Lesson du Jour"Everyone wants success. Some people want it so much that they will even
work for it." Anonymous
While we all might have a different definition of what success is, one thing
is for certain, we all want to be successful. In spite of this however, few
of us are willing to do what is necessary to achieve our version of success.
Unfortunately becoming successful rarely comes without sacrifice. Nobody
likes sacrifice. After all, sacrifice hurts. Sacrifice means having to give
up something we like, in order to get something else we want
like in a diet,
and nobody likes a diet. Like Garfield said, diet is "die" with a "t".
I can probably safely assume that if you are reading this newsletter you are
interested in becoming a better trader, but the bigger question is are you
willing to do what it takes to become a better trader? I can see you sitting
there nodding your head "yes", but it is not that easy. Becoming a better
trader will require some sacrifice; fortunately however, the sacrifice
required to become a better trader is not usually a big one.
Becoming a better trader doesn't require a lot of brains, or a lot of
special skills, but it does require time, practice and patience. You need to
devote time to practicing your trading system until you know it backwards
and forwards. You need time to learn to recognize reliable market signals
and to understand how the markets react. You need practice to know when the
right time to take a trade is and when it is time to stand aside. None of
these things are particularly difficult to learn, but as I said before, they
do require time, practice and patience.
So, are you working hard enough to achieve the success you desire? Well
here's a clue. If you're holding a remote control in one of your hands, the
answer is probably "no." Tom and I want to see you succeed and we're doing
what we can to help, but the rest is up to you. Ultimately "you" are the
only guru who can guarantee your success.
Okay, I'm putting the soapbox away now.
Erich
For the archive of hundreds of priceless homework articles and
Lessons du Jour, please join us at
http://www.supportandresistance.com/subscribe.html
Got a question that
needs answering like an itch you can't scratch? Send it along to me at
Erich@tradershelpingtraders.net
and I'll be happy to try and clear things up for
you.
|
|
Currencies Market
Overview
An interesting week in the currency markets this last week as most of
the currencies found resistance/support and began their pullback phases.
The pullback gives us a good opportunity to re-enter these markets from
a better price and in a more predictable manner. Since we already know
the direction of the trend we need to be on the alert for the renewed
move in the trend direction and we do this by trailing an entry order.
Australian Dollar
The Australian Dollar finally showed us resistance after a very strong
rally for a couple of week's prior. I'm not sure that the current
pullback move is over yet, but the market does find itself sitting on
strong support at 7660 7670 which might cause it to resume the uptrend
this week. Normally when we see a market complete a rounded top
formation, like the AD has, we can expect a larger retracement to the
38% or 50% Fib levels; however it doesn't hurt to place an order in
anticipation of an early reversal.
Entering at this point is easier as well given the low closing price
from Friday. This allows us to place an entry order to buy on a break
above Friday's high at 7724. Notice that there is some resistance at
7750-ish which we could buy above as well, but as I mentioned with the
lower closing price we can afford to try to buy the market sooner.
Exit stops will go just below the support at 7790 which is close enough
to count the same as Friday's low. Well, almost. Even so we will have
about $460 at risk, which is enough for me to spend on this market
should the trade head south. Profit target is the long term resistance
at 7900, but there is room for the market to move further to the upside
if we get some momentum.
BUY December Australian Dollar at 7733
Exit Order: 7687
Approximate Risk Exposure: $460 per contract
Profit Target: 7897
Approximate Potential Profit: $1640 per contract
RRR: 3 1/2:1
Degree of Risk: Moderate to HIGH
 Grains Market
Overview
What a week in the Grain complex! The major grains all managed a rally last
week before topping out by the weekend. The gap 'n fade days that finished
off the week shows considerable weakness in the market as prices seem to be
grasping at higher prices. Whether this will lead to a reversal remains to
be seen, but wheat is already trading in bear country. Wheat is considered
by many to be a "leader" market, so if that holds true we could see
something lower in corn and the bean complex as well.
Wheat
Wheat prices completed a traditional 123 topping formation last week when
prices broke support at 499 500 (don't worry if you don't know what a 123
top is, it's not important). From here we saw the market continue lower to
support at 477 478 which caused a bit of a reaction sending prices higher
on Thursday. This reaction was short lived however, when prices fell off
again on Friday. What's more interesting however, is the bounce, and
subsequent re-hook in RSI. This is a very strong sell signal for this market
and we can likely expect to see prices continue lower as a result.
While it is a little more risky, I will look to short the market on a move
below Friday's low. Here is another instance where the higher closing price
affords us the luxury of selling the market on a closer entry to the low.
The exit stops have a little more resistance behind them and will go above
the 494 high which has had at least 5 recent hits behind it. So the good
news is that while the entry might be a little wishy-washy we have a very
strong line to base the exit on.
The first profit target is support at the 62% retracement which we should
easily find. We are likely to get a reaction here so I'll probably exit on
target, but if it looks like we have good momentum I might try to ride the
trend lower.
SELL December Wheat at 484 3/4
Exit Order: 494 1/4
Approximate Risk Exposure: $475 per contract
Profit Target: 453 3/4
Approximate Potential Profit: $1550 per contract
RRR: 3:1
Degree of Risk: Low
[PS. While not shown here, you can do the same trade in the Kansas or
Minneapolis Wheat contracts as well.]
The charts in this publication are all made using Gecko's Track 'n
Trade charting software. You can get a demo for free
here. The rest of the Markets
in all sectors are covered in the Subscriber Edition.
This is only a
small sample of the markets
we cover!
For a detailed analysis of ALL the markets, with explicit charts, entries, exits, stops, risk/reward ratio,
potential profit, (and much more) please join us at
http://www.supportandresistance.com/subscribe.html
|
The purpose of this section is to give you a feel for which markets might be
worth trading and which you might pass on given your own set of
circumstances. The figures quoted are based on the price levels outlined in
the ezine, trading single contracts and do not accurately account for
slippage, commissions or other trading related fees.
The Score Card is updated monthly.Summary for the Month of
September 2006
| Date |
Pos. |
Market |
In |
Out |
Profit/Loss |
| September 5 15 |
Sell |
November Unleaded Gas |
172.85 |
162.05 |
4236 profit |
| September 5 18 |
Sell |
November Heating Oil |
199.95 |
179.15 |
8736 profit |
| September 5 18 |
Sell |
November Crude |
6975 |
6435 |
5400 profit |
| September 5 7 |
Sell |
December Corn |
243 Ύ |
243 Ύ |
0 |
| September 6 8 |
Sell |
December Bean Oil |
2497 |
2513 |
96 loss |
| September 6 |
Sell |
December Cocoa |
1483 |
1501 |
180 loss |
| September 6 11 |
Sell |
December Swiss Franc |
8163 |
8129 |
425 profit |
| September 11 15 |
Sell |
December Soy Meal |
159.9 |
162.7 |
280 loss |
| September 11 |
Buy |
December mini-Dow |
11507 |
11427 |
400 loss |
| September 11 18 |
Sell |
December Corn |
243 Ύ |
244 |
12 loss |
| September 12 14 |
Buy |
December mini-Dow |
11507 |
11593 |
430 profit |
| September 12 13 |
Buy |
October Lean Hogs |
6770 |
6657 |
450 loss |
| September 15 18 |
Sell |
December EuroFX |
127.17 |
127.67 |
625 loss |
| September 15 19 |
Buy |
Dec. US Dollar Index |
8571 |
8533 |
380 loss |
| September 15 20 |
Sell |
March Eurodollar |
94.675 |
94.735 |
150 loss |
| September 18 19 |
Sell |
December Japanese Yen |
8569 |
8615 |
575 loss |
| September 19 26 |
Sell |
December Mexican Peso |
90.975 |
90.325 |
325 profit |
| September 19 22 |
Sell |
November Heating Oil |
156.85 |
154.05 |
1176 profit |
| September 20 25 |
Sell |
October Live Cattle |
8947 |
8052 |
420 loss |
| Sept. 22 Oct. 3 |
Sell |
Dec. Australian Dollar |
7493 |
7457 |
360 profit |
| September 25 28 |
Buy |
December mini-Dow |
11653 |
11741 |
440 profit |
| Sept. 26 Oct. 3 |
Sell |
December Japanese Yen |
8647 |
8577 |
875 profit |
| September 26 27 |
Buy |
December Corn |
258 Ό |
254 Ό |
200 loss |
| Sept. 26 Oct. 3 |
Buy |
December Wheat |
424 Ό |
456 |
1587 profit |
| Sept. 29 Oct. 4 |
Sell |
December Live Cattle |
8932 |
9040 |
430 loss |
| |
Gross
Profit: $23,990
per contract |
Gross
Loss: $4198
per contract |
Net Profit per contract: $19,792
before commissions and fees!
|
* NOTE!!! Trading commodities is
RISKY!!!! These figures are estimates in the interests of tracking the
trades. Erich may or may not have a real money position in any market
covered at any given time. This Score Card does NOT apply to Tom's Trades.
This is neither a solicitation to trade nor a recommendation of any
strategy. Always consult your broker or advisor before attempting any trade.
Commodity trading involves substantial risk of loss. See full disclaimers at
the bottom of this email.
|
