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Understanding the market and Relaxing

It can take years to master the art of discipline and self control which are necessary in trading. Markets move in cycles. Sometimes you need to cycle your trading as the market cycles and take periodic rest periods.

Relaxing in trading, don't hurry, knowing wait for chances. No way to rich overnight except lucky by lottery. Our life are short and has some things to do. Enjoy our life. Sleep is a natural wonder. Why do you stay all night or all day long to play FX game?. Playing with a larger time frame is a better way.

It has been difficult trading environment with low volatility for a while. The volatility is starting to move up which should lead to a more profitable short term trading environment .

For example, The Fed meeting and announcement will happend on next Tuesday and Wednesday. Then, the market will probably be slow days with minimal movement next week. So Tuesday and perhaps Monday are good days to rest, plan your next of trades or do something else as exercicing our body, yoga, swimming, hiking, and working out are excellent to relieve stress.


Market Anomalies

Weekend Effect

The tendency of stocks'closing prices are lower than closing prices on the previous Friday. Returns on Mondays have been consistently lower than every other day of the week.

The "January Effect"

The phenomenon that suggests prices should rise during the month of January as tax loss selling abates and those funds are reinvested. The impact is said to be greater on small and mid-cap companies than it is on large caps. For example, for the "January Effect" of 1951 you would have entered at the close of business on December 29, 1950 at $20.43 and exited on January 31, 1951 at $21.66, booking a 6% gain. The average return for the S&P 500 in the month of January over the last 60 years is around 1%.

August is a slow month of year.

STRONG NOVEMBER FOR S&P 500

November - January has historically been the strongest 3-month period for the S&P Since 1945, the S&P is positive over those 3-month 72% of the time, up an average of 4.1%

AVG. ROLLING 3-MON. PRICE CHANGES SINCE 1945

Period Price Change Freq. of Gain
October-December +3.6% +77%
November-January +4.1% +72%
December-February +2.5% 63%

Because S&P 500 has a positive corelation with EUR/USD, then, We expect EUR/USD is going up in the period or after-lag property

Turn-of-the-month Effect: The tendency of stock prices to rise on the last trading day of the month and the first three trading days of the next month

Turn-of-the-year Effect: The tendency of stock prices and trading volume to rise in the last week of year and the first two trading weeks of January.

Some firms issue stock splits when their stock has risen to a price that may be too expensive for the average investor. Stock splits increase the number outstanding and decrease the value of each outstanding share.

Stock Split Effect: Before and after a company announces a stock split, the stock price rises.

Earning effect: After announcement of a firm, the stock price react and often continue to movein the same direction.

Merger or acquisition effect: When firms announce a merger or acquisition the value of acquired firms tends to rise while the value of the bidding firm tend to falls.

The Super Bowl Indicator: If the American Football League wins the game, the market will end the year lower.

If the National Football League wins the game, the market will end the year higher.

The Hemline Indicator: The market rises and falls with the lengh of skirts.

The Aspirin Indicator: Stock prices and aspirin sales are inversely related.

Recession every ten years


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