Overview of My Trades this week

[SSI]

first off Falls,,,,,,, Bob K is correct, you need $1190 to put a sugar trade on and then a margin (free money) in your account of $850 to hold the trade on......... and your account is figured at the close of each day, so if you make money in the trade, that counts as part of maintenace margin as well.......

and lets talk about the length of time in the trade............ here you go, first we are not day traders......... we could be in and out of the market as much as we like but that is not the best thing to do..........

i entered short at 11.04, and have now moved stoploss to 11.19....... this is just over the 11.18 high that you see in the numbers listed...... now why do i choose this and not lower it, to ensure a profit.......... the answer is, wiggle room and you need to keep the stoploss behind some resistance points........

what does it matter, if we are in the trade a week and make say $200 per contract, that is still good money........... you cant get into trying to time these moves..... the important thing is,,,,,,,,,, do your homework the previous night (ala Jim Cramer)........ then be in the market......... understand this, if sugar drops 30pts tuesday, im in,,,,,, i dont have to time another entry.........

ive traded both ways and trust me, in sugar, you need to posistion trade or option trade........

namanthfan....... i look at longer term charts to determine the underlying or overall trend............ surely you can look at a SP chart and see that we are in an uptrend........ samd for grains...... just pull up a daily chart and you will notice the upward trending motion..........

OK, in an uptrending market, we want to buy the DIPS.......... simple enough..... we dont want to posistion trade from the other side......

in a downtrending market, we want to sell the rallys to posistion trade..

everyone ok with that.........

Bobk is correct,,,,,,,,, be very careful being in the market when reports come out,,,,,, we will talk more about that, as we progress in our studies.

 

[SSI]

Falls, the best info, i can give you about gaps is............. i dont know much about the length of the gaps but what i do know is.....

1. most gaps are filled within a few days, if not --- the market is going to seriously move in the direction of the gap..

2. often times in a fast trending market, there is 3 days worth of gaps, the 3rd day is often times called an exhaustion gap....

the corn market is setup for this type of move next week....

 

[SSI]

April Hogs:

1/9: open 63.65, high 64.00, low 62.85, last 63.05

1/10: open 62.90, high 64.20, low 62.52, last 64.05

1/11: open 63.95, high 64.35, low 63.38, last 64.10

1/12: open 63.80, high 64.52, low 63.57, last 64.35

Just wanted to get these numbers up, for anyone following along.....

notice the date 1/10: we made a lower low and higher high than the previous day, we also closed over the high made on 1/9.............. this is called a reversal day and shows near term direction, alot of the time..

it worked that way this time......... entered a long posistion on 1/11 from 63.80, placed initial stoploss at 62.50, then raised it to 63.35 when the high of 1/10 came out......... the stoploss should now be raised to 63.55, as the high on 1/11 was taken out.....

trade would now look like this.......... long 1 apr hog 63.80, stoploss at 63.55, max loss on trade is 25pts or $100......

ive got to study the hog market quite a bit more before becoming involved in a real trade...... its one of my favorite markets to trade....... some good option and spread trades can occur in this rather volatile market.....





Also ive added several other markets to complete my list........ ill be actively charting and following:

Emini
Hogs
Cattle
Corn
Wheat
Beans
Bean Meal
Bean Oil
Sugar
Cocoa

these 10 are pretty much, what i used to trade............ this should keep me occupied and present alot of opportunites........... im also charting a couple of back months in some of these...........

 

[Kruser6]

SSI - I am extremely intrigued by all of this. I was thinking of ordering a book off the internet that maybe I could learn from. However, I feel like I did on the first day of sports betting. Not knowing words such as juice, understanding line moves and all of the terminology that is just 2nd nature to me now.


Things with this is just learning what exactly the commodity market is, who you are trading with, and how you make your trades are just a few things off the top of my head.

I understand the basic idea that you are trading commodities, but that is pretty much where my understanding ends. It would be impossible for you to pretty much do a commodities for dummies class in here, so if you could point me in the right direction of where I start learning from I would appreciate it.


Have you read this book?

Charting Commodity Market Price Behavior
by L. Dee Belveal

 

[SSI]

Kruser, i was introduced to this in the early to mid 90's,,,,,,, think it was by the Ken Roberts Course........... sort of a scammy infomercial........ you may have seen some of his adds, in newspapers or magazines,,,,,, he wears the big cowboy hat...........

it was my introduction and he actually has some basic beginning concepts..

also go to the "chicago board of trade" website and the chicago mercantile exchange site........

Commodity Traders Forum, may have some good stuff for beginners.... if not, go there and ask...... they have a forum and you probably can find some good basic intro.......

your right, you need to know the basics,,,,,,,,,,,,,, such as the commodities themselves, where they trade, how much each tick is worth, what month they trade in............... the difference between futures trading and option trading..........

i trade with a broker, a real broker.......... been with him for many years.. i could recommend him, they are great with beginners.........


no, i havent read the book you mentioned............ there is a lot of good info, out there........

 

[desrat]

Another question about your stoploss moves. Do you only change the number if day D's high (current day) breaks day C's high, or do you also go back to days B & A. Basically do you only check to see if it broke the previous day's number or do you go back a few days? A week? etc. (or lows in a short position)

I love stoplosses. I use them religiously in my equity trades to limit my losses and protect my gains as your are doing here. With my broker I can enter a trailing stoploss that moves with the price, basically 7-10% of the price depending on the volitilty of the stock. I also let the market take me out of my positions as you are doing here. I never thought that my trading style may be one that worked in the commodity markets but you have certainly opened my eyes...

Besides the stoploss questions, what I am looking to delve into is what you look for in the chart to decide when to open you position and what do you use on your charts (bollinger bands already mentioned, stochastics? moving averages? etc.). Any elaboration in those areas would be great.

 

[SSI]

a lot of time, ill mechanically trade it..... when this days low comes out, ill lower stop --- just over the previous days high....... but not always, you need to pay a little attention to where the supp and res areas are...... thats one reason, i keep posting the highs and lows each day..

you can by no means just trail it 5-10% behind................ that would be just putting it in thin air........ you got to locate it strategically..........

ive got to go out for a while........ ill talk a little about the entry later....... as well as the exits and when you should take profits........

i also want to get into the daily ranges in the commodities, most trade pretty strictly in this..........

 

[SSI]

desrat, you asked me about entry........ ill try and answer you with an example and this trade will probably occur next week, maybe tuesday..

Simply look at a daily chart for april hogs...........

you will see the overall down trend of the market....... you may also notice the bounce of the last couple of days..... ive noted this bounce in the numbers that ive been posting.............

looking at the chart, i see there is going to be alot of resistance at the 65.00 mark............ we hit a high friday of 64.52 and a low of 63.80.......

now with this knowledge, what do i want to do.........

Number one, i know the trend is still lower............ number two, ill wait to see yesterdays (fridays) low to be taken out, when this occurs, it will signal to me that the bounce may be over.......... this low is 63.80.... once this low comes out, ill begin to look for the exact entry....... now i wont sell hogs at the market so i must look for a good entry........ once this low comes out, ill look for the high of the day, if its lower than fridays high, then ill simply use fridays high of 64.52 to place my stoploss at 64.55...

if this market opens higher and never breaks the 63.80 low...... i will do nothing........ the 63.80 low is my trigger for this trade........

once this low comes out, ill sell the next rally that occurs.......... then ill put my stoploss at 64.55 or over tuesdays high, if that number is higher..

hope you understand this.......

this trade is setting up as a classic trade......... and we should get a low risk entry into it....... and if it simply goes higher tuesday, we will never enter............

here is what id like to see happen..........

currently at 64.35.......

open higher and go to say 64.80............. then start to drop and go all the way back down and break 63.80,,,,,,,, say go to 63.70......... then measure from 64.80 to 63.70....... its 110pts........ the next bounce should then go back 55pts or 64.25......... so our ideal entry short would then be
64.20............ and we would place our stoploss at 64.82..........

hope you understood some of that.........

 

[desrat]

All of it... I hope.

Your point of entry and stoploss decision are all based on what the market does to previous high and lows.

As for determining trends and future movement, hence short or long, what is the basis for your chart reading? Does the "classic" technical analysis models for equities also relate to commodities? Basically would I look for the same things on commodity charts as I do the equities?

 

[SSI]

its as simple as identifying the overall trend, then simply buying the dips in the bull markets and selling the rallys in the bear markets......

thats the simple version......

then you must locate supp and res areas,,,,, this is probably where it differs greatly from stocks......

My 2 basic tools, are the charts and the prices....... the chart is to determine the overall trend and to identify the big areas of supp and resistance........... the prices can put you almost exactly on the number...

The fib retracement %%% are very useful as well.......

Im a big believer in having the days plan, ahead of time and not changing..

so go back to the hogs,,,,,,,,,, i would know my plan if the price goes higher, if it goes lower or if it doesnt move much at all....... then i must trust my work........ all the while limiting risk.......

same for sugar, i know exactly what im looking at and i know my next move ahead of time...... thats called preperation........

preperation and discipline will lead you to the winners circle in this business..

if i do any "day trading', it will be in a setup trade for the emini... and probably will take all day to develop or may not develop at all.......

You sound like you have the jist of it......... id suggest reading your daily charts for the individual commodity, then list the prices, just as i have done...... what this does is, it puts you in touch with your market...... it will become 2nd nature on how it moves..... you will recall the price action and can anticipate the next move..


My last lesson for you would be on profit taking,,,,,, and thats actually going to be my last area of study............. all ive got to do now, is continue to chart for a couple more weeks and work on my exits......