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Pros and Cons of Day Trading vs. Swing Trading

Posted by TopstepTrader on October 13, 2019

How long do you plan to hold your position? This is one the fundamental questions a trader needs to ask before diving into the markets. If you're a short-term trader, the temptation to cling to a position long after the signals change is strong. That devil on your shoulder assures you that this is all going to work out—just let it ride!

Congratulations! You have now become an unintentional swing trader. There's nothing inherently wrong with this, but it's important to know the differences between trading in the short term (day trading) versus trading in the medium-to-long term (swing trading). Neither strategy is objectively better; however, both have a number of pros and cons that we will explain below.

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Topics: Trading Basics, Futures, trading strategy

3 Things You Need to Know About Trading October

Posted by TopstepTrader on September 29, 2019

Have you heard of the "October Effect"? It's the phenomenon suggesting that markets tend to be more volatile in October compared to other months. There is some debate as to whether the effect really exists—however, just last week Goldman Sachs urged investors to prepare for a wild month, noting that "stock volatility has been 25% higher in October on average ever since 1928."  Here are 3 things to keep your eye on between now and Halloween. 

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Topics: trading strategy

How David Tepper Made $7-Billion Calling the Bottom

Posted by TopstepTrader on August 11, 2019

Is it possible to be a middle class billionaire? David Tepper would certainly like you to think so. On one hand, he lives in a relatively modest home in New Jersey — then again, he also claims a $50-million mansion in the Hamptons and owns the Carolina Panthers. 

He’s unabashedly crude, but actively philanthropic. Many see him as a god-like figure in the world of trading, while others think he's just an “a**hole.” What no one can deny, is that David Tepper is pretty damn good at picking stocks. 

Today's installment of the 7 Greatest Trades of All-Time, explores how Tepper made $7-billion buying distressed financial assets in the depths of the Great Recession.

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Topics: Equities, trading strategy, trading history, Greatest Trades, David Tepper

10 Best Trading Books for Your Reading List

Posted by TopstepTrader on August 08, 2019

A lot has been written about trading, investing, and financial markets over the years. Some books are great, and many are, well, bad (really bad). Here’s a list of ten names that have stood the test of time and that are worth a look when you’re shopping for your next reading material.

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Topics: Trading Basics, trading strategy

Could a 'Hawkish Cut' Lead to the Next Major $USD Rally?

Posted by Mark Meadows, TopstepFX on July 29, 2019

In November 2017, the Bank of England hiked interest rates for the first time in 10 years. The market dubbed that a “dovish hike,” encapsulating the idea that though the BoE hiked interest rates, it provided forward guidance that made it very clear it would not be hiking in the near-term future. Then, Brexit uncertainties grew and the BoE has not hiked interest rates since.

Right now, the market is high on euphoria around the Federal Reserve lowering interest rates. But what happens when it’s a hawkish cut? The Dollar gets sent on its next leg higher, that’s what.

Our base case: the Fed rate cut will be the impetus for the Dollar to strengthen—maybe not immediately, but in the days and weeks after.

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Topics: US Dollar, EUR/USD, Currency Pages, trading strategy, TopstepFX

Gold Poised for Breakout Move: Higher or Lower is the Question

Posted by TopstepTrader on July 25, 2019

Gold has been rallying in 2019, but the advance ran out of juice in recent days and prices have come down from six-year highs near $1450 seen last week. It’s not clear if the recent dip is just a pause in a bull market or the start of a bigger reversal to the downside. An answer to the question is likely before month-end.

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Topics: Gold, Futures, trading strategy

7 Greatest Trades of All-Time: How Jesse Livermore Made $100-Million Shorting the Crash of 1929

Posted by TopstepTrader on July 24, 2019

(AP photo via Wikimedia Commons)

In honor of the 7th anniversary of TopstepTrader, we'll be releasing a series of blogs that breakdown the 7 Greatest Trades of All-Time. That's right — from bartering beaver pelts to the Great Recession, we've tracked down the 7 most successful trades in human history (at least in our opinion), and we will bring them directly to your browser over the next two weeks. 

To kick things off, we take you back to a time before high-speed microwave trading lines and well… before actual microwave ovens too. This is the story of how Jesse Livermore shorted the Great Stock Market Crash of 1929 and made $100-million in the process — along with a number of enemies. 

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Topics: Jesse Livermore, Equities, trading strategy, trading history, Greatest Trades

Crude Oil Advances on Geopolitical Unrest, But Turns Away from Key Resistance

Posted by TopstepTrader on July 23, 2019

Crude oil prices moved higher Monday as events in the Straight of Hormuz continue to raise concerns about possible disruptions in supply. Yet, at $56.25 per barrel, prices remain well below levels of more than $60 seen just two weeks ago. In fact, sentiment seems to have turned somewhat bearish due to concerns about a weakening global economy and waning demand.

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Topics: Crude Oil, trading strategy

Take a Look at the Up and Down Dollar Action Ahead of a Fed Rate Cut

Posted by TopstepTrader on July 22, 2019

The dollar is experiencing notable ups and downs amid changing interest rate expectations lately. The volatility comes ahead of the Federal Reserve’s next rate announcement, which happens just a few hours before markets close on the last trading day of the month. Also making things interesting, a bunch of key economic reports are due in the days just before and after the anticipated rate cut.

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Topics: US Dollar, Currency Pages, trading strategy, TopstepFX

Whale Trader Makes Huge Bet on Silver. What's Next for the White Metal?

Posted by TopstepTrader on July 17, 2019

Silver is sizzling. The white metal is on a four-day 5% rip and moving to its best levels since February. Yet, it still lags gold by a large margin and the ratio of gold prices to silver reached 20-year highs. Can silver continue to play catch up?  At least one whale of a trader in the futures market seems to think so.

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Topics: Gold, trading strategy, Silver

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