned in ECON 201. The rules of supply and demand are tested in this clear example of panic from wrong way traders.

Continued

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The M1 Money Multiplier: Ratio of “bank money” to “base money”

Posted in Uncategorized on 2011-09-19 by Strategesis

From The Federal Reserve Bank of St. Louis:

“Base money” is money created out of nothing by the Federal Reserve–currency plus the funds banks have on deposit at the Federal Reserve.

“Bank money” is currency in circulation plus total customer funds on deposit in demand accounts plus traveler’s cheques.

According to both monetarist and Keynesian theory, the M1 multiplier (bank money divided by base money) should increase as base money increases (as the Fed creates new USD out of nothing.) In view of the unprecedented expansing of base money by the Fed in recent years, the chart emphatically falsifies the theory.

All the Fed’s money creation, and all the Fed’s men, can’t turn social mood positive again:

When social mood is manic, people are willing to loan, to borrow and to assume risk. In such an environment, money pumping gives the illusion of working, because the psychology of the times synergistically multiplies the effect of an increased supply of money.

But when social mood turns negative, people become risk averse, and relatively unwilling to loan or borrow. In that environment, not only does increasing the money supply not work, the huge debts and massive waste of resources on unwise ventures that occurred during the preceding mania not only provide manifest justification to the new risk aversion, they put the whole financial system at risk of catastrophic failure,

Price Chart of Gold Futures | 1975..2011 | Quarterly Price Bars

Posted in price chart, technical indicator, Uncategorized on 2011-04-16 by Strategesis


(Click on image for larger view)

So for, no sign of any deceleration of the trend or the momentum. However, some of the indicator histograms could be seen as showing signs of divergence (higher price but lower peaks in the histograms.)