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Tuesday, September 25, 2012

FUTURES TRADING ENTERS A NEW ERA PART II


THE GOOD, THE BAD, AND THE UGLY

This can be a lesson to anyone reading. When you stray away from your core competency too far, sometimes you lose sight of certain things. I was pleased to finally get my site launched today even though there are a few bugs. I am sorry the emails do not work in the contact section. My hoster told me they did and I did not double check them. When I did tonight I discovered none of them work, ARGHH! This has been a big distraction from my trading, and now I can get back to business. Today was one of the worst trading days I have had in a while, but the good news was the Bond System fired off another primo trade for the subs. The students beat the teacher today, there is no doubt about that. I managed to overcome the great Bond trade with what you will see below.

Thanks to everyone who signed up for something. There will be information coming to you soon. Everything kicks off October 1. The newsletter will be emailed to you when it is released each month. It will come initially from mktwzrd1@gmail.com, so make sure you have that as an accepted source so it does not get kicked into SPAM. The Bond orders will continue to be sent via email. The Swing trades will be in the website at the designated time each day. There will be days where there are no trades, but on those days the site will state no trades. For those who are doing both the bonds and the Swing trades, be prepared for a lower winning percentage in the Swing trades but higher average profit. Of course the Bonds are basically 100% at this point, so anything will be less accurate than that. Keep in mind they are two different approaches. You are spoiled so far with the Bonds having only one loss of $31 and all the other trades having been wins. I am looking forward to getting rolling on this. I am especially excited to send out the first newsletter edition.

Let me show everyone where I went wrong today, this is something I know better than to do, but I have been too distracted in recent days. Here it is.

RUSSELL



GOLD



If you switched the symbols on these two charts, you would barely be able to tell them apart. The first one is the Russell and the second one is GOLD. These are the same trade, and I did both of them, what a ding bat! I harp all the time about correlations, and I lost sight of it here. There actually is some logic as to why I ignored this correlation when I normally would not have. Michael and I have been playing around with a new trading approach, that is very mechanical. In those instances you just take the trades. I have been trading like this to try it out for about a month, and had not been burned like this. My thinking in systems is you take them all. They systems do not know if they are correlating with something else or not. The reality is these are trades I normally would have never done, and this new approach gets officially kicked to the curb now. I will keep studying it, but not with live ammo for a bit now. Thanks to PFG I don't have enough free capital to experiment like I used to do.

I will cover this subject in detail in an edition of the newsletter, it is very important in how you do your trading. Over exposing yourself to the same trade like I did today is not wise, and it will always catch up to you if this is something you continually do.

It looks to me like the date I mentioned yesterday, about the Presidential cycle dip being due was dead on. Most of the things I use are saying we are likely to go down in most places here in the next week. Beyond that I do not know at this point. My main S & P model does not have a major sell signal here yet. My COT Synthetic is in the sell zone, but it is not reliable when against a trend this strong. I will explain this as well as time goes on to readers of the newsletter. It will be featured every month as a directional tool for which way to look. It is pretty good, but like everything else, it occasionally makes a wrong turn. Typically the wrong indications are the ones that look like this does ( not pictured ), where the indicator says sell when price is flying upward in a big uptrend. There is nothing that picks tops accurately other than a time machine.




I apologize this is a crummy chart, but hopefully you can see it. This is the Presidential cycle in year 4 of a term. Today is the exact day in time where the arrow on the chart indicates a minor dip in price should begin, which will last into the end of October. The Presidential cycle does call for a strong rally into the end of the year in the 4th year of the "regime." You can clearly see that on the chart with the black arrow.

I think from a short term standpoint we need to sell the first bounce here, but bigger picture after that leads to another down leg, it will be a good longer term buy spot.

Good Trading




7 comments:

Robert said...

Chris

sent you an email but i guess they did not get through .Question I had was about the swing trades .
When it comes time to close a trade will you send an email or do we just have to check the website ?
What happens if you decide to close a trade during the trading session--will you send an email ?
Also do you use OCO brackets for your trades ,or will you just give entry ,sell, and stops ?
Lots of questions .Is the contact email now working
Thanks,
Robert

Robert said...

Chris,
Knowing your love for B of A I thought you would get a kick out of this:

As the NFL torments it players, coaches, and viewers by playing hardball over 'real' referee earnings, the truth of Monday's blown call is coming out. Courtesy of American Banker, we now know that the referee at the center of the most controversial call of the season so far is in fact a vice president for small-business banking at Bank of America in California

The result of this call was over a billion dollars exchanging hands in Vegas bookies' offices from what was a certain winning position to certain losers, precisely due to just this one call, causing substantial losses for bookies in the process as well.

Also i will ask again--your swing trades--do you use OCO bracket trades--also will you send out email alerts if you decide to close out a trade before 3:00--I'm sure there will be times that a trade needs to be closed for a number of reasons--unless you are using OCO brackets

thanks,
Robert

Chris Johnston said...

Robert

The swing trades will be entered and exited on stops and limit orders with occasional MOC exits. A typical trade will have a stop price for entry then a protective stop loss. Once the trade closes the first day we will then be using trailing stops with profit targets which will be limit orders. For example on the 2nd day in a trade you will have a trailing stop and potentially a limit order for exit that would be OCO with the trailing stop. However, we are trying for larger gains and holding these for some time, so rarely would their be a target the first day unless we had a huge move in our favor immediately. You will not have to watch the market intraday on these. I will give all the details each day, the orders will be very simple and straight forward.

Sorry the email is not working use mine for now mktwzrd1@gmail.com. My web hoster takes days to respond so the emails may not be fixed for a few days. I should have tested them but he told me they were working so I took his word for it.

I did see the B of A story and laughed.

Anonymous said...

hi Chris,

Do you cover all the previous month's swing trades in your newsletter or just a few of them to illustrate the points you want to say?


Regards,
TraderJ

Chris Johnston said...

It is going to be a few of them to make points

Aaron said...

Hi Chris,

Great info on your blog site!

I noticed you'll be sending mass emails out through gmail. I'm aware of other's that have been flagged as spammers by gmail and the emails did not go out. They received no notice that their emails were not being sent. If you haven't already you ought to consider vetting your emailing plans with google.

Better yet, set up an email server with your site host. A good host will be able to setup a email server. Did you look into that?

Just my $0.02 to help avoid a headache.

Aaron

Chris Johnston said...

Thanks Aaron for the .02 a good point I had not considered