Trader Vic on Commodities, Gold and the Dollar

Original Article from Seeking Alpha Dollar Currencies

Hard Assets Investor submits:

When it comes to the 2010 outlook for commodities, who better to ask than commodities whiz Trader Vic?

Victor Sperandeo (also known as "Trader Vic") is one of the world’s most outspoken commodities traders, with over 40 years of market experience. He has invested independently for the likes of George Soros, Leon Cooperman and BT Alex Brown, and has written a book, "Trader Vic on Commodities." Mr. Sperandeo also created the popular Diversified Trends Indicator, a long/short rules-based trading methodology based on a highly diversified basket of commodity and financial futures contracts.

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‘Rogue trader’ boss probed

PARIS – A FORMER boss of alleged French rogue trader Jerome Kerviel at Societe Generale is being investigated by French financial regulators for insider trading, the bank said in a statement on Thursday.

The Financial Markets Authority (AMF) has identified Jean-Pierre Mustier, formerly head of Societe Generale’s corporate and investment banking division where Kerviel worked, as a suspect and he will leave the bank, it said.

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Option trader takes put insurance on consumer staples ETF

XLP – Consumer Staples Select Sector SPDR – Shares of the consumer staples ETF have rallied approximately 2% to $23.45. The fund caught our eye after some 7,500 puts were purchased in the January 2010 contract at the 19 strike price for 35 cents apiece. At first glance the transaction looks bearish as well as contrarian in the face of today’s rally. However, we believe the transaction is the work of a bullish investor who has simultaneously picked up shares of the underlying in combination

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Essential Elements of a Successful Trader

Courage Under Stressful Conditions When the Outcome is Uncertain

All the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery ?You gotta be in it to win it?. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.

You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful trader.
However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue ? you?re overconfident and not focused enough on the risk you’re taking.

Start by analyzing yourself. Are you the type of person that can control their emotions and flawlessly execute trades, oftentimes under extremely stressful conditions? Are you the type of person who?s overconfident and prone to take more risk than they should? Before your first real trade you need to look inside yourself and get the answers. We can correct any deficiencies before they result in paralysis (not pulling the trigger) or a huge loss (overconfidence). A huge loss can prematurely end your trading career, or prolong your success until you can raise additional capital.

Both the inability to initiate a trade, or close a losing trade can create serious psychological issues for a trader going forward. By calling attention to these potential stumbling blocks beforehand, you can properly prepare prior to your first real trade and develop good trading habits from day one.

The difficulty doesn?t end with ?pulling the trigger?. In fact what comes next is equally or perhaps more difficult. Once you are in the trade the next hurdle is staying in the trade. When trading foreign exchange you exit the trade as soon as possible after entry when it is not working. Most people who have been successful in non-trading ventures find this concept difficult to implement.

For example, real estate tycoons make their fortune riding out the bad times and selling during the boom periods. The problem with trying to adapt a ‘hold on until it comes back’ strategy in foreign exchange is that most of the time the currencies are in long-term persistent, directional trends and your equity will be wiped out before the currency comes back.

The other side of the coin is staying in a trade that is working. The most common pitfall is closing out a winning position without a valid reason. Once again, fear is the culprit. Your subconscious demons will be scaring you non-stop with questions like ?what if news comes out and you wind up with a loss?. The reality is if news comes out in a currency that is going up, the news has a higher probability of being positive than negative (more on why that is so in a later article).

So your fear is just a baseless annoyance. Don?t try and fight the fear. Accept it. Have a laugh about it and then move on to the task at hand, which is determining an exit strategy based on actual price movement. As Garth says in Waynesworld ?Live in the now man?. Worrying about what could be is irrational. Studying your chart and determining an objective exit point is reality based and rational.

Another common pitfall is closing a winning position because you are bored with it; its not moving. In Football, after a star running back breaks free for a 50-yard gain, he comes out of the game temporarily for a breather. When he reenters the game he is a serious threat to gain more yards ? this is indisputable. So when your position takes a breather after a winning move, the next likely event is further gains ? so why close it?

If you can be courageous under fire and strategically patient, foreign exchange trading may be for you. If you?re a natural gunslinger and reckless you will need to tone your act down a notch or two and we can help you make the necessary adjustments. If putting your money at risk makes you a nervous wreck its because you lack the knowledge base to be confident in your decision making.

Patience to Gain Knowledge through Study and Focus

Many new traders believe all you need to profitably trade foreign currencies are charts, technical indicators and a small bankroll. Most of them blow up (lose all their money) within a few weeks or months; some are initially successful and it takes as long as a year before they blow up. A tiny minority with good money management skills, patience, and a market niche go on to be successful traders. Armed with charts, technical indicators, and a small bankroll, the chance of succeeding is probably 500 to 1.

To increase your chances of success to near certainty requires knowledge; acquiring knowledge takes hard work, study, dedication and focus. Compile your knowledge base without taking any shortcuts, thereby assuring a solid

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Commitment of Trader Currency Report and Analysis

Commitment of Trader ((COT)) Report: Every Friday the CFTC releases data about futures/options trading activity by market segment in various markets including currencies. Positions for each currency are classified into 3 groups: large speculators, small speculators, and commercial traders. If interpreted correctly this data can be useful in forecasting price trends in the spot ForEx market.

The table below contains a condensed version of currency trader’s collective market votes. Interpretation of this data is definitely an art rather than a science. With that caveat, you may view the latest COT analysis for each currency in the analysis fields of the table below. *See below for definitions and additional information about the COT Report and analysis

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Brazilian trader deploys bearish protection

EWZ – iShares MSCI Brazil Index ETF – Shares of the Brazil ETF are slightly higher today by less than 1% to stand at $53.17. The EWZ ticker symbol took up residence on our ‘most active by options volume’ market scanner early on in the trading day after one investor initiated a large ratio put spread in the December contract. Motivating factors underlying this transaction may be downside protection on a long stock position, or it could be that the trader is simply bearish on the fund and hoping

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XLF call trader cashes in on bear position on banks

XLF – Financial Select Sector SPDR – They say that time is a great healer, but it would appear that the trade du jour represents a rather plucky play on the prospects for financial share prices. A massive lot of approximately 100,000 calls was purchased at the near-term June 13 strike price for a premium of 21 cents apiece this morning. While such a trade might appear to be bullish, it was actually the work of an investor who was initially short the calls. Shares of the financials ETF are

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How to Read the Commitment of Trader Report for Currencies

Commitment of Trader ((COT)) Report

: Every Friday the CFTC releases data about futures/options trading activity by market segment in various markets including currencies. Positions for each currency are classified into 3 groups: large speculators, small speculators, and commercial traders. If interpreted correctly this data can be useful in forecasting price trends in the spot forex market.

The table below contains a condensed version of currency trader’s collective market votes. Interpretation of this data is definitely an art rather than a science. With that caveat, you may view the latest COT analysis for each currency in the analysis fields of the table below. *See below for definitions and additional information about the COT Report and analysis.

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Potential Pitfalls For the New Trader

The day someone decides they are going to pursue a trading career, they are typically making that decision because of the potential financial prize. In other words, they are making that decision because of the perceived benefit. What most people don’t understand, let alone consider, is that they are about to step into a “mine field” of traps that have the potential to drain and destroy their bank account and self confidence all in one. When I look at the traders who do well and those who

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The Raw Food Trader Diet?

Rob’s been eating only fruits and vegetables. Will he survive? What’s the point to eating well? How does that fit in with trading? Click here now to listen to the broadcast.

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