The Yin and the Yang of Markets

I am reading a fantastic book on trading, first published in 1924, by Richard D. Wyckoff, titled "How I Trade and Invest in Stocks & Bonds". Although most of the examples in the book pertain to stocks, the insights into the nature of trading are relevant no matter what instrument you choose to trade.

I am particularly drawn to the authors' appreciation of the ebb and flow nature of markets and how this perspective can be used to great effect.

"It is difficult to over-emphasize the importance of studying the technical position, particularly when making a speculative commitment. Many people may say, "What is a weak or a strong technical position?" My reply is, in brief, that a stock is in a weak technical position on the bull side when it has been purchased and is held by a large number of outside speculators; when most of these are looking for a profit; when the price of the stock has advanced to a point where no further buying can be stimulated for the time being. It stands to reason that when buying power is exhausted a stock must decline, no matter how strong its finances, management or earning power."

"On the other hand, a stock is in a weak technical position on the short side when the bears have exhausted their ammunition by selling all they can afford and when the buying power of investment and speculative purchasers is such that it resists the pressure of the bears; in other words, when demand overcomes supply. The weakness in such a position is found in the fact that all those who are short are potential bulls; they must, sooner or later, cover their commitments in order to close their trades. They do not wish to remain short indefinitely."?. "Bears, after they have sold short are an element of strength, not of weakness."

Perhaps the nature of all markets is best described by the Chinese Yin Yang symbol.

In every bull move, and in every bear decline, are the seeds of their own destruction.

Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com

ABC News
Shekel opens weaker against euro
Globes, Israel - 2 hours ago
The shekel had a mixed opening to foreign currency trading this morning, gaining slightly against the dollar but weakening against the euro. ...
Video: US takes over mortgage giants - 08 Sep 08 AlJazeeraEnglish
Yen slides as Freddie, Fannie bailout calms nerves Reuters
US stock futures jump on Fannie, Freddie seizure MarketWatch
Forbes - RTE.ieall 4,408 news articles

India Infoline.com
Asian currencies lower against dollar
Economic Times, India - Sep 6, 2008
Yuzo Sakai, currency trading manager at Tokyo Forex and Ueda Harlow, predicted before the Labor Department report that the yen could rise again. ...
* Dollar dips vs euro, but up vs yen on GSE bailout plan guardian.co.uk
Yen Rises on Speculation Stock Declines to Crimp Carry Trades Bloomberg
Gold loses its glitter Business Standard
Forex Factory - The Ageall 285 news articles

The Moscow Times
Central Bank Acts to Stem Ruble Slide
The Moscow Times, Russia - 13 hours ago
08 September 2008The ruble recovered on Friday from a historic trough after the Central Bank said it would not allow the currency's trading band to widen, ...
Ruble Rises Against Currency Basket After Central Bank Steps In Bloomberg
Russian assets tumble amid worries about ruble MarketWatch
Big Summer Sell-Off Hits the Russian Stock Market New York Times
Bloomberg - MarketWatchall 36 news articles

Forex – Currency Trading Absentee
Corsavoo.com, France - Sep 6, 2008
Such tools include the various type indicators applied against a FOREX chart for the desired currency pair. Depending on your risk tolerance, you may decide ...
Profitable Forex Trading Strategies Corsavoo.com
Mini Forex Trading Platforms Corsavoo.com
Forex Signal Service Providers Corsavoo.com
all 4 news articles

Jordan's mufti issues fatwa against electronic currency trading
Monsters and Critics.com - Sep 6, 2008
... the trading of currencies on the internet after scores of citizens went bankrupt, suffering big losses in currency trading with foreign markets. ...

Stay prepared for breakout
Business Standard, India - 18 hours ago
Action in the new currency trading segment suggests that market expectations are in the range of Rs 44.80 to the dollar by the end of the month. ...

India Infoline.com
Defining the role of currency futures and other derivatives
Economic Times, India - 12 hours ago
India launched exchange-traded currency derivatives the other day and on the first day of trading, the exchange handled $60 million. ...
RPT-India commodity trading ban may stay till prices ease Reuters India
Best of both worlds Economic Times
India gold futures higher on commodities mkts boost Reuters India
Reuters India - Reuters Indiaall 18 news articles

RTT News
Daily Forex Snapshots - Asian Session – Markets higher as US ...
Forex Hound, NY - 40 minutes ago
As forex specialist, ACM provides only currency and precious metals trading via highly professional forex trading software. All customers are aware that ...
Japanese market advances, Nikkei up 2.8% RTT News
EURUSD Trading at Resistance Forex Factory
US Dollar Holds Strong Despite Jump in Unemployment Rate to 5-Year ... Daily FX
RTT News - Daily FXall 41 news articles

`Overvalued' Pound to Fall 20% as Darling Despairs (Update1)
Bloomberg - 2 hours ago
8 (Bloomberg) -- Currency traders are starting to take the British government at its word, putting the tumbling pound on course for the worst year since ...

Currency Market Predicts Bailout Is the End of the Credit and ...
Seeking Alpha, NY - 1 hour ago
Another interesting event that took place last Friday was that the banks bottomed around 11 am and rose through the remainder of the trading day, ...

Wind Chimes and more...

Windchimes for great gifts!

Internet and Computer Systems in the FOREX Business