Support and Resistance Trading
Simple Strategies for Short Funded Traders

Traders Helping Traders E-zine for the week 8-14-2006 - Test Drive Edition


For a detailed analysis of ALL the markets Erich and Tom cover along 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 Truth About Trading Support and Resistance eBook


Need help with Entries, Exits
and Trade Management?

Our Experience. Your Results.

  • Do you suffer from being not able to "pull the trigger" on a trade?
  • Are you confused as to which trades might offer the best potential?
  • Do you seem to be going one way when the market is going the other?
  • Do you have trouble managing your stops?

Click Here Now for the Solution!

 

 

Questions & Answers


Question:

I am looking for trading education, signals to trade myself and/or possibly have a broker managed account according to your signals. Can you explain the difference and what should be the expectancy of each service?

Answer:

If you're looking to learn to trade yourself, then you'd be best served by becoming a member of Traders Helping Traders or SupportandResistance.com. The Commodity Pick Report has no educational materials with it and is strictly a trade advisory.

The signals generated for both are the same, so you're not missing any signals by being a member at one and not the other. If you choose to become a member at Traders Helping Traders or SupportandResistance.com, let me know if you want to preview the CPR mailings and I'll add you to the list.

Enjoy this week's issue,

Erich
erich@tradershelpingtraders.net
 

Markets for this week...


Currencies Market Overview for The Coming Week

The Currency markets finally found a bit of trend last week, although at first glance it looks like the markets were still on the choppy side. We picked up profits in a few of the markets like the Pound and Euro before last week's reversal. I do expect the reversal to be short lived however. Many markets (EC, SF, and DX) are nearing an RSI test, which could bounce them back to their original directions.

I think this week we'll give the Test Drivers something else besides the Currencies! :)

Hmmm, let's see...

Energies Market Overview

Huge move lower in energy prices this week as the markets wasted no time falling to trendline support. Unleaded probably had the biggest single day move I've seen in a while when prices fell about $7500 last Thursday. Hopefully some of these lower prices will find their ways to the gas pumps, but don't hold your breath for too long. Trendline support is likely to cause at least a small bounce this week and while the markets seem to have put in a top (again) it doesn't take much to get this sector charging higher.

FLAT Energy Complex

Grains Market Overview

The Grain complex made a big about-face going into the weekend as prices violated all kinds of support levels. No doubt this came as a result of the Crop Production report which was released on Friday, although this report doesn't normally have this kind of impact on the market. We're currently in a few grain positions and depending on how the markets respond to nearby support; we might get into a few more this week.

Oats

Oats were one of the more subdued markets on Friday as prices only made a mild break of the support zone at 177 – 178, but it was enough to find our sell order, getting us short this market. I'm not too concerned about the trade at the moment, as DMI is showing a reasonably strong trend which seems to be increasing in strength. RSI has also hooked lower, which is also a good sign. My first priority for the trade is to get it to breakeven, and with a bit of luck we should be able to do that early this week.

In the meantime however we need to be careful how much we adjust our stops as we don't want to stop ourselves out of a promising trade too early. If you can stand the risk, the best stop placement is still the original at 182 ¼, just above the 182 resistance which should be fairly obvious as you look back in the history of the chart.

If that seems too risky for you could opt for bringing the stops in above Friday's high instead. It won't save you a lot of money, but it will allow you to take some of the risk out of the trade. As a third alternative you could use resistance at 179 to cover the trade above; however this is almost guaranteed to be too tight, so I'd do my best to avoid it.

CONTINUATION of Short September Oats at 177 3/4
Exit Order: 182 1/4
Approximate Risk Exposure: $225 per contract
Profit Target: 162 3/4
Approximate Potential Profit: $750 per contract
RRR: 3:1
Degree of Risk: Moderate

september oats

Soybean Meal

Similar to the oat trade we also sold soybean meal on a break through recent support on Friday. The overall session wasn't as encouraging however as we saw prices close relatively high and close to our exit stop. While I would have preferred to have seen a lower close, DMI is showing a strong trend to the downside, so with a bit of luck we'll be able to ride out this brief hiccup. RSI is also bouncing off the trendline testpoint, all of which looks good for prices to continue lower for the short term.

But soy meal can be a big ranging market, and our stops are just sitting above the 160 resistance from last week. There's not too much we can do with the stops at the moment, so we'll have to keep our fingers crossed and hope we don't see too much back-peddling come Monday. I'm sure we've got the right idea in this market. Now if we can only ride out the daily price swings.

CONTINUATION of Short September Soybean Meal from 157.9
Exit Order: 160.6
Approximate Risk Exposure: $270 per contract
Profit Target: 146.1
Approximate Potential Profit: $1180 per contract
RRR: 4:1
Degree of Risk: Moderate to HIGH

soybean meal

Soybeans

Soybeans made a very nice move lower on Friday through last week's support at 560. Once the market broke through it never really looked back which gives us enough room in the trade to adjust our stops a bit.

Like many of our grain positions, the best stop is still the original, in the case of Beans that would mean leaving them above 568. This will still have $475 at risk, not to mention the accumulated profit from Friday's session. Alternatively you could bring your stops in above Friday's high, which would help cut the risk in half, and based on Friday's close, continue to give us a more favourable risk/reward ratio.

DMI is looking very strong so I'm hoping that we'll see at least one more day like this on Monday and/or Tuesday so that we can at least get the trade to breakeven. But with many trades that are looking like they are building trends, we want to be able to give them a little bit of room in order to allow our profits to run.

CONTINUATION of Short September Soybeans from 558 3/4
Exit Order: 564 1/4
Approximate Risk Exposure: $275 per contract
Profit Target: 525 1/4
Approximate Potential Profit: $1675 per contract
RRR: 6:1
Degree of Risk: Moderate

soybeans chart

Wheat

Wheat prices made a rather decisive breakout through the bottom end of the trading range/triangle on Friday, finding our sell order in the process. The big move lower makes it a little easier to adjust our stops in this market as opposed to some of the other trades we're in.

Again the best stop placement is still above the 390 resistance; however this is going to leave $400, plus Friday's accumulated profit at risk – which is too much money to risk in this trade. DMI is showing a building trend and RSI broke through the trendline testpoint, so I don't want to squeeze this trade too tightly as I think it has a good downside potential; therefore I'll attempt to give the trade a little more room by running the exit stops just above Friday's high and the 185 – 186 resistance zone.

Given Friday's big range I would expect to see a reaction on Monday. Hopefully our stops will be far enough away to avoid a possible whipsaw.

CONTINUATION of Short September Wheat from 381 3/4
Exit Order: 386 3/4
Approximate Risk Exposure: $250 per contract
Profit Target: 351 1/4
Approximate Potential Profit: $1525 per contract
RRR: 6:1
Degree of Risk: Low to Moderate

wheat chart

The charts in this publication are all made using Gecko's Track 'n Trade charting software. You can get a demo for free here.

This is only a small sample of the markets we cover!

For a detailed analysis of ALL of 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

If you have any questions at all about any of these chart lessons, please feel free to ask at the futures trading forum or click here to email us. You can also chat with Erich and Tom live every Wednesday evening at 9:30pm eastern in the HotComm webinar room. Click the link for details about the Support and Resistance Trading Webinars.

Erich's Updates for Tuesday:
To Follow

Tom's Updates for Tuesday:
To Follow

Erich's Updates for Wednesday:
To Follow

Tom's Updates for Wednesday:
To Follow

Erich's Updates for Thursday:
To Follow

Tom's Update for Thursday:
To Follow

Erich's Update for Friday:
To Follow.

Tom's Update for Friday:
To Follow.

For a detailed analysis of ALL of 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

If you have any questions at all about any of these chart lessons, please feel free to ask at the futures trading forum or click here to email us. You can also chat with Erich and Tom live every Wednesday evening at 9:30pm eastern in the HotComm webinar room. Click the link for details about the Support and Resistance Trading Webinars.

Take care, and good trades to you for the coming week!

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 Scorecard

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 April 2006

Date Pos. Market In Out Profit/Loss
April 3 Sell June Mexican Peso 90.950 91.525 287 loss
April 4 – 6 Sell May Bean Oil 2247 2260 78 loss
April 4 – 5 Sell June Lean Hogs 6567 6445 490 profit
April 4 Sell May Cotton 5245 5305 300 loss
April 4 – 10 Buy May OJ 148.65 149.30 97 profit
April 5 – 10 Sell June Mexican Peso 90.875 89.575 650 profit
April 5 – 7 Buy May Heating Oil 186.80 186.80 0
April 6 – 10 Buy July Corn 237 ¾ 240 ¾ 150 profit
April 6 – 11 Buy May Silver 1185.0 1249.5 3225 profit
April 10 -11 Sell May Soybeans 554 ¾ 561 ¾ 350 loss
April 10 – 12 Buy May Wheat 357 ¼ 363 ¼ 300 profit
April 10 – 12 Sell May Feeder Cattle 100.87 101.72 425 loss
April 10 Sell May Coffee 106.85 108.05 450 loss
April 11 – 20 Buy June British Pound 174.81 178.97 2600 profit
April 11 – 12 Buy June EuroFX 121.87 121.47 500 loss
April 11 – 20 Buy June Swiss Franc 7753 7900 1837 profit
April 11 – 12 Sell June US Dollar Index 8917 8953 360 loss
April 13 – 17 Sell June Mexican Peso 89.725 90.025 150 loss
April 13 – 17 Sell December Eurodollar 84.665 94.705 100 loss
April 13 – 17 Sell May Cocoa 1417 1443 260 loss
April 13 – 18 Buy May OJ 142.30 140.30 300 loss
April 13 – 17 Sell July Sugar 1679 1705 291 loss
April 17 – 20 Buy June Heating Oil 200.10 207.00 2898 profit
April 17 – 20 Buy June Crude 7165 7350 1850 profit
April 17 – 18 Sell June mini-S&P 1287.50 1295.50 400 loss
April 18 – 20 Buy June Canadian Dollar 877 8795 180 profit
April 18 Sell June Lean Hogs 6417 6490 290 loss
April 19 Buy July Corn 253 ¼ 249 ¾ 175 loss
April 20 – 27 Sell July Cotton 5345 5160 925 profit
April 21 – 27 Sell June Mexican Peso 89.875 89.525 175 profit
April 21 – 26 Sell December Eurodollar 94.715 94.680 87 profit
April 21 – 26 Sell May Feeder Cattle 102.95 100.80 1062 profit
April 21 – 26 Sell June Live Cattle 7485 7390 380 profit
April 25 – May 4 Buy June Canadian Dollar 8833 9017 1840 profit
April 26 – May 8 Buy June Australian Dollar 7481 7677 1960 profit
April 27 – May 15 Buy June British Pound 179.77 188.42 5406 profit
April 27 – May 2 Buy June Japanese Yen 8809 8977 850 profit
April 27 – May 3 Buy June Swiss Franc 7963 8107 1800 profit
April 27 – May 2 Buy July Bean Oil 2553 2579 156 profit
April 27 – May 2 Buy July OJ 144.10 149.00 735 profit
April 27 – 28 Buy June mini-NAS 1731.50 1719.50 235 loss
April 28 – May 2 Buy July Oats 187 ¼ 192 ½ 262 profit
April 28 – May 8 Buy June Gold 646.5 675.5 2900 profit
      Gross Profit per contract: $32,815 Gross Loss per contract: $4951 Net profit per contract: $27,864
 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.
 
 

 
Traders Helping Traders

 


If you're a short funded trader with an account of 2-3k, new to futures trading or just struggling with your trading, you should learn to trade using low-risk trading strategies.

Almost every Technical Analysis Pattern is Support and Resistance based...if you don't understand how to "see" a chart, you will continue to struggle!

Let Tom and Erich show you step by step how to dramatically improve your results with highly detailed Daily Trade Alerts and Weekly Live Classes illustrating entries, exits and intensive trade management.

Traders Helping Traders trade the commodities futures marketsYou'll receive Erich's highly regarded eBook on Support and Resistance Trading and you'll also have access to a wealth of helpful information and charts in the Members Area.

We've got your back

You're NEVER left on your own to struggle with your trading...Tom and Erich back you up 100% with help and support when you need it most.

Click here to join our trading community today!

Our personal guarantee:

You'll be thrilled you joined us or we'll refund every penny you paid, no questions asked!

Click here to join us!
 

Click here for the Traders Helping Traders Ezine Archives

 

Pick of the Letter


For the Pick of the Letter hot and fresh off the presses, please join us at http://www.supportandresistance.com/subscribe.html
 

Lesson du Jour

Question:

In your Support and Resistance Manual, Appendix A says that the point spread determining resistance in cocoa is 5 points. Does that mean that if I see an area where the market came to resistance and reversed and I drew a horizontal line through this area, that any price bar's high or low within 5 points of the line would be counted? That seems like a spread of 10 points to me?! Any further explanation?

Answer:

For the popular weekly Homework assignments, (and many more archived in the member area) with explicit charts, entries, exits, stops, risk/reward ratio, potential profit, please join us at http://www.supportandresistance.com/subscribe.html
 

Futures Trading is Risky! Never trade with money you cannot afford to lose!


Nothing in this publication is either a solicitation to trade or a recommendation of any strategy. Always consult your broker or advisor before attempting any trade. Commodity trading involves substantial risk of loss.

THE DATA CONTAINED HERE IN ARE BELIEVED TO BE RELIABLE BUT CANNOT BE GUARANTEED AS TO RELIABILITY, ACCURACY OR COMPLETENESS; AND AS SUCH ARE SUBJECT TO CHANGE WITHOUT NOTICE. TRADERS HELPING TRADERS AND IT'S ASSOCIATES WILL NOT BE RESPONSIBLE FOR ANYTHING WHICH MAY RESULT FROM RELIANCE ON THIS DATA OR THE OPINIONS EXPRESSED HEREIN.

DISCLOSURE OF RISK: THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS CAN BE SUBSTANTIAL; THEREFORE, ONLY GENUINE RISK FUNDS SHOULD BE USED. FUTURES AND OPTIONS MAY NOT BE SUITABLE INVESTMENTS FOR ALL INDIVIDUALS, AND INDIVIDUALS SHOULD CAREFULLY CONSIDER THEIR FINANCIAL CONDITION IN DECIDING WHETHER TO TRADE. OPTION TRADERS SHOULD BE AWARE THAT THE EXERCISE OF A LONG OPTION WOULD RESULT IN A FUTURES POSITION.

NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO, ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM, IN SPITE OF TRADING LOSSES, ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS, IN GENERAL, OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
 

Traders Helping Traders Publications, including this one, are all copyright Traders Helping Traders, all rights reserved.

 - www.supportandresistance.com -
204 Cowichan Avenue East, P.O.Box 157, Lake Cowichan, BC, V0R 2G0.
Phone: 250.749.4191