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The Prop Trading Futures Project

Commodities, Financials and FOREX Special Situations – Oct 19, 2014

While the stock market goes through the biggest pullback in over two years and the Dollar Index is trading at levels not seen since 2010, on a weekly basis, there is a lot of indecisiveness in all major currencies, commodities and financials.

During times like this, a careful selection of trading setups and a reduction of portfolio leverage may be the wisest thing to do. Diversification is always king, but remember that during periods of high market volatility, correlations between asset prices can differ substantially from those seen in quieter markets. [click to continue…]

Compulsive Trading

Trading is known for its powerful psychological elements. Being aware that emotions are always right on your doorstep is the first step to build a sustainable trading business… or build a different business! In a previous post I wrote about trading and gambling issues. That article got some interest and I had a few people that wrote me to share their experiences. [click to continue…]

Commodities, Financials and FOREX Special Situations – Oct 13, 2014

We start this edition of our weekly market update by presenting price and charts developments in United States Dollar, Gold, Silver, Palladium, US Stock Indexes, NZD-JPY, USD-BRL, Live Cattle, Eurodollar and Cotton markets. All these markets present special situations where trends -originated from breakouts out of classical chart patterns- are already in play.

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FOREX, Futures and Equities – Classical Chart Patterns Report – October 6, 2014

After extended periods of low volatility, a series of profitable trades or having accumulated several open positions, is easy to find yourself with a portfolio out of balance. Either it is over-leveraged or not enough diversified. Leverage is quite easy to keep under control since it can be expressed with a simple $/$ ratio. On the other hand, short term portfolio diversification and short term correlation between positions is less easy to manage.

I monitor 1-day, 2-days and 3-days account volatility to protect my egg nest. If any of the three systems get triggered I reduce or cut my overall exposure. I think of risk as a function of account volatility over time. [click to continue…]

FOREX, Futures and Equities – Classical Chart Patterns Report – Sept 28, 2014

I expect the predominant theme for the rest of the year and 2015 to be a strong Dollar. After a decade of sideways consolidation, this month we have started to see early signs of a new trend in the back.  This event alone recently brought two changes in the behavior of several FOREX cross pairs and commodity. In all these markets I expect new trends to flourish in the months to come. Why I’m saying this and how much I expect the Dollar to move is discussed later in this report. [click to continue…]

Habits of successful traders

Why some traders succeed and others fail? If you are a trader yourself I’m sure you have already asked yourself this question several times and you probably got several good answers too. Discipline to commit, faith on our own capability, emotional strength, motivation, etc. are all leading indicators of success. [click to continue…]

FOREX, Futures and Equities – Classical Chart Patterns Report – Sept 21, 2014

Here are my views of what is going on in the markets and the charts that I’m going to look at entering into next week.

Patterns in play in December Gold, December Silver, Euro-Japanese Yen, Canadian Dollar, Soybeans, Gold,

Patterns in formation: Australian Dollar, Singapore Dollar, January Platinum, December 2016 Eurodollar, December Cotton, December Natural Gas

Patterns completed last week: Soybeans Meal, Wheat.

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FOREX, Futures and Equities – Classical Chart Patterns Report – Sept 15, 2014

In this edition of the FOREX, Futures and Equities Classical Chart Patterns Report we are going to review patterns in play in Australian Dollar, Australian Dollar/Japanese Yen, Australian Dollar/New Zealand Dollar, Euro/Yen, United States Dollar/Canadian Dollar, Gold and Silver, Grains; an anticipation setup forming in the Singapore $/US$ and three setups that were completed last week in the British Pound/Canadian Dollar, United States Dollar/Japanese Yen cross rates. [click to continue…]

Thoughts On Trading News Feed and Data

The idea that the more you pay, the more you get and the more you get, the better off you are, not always holds true. If you consider the data and the information available to retail traders, you can spend from a few hundreds to thousands of dollars a month just for trading news feed and data.

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Silver @ $10,00 per ounce?

Recent price developments in precious metals leave no doubts that Silver is – and has been – the weaker material in terms of price action and long term charts are suggesting that even more bearish implications can be just behind the door if it cannot hold above $18.6/ounce. [click to continue…]

Think at your trades like at bricks

Think about your trades like at the bricks you are lying down to build a tall building. This building can be your house, the stairway to your financial freedom or the tower of your success. You choose your favorite metaphoric construction. [click to continue…]

Plan the Trade and Trade the Plan

Many new traders find difficult to follow their trading rules. Have you ever wondered why?

There is more than one reason behind this common issue. The most important is a lack of self-confidence and a lack of confidence in their strategy. These traders tend to break these rules because of the circumstances and the uncertainties surrounding them. [click to continue…]

Successful Traders are Doers

I can make a big list. A list that would make this post the longer piece on this blog. A list that includes all the web sites that offer shortcuts to make quick money with trading.

But I expect none of them to work. At least not to work as they are sold.  Surely there are very few gifted, successful traders that make a fortune quickly and without efforts, but those are black swans. And those success stories are not replicable. [click to continue…]

How to strengthen and expand you trading arsenal

If you trade chart patterns you should consistently analyze and keep track of those patterns that in the last weeks and months generated the best outcome out of each of trading setups. Make this analysis part of your daily or weekly routine.

By trading setups I mean the rules that you should have written down in your Trading Plan, not vague concepts or, even worst, opinions. [click to continue…]

FX, Futures and ETF – Classical Chart Patterns Report – Aug 18

After few quite frustrating weeks with lack of follow throught and lot of volatility, the past week the markets we are following in this report were trending better. The Pound and the NZ Dollar negated my chart interpretation, while all the other markets play out as expected. No new trades were made in the last 5 trading days.

This weekend I have some new setups that may offer nice trading opportunities for swing and position traders. I’m referring to December 2016 Eurodollar, EUR/JPY, China and gold miners. [click to continue…]

FOREX, Futures and Equities – Classical Chart Patterns Report – Aug 11, 2014

In the last two weeks markets, especially equity and FX ones, have been mostly driven by news. This is quite typical for this period of the year and can make trading quite frustrating.

During the last week I closed all but three positions in my portfolio due the lack of trends in the markets in which I was involved. Holding several leveraged positions that overall cannot get traction is a worthless risk to be taken. [click to continue…]

CBM – A strong stock breaking out in a weak market

Usually I do not talk about stocks here, but since I have some friends/readers that are interested to see some application of the concepts discussed here also on stocks I’ll randomly show some setups and stocks scans.

Today Cambrex Corp (CBM) offers an example of a strong stock that is breaking to new highs in a weak market. The breakout happened after 6 months of consolidation that took the shape of an inverse head and shoulder continuation pattern. [click to continue…]

Bullish on Coffee

During the months of June and July Coffee encounter a strong buying power below $170/KCU and today completed a reversal Head and Shoulder Pattern Failure. Now I’m expecting this market to retest $220 and maybe then moving higher. [click to continue…]

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