Ray Dalio Quotes

Today we'll look at the some of the most prominent quotes by Ray Dalio. He is the founder and chairman of the biggest hedge fund, Bridgewater Associates, currently managing over 160 billion dollars.

He started out as a stock trader and later developed skills to master markets on the global scale. Ray Dalio is revered as the man who figured all a strategy for all seasons, i.e. one that works at all times thanks to diversification and risk exposure.

Here are some of his best quotes on trading and investing:

1. “If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential”.

2. “Principles are fundamental truths that serve as the foundations for behavior that gets you what you want out of life. They can be applied again and again in similar situations to help you achieve your goals.”

3. “In trading you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.”

4. “To me it all looked like a beautiful machine with logical cause-effect relationships. By understanding these relationships, I could come up with decision rules (or principles) I could model.”

5. “I believe that the key to success lies in knowing how to both strive for a lot and fail well.”

The Patterns of the Charts Part II

Human beings are indisputably all part of nature, so is their consciousness. What they create on the price-time charts is arguably "microcosm” of “macrocosm” in the universe. So their emotions and consciousness is in line with the “natural law” or the “universal order”.

A person by the name of W.D. Gann who was a stock and commodities trader and lived before the year 1955, tried to reveal the hidden structure of the markets both in price and time. Actually to him time was more important than price and he tried to link it all to “The Law of Vibration”. Most of you have probably heard his name and familiar with his methods.

The fact that matters is that there was a lot of secrecy in his work and he always kept things mysterious. Actually, he died with only $50,000 to his name but he had already made nearly $50,000,000 in his trading career. It is said that he deviated from his main analysis, trying to depend on “financial astrology” which was the cause of his failure. However, most of his courses have been modified and you may barely find his original courses out there, and on top of that there is ton of secrecy in his work.

GBP/USD Up on Agreement

The Sterling was trading to the downside yesterday and the day before going from a high of 1.3380 to a low of 1.3223. The downtrend was going smoothly as the pair was reaching new lows when all of a sudden the news broke out that the UK has reached an agreement with Europe regarding the Brexit.

The Telegraph has issued the news not stating any reasioning or details behind the deal but the market was quick to react and bought heavily into the UK currency.

That drove the price of GBP/USD to this morning's high of 1.3429. If the news turn out to be long term positive for the Sterling, then we might see a break above the long term resistance at 1.3450. Otherwise, if this ends up as unimportant, the market will disregard it and the Sterling will again be on its way down.

Chart: GBP/USD H4

The Patterns of the Charts Part I

Looking at markets and charts through a different perspective, other than just two sides buying and selling, we see things differently. Metaphysically, the patterns on the charts of the financial markets are all perfectly ordered by the Natural law of the Universe. You might just doubt it now and think that the moves on the charts are all random and everything, but you will see that these complicated zig zag patterns repeat themselves over and over as the time goes by.

It is the same case in all time frames. Some of you out there may suppose that this is the economic state that moves the charts, creating such complex zig-zag patterns but this is actually the human emotions doing so. When humans feel joy and prosperity we buy, raising the price index but when we start to feel fear and panic then we sell, lowering the price index.

The fact that matters is that this is the structure of human’s behavior graphed out on the charts, just as spider which is not aware of the beautiful web it builds. Therefore what traders construct in time and price charts are absolutely phenomenal and they should be able to study and research the humans behavior and consciousness instead of focusing on the markets and economic state.

Free Trading Archives

Resourcefulness is much more important than mindlessly browsing through the Internet for the right education that makes a trader. That's why it's important to narrow down on your information basis and pick only the the database that can deliver you useful and valuable knowledge.

Such database can be found on ActivTrades' Webinar Archive Section where you can find some of the most important lessons in trading. You'll find there important milestones in the latest market developments such as Brexit and other fundamentals as well as technical trading and lessons from trading greats such as Jesse Livermore.

It's especially vital for your trading success to pick the right source of information. If you want to dig deeper into their archive, feel free to visit HERE.

Gold Sell Off

Gold got sold off in yesterday's trading session due to fundamentally unknown reasons. The only probable reason is that from technical perspective Gold reached and breached the resistance level on the short term horizon at $1,295.

The precious metal went as high as $1,296.85 in the opening hours yesterday and bears took hold of the situation depressing the price to a low of $1,274 in the afternoon hours of the European session and just right before the opening of the US session.

Currently, Gold is trading at $1,280, a few points higher than latest low. Direction, however, remains unclear as price has been fluctuating in the range of $1,290 and $1,270 for the past few weeks.

If we can get a break above $1,290 and sustain price momentum we could expect Gold to close the year above $1,300.

Chart: XAU/USD H4

Silver Drafting a Cypher

A bearish cypher is on the rise for Silver. The precious metal went from 18.20 in early September to a low of 16.55 in early October. By mid-October Silver made a short lived rally that pushed the price to a high of 17.46. Then it went into consolidation and has not yet breached out of it.

The price is now 17.18 and as it appears, it's slowly moving out of the range towards the break of resistance at 17.40.

Silver is currently drawing a cypher pattern that would turn bearish at the end of it if all goes according to the rules. In such case, the metal would have to climb to $18.00 before November is over. If that does not occur, then the pattern would be deemed invalid.

Chart: XAGUSD H4

GBP/AUD Close to Resistance

GBP/AUD has been trading higher this month as price went from 1.69 to just a few point shy of 1.76 this week. As it seems, the pair is now facing mild resistance at 1.7565. If that resistance is taken out we might the pair reach second bullish target at 1.7651. That can be easily taken out for the greater target at 1.78.

At 1.78 bulls will face stronger resistance as bears would have a certain triple top if they manage to turn the trend and push the price down. That would be a good level to place a heavy short position with a tight stop just a few point over the target. Should bears succeed, first target would be to bring the price to 1.76, below the second pivot point on the long term scale.

This week is certainly not data-heavy so we might see a smooth continuation of the uptrend towards the bullish targets.

Chart: GBP/AUD D1

Economic Events of the Week

This week's event are important turning points for the markets. Beginning with a light Monday and Tuesday with relatively no major news - ECB President will hold a speech today afternoon, and on Tuesday data will be released from Australia - RBA Meeting Minutes, Great Britain - Inflation Reports and the USA - Existing Home Sales. All three of them are not sharply anticipated by the crowds and so they are not expected to move markets that much.

For Wednesday we'll have the monthly FOMC Minutes where we expect no surprises, i.e. rates will be left unchanged so that they can raise them in December. 

Thursday and Friday are also on the low key note with a few but no very important events. The last full week of November will most likely be welcomed by the market participants with no excess anxiety and we could expect smooth sailing without spikes in volatility.

Warren Buffett Top Ten Rules For Success

Warren Buffett is the most successful investor of the 20th and 21st century. Named one of the most influential people in the worth he is now worth 78.4 billion. Famous for being a creature of habit, Warren Buffett always does the same route to the office, orders the same breakfast and comes home every day at the same time.

Here are the top ten Warren Buffett rules for success:

1. Find your passion

2. Hire well

3. Don’t care what others think

4. Read, read, read

5. Have a margin of safety

6. Have a competitive advantage

7. Schedule for your personality

8. Always be competing

9. Model success

10. Give unconditional love

Warren Buffett is now a lot more reserved than what he was in his prime. But he still lives every day with high energy doing what he love and he sure can be a role model for a lot of people.

Gold Consolidates

The consolidation in the metal market continues for a third consecutive week after October pushed Silver and Gold into bearish territory. During October Gold was trading at a high $1,307 and then went to $1,266 before the month ended.

That level was closest to the 200SMA and some support occurred there that moved the price to yesterday's high of $1,288. The move turned out to be somewhat a reflex and the price went down again below $1,280.

This month uncertainty in the metal market is the predominant sentiment and this is seen also in the Silver market where price is range bound between $17.20 and $16.90.

Gold is yet to define a direction and times as these might be used to pile up positions as the market is getting ready to move.

Chart: XAU/USD H4

USD/JPY Moves Lower

USD/JPY has been trading to the downside this week with a new lower leg since this morning. The pair reached a high of 114.75 on November 6 and since then it's been going South. The lowest low was reached this morning at 112.65 and the pair seems to have not found any support.

Next level to the downside is seen at 111.66 which would create a double bottom and, if successful, the pair should jump start a new upward move to continue the medium term upside trend.

The Fed announced they are ready to move in December with one rate hike and they did announce it beforehand so that it wouldn't be a surprise to the market environment. This move is already registered by the market participants so no major fluctuations are expected to occur during the news release.

Chart: USD/JPY H4

EUR/AUD Closer To Resistance

EUR/AUD continued on its way up in today's Asian and European trading session. The pair moved from 1.5280 in the opening hours to a high of 1.5380. Partially, the rise is due to the speech by Mario Draghi, the ECB President as well as the German ZEW Economic Sentiment (Nov) that actually turned lower than expected at 18.7 vs 20.0.

The pair is currently trading a bit lower at 1.5355 as market participants are anticipating the speech. The Euro moved up against all its competitors this week making a break above the 1.17 level against the US dollar.

We are yet to feel the effect of the panel of central bankers on the markets so have in mind that volatility might ramp up prices.

Chart: EUR/AUD H4

EUR/AUD At Resistance

On the daily EUR/AUD chart it is visible that the price is in a stable uptrend. However, we are able to see that the pairis currently stuck inside a box range below the 1.52235 resistance. Price has been moving sideways for a period of time being trapped below the 1.52235 resistance, along with showing rejections from the ascending trendline and the bullish EMA's.

Price has recently been holding above the 20EMA. Previously we saw price show a fake break of the 1.52235 resistance, where price then fell back below. As price now sits back at the resistance of 1.52235 again we are watching for a potential break. A break of the resistance would lead to potential long positions up to the 1.54700 area.

Tomorrow ECB President Mario Draghi would deliver a speech that could give the pair a direction and either confirm the above scenario or break the support and move downward.

Chart: EUR/AUD D1

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Use the opportunity to elevate your strategy advance your trading to higher level with the use of SmartOrder 2. For more info just click HERE.

USD/JPY Consolidates

Consolidation is viewed as the decision period in any market. Although short term, the consolidation in the USD/JPY indicates that the pair is looking both ways and has not yet decided where to go from here.

The resistance level met at 114.60 was met with favor from the bear camp who sold the pair to a low of 113.63. The pair is now trading at 113.79, just slightly higher than the lowest low. If the indecision persists, we could see the pair gravitate between 114.00 and 113.70.

This week is light on news which could suggest that the consolidation will continue. No major news is sometimes good news given that the healthy behavior of a market is enough to keep the direction going.

On the downside, first support zone is seen at 111.66, on the upside, first resistance zone is the latest high at 114.60.

Chart: USD/JPY H4

NZD/USD Signs of Recovery

NZD/USD suffered a lot of depreciation last month when New Zealand went through a political change that posed insecurities in its financial markets. That's when the pair lost about 400 points against the US dollar.

The support was precisely met at 0.6817. Bulls were quick to react and supported the pair with heavy buying that drove the price to a high of 0.6956. Currently the pair is trading at 0.6913, slightly lower than the highest point reached earlier this week.

If the uptrend continues we might see the pair break the first resistance level at 0.6980. After that, next bull target is seen at 0.72 which would mark a double top. And major target is expected at 0.7500. It is dubious if we would get there before the year end as we are anticipating a rate hike in December and that would, in theory, mean a stronger dollar.

Chart: NZD/USD H4

Economic Data of the Week

Today's week is filled with somewhat light data mainly from the US and Europe. The data is heavily concentrated on Tuesday when we have Australia's Interest rate decision - expectations are to maintain current rate at 1.50%.

The ECB President Mario Draghi will be holding a speech in the morning European hours. After that scheduled for US afternoon we would hear Fed Chair Yellen speaking about the economic outlook.

With the strengthening of the US dollar and the depreciation of the Euro, the fundamentals might come only to reaffirm current positioning in the market.

Other than Tuesday, the rest of the week will have no major influential events so it would most likely be a calm trading environment.

EUR/USD Close to Double Bottom

EUR/USD went down on Friday despite the negative result from the latest Jobs report. The report indicated that new jobs created amounted to 261k, a miss from the expected 310k. Some analysts even predicted 400+ taking into account the latest developments from the hurricane that hit California.

The initial reaction in the US dollar was a sell of as the pair went as high as 1.1690 and stayed there a few minutes after the news only to fall down below prior-to-news level of 1.1655.

The reign of the Euro seems to have went through a tipping point as for the past few weeks the trend has been turning bearish. Current price is now 1.1596, down from 1.1620.

Strong short term support is seen at the previous bottom at 1.1574. If price finds enough buyers at that level we would have a double bottom and a bullish target at 1.17.

Chart: EUR/USD H4

Silver Goes Down

Silver is trading at high volumes and high volatility, currently gravitating towards 16.80. The precious metal lost its highs after the US dollar reacted bullishly to weak US data. The report was a surprise for market participants who expected even higher than the predicted 310K.

Nevertheless, the precious metal sold out and traders and investors jumped on the US dollar to prolong its appreciation.

Silver is expected to hit support at 16.71 as first bear target. If that level does not hold we might see it go for the lower level at 16.42. This level should present more of a challenge than the prior level as it comes at a stronger time period.

November starts with big swings that will likely give direction for future moves.

EUR/USD Down

The US Jobs report that was released earlier today turned out to be lower than expected - 261K, expected 310K. Some experts even predicted 401K but even that negative result could not keep the US bulls at bay.

Despite the result, the US dollar continued on its way to dominance over major currencies marking a new low against the Euro - the pair is now trading at 1.1605. Prior to the news it was standing at 1.1655, went as high as 1.1690 and then went South to current low.

The long term bullish trend on the EUR/USD seems to be exhausted and now the effect can be felt. If the pair continues to post losses, it will break the support level at 1.1540 and then it might go lower to 1.14.

If we see the pair depreciate, it will cancel out the possibility of the pair to be one of the best performing pairs for the year.

GBP/USD Down, BoE Raises Rate To 0.50%

The Sterling is down triple digits against all of its competitors after the Bank of England decided to hike rates from 0.25% to 0.50%. Since the initial sell off reaction, the Pound has not been able to recover as waves of selling continue to drive the price lower and lower.

GBP/USD is down 1.40%, GBP/JPY is down 1.47% and the biggest losers are GBP/AUD with 1.87% and GBP/NZD with 1.80%. The sell off is far from over as policymakers expect further tightening of monetary policy and that would have a continuous effect on diminishing the value of the currency.

The move may have been a surprise to some as usually raising interest rates means you get more for the money you hold and thus is preferable to hold more. But today's scenario brings back memories from 1992 when George Soros and Stan Druckenmiller sold off what would become the biggest trade in their life. That same trade resulted after  the British government announced a rise in the base interest rate from an already high 10 to 12 percent to tempt speculators to buy pounds.

Chart: GBP/USD H4