My can’t miss presentation will cover how to Hedge Your Portfolio effectively during these volatile times.
I'll show you how $25,000 can be traded like $200,000, accelerating the growth of your IRA while simultaneously protecting your capital through the power of hedging.
Tomorrow, you could begin doubling your account every single month starting with one letter.
The letter will come from a 20-year trading professional named Ian Cooper. He says, “In 2017, following my trades you would be doubling even tripling your account some months. Let me show you how.”
He will show you exactly what to do... and he’ll give you the blueprint for just $1.
Commodity Futures Trading: Five Basic Rules
by George Angell
These rules are fundamental to any success in commodity futures trading.
1. Always use price charts. Always begin a trade in commodities by acquainting yourself with the price history of the futures contract. The price chart will familiarize you with the recent price history of the contract. Has it been in a bull market? Has it been trading near all-time lows? Is the market going sideways and perhaps basing? All these are important considerations in taking a trade.
Many traders prefer to keep their own charts. Regardless of how you obtain your charts, always refer to them when making a trade. No sophisticated commodity futures trader ever enters the market without referring to price charts. It is simply not done. Because timing is so critical to success in the market, the charts enable you to place your orders to buy and sell at precise levels.
Price charts help you set up clearly defined entry and exit points. Moreover, due to the limited amount of time involved when you are trying to select a bottom for buying or a top for selling, you don’t have the luxury of adopting a wait-and-see attitude. The price chart will help you decide what action to take.
What can you learn from price history? Many things. First, you can tell the character of a market. Does a futures tend to make sudden moves and be quite volatile? Or is it a trending commodity? Orange juice, for instance, has had a price history characterized by long periods of inaction periodically broken by freeze warnings and the like which have caused the market to soar. Moreover, due to the seasonal nature of the market, the sudden price rises – and falls – have tended to occur at specific times during the year. A chart, of course, illustrating past price action can be very valuable in pinpointing the period when a commodity or futures is about to make a significant move.
2. Do what the market tells you. When trading futures contracts, you must never, never fight the market. This means you must not try to trade against the trend. If the trend is up, buy long; if the trend is down, sell short. This sounds simple, but is difficult to achieve in practice. Traders tend to ignore what the market tells them until it is too late. Thus, most traders will become buyers at the very top of the market and, conversely, sellers at the bottom. While it is extremely difficult to pick tops and bottoms, trends are somewhat easier to pinpoint. Moving averages and a number of other mechanical systems work particularly well in trending markets. The basic idea the trend trader works with is that he is looking to take a piece out of the middle of the market – and not select the absolute bottom or top. Your charts, and the price action itself, will let you know whether you are trading with the trend. In addition, there are charting techniques that help you define a market trend.
3. Never meet a margin call. Margin calls are issued when the equity in your account falls below the maintenance level. That the market has been allowed to move this far against you, without your having taken protective action, is a sign that you are not trading properly. Try to take losses as quickly as possible and liquidate your positions before they grow serious. When you fail to do so, you invite trouble.
The strategy is to place close stops near the market that will liquidate your position before a margin call is issued. If, however, several limit moves against you cause a margin call to be issued, instruct your broker to liquidate your position and take the loss. Many traders attempt to avoid this loss by meeting the margin call in hopes that the market will soon reassert itself in a more favorable direction. This is a mistake. In many markets, you could easily lose a fortune before the market turns your way again.
4. Cut your losses and let your profits ride. This rule, perhaps better than any other, sums up the secret of successful commodity trading. Despite what you hear about how you can never go broke taking a profit, the simple fact is that you can very easily. Traders who take their profits every time they make a hundred dollars in the market are the same ones who watch their losses mount into thousands before they ultimately throw in the towel. You can win at commodity trading if you are right only 10 percent of the time – as long as you follow this rule. Big profits on 10 percent of your trades will easily offset small losses on the other 90 percent.
To implement this rule, use stop-loss orders. When you buy, place stop-loss orders under the market; when you sell, place stop-loss orders above the market. Where do you place the stops? There are two methods. One is based on technical analysis in which you place the stops above and below the so-called resistance and support levels respectively. A resistance level occurs when a preponderance of selling over buying causes prices to stop rising; a support level occurs when a preponderance of buying over selling causes prices to stop falling. Your charts should help you locate these areas. The other method is to liquidate your position when you have lost a certain percentage of your equity. For example, if your total margin is $3,000, you may want to liquidate your position when you have lost, say, 20 percent of your equity, or $600.
To allow your profits to accumulate, you can use trailing stops. Trailing stops follow prices as they move up, in the case of a long position; and conversely, follow pries as they fall in the case of a short position. For instance, let’s say you are a soybean buyer at $5.92 a bushel, and you want to maintain a long position in the market with stop 12 cents below the market. Let’s assume that the market now moves up to $6.22. Your trailing stop is then moved to $6.10, up from the original $5.80. To protect your paper profit, the stop will continue to trail the price. Now price move to $6.24 and the stop moves up two cents to $6.12 per bushel. Now assume the market makes another rally and prices move to $6.38. The trailing stop will now move up to $6.26. If prices plummet, your stop-loss order at $6.26 will get you out of the market at that level with plenty of your paper profits still intact.
Many traders make the mistake of taking profits too quickly. They like to believe that if the market continues to rally, they can always buy in again. But, there are two problems connected with this type of thinking.
The first is that each entry and exit from the market requires that a full round-turn commission be paid. The second involves the nature of the market. In a roaring bull market, with plenty of buyers bidding higher and higher prices, you aren’t going to get in again at a very satisfactory price. And, of course, moving in and out of the market too frequently, you may be forced to give up a great part of the move and have commissions eat up much of what you do make.
Lastly, you can adhere to this rule by never getting into a trade in which the potential profits don’t appear to be much greater than the risks. By looking for trades in which the potential profits outweigh the risks, you will be setting up a situation in which you stand to make a profit over a period of time. Again, this is not to say there won’t be losses… there may be many. But the profits you do take will be considerable and will more than compensate for the losses incurred.
5. Trade only the most active commodities and futures. This rule has a simple premise behind it. You take an unnecessary risk when you trade a “thin” or inactive market. Buyers and sellers interacting establish prices. Unless there are sufficient numbers of each, there is no one ready to give you your profit when you want to take it. Moreover, in such markets a handful of large traders can dominate and more or less establish prices by themselves. A corollary to this rule is to trade the most active trading month – unless, as in spread trading, you have a good reason not to. The most active trading month will generally be the nearby month, but not when the nearby month is the delivery month. For instance, in mid-January, the nearby oats contract is for March delivery. But in March, the oats trader will switch to the May contract.
PLEASE READ: Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by TradeWins. For additional information on auto-trading, you may visit the SEC’s website: All About Auto-Trading, TradeWins does not recommend or refer subscribers to broker-dealers. You should perform your own due diligence with respect to satisfactory broker-dealers and whether to open a brokerage account. You should always consult with your own professional advisers regarding equities and options on equities trading.
1) The information provided by the newsletters, trading, training and educational products related to various markets (collectively referred to as the “Services”) is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by TradeWins Publishing (“TradeWins”) a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. The Services are intended to supplement your own research and analysis.
2) TradeWins’ Services are not a solicitation or offer to buy or sell any financial products, and the Services are not intended to provide money management advice or services.
3) Past performance is not necessarily indicative of future results. Trading and investing involve substantial risk. Trading on margin carries a high level of risk, and may not be suitable for all investors. Other than the refund policy detailed elsewhere, TradeWins does not make any guarantee or other promise as to any results that may be obtained from using the Services. No person subscribing for the Services (“Subscriber”) should make any investment decision without first consulting his or her own personal financial adviser, broker or consultant. TradeWins disclaims any and all liability in the event anything contained in the Services proves to be inaccurate, incomplete or unreliable, or results in any investment or other loss by a Subscriber.
4) You should trade or invest only “risk capital” – money you can afford to lose. Trading stocks and stock options involves high risk and you can lose the entire principal amount invested or more.
5) All investments carry risk and all trading decisions made by a person remain the responsibility of that person. There is no guarantee that systems, indicators, or trading signals will result in profits or that they will not produce losses. Subscribers should fully understand all risks associated with any kind of trading or investing before engaging in such activities.
6) Some profit examples are based on hypothetical or simulated trading. This means the trades are not actual trades and instead are hypothetical trades based on real market prices at the time the recommendation is disseminated. No actual money is invested, nor are any trades executed. Hypothetical or simulated performance is not necessarily indicative of future results. Hypothetical performance results have many inherent limitations, some of which are described below. Also, the hypothetical results do not include the costs of subscriptions, commissions, or other fees. Because the trades underlying these examples have not actually been executed, the results may understate or overstate the impact of certain market factors, such as lack of liquidity. Simulated trading services in general are also designed with the benefit of hindsight, which may not be relevant to actual trading. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. TradeWins makes no representations or warranties that any account will or is likely to achieve profits similar to those shown.
7) No representation is being made that you will achieve profits or the same results as any person providing testimonial. No representation is being made that any person providing a testimonial is likely to continue to experience profitable trading after the date on which the testimonial was provided, and in fact the person providing the testimonial may have experienced losses.
8) The author experiences are not typical. The author is an experienced investor and your results will vary depending on risk tolerance, amount of risk capital utilized, size of trading position and other factors. Certain Subscribers may modify the author methods, or modify or ignore the rules or risk parameters, and any such actions are taken entirely at the Subscriber’s own election and for the Subscriber’s own risk.