Posts Tagged: futures contract

 

This chapter gives several examples of different peoples method of placing their trades, and uncovers the difficulties that many people have in following a trading method. Much of the difficulties lie in the behavior pattern of avoiding punishment. A speculator may make mistake and know that he is making them, but not why. He simple calls himself names and lets it go at that. 

Mistakes are always around if you want to make a fool of yourself. Mistakes are part of the human condition, and should not cause lost sleep. But being wrong – not taking the loss – that is what does the damage to the pocketbook and to the soul.  

Trading Commodities rather than stocks partakes more of the nature of a commercial venture than trading in stocks does. Commodities are governed by one law in the long run, supply and demand.  Fundamental information is more concrete than in Stocks, where the investor must guess about many influences.  

Technical analysis, or tape reading, works exactly the same for stocks as for cotton or wheat or corn or oats. Still, the average trader from Missouri everywhere will risk half his fortune in the stock market with less reflection than he devotes to the selection of a car. Today the popular analogy is that most people spend more time planning their vacation than they spend planning for their retirement.   >> Read More

 

CME Group Inc., the world’s largest futures market, halted all of its Globex electronic trading markets, including gold and silver, for four hours due to a “technical glitch” yesterday. This is the second time this has happened this year.

CME halted trading on its electronic platform and said it was due to “planned software reconfigurations.” CME, which owns the Chicago Board of Trade, New York Mercantile Exchange and other markets, made the reconfigurations over the weekend as part of ongoing upgrades to technology, a spokeswoman said in a statement.

Market participants were left scratching their heads as to why the “planned software reconfigurations” did not take place prior to the commencement of trading.

All other Globex electronic trading markets, including U.S. Treasury’s, oil, gold and U.S. stock indexes were affected with many markets having order routing problems.

A note on the CME Group website said “CME Globex markets will Pre-open at 20:30 Central Time and Open at 21:00 Central Time. All day and session orders, including GTDs with today’s trade date will be cancelled. All GTCs that have been acknowledged will remain working.”

Earlier, trading was suspended indefinitely. Any day orders that brokerages attempted to file and any orders that were filled, dated today were canceled. >> Read More

 

The electronic trading of futures through CME Group’s (NASDAQ: CME) Globex platform was halted Sunday evening, the company said on its website.

The Chicago-based futures exchange has not released any information about the delay, only saying on its website that the open has been delayed and that all futures products, with the exception of Bursa Malaysia Derivatives, were halted at 6:45 p.m. EDT.

CME’s Globex platform provides access to futures and options on interest rates, stock indexes, foreign exchange and commodities. Although gold futures haven’t started trading, the cash or spot market, which trades globally, is still active. As of 7:53 p.m. EDT Kitco.com live chartreported spot gold at $1,277.00 an ounce.

At 7:30 p.m. EDT, the company posted another update on their site saying that all trades made at the open will be “busted.” >> Read More

5 Trading Frustrations and Solutions

24 August 2014 - 10:28 am
 

Top Trader Frustrations

  1. I cannot trade my plan!
    • You need to develop the skill to execute your trading plan under duress.
    • Use visualization exercise to see yourself successfully executing your trading plan during the day. The greater level of detail a trader uses in their visualization exercise the greater its effectiveness.
  2. I cut my winning trades too early!
    • Have profit targets
    • Take partial profits
    • Measure each day the missed profits that you could have obtained if you didn’t miss a setup, or if you didn’t cut your winning trades too early.
  3. I am not consistent with my trading
    • Establish a playbook with setups that work for you, and setups that don’t work for you.
    • Define the risk that you should take in setups based on whether they are A+, B, C setups (based on risk/reward and % win rate).
    • Track the amount of risk that you are taking on similar trades, so that the results can be properly analyzed. Risk 30% of your intraday stop loss on a A+ setup, 20% on a B setup, 10% on a C setup, 5% on a Feeler trade.
    • Do a trade review
      • Did I trade the best stocks today?
      • Did I recognize the market structure?
      • Did I push myself outside the comfort zone?
      • Things I did well
      • Things I could improve
  4. I cannot find a profitable trading system
    • Trading is a probability game, setups don’t work all the time, so don’t keep trying and throwing away trading setups without thoroughly testing them.
    • Get exposed to lots of different setups and trade the setups that make the most sense to you and works best for you.
  5. I lack the confidence to take trades
    • Have a detailed trading plan, place orders in advance in possible.
    • Put on feeler trades with 5-10% of the risk that you normally put on. Once you start to become more comfortable you can then put on your regular trades again.

Crude Palm Oil Hits 2009 low

22 August 2014 - 14:23 pm
 

Palm oil is on a slippery slope.

The price of Malaysian palm oil has fallen to its lowest since October 2009, with contracts for delivery in November falling as much as 0.5 per cent to 2,029 ringgit per tonne, following a lengthy decline.

Palm oil, which is mostly produced in Malaysia and Indonesia and finds its way into products from instant noodles to toothpaste, generally tracks soy and corn oils, which are used to make similar products.

And the soy price has been falling due to forecasts of a bumper crop from US producers.

Chicago-traded soybean oil futures hit a five year low on August 19, when the contract was priced at 32.66 US cents per pound.

On a long term basis, the palm oil price has been depressed by slowing economic growth in China and India, which are major consumers of the commodity.

Managing Emotions

17 August 2014 - 11:15 am
 

The hardest thing about trading is not the math, the method, or picking the right stock, currency, commodity, or futures contract.  The most difficult thing about trading is dealing with the emotions that arise with trading itself. From the stress of actually entering a trade, to the fear of losing the paper profits that you are holding in a winning trade, and most importantly dealing with the emotional lows of a string of losses or the highs of many consecutive wins the bottom line is how you deal with those emotions will determine your long term success in trading more than any other one thing.

To manage your emotions first of all you must trade a robust trading methodology that is profitable and you have to know that it will be a winner in the long term if you stay disciplined. You also must trade your method with proper position sizing and risk management to keep the volume down on your emotions and ego. If you have that the next step is the management of your emotions.

You must understand that every trade is not going to be a winner and not blame yourself for equity drawdowns if you are trading with discipline.

Do not bet your entire account on any one trade, in fact risking only 1% of your total capital on any one trade is the best thing you can do for your stress levels and to bring your risk of ruin to virtually zero. >> Read More

 

On one hand, despite initial weakness following Europe’s triple-dip red alert, futures declined only to surge higher after some headline or another out of Russia was again spun to suggest imminent Ukraine de-escalation (something which Russia whose only interest is to keep crude prices high, has absolutely zero interest in), perpetuating a rumor which was set off by a Russian media outlet tweet last week that has sent S&P futures over 50 higher in less than a week on… nothing.

On the other, Putin just said the following, which no matter how one spins it, shows precisely how Russia is inclined vis-a-vis future (un-de-counter) escalations.

PUTIN SAYS RUSSIA SHOULD AIM TO SELL OIL AND GAS FOR ROUBLES GLOBALLY, AS DOLLAR MONOPOLY IN ENERGY TRADE IS DAMAGING ECONOMY

Reuters adds:

President Vladimir Putin said on Thursday Russia should aim to sell its oil and gas for roubles globally because the dollar monopoly in energy trade was damaging Russia’s economy.

 

“We should act carefully. At the moment we are trying to agree with some countries to trade in national currencies,” Putin said during a visit to the Crimea region, which Moscow annexed from Ukraine earlier this year.

Countries such as China, India, Iran, Brazil, and virtually every other non-insolvent, that is to say “developed, Western” country.

And now, bring on the Russian “isolation” (which is about to push Europe, not Russia, into a triple-dip recession) and further de-escalation.

The Four Elements Of Successful Trading

07 August 2014 - 16:02 pm
 

Trading is a very complex undertaking and if you miss one element you will likely eventually fail  in this endeavor.

Here are the four different elements we must have working for us for success in trading:

The Knowledge

If we don’t do the homework to know what we need to know we will fail due to ignorance. Understanding historical price action, reading books by and about the best traders, seminars, mentor-ships, and  systems testing is all part of the homework we must do to get the needed knowledge.

The Resources

While trading with a small account is a good place to start it is not a good place to stay. Traders must be adequately capitalized for meaningful trading. We must have an affordable broker that does not charge bloated commissions and gives great execution on orders. A trader must have a platform and charting service that is adequate for his trading style. Trading a small account with an expensive broker with poor execution is a path to eventual failure. >> Read More

 

It is very interesting to note that the forefathers of technical analysis, unlike many snake oil salesmen of today, while espousing the benefits of technical analysis, went to great lengths to warn future chartists of the many dangers inherent in charting, such as the desire to be right.  Schabacker, in his classic Stock Market Profits, published nearly 80 years ago, writes in an eloquent prose few today can match

No trader can ever expect to be correct in every one of his market transactions.  No individual, however well he may be grounded, no matter how much experience he has had in practical market operation, can expect to be infallible.

There will always be mistakes, some unwise judgments, some erroneous moves, some losses. The extent to which such losses materialize, to which they are allowed to become serious, will almost invariably determine whether the individual is to be successful in his long range investing activities or whether such accumulated losses are finally to wreck him on the shoals of mental despair and financial tragedy.

 

 

>> Read More

 

The 16-month-old United Commodity Exchange (UCX) faces an uncertain future with all its employees quitting and its promoter “siphoning off” the corpus.

Sources said about 75 employees have quit on instructions from the senior management and are serving their notice period, which ends on August 31.

“We found during our audit of the exchange in June that the corpus has been siphoned off and asked the exchange to conduct a forensic audit. We found many other irregularities too,” said Ramesh Abhishek, Chairman of the Forward Markets Commission, which supervises the functioning of commodity exchanges in the country.

The exchange, launched in April 2013, suspended trading on July 19. If it shuts down, it will be the second commodity bourse to do so this year after India Commodity Exchange Ltd closed in January.

Currently, NCDEX, MCX, NMCE and ACE derivatives are the commodity exchanges that are active in the country. Sources alleged that Ketan Sheth, the promoter, had siphoned off all the funds, totalling over ₹50 crore.

Calls made to Sheth were unanswered. >> Read More

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Technically Yours,
Team ASR,
Baroda, India.