Let your winners run and cut your losses short.

- Chris Morse

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September 14, 2007

COMPLIMENTARY Trade Signals

Trend Simplicity's trading systems allow you to see & monitor the most recent performance of our trend trading software for your evaluation. The trade signals are emailed for every trading day and include access to screenshots of the charting software displaying the most recent trades. Plus if the time is right, you may be able to follow some of their trades. Trend Simplicity is a financial trading software company, providing profitable trading solutions. Sign up today for your access.

A successful trader will at times follow up to 30 markets or more on up to three different time frames. Why follow this many markets and time frames? A given market may only trend 30 percent of the time. This means that most of the time a market is not trending and is choppy. To compensate for the lack of time a market is in a trend a good trader will follow multiple markets which will give the trader much more of a chance of finding where the trends are. Different time frames allow the trader to benefit from the variation of how a trend will setup and follow through each time. Sometimes a trade will go up very fast and fall back even faster (good for short-term). Other times a nice trade will look like climbing a mountain on the way up and back down (good for long-term).

Markets

It is important for a trading system to be able to follow multiple markets since an individual market may present trading opportunities at any given time. If a given market is only trending a third of the time or less it makes good sense to follow multiple markets.

There are many market sectors in the commodities markets. There are even more markets within each market sector. For instance, market sectors may include the Indices, Financials, Currencies, Fuels, Metals, Meats, Grains and Softs.

Within just the Grains sector there are three main markets; Corn, Wheat and Soybeans. Further in the Grains you have Oats and Rice. You even have different variations on certain grains or complexes. Soybeans have Soybeans, Soybean Meal and Soybean Oil. Wheat trades Winter Wheat and Spring Wheat.

If one was to just be following Corn right now and not Wheat at the same time they could have missed out on a great trend that is currently going on in Wheat right now. Take a look at the chart below to see how the Trend Simplicity trading system is tracking Wheat.

If you cannot view the Wheat chart, go here.

Look at the most recent trade signals for Wheat. The blue arrow pointing up is the entry signal. The light blue/cyan arrow pointing down is the systems exit. Clearly Wheat has been trending quite well.

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Now let us look at a Corn chart.

If you cannot view the Corn chart, go here.

Look at the most recent trade signals for Corn. The red arrow pointing down is the short entry signal. The light blue/cyan arrow pointing up is the systems exit. In this case the Corn is very choppy.

As you can see the Wheat trade is trending up while the Corn trade is trending down and choppy. If you were following Wheat you would be a winner. Had you just been following Corn you might be a net loser. Had you been following Wheat and Corn at the same time you would be in a good position to be a net winner. This is why it is very important to follow multiple markets. The more markets you can follow the more diversification you have.

Multiple Sectors

For even more diversification you will want the ability to follow several market sectors. There are eight market sectors in the commodities markets; Grains, Currencies, Financials, Meats, Metals, Fuels, Softs and Indices.

Had you been following just the Grains this year you may be a profitable trader. If you were following the Grains in 2006 you may have lost money. On the other hand if you have been following the Metals this year and last then you should be profitable in the Metals. Had you been following the Metals and Grains simultaneously the past two years you should have been successful. As you apply more market sectors to your portfolio the possibility of catching the trending trades goes up exponentially. This is where a good trading system comes in handy. This is by allowing you the ability to calculate trends across many market sectors.

Time Frames

Look at the picture below and see three popular trading strategies using Trend Simplicity Systems following an identical twenty market portfolio.

If you cannot view the Comparison Chart, go here.

There were times when the short-term time frame performed best and there were times when the medium-term and long-term time frame did best in a given year. Most important is the “All Time Frames Combined” column. By combining and applying three different time frames to a portfolio you have a more consistent equity curve. As a great trader once said “The only free lunch on Wall St. is diversification”.

Trading System

It can be very difficult for a person to follow thirty or more markets every single day. A well diversified trend trader will typically use a trading system such as Trend Simplicity to track the markets for them. A trading system can do numerous calculations on a multitude of markets in the blink of an eye. Best of all a trading system will work for you every day. The system will not get tired or sick. Maybe you want to play golf or spend time with your loved ones. This is where a good diversified trend following system will be your friend. A good trading system will be completely automated in generating its trading signals for you. A good system will work on a multitude of markets, market sectors and time frames. A good system takes the emotion out of trading.

Summary

What is the catch? This type of diversification comes with a pretty steep entry fee for some. It typically takes a minimum financial commitment of at least $30,000 to follow a single time frame on about 20 markets across seven market sectors. To follow a 20 market portfolio across three time frames it can involve a portfolio of a minimum of $100,000 or more.

I wish you the best of luck in diversifying your commodities portfolio.

Disclosure : Commodity Trading has large potential rewards, but also large potential risks. You must be aware of the risks and be willing to accept them in order to invest in the futures markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell commodity interests. Users of the software are solely responsible for the operation of the software and trade postings to this website are either only as examples of how the software works or the results of operation of the software after the market closes provided to licensees of the software only to help validate their operation of the software. Trend Simplicity does not manage any money or provide trade or investment recommendations.

Notice: Returns are hypothetical. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under or over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight, no representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Chris Morse is President of Trend Simplicity, Inc. Chris is the developer of the Trend Simplicity trading system. He has been involved in the development of trading strategies for nearly ten years. Recently Mr. Morse has been focusing on the development of a commodity pool. He is registered with the CFTC as a CTA and CPO and a member of the NFA.

COMPLIMENTARY Trade Signals

Trend Simplicity's trading systems allow you to see & monitor the most recent performance of our trend trading software for your evaluation. The trade signals are emailed for every trading day and include access to screenshots of the charting software displaying the most recent trades. Plus if the time is right, you may be able to follow some of their trades. Trend Simplicity is a financial trading software company, providing profitable trading solutions. Sign up today for your access.