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Well, again it is that time of year again. That is the time that most people reflect on their success and failures and try to plan ahead for next year to make it productive and prosperous. It has been a very interesting year to say the least. The markets were all moving in big swings like copper, coffee, lumber and cotton. Some were trending more than anyone thought like currencies, bonds, stocks and stock indexes.
As I look back at the past year and examine my style of trading (intra-day trading the S&P 500 market) I am even more excited and committed to this type of trading. Why? Well here are some points that I will review that I have found to be beneficial to myself and hopefully to others. These are all points that I have brought out during the year, but it is a good time to reflect, review and plan for next year.
Many etraders are searching for a trading method and have been for years. This is the most frustrating modes to be in, because how can you plan for a prosperous year if you still don't know exactly how you are going to trade or approach the markets. You simply cannot have any confidence if you do not have a method or way of identifying trades along with money management guidelines. You're lost in the woods, so to speak. I was there for many years. What did I do? This may help a lot of you.
I threw out 99% of all the crap I learned about oscillators, divergence's, Elliott Wave, cycles, timing, seasonals, Gann, pitchforks, volume, fractals, RSI, stochastics, overbought/oversold (this is a good one - the stock indexes, currencies and cotton for example everyone said were overbought and topping in February and March this year). Look what they did. Needless to say, I don't pay attention to this anymore either, etc., etc. The list goes on to infinity almost. I went back to the basics. I went back to a few simple chart patterns, (a simple moving average and trendline now and then for a visual aid).
I came up with a low risk money management plan and put it together with trading with the trend and wah-lah, presto, an effective and time tested trading plan. The plan is simple and has worked since trading began and will last me a lifetime. What a relief not to have to spend countless hours every night trying to find a new way to trade. I am sick and tired of that after 7-years.
When the day is done my analysis for the next day is automatically done in less than 5-minutes on my own software program I had developed and I'm off to enjoy my evening. No more, honey, I need to analyze the charts till midnight again and all weekend. Now I can concentrate on improving my psychological or mental skills during the trading day.
This will be an ongoing lifelong challenge. Nobody ever stops learning and trying to be a little better. Is my method perfect? No! (None are) am I perfect? Surely not. But it is the simplest and most accurate way of trading that I have come up with, and I've looked at lots (tons) of ways of trading. My method or approach works just as well on daily, or weekly charts. I choose not to trade that way.
I really enjoy and believe in the day trading concept. There are so many advantages. No overnight exposure to huge gaps, not getting sick to your stomach over the weekend if it rains in Iowa and your long soybeans or some government official makes the wrong comment over the weekend on "Meet the Press" and your life flashes before your eyes, because your long currencies and they're going to tank on the opening Monday morning. I've been through it and so have many of you. No thank you anymore. Every day is a new day. You start fresh with a clean slate.
You slept at night. You enjoyed your weekend with your family. If you made a mistake yesterday, you can try to do better today. I realize that some traders cannot trade during the day because of other commitments. That's OK, you will just have to deal with the overnight risk. So trade small size and use stops. Perhaps use the Mid-Am or a smaller equivalent to the market you're trading if available. If you can have some access to intra day charts, you can use this to establish a longer term or intermediate term position with very low risk.
For example, when a daily trader sees a trade setup, they can go to the intra day chart and wait for the same setup intra day. Establish the position with a fraction of the risk, turn the monitor off, walk away, and then monitor it from a daily perspective. You just need to be aware of gaps (there's that nasty word again) of which you have no control. So day trading even has a place for the position trader.
I also believe at becoming an expert at one market and its behavior and then putting all your skills and energy to work in a concern(traded) manner. Get good at that market and trade the heck out of it. Increase your size over time and you'll make more money with less effort. There are lots of professionals that do this. Look at some floor traders or locals that stay in the pit for many years trading one market exclusively.
You say you can't do it. I have two words for you. Tom Baldwin made all his money watching, waiting and learning the intricacies of the bonds until he could trade them in his sleep (which I'm sure he did, I do it all the time, most traders do!) and then traded the hell out of them. Point Made!
One thing that I have learned this year, is that I am trying to cut back on the number of trades I take and be more selective and not trade in congestion as much as I did before. I miss some good trades out of congestion, but I save myself a lot of mental energy, buy myself some more free time during the day, and get better more profitable trades.
My attitude is changing now to one or two good trades, and that is all I need to make my week (a triple or a home run, so to speak). There are plenty of them during any given weeks time. There are also a lot of singles and doubles to add to that and a few strike cuts or losers to absorb. This is part of the learning process and part of getting older. So I pass these observations on to you, in order that you may profit from my experience. Don't try to reinvent the wheel.
Trading is fun. Once you have a method and money management in place, it allows you to concentrate on trading and not on searching and researching. That gets old and frustrating. Make it your goal to find a simple method for next year. One that you can hang your hat on and that will last you a lifetime. Trading is simple. Remember that it's the Execution or implementation of your trading plan that is the bigger challenge.
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Most e-traders make finding the method the big challenge. That is because there is so much junk thrown at traders. They feel like a child in a candy store and have to try every doodad in the place. When they are done, they are sick and never want to see another candy store (trading gizmo) again. They could have had the plain piece of milk chocolate at the front of the store (simple method price patterns) which would have done everything they desired and fulfilled all their needs.
I think CTCN has evolved into a very good sounding board for ideas and interaction. I'm glad to see a lot more discussion on the psychological aspects of trading. I feel that this is where the most improvement for traders will come.
I hope some will be able to end their journey in search of a traders Holy-Grail or technical indicator that will turn their financial life around. Search for simplicity. You will be surprised what has been right under your nose all the time, right there in front of you on the chart or price bars. Pay attention to what they say and they will tell you everything. You need to listen and get to know them. It can be so simple!
Natures Law Secret of the Universe book - $47
This unique learning course is a copy of the very rare and valuable original edition of the book “Nature's Law - The Secret of the Universe,” by R. N. Elliott - published in a very limited edition in 1948 & reprinted by Commodity Traders Club in 1995. Photo-copied & then “scanned” from the original hard to find microfilm. This is what started the “Elliott Wave” popularity for Stock/ Commodities Technical Analysis & Trading Methods
Here are some of the amazing subjects covered so you understand Elliott Wave. You can use it to help you make money trading commodities with lower risk!
Rhythm In Nature, Egyptian Pyramids size - ratios and scaling are based on Natural Laws involving Fibonacci numbers, Sunflower research on how Sunflowers and their seeds conform to exact Fibonacci ratios, How the Washington Monument & US History is ruled by Natural Laws & Fibonacci numbers, Wave knowledge can be applied to stocks-bonds-grains- cotton -coffee & others, Stock market cycles and waves, Corrections, Complex corrections, Triangles, Thrust breakouts, Wave extensions, Correct wave counting, Sideways movements, Irregular tops, Scaling of charts, 13-year triangles, Dow Jones Industrial Avg Analysis and charts, How retracements and patterns maintain 62% ratios, Price of gold, Waves in gold prices, Gold chart and waves for 685 years from the year 1250 thru 1932.
Human activities and patterns also run in waves, more Dow Jones and London Industrials chart analysis, Dow Jones Railroad Index chart and analysis from 1906 thru 1944, Why news events are merely the tardy recognition of natural laws and waves, Natural laws discount the value of sudden major events, Detailed suggestions on maintaining charts, Daily range charts, Hourly charts, Chart paper and chart size, Weekly range charts, Monthly charts, Investment timing, Wave analysis foretells markets future direction, The fact sudden news has little long term effect because it's already reflected in the waves and cycles.
Continuation of subjects covered:
Emotional cycles of individuals, Human emotional cycles avg 33-36 days and resemble market charts, Other human cycles avg 5-weeks, 56-day blood cholesterol cycles, Human cycles basic periods equate to 34 & 55 (day) Fibonacci Numbers, Pythagoras - ratios - mathematics, Minor - intermediate - major activities advance in 5 waves. A drawing of Pythagoras holding a small pyramid and squaring of numbers examples, Trading volume of waves is important, Miscellaneous facts & figures, Bull Market analysis, Parallel lines & base lines on a Dow Jones chart, Reviews, Conclusions.
This work is not a trading system or a trading method. However, a potentially high profit commodity or stock market trading system can be constructed using these theories. In fact, there have been many systems developed based on either Elliott Wave or Fibonacci Numbers, or both combined. The facts presented in this unique work are extremely interesting and in many cases amazing.
This reprint consists of 64-pages - printed on one-side, all scanned into our computer from photocopied pages of R. N. Elliott's original manuscript published in 1946, from a difficult to obtain old microfilm record. The book itself is long out-of-print and seemingly impossible to acquire. The original work was printed in extremely small numbers.
Because we copied from an old and rare microfilm, there are some words that were hard to read but the overall quality and readability is good. We interpolated a couple of those illegible words to avoid any incomplete sentences. Mr. Elliott was not a great writer and also occasionally demonstrated poor grammar, and misspelled some words. Many of those words have been corrected and our grammar checker may have corrected some, but not all of the questionable grammar. We have used spiral-binding so its easy-to-read and lays flat for ease-of-use.
You will get Natures Law Secret of the Universe book for only $47.00 (includes S&H)
This is a very rare and hard to find work that can help you trade successfully.
Fibonacci numbers may be used in conjunction with other techniques to trade successfully. For example, fibonacci numbers can be used to gauge retracements against the trend for trade entry purposes, for placing stop-loss orders or for trade exits at a target price.
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A real good time to finally learn how to trade commodities, futures and stocks for profit is today so don't delay studying to learn the best trading rules to follow and trader techniques, methods and trading systems. Especially avoid unnecessarily high-risk trades with potential large losses by using drawdown minimizer logic, combined with Nature's Law and The Secret.
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Gann Trading Courses
Investing and trading knowledge from the Commodity Traders Club News
New Level of Software Programs that will be your Best Source for Potential Trading Success
CTCN Back-issues about Commodity futures trading
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