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Traders focus on developing trading rules and systems that identify market entry and exit points. A factor
that is often overlooked is the percentage of trading capital available that is risked on trades. STOCKS &
COMMODITIES contributor and author Nauzer Balsara analyzes the risk of ruin by varying three
parameters using a Monte Carlo simulation. The results can help you determine your chances of success
http://www.carljohnson.net/LDN/Money%20Management/APPRECI.PDF
High-frequency trading networks, which complete stock market transactions in microseconds, are vulnerable to manipulation by hackers who can inject tiny amounts of latency into them. By doing so, they can subtly change the course of trading and pocket profits of millions of dollars in just a few seconds, says Rony Kay, a former IBM research fellow and founder of a cPacket Networks, a Silicon Valley firm that develops chips and technologies for network monitoring and traffic analysis.
We side with Warren Buffett on the direction of interest rates. If the US economy grows at a rate close to 4% two years in a row (as predicted by Goldman Sachs), inflation rates won’t stay put below 1%.
As of the close of trading last night, I have the lowest long exposure that I have had in many years -- in marked contrast to the optimistic recommendations of:
http://www.thestreet.com/story/10963146/1/kass-bullish-on-cash.html
This pattern is an indication of a financial instrument's SHORT-TERM outlook.
The name "Hanging Man" is used because it has a gloomy connotation, and also because the candlestick that defines this pattern looks like a hanging man with dangling legs. The Hanging Man pattern is characterized by a small Real Body near the top of the price range. The Real Body can be black or white, although a black candlestick is preferable. A black candlestick is slightly more bearish since it shows that the close could not get back up to the opening price level. The Hanging Man has a long lower shadow that should be at least twice the length of the Real Body. The upper shadow should be very small or non-existant.
Trading Considerations
In cases where a major uptrend exists followed by a Hanging Man, the investor should consider vacating long positions.
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Criteria that Supports
A Hanging Man can be confirmed by a bearish gap between the Real Body of the Hanging Man and the open on the next session. In other words, the investor should look for the next session opening lower than the Real Body of the Hanging Man. The greater the gap, the stronger the signal.
A Hanging Man may be a stronger signal if the subsequent session shows a black Real Body with a close lower than the close of the Hanging Man.
A Hanging Man may be a stronger signal if it is followed by another, well-formed Hanging Man in the next session.
The longer the Lower Shadow of the Hanging Man the greater the significance of the pattern.
The smaller the Real Body and the Upper Shadow the more significant the pattern.
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Criteria that Refutes
It is important to view signals in the context of prior price action. If the uptrend is strong and there are major bullish indicators before the Hanging Man, then perhaps the bullish momentum is overwhelming and the Hanging Man won't work. In such cases it is wise to wait for bearish confirmation before acting.
The uptrend may still be in force if the next session opens higher than the Real Body of the Hanging Man.
A Hanging Man with a white Real Body (where the close is higher than the open) may indicate weakness in the pattern.
