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Commodity Trading – Be Different From The Crowd – PART 3 – Avoid These Novice Trading Mistakes

Here’s a quick trading tip. I have a long-term “chopping” market model I use for writing commodity options for premium collection. It consists of two “sub-models” for each commodity, bull and bear. These are fairly complex models with a fair amount of computer code. Just today I started experimenting with a simple moving average that blocked signals if against the major trend. It made a measurable difference in the long term performance! I found the percentage of win/loss went up as well as the profit/loss ratio.

Just a little thing like a bull/bear filter can keep you out of some losers. Bucking the main trend is usually trouble. My point is, pay attention to the simple stuff too. We think things have to be complex, but remember, simple is complex and complex is simple in the commodity futures contract market. Another way to say this is optimization and curve fitting is complex and a loser. Loose,먹튀검증 simple and flexible techniques are often winners…. at least for a while. Matching a simple method to the right market, at the right time, is the challenge.

I think Joe Granville said it right one night. I attended one of his free “performances” in 1981. Joe is a showman. He said something to the effect, paraphrased, ” I’m crazy! That’s what it takes. You must be different from the crowd to understand the market. Crazy people like me are successful for this reason….”

Being a trading maverick that tries everything and anything is the only way to discover what works for you. The surprising thing of all is what you are really doing is finding an interface to view the commodity futures market through your own eyes. For some folks, all it takes is a quote machine with prices flickering. Some can do it with a ticker tape. Others do it standing in a pit watching the crowd and flow of orders. Still, others find their edge watching chart patterns because they are good visual detectives. Others use Elliot Wave theory and cycles. It doesn’t matter!

There is some combination you must uncover that lets you see, hear, feel and touch the true ebb and flow of each individual commodity futures market. Every one of us has a false impression of what we think is happening. It’s just rose-colored glasses. You need to find what particular lenses work best for you. You will find the fit if you keep looking and trying things.

A mentor can help, but be sure he’s not pushing what works best for him. He should expose you to many general techniques until he sees you click. Think about this before getting excited about buying the next “hot” system. To repeat, the Holy Grail is NOT in the next hot system for sale. Save your money.

The best thing a new commodity futures trader can do is find someone who has already been through this process and paid his dues. Study this trader and decide if his style suits you. If so, then stick with him and learn all you can.

Good Trading!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors.

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