Howdy Peeps, Below is an e-mail from EC Method. I thought it an...

Howdy Peeps, Below is an e-mail from EC Method. I thought it an excellent read and am sure they would not mind me sharing it with U all.

http://www.theecmethod.com/index_files/Page359.html

Dear Subscribers and Free Triallers,

We feel that the current market conditions require an email to talk about some of the current driving factors behind the volatility

Please be assured that Craig and I remain committed to assisting you with each and every query you may have, no matter how big or small. We endeavour to answer all correspondence within a 24 hour period.

This is one of the most difficult and complex markets either of us has ever encountered. It is fraught with a zillion complexities and the world is in a state of economic turmoil. The debt spreading through the Eurozone and now the US congress “super-committee” not being able to agree to a deal on the budget to reduce debt by $1.2 Tillion has really been driving the market lately. It seems that the market is so full of bad news that any good news sends the market flying up only to slowly work its way back down again. Because of this there is a very tight range both the XJO and Dow are trading in.

Today was another great example of the market changing rapidly. The XJO was consolidating as one would expect after a great run. Then an announcement from the Federal government that they have cut the growth forecast for Australia. And so the market responded by dropping rather quickly. Then about an hour later ratings agency Fitch came out and announced it is upgrading our debt rating from AA+ to AAA. All this while a lot of the world is being downgraded and as a result the market flew in the opposite direction.

The dow was much the same. Some consolidation after a huge run then some not so good news and a bit of dip then some good news out of the states and it heads up again.

Always take good profit when you see it!!

Normally we will only get a few alerts a week however the rapid swings that the world markets are experiencing at the moment are causing many more alerts than normal and making trading more difficult. There have been so many alerts in the last few weeks it is testament to the level of volatility and thus is an extremely dangerous market and not for the faint hearted.

We recommend those taking positions - keep them small and tight. Do not throw the farm at the market ever - but especially not in the present economic climate. Always remember - there is always another day and another trade, and unless you make a seriously monumental blunder you will basically forget the last trade you did as you move on to the next one.


Below are a few points, some not included in the website and some we re-iterate since not everyone refers to all sections of the website and a reminder is never a waste of time.

1. Never enter a trade without a stop in place

2. Always be aware of the daily chart and the trend of the market

3. Always be aware where daily support and resistance lie

4. One of our favourite indicator is volume. "High volume high price = educated sellers selling to uneducated buyers. High volume low price = educated buyers buying from uneducated sellers". The observation is that you get an increase in volume on highs or obvious resistance levels, or lows on obvious support levels, no matter what the time frame, be it by minute, hour, day, month etc. - when it is noticeable the market will often travel a little further in the direction it is travelling till it flushes out all the punters - be it those who think they will miss out as it goes higher, or those who can take no more pain as it plummets. When we receive an alert we check the to see what the volume is doing which helps us with our entry point.
5. To improve on your trading it is always a good idea to do the most basic course in pattern recognition via the candlestick charting method. There are so many patterns but we only look for the two most basic and use them in conjunction with the alert to improve our entry point. Look for the shooting star on highs and bottom rejection pattern which is basically a dip and recover on strong volume on a support level. This way adding some subjective contribution to the trade, in addition to placing your stop when you enter a trade it is possible to improve the exact entry point and increase profits.

6. We have recently started a new Australian forum been established purely for indices and FX traders. We intend to make regular contributions to this forum and would encourage you to participate and share your thoughts. Most other forums deal with a multitude of individual share threads but this one does not encourage that and is purely for the sharing of trading styles, techniques and general information which may be of interest to futures traders. The addess is http://cfdforum.freeforums.org/. Please join and discuss the market.

7. We would also recommend that you subscribe to Morning Money and The Daily Reckoning. Both are free and the information provided is unbiased, interesting and over the many years I have been receiving it I've found it to be so insightful as to be an absolute "must". We have no personal or financial interest in either publication nor do we know any of the writers. We just like the fact they just say it 'warts and all' without fear or favour.

Finally - please remember, Craig and Elizabeth offer a very personal service - unlike most organizations today. We strive at all times to render as much assistance as we can and to be totally accessible and answer all queries, no matter what, within a 24 hour turn around period.

Happy and safe trading.

Craig and Elizabeth
TECM - "The EC Method"