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Sunday, June 26, 2016

Expecting another drop in the markets after Brexit this week

It was quite a hectic trading week last week. Volatility continues to dominate the markets mainly due to the Brexit vote, so I'm expecting the markets to drop even further this upcoming trading week as the battle between the EU and Britain goes on. Can it go lower? Oh yes it can! This whole Brexit and political instability in Great Britain is to blame. It seems like no one can make up their minds! Once you think it's going in one direction it goes exactly the other way. I never would have thought to hear the abbreviation 'Regrexit' for instance. I won't elaborate on that now. But anyway, what does this mean for this upcoming trading week? The GBP is likely to depreciate even further against a basket of major other currencies, same goes for the EUR/USD, oil and major world markets (Asia, Europe and America). The age old question is by how much and when can we expect to see a rebound. As long as there is no clear direction in the markets I don't think any time soon. Therefore I'm trading with extreme caution this week, I have my eye on the GBP/USD, FTSE, EUR/USD, the oil trade (all short), and gold and VIX (all long). As always I'm looking for the perfect entry point for all trades. As of right now I don't hold any positions. I honestly did not expect a Brexit, in fact I even tweeted last Wednesday, right before the vote, that my prediction would be that Britain would remain in the EU. Evidently I wasn't the only one who was wrong and baffled by the results, the Dow Jones dropped more than 600 points last Friday, and other financial markets around the world plummeted. People were shocked by the outcome.

It's hard to stay optimistic when markets crash like this, but I think there are also huge trading opportunities in such a scenario. If the markets rebound then it's game-on! Not only there are great opportunities in the currency markets, but also the commodity and stock markets. Stocks that were heavily affected by the result of the Brexit may then be a lot cheaper, think of British automakers for instance. In the short term I don't think this chaos is far from over, mainly because I expect other countries in Europe wanting to hold referendums soon as well. A Frexit, Nexit next? Perhaps every country in Europe might want to hold their referendum, only causing more economic instability in the (financial) markets.

It's not only the Brexit that is causing turmoil in Europe, today Spain is holding elections as well, the outcome could spark even more volatility. Whatever the case is, chances that the markets rebound tomorrow and the rest of the week is slim to none in my opinion, especially now that there's so much going on. It definitely is not going to blow over in a week, that's why I believe there are a bunch of short opportunities, go short now while you can (in the right trades of course)! Eventually the markets will correct themselves, but until then it's trying to make money with short positions.

Limit your risk, and research trades well before you execute them.

Let's have a profitable week!

Wednesday, June 22, 2016

According to the markets the results are in: Bremain wins!

The Brexit vote is coming up tomorrow, but it seems like the (currency) markets have already made up their mind: Britain remains in the EU! I personally have no opinion regarding this matter since I'm not British, and no matter what happens it won't really affect me. Therefore I'm not biased, but I have noticed a strange pattern regarding the GBP/USD chart I'd like to share.

Monday, June 13, 2016

Brexit fears pound the pound

I've always wanted to do a title with a word play like this! It wasn't on my bucket list or anything, but still, the perfect opportunity has come! In all seriousness, the possible Brexit would have a major impact on the GBP currency. That's because the polls now show that a majority of Britons prefers to exit the EU. On June 23 it's the final vote, but before that there is a lot of anxiety in the currency market. Already a lot of money has left the UK. Scenarios like this always creates trading opportunities due to high volatility, and in this case a good fx play. 

My trading setup would begin around 1.41, anything below would signal an even further drop towards 1.40 and below, anything above 1.42 and there may be an upward trend. Regardless I'm keeping a close eye on the psychological level of 1.41. When a Brexit indeed does happen, we can expect to see an even much lower GBP/USD, perhaps even as low as 1.25 in the short term. I'm usually a cautious fx trader, but in this case I'd risk a 30 pip SL in either direction.

We'll see what happens.

Thursday, February 4, 2016

8 Free research websites for stock traders

I'm often asked on social media which research tools I use for my trading, so I thought it was a good idea to list the ones I personally use the most. Perhaps you already know about the following websites for doing your own stock research, but just in case I’m going to list them all here in this article. Again, these stock trading websites I use myself on a regular basis to research which stocks to buy, sell or hold. Some resources also feature forex, etfs, commodity research as well. I’ll explain why I like these websites to research my stocks. I left out the subscription based ones like Zacks Investment Research for example, although some websites mentioned in this article have ‘premium’ or ‘elite’ versions for a fee. If you feel a resource needs to be added to the list, by all means feel free to leave a comment. Enjoy.

Friday, January 15, 2016

The oil trade and the Dow Jones, so far...

The first two weeks of the new year have not been very kind to the global markets. Aside from a few FX plays I haven't traded much stock or commodities this year for that matter due to high volatility in the current financial markets. What a mess! The great sell-off which was caused mainly by low oil prices, and investors spooked by crashing markets in China, seemed never-ending. The age old question now once again is: has the bottom been reached? Can we confidentially assume that stocks are indeed on sale right now, and can we finally add some great bargains to our portfolio? Of course no one can be 100% certain that this plays out well, but I am pretty optimistic, regardless of oil. I think we may have come to a turning point regarding the American markets.

The blue arrow indicates there are buyers in this market, the last few times a candle arose like this, a bull market followed - not a long one, but at least there was one. Looking at the charts I see big opportunities lying ahead. I don’t want to delve into specifics when it comes to stocks (still doing research, I’ll post my picks on twitter as soon as I have my list ready), but already the Dow and the oil trade are on my trading list. Both of them are pretty simple trades, with the Dow regaining the losses of the beginning of the week and when it comes to the oil trade; $30 is basically the psychological price point. One of the reasons why it has been hovering around there. If it crashes any further, I think below $29 is a pretty good trigger, we can fairly assume that the downward trend will continue, if above $31 next week it could signal an uptrend. Either way, it will cause a domino effect in the financial markets. As for now I am a seller of oil, mainly due to the oversupply. When it comes to the Dow, I’m looking for a good entry point. I’m keeping a close eye on both CFD trades.

Good Luck trading!

+John van der Munnik

Tuesday, December 1, 2015

What can we expect from the ECB this Thursday?

The European Central Bank is going to hold a meeting about the continuation of European monetary policy this upcoming Thursday, but what can we expect? I'm not only asking this question regarding some personal holdings in European stocks, but also because I have some FX plays in mind. The EUR/USD pair is incredibly low at this point, and like many traders holding this pair, including myself, I wonder how low it can go. A big factor is this upcoming ECB meeting. Andrew Bosomworth of PIMCO wrote in a sneak preview that the economic problem in the EU stems from the fact that the inflation is far too low, and that it has been too low for years. The prediction of the ECB that we will reach an inflation point of 1.7% is simply not feasible, and that they're more leaning towards 1.3%. This specialist believes that significant steps necessary to increase those inflation expectations, otherwise there'll be likely a scenario as we see today in Japan. He emphasizes that it's the reason why extra stimulation packages are needed to boost the economy in Europe. That's because market players are more likely to adjust their inflation expectations when there are big changes in the market.

Wednesday, November 25, 2015

VDM Trading Contest 2016 now open!

The VDM Trading contest on MarketWatch 2016 has begun! How well will you fare in the stock market in 2016? If you haven't participated in a stock trading simulation before than this is a great opportunity to learn more about the financial markets and trading without risking your own money. Joining is completely free and you're able to join at any time between now and November 24th, when the competition closes. The rules this year are as follows (a slight modification this year, all portfolios are private):

Portfolio Options for VDM Trading 2016
Starting balance for participants: $100,000.00
Commission level: $10.00
Credit interest rate: 3.00%
Debt interest rate for leverage: 6.00%
Minimum stock price: $1.00
Maximum stock price: $500,000.00
Trade volume Limitaion: 1.00%
Short Selling Enabled
Margin Selling: Enabled
Limit Orders: Enabled
Stop Loss: Enabled
Partial Shares Enabled

Again, joining is free and easy and can be done by clicking here or clicking the join button below. Hope to see you soon!!


All opinions expressed, trade recommendations/advice on this website are solely of John van der Munnik and are not affiliated with any investment firm or any other organization. You should not make an investment only based using this website VDM Trading for your trading needs without seeking help from your own financial advisor.