Sietook - commodity trading, board of trade

I realised one great idea - commodity has to be your friend. You have to be with some concrete commodity on everyday touch and do know it as long as possible.

I use words of one of the greatest men on the Earth, Leonardo Da Vinci`s:

The great love is growing by knowing the person or the thing. If you don`t know it, you cannot love it. Only if unpretending.

These words are real. Really real. It works in the world of the mankind, when you fell in love. It works with things, commodity not exempted. During the first moments you will be seeing through pink-colored glasses, but after some time it will be OK and you will see every detail, every problem as real thing.

Know your commodity as your friend and be with it every day.

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As I have wrote, my trade method New Trend gives me the great signals to order to buy or to sell. Now I am going to tell you, how exactly works New Trend method

Step 1

We have to find some market what we want to trade. My favourite commodity is corn so I am going to describe New Trend on it.

Step 2

We have to find trading month which is good for us. It depends on the number of trades open during the trading days – volume and open interest . If volume/open interrest is not low, something about 10 000 trades open during the day and higher, trade month is good to trade.

Step 3

Here begins the New Trend. It is based on %R and moving average indicators. Let`s show it.

If moving average (settings depend on the commodity, I usually use 34-day moving average) shows some trend - bearish or bullish - it`s time to prepare for trade.

Step 3.1 - bullish trend

Moving average is going up and we have to find some %R signals to this trend. If chart bars give us some highs and lows to bullish trend, it is time to wait for another %R signal. You can see waiting interval (highs and lows mark by yellow lines) and buy order on the picture below.

Summary: if both of the marked lines (highs and lows) are the sime bullish trend direction like trend line (moving average), it is great time to wait for another %R indicator crossing up 20% (-80%).

Step 3.2 - bearish trend

Similar situation like in bullish trend, but trend line (moving average) is going down and both of the marked lines too. You can see it on the picture below.

Step 4 - training

And it is all about training. Good luck.

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Categories: New trend, Trading
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My trading method, I call it as New Trend, is rather successfull and simple. I like simple things working great. Let`s talk about it little bit.

I start with (paper) trading sometimes in autumn of 2007 and it get me with these words in my mind: “wow, it will be your job”. I don`t know when, I do not plan it, but I have some goals to make:

1. earn money for real commodity trading,
2. learn how to trade.

And now, we are going to talk about point 2 of above list. I have read about some methods how to trade commodities, but, you know, nothing was so good what was I looking for. I have tried something about 500 trades using Track And Trade software on historical data as long as I have found it.

My method, New Trend, risks a little money for a great profit. Some statistics: I have done 35 trades with historical (like it was real) data and I have lost 19 trades and win 16 trades = 45.71% of success. My paper investment has been $4 000 with $200 of aceptable loss (moving stop-loss is only one and great instrument what you can control). And I have earned $26 612.50. It is 565.3125% return of investment.

Risk/Reward Ratio of New Trend was 1:4. Now, I am trying this method real time with actual charts. It gives me some interesting numbers. I have done 4 trades with 50% of success. I have lost $460 and won $3 513. Yes, it is output only from 4 trades, but it is still working great.

More about New Trade technique with tradeable patterns in near future.

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Categories: Board of trade, New trend, Trading
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From 25. march 2008 to 21. April 2008 I have earned $2 970. Every possible tax is already included and it is still paper trading. Here is my method, what I am using.

First of all, I use %R indicator by Larry. R. Williams. Beauty of %R is, that it is so simple to use and that it is based on psychology of bunch of people. I will not describe this indicator, you can read a lot of about it after searching by Google.

The second step is based on watching trends. I watch trend using %R indicator and low and high prices of some long trade time interval - for example two months. And now, if I see some %R rates above 20% or below 80% I put my eye on the chart.

Bullish trend (price is coming up)

If it is the day with “price top” (local maximum) in the chart before day, when %R is crossing down -20%, I find another signal. Another signal is, when it is the day with “price bottom” (local minimum) in the chart before day, when %R is crossing up -80%.

This price turn I call period. Whole point is to find two periods in the chart of “price top”, “price bottom”, “price top”, “price bottom”. If this pattern is close to bull trade (I will figure my patterns later), when prices are coming up, it is time to put order to buy conctract/s.

For bearish trend I use analogue periods, but with order: “price bottom”, “price top”, “price bottom”, “price top”.

December Corn 2008

Simple introduction to my trading method we have passed, then, how I earn $2 970 with trading december 2008 contracts of corn.

How I said, I have found “price top” on 15. January 2008. Then %R crossed down -20% rate on 15. January 2008. “Price bottom” was on 23. January 2008 with %R crossing up -80% rate on 24. January 2008. Another period started on 13. March 2008 with %R crossing down -20% rate on 14. March 2008. Another “price bottom” was on 19./20. March 2008 and on 20. March 2008 %R crossed up -80% rate. And that was signal to put order for buy one contract of december corn of 2008 (C Z8). I put buy order one tick above corn close price of 24. March 2008 - 539,75/bushel. So, I bought one contract on 25. March 2008 at the price 540,00/bushel.

Stop-loss I put so as my loss is only $230 if trade will be going bad. But, trade wasn`t going bad and I have earned $2 970 in one month. Picture below ilustrate this trade.

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Categories: Board of trade, CME Group, Chicago, Corn, Trading
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So, let trading start. At the first, I have to tell you, I`m doing paper trading nowadays. In the future it will be real full time business for me. How long I will be learning this part of mankind (commodity trading), is somewhere out there.

What am I using:

• Futuresource graphs,
• MS Excel.

And that is all. Yes, I read books about trading too, but I don`t want writing about books. I want writing about methods, what I am using for trading and about outgoings.

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Categories: Board of trade, Self-improvement
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