Simple trading strategy in commodity

[DanPickUp]

Hi

Here some adds to the money management from what is shown, as it is a so called three stage trade. Many people trade with that kind of MM and stop loss in such kind of trading is crucial, as other wise you run in the trap dear Anuragmunjal has mentioned. In case there is any problem you can or could face about setting your stop losses and being filled at the right moment, I would recommend you to think again about what you do.

Most future traders here add contracts during the market goes in there direction and that is complete the other way round to what is posted here. I am not a supporter of adding contracts nor I am a supporter of taking out contracts. That is personal choice and also has to do with the hedge ideas I trade and nothing else. As I am more in delta trading, I look at bit different at certain things in MM.

Now let me give you an idea from Walter Bresset how you can do the play with three contracts. The picture needs no comments as every thing is clearly explained on it<

The next idea is from Dr. John Keppler in which he uses the same three in advanced fixed market targets with clear stop loss. He gives an idea with 10 contracts and compares that when traded the same system only with 3 contracts and taking out one contract at each level. .

http://i48.tinypic.com/znpg7o.png

http://i49.tinypic.com/2e6fq6u.png

http://i50.tinypic.com/6qlm53.png

What may should be told< J. Keppler trades that system always with 10 contracts on a very specific chart which is called Market profile chart. Market profile is a very precisely tool when understood the right way. Here is the whole video in case you are interested in http://www.youtube.com/watch?v=GTxw3YRwpF4&feature=related

I am not a supporter of trading purely on RSI, but as it is your money, it is your choice. Dear Comm4300 has already made a good post about the risk you face by doing so, so no more comment from me on that side.

Now I wish you good luck and good trading

DanPickUp

 

[anuragmunjal]

hi Dan
very informative..nice way of unloading and reloading , with some of original position intact.but even here all 3 contracts are being bought simultaneously,then offload some and buy back more when the risk is reduced. the additional contracts are always being bought above the previous 'buy'.

on the other hand our friend wants to increase contracts as the position goes against him, by the time his 3rd position builds, the original two lots wd be in decent loss. he does not have a plan even after that.... only hope ...and 'hope' I believe does not help much while trading.

regards

merry x'mas to u and everyone else here

 

[The Piedpiper.]

your strategy is against the basic fundamentals of trading. Pyramiding your winners will give u large profits , if u start pyramid your loosers ,one bad trade will be enough to wipe out your a/c .

 

[DanPickUp]

hi Dan
very informative..nice way of unloading and reloading , with some of original position intact.but even here all 3 contracts are being bought simultaneously,then offload some and buy back more when the risk is reduced. the additional contracts are always being bought above the previous 'buy'.

on the other hand our friend wants to increase contracts as the position goes against him, by the time his 3rd position builds, the original two lots wd be in decent loss. he does not have a plan even after that.... only hope ...and 'hope' I believe does not help much while trading.

regards

merry x'mas to u and everyone else here

Hi Anuragmunja

Yes, there is no adding on losing positions in what I showed. Checked again his first post and now saw the miss interpreting from my side, as I naturally thought he only buys when RSI is under 30 with the hope that it quickly will be over RSI 70 and then starts to sell his first contract, at the next level his second contract and so on.

But I not thought of going short at 70 and then even adding more shorts when market moves up. Absolute against my way of trading and as you do, I never would recommend to do such way of trading to any body.

But let me tell this, as the bottom line was and is the key to not have lost too much money in the coming story the fund manager had at that time<

There are people which really trade like that. I heard from one share fund manager which did it in the last big crash in the States on the long side and every body which know about it thought, that this was crazy. But the guy did not trade on pure TA. He just followed his thoughts, believes and the way he always traded.

Now to the button line and the key< He had and still has the attitude to not thinking to be married with any position he has. Means, after the weekend this crash happens, he immediately reversed his whole portfolio and in average he lost not more or less than other share funds did in that month. But such games are only for absolute hard pros and retail traders really should stay away from averaging losing trades.

By the way< Also to you and all other readers < Merry Christmas and a good jump into the new year.

Dan

 

[srikantpreddy]

Thanks a lot to everybody for their critical input which I really need to make my system more concrete.

Inorder to prove my point, I want to post some charts....

Can somebody let me know how to post charts which will prove my Points.....

From the begnning I have told this system is not for equity (strict No)

 

[srikantpreddy]

Anuragmunja Bro,

Based on your question, My min profit I am looking is 10K per lot

lets say today close @5100 (my shorting level)....Next day open at 5050....I will keep on waiting to get atleast 100Rs on downside...

Lets say it goes till 5230 the 3rd day (My other shorting lot will be near 5200 +-3 4Rs)...So my Avg will be around 5150... I will keep holding both the lot.......

Once I will get 100Rs in per lot, I can exit both lots or book 1lot and keep trailing with SL of my cost for the other lot........

 

[SaravananKS]

Anuragmunja Bro,

Based on your question, My min profit I am looking is 10K per lot

lets say today close @5100 (my shorting level)....Next day open at 5050....I will keep on waiting to get atleast 100Rs on downside...

Lets say it goes till 5230 the 3rd day (My other shorting lot will be near 5200 +-3 4Rs)...So my Avg will be around 5150... I will keep holding both the lot.......

Once I will get 100Rs in per lot, I can exit both lots or book 1lot and keep trailing with SL of my cost for the other lot........

Dear Srikantpreddy,
your martingle Strategy will work in SideWays It will not work in trending Phase.

You May be success in Long Mode Since Usually commodities won't Stay below RSI 30 for Long Period.
but one should not over look the rollover cost.
if one has has huge capital then it is Possible to book profit in all Positions in commodities.
but he may not get a good return on investment

In short Side it is very danger method

Sample one from my personal experiance

Take 9th Sep 2010 when Silver Trading @ 32303 on that date RSI Was 79.34 if one adapted the same Strategy in short side definitly must have lose hugh amount.


all the best:thumb:

 

[comm4300]

Can somebody let me know how to post charts which will prove my Points.....

go to imgur.com upload your pic; various links would be provided. Copy n paste BB link here...

to check if your chart link works, just click of preview button and then submit reply button.

 

[sivgates]

Attached,

Commodity Levels for trading day 26-12-12

 

[srikantpreddy]

Dear Srikantpreddy,
your martingle Strategy will work in SideWays It will not work in trending Phase.

You May be success in Long Mode Since Usually commodities won't Stay below RSI 30 for Long Period.
but one should not over look the rollover cost.
if one has has huge capital then it is Possible to book profit in all Positions in commodities.
but he may not get a good return on investment

In short Side it is very danger method

Sample one from my personal experiance

Take 9th Sep 2010 when Silver Trading @ 32303 on that date RSI Was 79.34 if one adapted the same Strategy in short side definitly must have lose hugh amount.


all the best:thumb:

Dear SaravananKS,

Thanks... Even I have check from 2005 data to backtest the whole thing again.....

This system is not working when there is a sudden rise or sudden fall in the Mkt...I mean to tell in a big trending Phase it's not working....

But this is working nicely in a range bound Mkt.....

Thanks all for their comments.....

This weekend I will include some more indicators (like RSI/MACD/BB) and will back test again to improve the success ratio