Trading the USD/CAD by Jon Hewson

            My name is Jonathan Hewson and I am a sophomore finance major at the University of Pittsburgh. I am a member of @thetradingpitt with Jake and I will be writing a few blogs about my trading to go along with his. I am mostly a day/swing trader but I wouldn’t say I have exactly found my nitch yet.

            I have been working extremely hard this semester to put together a trading plan that will work logistically with all my classes while maintaining a consistent profit margin. I find it difficult sometimes to get the right intraday entry and exit points when I am only in my room at night, during the least traded hours of the day. I use a lot of indicators but one of my favorites is Pivot points (daily, weekly and monthly). These can be extremely powerful support and resistance levels but they require you to judge breakouts and bounces very efficiently. The trade that I am least successful with over the course of my career is definitely the breakout trade. I always seem to buy the highs, sell the lows and the breakouts never pan out the way I want.

            One reason I see for this is my innate desire as a trader to get the best price possible. There have been too many times when I buy or sell within four or five pips of a certain level and see price immediately shoot off the opposite direction. One example of this was with USD/CAD this week (10/30/2011). Price had worked its way up to the monthly pivot point (calculated at 1.018) during the first few days of November. I wanted to enter a trade at the break/bounce of this level because I saw a lot of $USD price action in the coming weeks. I saw price break the level and retest on the 15 minute charts so I bought at the white arrow seen in the picture (around 1.01890). As you can see price moved against me, eventually hitting my tight stop at 1.0149. Soon after my stop was triggered I decided to go short, thinking that price had rejected a move above the monthly pivot level. However, price again moved against me, passed the 1.018 level and my stop was again triggered. Two losing trades in a row.

            Seeing the charts now, my decisions seem incredibly stupid. The movements of the market weren’t nearly strong enough to warrant a break. So, where to go from here? I am writing this blog partly just to hammer into my own head that following the trend is far more profitable then attempting to get a perfect entry. In the future I am going to look at longer timeframes, BE PATIENT and WAIT for price to show a clear sentiment in a certain direction. 

ORCL 11/3

Today I'm going to give a quick rundown of my first trades in the stock market.  As of now, I'm still playing around with different ideas and strategies, but I figured I would jump right in and go from there.

I decided to trade Oracle today.  Its a name I'm somewhat familiar with, not too expensive, large cap, and liquid.  I like tech in general because its relevant to me.  Oracle has been stronger than the market since about mid August, although I didn't really recognize this until after my trades.  Below are daily charts of $ORCL (top) and the $SPY (bottom).

I started off looking at the one minute charts a little bit after 12 noon.  It looked to me that the SPYs might be stuck under the 125.30 level that had held resistance a number of times earlier in the morning.  Thinking it might fall back into the day's range, I shorted at 32.62 when it failed to break the falling trend line shown in the picture below.  My stop was at 32.72, and after shortly moving it my favor I was stopped out.  This should have tipped me off that both the market and $ORCL were stronger than I had expected.  Unfortunately it didn't and I tried to get short again near 1pm at 32.70.  This was a bad mistake, getting short a strong stock in a rather strong market (in addition, the SPYs had just made a new high).  Had I analyzed a longer timeframe I would have seen this.  @stevemcmannis let me know of my mistake and I was stopped out soon after.  $ORCL trended up all day, along with the market .

1 min ORCL (top) & SPY (bottom)

I learned that I need to be more aware of relative strength intraday.   I also need to think more about the time horizon for my trades.  My first trade moved for me immediately like I thought it would, but once the SPY's showed they weren't going to break down further I should have gotten out.  I'll be back at it tomorrow, following $ORCL and hopefully a few more.  Good luck, and have a great weekend.

Beating Markets Update and Changes

Hey all.  Its been a while since I've posted anything on here (been spread really thin with school, growing our university trading club, my own trading), but I'm making it a top priority to keep up with the blog from now on.  I recently spoke with another good young trader from Pitt named Jon Hewson (@Hew_Dat) who is going to be hopping on board and helping me run Beating Markets.  He is a forex swing trader and is also involved with equity options, so he'll be bringing a slightly different perspective to the blog.  

Also, my interest in the stock market has been increasing a lot lately, so I just opened up a demo account and will be trading equities.  Right now I plan to focus on swing trading while occasionally trading intraday with in-play stocks to see which method suits me best.  I've always followed the stock markets with my forex trading but I've never focused on individual names, and I'm excited to jump right in.  I plan on being as transparent as possible on Twitter and will hopefully be posting at least 1 or 2 trade reviews/videos a week on here.  

I'm pretty excited about these changes to the blog.  I'm expecting this blog to be much more active than it has been the past few months, and I think it will be great to discuss the stock market as well as forex in our posts.  Keep an eye out for new posts in the next week or two and good luck with your trading!