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Friday, September 07, 2012

A WASH




I did 3 trades today and the net was basically a scratch. I like to show things like this so everyone who just stumbles upon this realizes that it is not all show. It is real trading and not always brilliant. The first trade I did on Thursday was to go long Gold where indicated. I mentioned I was looking at upside action in the metals, and here is where I played. I probably should have played Silver because it was stronger, but I went here because I had a good pattern from my bank of things in my little head I like to use. For a while this trade was gang busters, and with the Dow blazing ahead, this one seemed destined for stardom. Alas, it lagged the DOW all day long and finished way off the high. When that drop happened, I exited the trade at the close taking only about $400 per contract out of it.  

I knew as I checked in when the DOW was up 225 and saw this had dropped off it's high a bit that I was likely going to exit before the end of the day and not hold it over night. Had this closed strong I was going to hold it for a run of a few days, but it did not. I should have done Silver the stronger market. The next chart is that of the Aussie Dollar. I also mentioned that I thought this was due for a rally, so I went long there in line with my comments. 





You can see I exited last night in the night session, again another quickie that just made about 70 points. You can see the Seasonal low was due right about now, and there were some divergences in some of the short term things I look at, so I thought this was worth a shot. The COT Synthetic was worthless here giving us nothing at all. The market still is in a longer term up trend in spite of the recent decline on the daily chart. As a result since this had pulled back into the bands I show here at times on weekly charts, this trade was a go. Again, when we got that monster stock move, I felt with all the correlations that go on, this should have gone further than it did. To me that was a divergence, so I exited this one in the night session for a few more points. This has gone on to rally big today, but I don't care. This was an against the trend short term trade, so I followed by rules and 70 points is a good profit for something like this.

Now to the blunder......





You can see here in Heating Oil we have followed the seasonal path very closely. When we pulled back for a couple of days, some of my methods were telling me to go long, along with the other energies. I felt Crude had been the weakest, and also had a crazy large range bar, making the stop there also way too big. RB had been the strongest, but one of my confirmation tools was giving me marginal indications of saying yes. As a result I settled on Heating Oil, and went long. I knew when everything took off and this barely filled, I had a problem with this trade. When the end of the day came around and this had reversed back down, I just decided to exit the trade along with the above two, and scratch the day. This trade basically lost what the other two made collectively, so net I made about $100. My logic was that I should have been in RB, and why just keep pressing a bad trade hoping it will work out. Today had I held this like my rules said to, it is back above the entry price and would have been ok. However, if you look at RB, it is on new yearly highs, validating you always by the strong and sell the weak, which I did not do in this case. For me when I realize I have made a mistake, I like to get flat and regroup. It is just a personal choice.

What you can learn from my mistakes here is that comparative strength and weakness in sectors does matter, buy the strong and sell the weak. Basically I did the wrong thing here based on a few technical things that are not discussed here because they are proprietary, but in the end it is all about making good judgements. I did not do that yesterday, it happens.

I made the news yesterday see the link below


PFG - they have not updated us as to whether or not claim forms need to be filled out or not at this point. There is a CCC conference call today, I would suggest listening in on that if you are a PFG victim. They have had good information on this from the get go. It does appear now that there is a rift between Koutoulas and the Trustee, so that may result in less good quality information going forward, but we will see about that. Go to the CCC website there is call and timing information. It appears the small accounts get the money first ( 50 k), this month, then people like me next month. Forex gets nothing, that is non-segregated money, so that will likely be a 100% loss. It becomes company money and if the law is followed, which is never a guarantee, all money recovered will go to the segregated holders first, before other creditors. As a Forex holder, you are behind segregated holders in the pecking order for money. You will not get any money back until all the segregated holders get all of theirs first. This is why trading forex is the most risky thing anyone can do with their money. It is just a layup for theft at a brokerage firm. Since the money is not segregated ( it should be but is not ), it just becomes company money. I am sure some egghead accountant could come out and explain why this is the case and be so proud of himself in doing so. The bottom line is that is a law that needs to be changed. Just because you trade FOREX, that should not mean people can just take your money like this and have no recourse at all. I have no idea how anyone could possibly justify that. However, in a bankruptcy company money just goes into the pot for distribution to creditors, and you are not in front as a forex client. I know this is crappy, but it is just the truth unfortunately.

BOND SYSTEM

I wanted to touch on this briefly since I have had several phone conversations with people about this during the week.

The Bond System is a short term, completely mechanical system, with an average time in trade of a couple of days. We look to exit and take profits very quickly. It trades the ZB symbol. You basically just have to watch the open, then place the orders and check in at the next open and follow the rules. The original stop stays in place until the trade is either exited for a profit, stopped out for a loss, or reversed to a trade in the other direction. It is about as simple as trading gets.

I have personally used this system for close to 10 years. I have made slight changes to it to accomodate market changes such as the move to electronic markets. However, in it's basic form, it has remained unchanged for about 10 years. As a result it has a significant track record of real trading. The only reason I have made this available to people is the massive theft of my money at PFG. For those new readers if you read the above link to my quote in that article, you can see I had a significant amount of money stolen from me. That theft has forced me to change my whole life. One of those changes is going back into business with my trading web site.

I am very excited now about having that site going again, and in hindsight I probably never should have shut it down before. This is my top interest in life and always will be. There is no reason why I should not be in the business, and just being a selfish trader on my own with a blog was short sighted on my part.

One of the things that makes me feel really good is seeing people doing so well using this method. I have a conscience, which is a problem some times. Many of my competitors don't seem to have that problem. If a trade in a service loses money for subs, I lose too, both emotionally and financially. Although I can't guarantee that I am in every trade, I am in most of them. There are always margin considerations or other things that could happen which might result in me not being in every one of the trades. I could over sleep, I could break my leg, I could make a bad judgement like I did yesterday in what I explained above. However, for the most part trades I recommend in any service I would offer, are going to be trades that I am also doing.

The only thing I can guarantee at all is that the future will not duplicate the past. It may be better or worse, but it will not be the same. The BOND SYSTEM has had an incredible run this year, and especially the last 90 days or so. There are going to be periods where it loses money and or has losing trades. No matter how many times I say this, I know there will be some who will sign up and leave the second one losing trade happens. I also know there are people that won't follow the rules, and will under perform my system and blame it on me. These are things I cannot control. What I can control is offering the best possible thing I have, which this system is.

I am going to limit the number of people using this, and then beyond that there will be a waiting list. I did want a minimum number of people using it to launch it, which I did get before the launch last month. What I don't want to have happen, is have so many people using it that it effects the results. In the Bond market that could be thousands since the volume is so high, but this system is very important to both me and my partner Michael, since we use it our selves. We cannot afford to have it's efficacy effected. If for some reason a large fund were to get the trades and start firing off massive sized orders, it could effect things. As a result, it is only available for individuals.

It carries a $1700 stop per trade, no exceptions. If you try to be cute and use a smaller stop, you will under perform the results. Trust me I am the creator and have tried this and failed. If the creator can't outsmart this thing neither can you. I have also tried using technical tools to exit the trades "better" when a huge move happens. This has also failed. With a trading system you just have to follow the rules, it is simple yet hard to do because emotions or opinions get involved. The best way to trade it is  place the orders and walk away. If you have an account that is too small, or want to try and out smart this, do not sign up for this, it is not for you. The price is $60 a month, and it is pay as you go. Once the site is up you will be able to pay this via an online method. It is not going to be Pay Pal, they just charge too much.  I don't want people who are unhappy involved with this just to make that small amount of money. Trust me on this, administering to tons of people coming and going on something like this is really a pain in the ...

Feel free to call me at 760-734-6927 if you want to talk about this. For those who I have talked to you can tell I am very open, honest, and love to talk about trading. I just wanted to try and cover some points here that have come up in my chats with people about this. What I don't want is emails or calls about an individual trade, asking for my opinion on it. In a system there are no opinions, you just take the trades as they are spit out. My opinion will always be the same, neutral. I have no idea which ones are going to work out the best, I wish I did. I look at things like this constantly, and if I find something, I will incorporate it into the system. However, why bother trying to improve something that is right more than 80% of the time? How much better can it be?

Sorry to go on and one about this but hopefully this is helpful. The site will have a page completely dedicated to this once it is launched, which should be next week.


Have a great weekend 


8 comments:

John M said...

Chris, that Forex business with 'company funds'...I had no idea. It's not my cup of tea, but I never heard it explained by anyone, anywhere, the way you did here. Thanks.

The bond system is great, as is your patience with the public's questions about it. I knew you were a good man as soon as I saw how you cared for the dogs you take in. That's always a sure sign for me. I hope you get back a larger portion of your money than they expect, selling that crook's houses and headquarters has got to help at least some. Good luck with that.

Chris Johnston said...

Yes John friends of mine that I have warned about forex did not know this either, one lost 100k with PFG in a forex account. There was an article out today that lays out the assets of PFG at about 60% of our money, so that is where we are likely to wind up. I think whatever they get for the sales will be more than eaten up by the legal fees the trustee is billing at $650 an hour, which will be millions of dollars after a year goes by. It just is what it is. My goal is to make back what I have lost by the time they get it back to me, and if I can I will have the last laugh here.

I think the market for the HQ building is going to be scant, it is in an area where it is not a likely local suitor for that place. It could be years before they sell it.

Thanks for the nice comments

Anonymous said...

Hi Chris Johnston, I couldn't figure out how to upload an image into the comment, so I uploaded it to a post here:

http://tfc-forum.tradingcharts.com/forum/index.cgi/page/1/md/read/id/551306/sbj/aud_usd.html

I was just wondering if you had any thoughts about the behaviour of commercials in the COT in this example?

Cheers,

Chris Johnston said...

My comment on that would be that is shows that the commercials are trying to stop this market from going about the recent highs, in other words they are defending that price level. It is a COT sell signal by that theory. However, I just don't think the US FED will allow anything to go down until at least after the election. They are trying to get a president re-elected via strong markets. If it were not for that this probably would be a good sell signal.

Chris Johnston said...

typo above, about should have been above

Anonymous said...

In May 2006 Larry Williams was arrested in Sydney by federal police. He can now go anywhere in Australia, so long as he posts his movements to police.

This is your hero????

Chris Johnston said...

As I have said many times, recessions don't cure stupidity as is proven by this comment. I probably should have deleted it but when someone wants to be this ignorant, I like to let them expose themselves.

First of all, where is it stated he is my hero?

Second, that was 6 years ago, do you happen to know that he actually won his case and was vindicated? Of course not.

Third, do you even know what the case was about?

Fourth, have you ever made a mistake in life?

Fifth, have as the gutsy Anonymous you made more money trading than the millions he has? Have you ever had a profitable month trading?

He lives in the Virgin Islands and has for a while now. Are you in a time machine? He has not lived there for a very long time now. Whether or not his movement would be restricted if he visited Australia now, I have no idea. Since the case is long since resolved I seriously doubt it.

I am not his spokesperson and could care less what he does. He has been helpful to me in my career and I give him the proper respect for that. What he did with his tax return one year is irrelevant to me. He wrote a book about this if you would care to at least get enough of a clue to get the current information on this.

How could you surf the web enough to find that very old story and not get the correct information?

What a MORON

Vikas said...

Ahahah Laughing my ass off at this: "Have you ever had a profitable month trading?"

Great response Chris. All such paper tigers are "anonymous". Moron indeed.