|
Trader's Tip
|
Check every order before you send it, it may save you thousands some day.
- Michael Levin |
|
Fast Break Sponsor
Quotes & Charts
Quote Search:
Market Specific Links:
Indices/Minis
Grains
Currencies/Forex
Financials
Food/Fiber/Softs
Metals
Energy
Meats
|
Special Message from Our Author
|
Trade the Platinum Commodity Spread Program COMPLIMENTARY for 60 days
PLUS, for a limited-time only, receive 30-days complimentary access to the Platinum Weekly email market performance update! This system works! Long only commodity funds that buy and hold huge quantities of futures contracts in many commodities have become a very powerful force in the market. These funds act in a very predictable way and the Platinum Commodity Spread Program has found an ingenious way to profit from the price movements of the spreads caused by these long-only funds. The Commodity Spread Program is now offered on a limited basis by Platinum Trading Solutions.
Go here to learn more. |
|
Today's Featured Article
|
Ok, the equity markets got rocked this week, bonds have been skittish, Oil is up one day down the next, Gold tumbles when you think it would rally, the dollar is on it’s lows and looking lower, Corn is at the lows, Wheat at the highs…
What the heck does one do to make money with all of this volatility?!
Maybe NOTHING.
How crazy is that? With all of these prices moving back and forth, there’s got to be something worth playing… Right?
Depends, are we in this “Game” to play and have fun and excitement? Or are we in this game to make MONEY and NOT LOSE MONEY?
I have many clients that are clamoring for advice on what to do next. Should they get out of their energy positions? Is a hurricane EVER going to land in the Gulf again? What the heck is happening with Corn? Why so low and Wheat so high? When is Silver ever going to run?
Here are my answers on everything all at once:
How do you “know” with some sort of certainty, which commodity is going to move in which direction and by how much? Where is your “edge” in the market.
Are you a good “gut level” trader that has a feel for things when they are ready to reverse, run or collapse? Do you have technical savvy enough to discern where real resistance/support is and trade off of that? Are you a leverage trader, looking for the biggest bang for your buck? What about trading spreads? Spreads on the same commodity and even spreads between the same complex?
I will be raising more questions than I give answers today, but I want to make sure that we as traders, have a real game plan that we stick to in these volatile times where with one wrong move, we can decimate our accounts and knock us out of the game. |
|
|
A Word from a Fast Break Sponsor
Advertise With Us
|
Daily Market Commentary
Sign up for the 30 day complimentary access to Illinois Grain's 'Daily Market Commentary' report. This newsletter contains all you need to know to follow the grains industry. You will get daily recaps, fundamental forecasts, investment strategies and much MORE! Illinois Grain is a division of Cytrade Financial, L.L.C. Founded in 2000 and based in the Financial District of Chicago, Cytrade Financial, L.L.C. is a highly specialized brokerage firm providing a broad array of derivatives products and services.
Sign up today for access. |
|
|
|
Depending on the size of your account and how much risk you want to assume, let’s take a look at a few trades here and see what you can do:
Oil
I wrote an article recently on the “supposed” collapse of Oil prices. It was an article, not a trade so the only thing I stand to lose is a bit of my reputation.
What if you are to bet on Oil to be lower, what would you do?
Would you outright short the futures contract? Which month? Where is your stop point? Will you hedge with options or hedge by going long another month?
What about shorting the ETF’s or even buying puts on Oil? Again, which month, how much time? Will you enter your position all at once or will you scale in?
It all depends on these items:
- Conviction in your position
- Reasoning for your Conviction
- Dollar amount you will commit
- Dollar mount you will risk
- Timeframe
- Type of positions and risk/leverage involved.
Getting back to the fear/greed title of this article, here is where it comes in:
All six of the items listed above contribute to the amount of fear and greed that you will experience when you finally enter the trade. Throw out everything you are thinking, once your money is on the line.
If the trade starts going your way from the outset, your greed will grow and your conviction about the trade will grow and your risk management WILL SHRINK. It’s natural, we’re wired that way. This is what gets many a trader into trouble, the conviction they are right, not their P&L.
I like to take a little off the table when the trade goes my way and a little off the table when it goes against me, so I am not beholding to my convictions, I am one with my risk management rules.
I ultimately know that I have “X” to risk in any one position and I NEVER marry a position, let alone get engaged to one, unless it is a long term position in a fund or an equity that I am building for the long term.
A trade is just that though, a 1 time foray into the market for a specific reason: To take advantage of an edge to make money and to take a profit.
So, in the Oil case, pick your position, have your reasons and if you are moved to take a side, then do it and manage it, but don’t do it for fun, or to be right, do it for profit. |
|
|
A Word from a Fast Break Sponsor
Advertise With Us
Complimentary Trial Membership
Gann Global Financial is offering an exclusive trial membership. Your complimentary membership includes video screencasts forecasting, commodity forecasts, stock market forecasts, 44-page eCourse for traders, video archive access and much more! Gann Global’s innovative market analysis can help you take an extraordinary step toward living out your financial dreams. Sign up today!
|
|
|
|
Other ways to look at some trades are the spread positions…
An example here might be to look at how Corn has tumbled as Wheat has risen. Do we go long Corn and short Wheat? If you look at the 2 charts, they couldn’t be more opposite:
Sep Corn:
If you cannot view the Sep Corn Chart, go here.
Now Wheat:
If you cannot view the Wheat Chart, go here.
Why is wheat up here? Must be a reason. Has the rally been healthy or is it a thin rally without enough conviction by the longs. Will they be skittish and sell into a decline? What about Corn, are traders fed up with Corn and how disappointing it has been? Will they sell into rallies to recoup losses?
Every trade must be looked at from a wide variety of angles, UNLESS you have such a great feel for a market that by your own P&L over the years, you can go on a gut instinct and be right a majority of the time.
I don’t have a lot of space here this week to go over all of the things I wanted to, but I want to make sure that as volatility and excitement and fear and greed abound, that you are more level headed than the crowd and aren’t caught up in the hype of the trade, more so the potential profitability of a smart move at the right time.
All the best in your trading. |
|
About the Author
|
Michael Levin is a Consultant to Platinum Trading Solutions. He has been in the Financial markets since 1981, having been a broker and trader on the PHLX Equity Options floor in the 1980's and ran trading firms in New York in the 1990's to 2002. Mike briefly set a record in the options trading division of the US trading Championships years ago. |
|
Special Message from Our Author
|
Trade the Platinum Commodity Spread Program COMPLIMENTARY for 60 days
PLUS, for a limited-time only, receive 30-days complimentary access to the Platinum Weekly email market performance update! This system works! Long only commodity funds that buy and hold huge quantities of futures contracts in many commodities have become a very powerful force in the market. These funds act in a very predictable way and the Platinum Commodity Spread Program has found an ingenious way to profit from the price movements of the spreads caused by these long-only funds. The Commodity Spread Program is now offered on a limited basis by Platinum Trading Solutions.
Go here to learn more. |
|
|
