The Fear Of Missing Out

One common problem that I think many traders have is the fear of missing out. I know this is a problem because this is something that I myself have learned to deal with over the years and even now I still jump the gun because I fear that I will miss out on a potential move in the market.

One way to overcome the fear of missing out is to have a well thought out trading plan with specific rules for entry and exit. By having clear rules that you have researched thoroughly on past data, you will take some of the emotion out of trading and your confidence will also increase.

One problem that I see myself doing quite often is that I tend to jump the gun with my entry. For example, if my system says I should enter the market when the moving averages cross on an hourly closing basis, I tend to enter before the hourly close because the market may be moving rapidly in the anticipated direction and I fear I will miss out if I wait for the hourly close. This almost always causes me to enter prematurely and it usually costs me money because the averages never actually crossed on a hourly closing basis. What has helped me overcome this tendency to jump the gun is to not watch the markets until a few minutes prior to the hourly close. So for example, if I have a watchlist of stocks I am looking to buy on the 60 minute time frame and my entry is a crossing of the moving averages, I will scan my list of stocks at 9:55. 10:55, 11:55 12:55...etc. By doing so, I will not be tempted to enter the market prematurely.

If your system is to enter the market based on the daily close, it might be helpful to watch the market during the last 15 minutes of the day so you can scan your watchlist of stocks that are setting up for a potential trade. By waiting for the last 15 minutes of the day you avoid tempting yourself from entering the market during the day.

So there you have it. By having a well written trading plan for entry and exit and by limiting your time in front of the computer, you can help overcome some of the fears you may have of missing out on a potential move in the market. This has helped me a great deal and has also reduced much of the stress I was experiencing. I hope this helps you as well.

Gold Futures Make All Time New Highs

Even though the dollar was up today, gold surged higher based on news that the Reserve Bank of India bought 200 tons of gold from the IMF for $6.7 billion. Today gold made a new record high but silver has yet to break high.

Crude Oil Update

A few of you have been writing in asking me what my opinion is on crude oil so I decided to make this post so that you can see exactly what I am thinking (if that means anything to anyone).

Above is a daily chart of USO which is the ETF for crude oil. As you know I have been long this market based on the breakout of the symmetrical triangle formation which I posted here on this blog well before the breakout occurred. I was somewhat skeptical of buying the breakout 3 weeks ago due to the bearish seasonal that usually kicks in around this time of year but I went and bought USO anyway but with a smaller share size.

As of now I have not taken any profits on my long position because my profit target is much higher. I did however raise my protective stop to lock in a small gain if the oil market decides to head south.

You'll notice in the above chart that USO is now developing a bull flag formation. I do not plan to add to my position due the bearish seasonal that is due around now but if oil does make a move to new highs, I will then raise my stop right below the low of the flag which as of now comes in at around the $39 level. Lets see what happens.

Forex - Has The Euro Put In A Top?

Above is a daily chart of the ETF for the Euro, symbol FXE. Last week when the Euro pushed up to new highs there was a MACD bearish divergence that developed. Now it appears that a major trendline is about to be broken. In my opinion if this currency can put in one more close below the trendline, I think that would confirm a high is in place and that the Euro should now begin some kind of sell off. Let's see what happens.

Stocks Close The Week On Their Low

The stock market had a rough week with the S&P down 4.18% from last Friday's close and closing the month at a loss. In the above chart you'll notice the increase in volume. This is the largest weekly volume we've seen in 22 weeks. The major trendline which began last March was broken as well.

As you know I've been bearish on the market as of last week based on the weakness I was seeing in the banks, small caps and housing stocks. You can read that post by clicking here.

Has The U.S. Dollar Bottomed?

I'm keeping an eye on the U.S. Dollar because I see some interesting technical signals coming into play. Notice in the above chart that there is a MACD bullish divergence that took place last week when the dollar made new lows. There is also a very important trendline that this currency is now about to test. I think if we see 2 or 3 closes above the trendline that would confirm that a bottom has been established and that the dollar should stage some kind of a rally.

As of now I have no position in this currency but as always I like to share with my readers what I am seeing and thinking BEFORE the move happens rather than after the fact.

A Level To Watch In Gold

Gold has been selling off over the past few trading sessions and is rapidly approaching a very significant level. If you look at the above chart of GLD you'll notice the psychological $100 level was resistance last month and may now act as support.

I personally don't think the $100 level will hold because silver has been very weak and it may pull down gold even further. We'll see how things unfold.