Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading_6

Tham khảo tài liệu diary of a professional commodity trader: lessons from 21 weeks of real trading_6, tài chính - ngân hàng, tài chính doanh nghiệp phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả
Nội dung trích xuất từ tài liệu:
Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading_6Once a position has been established and the initialprotective stop has been set, there are a number oftechniques used by the Factor Trading Plan to exit a trade. In nearly all cases, trade profits are taken if a marketreaches the target implied by the pattern that launched thetrade. Stops are also advanced in the direction of theposition using several methods, including the RetestFailure Rule, the Trailing Stop Rule, and the InterveningPattern Rule. Explanations and examples of these methodsto move protective stops are found in Chapter 3. Trade Order ManagementWhereas trade risk management deals with thedetermination of the risks and leverage taken on any tradeor combination of trades, trade order management dealswith the actual physical process of entering and exitingtrades. My job as a trader is really nothing more than that of aglorified order placer. At its irreducible level, trading isbasically the process of entering orders. I have no controlover what the markets do. The real challenge of trading isto identify the controllable factors and build into the tradingprocess means to control what can be controlled. Themarkets will do what the markets will do whether I buy, sell,hold, or do nothing. At the end of the day, the only control Ihave is over the orders I enter. I will divide this section into trade order management onpositions being considered for a new entry and trade ordermanagement on existing positions. Entering New OrdersI review the weekly charts for about 30 different marketsonce each week—usually late Friday afternoon or earlySaturday morning. This review gives me a good idea of anynew developments taking place in the markets and if thereare any new potential trades on the horizon. The types of weekly chart patterns I want to trade take avery long time to develop. In fact, there are only about two tothree significant weekly chart patterns that qualify anindividual market for a trade in any given calendar year.Finding more than three weekly chart patterns in a specificmarket even during a strongly trending year would signifythat I might be reading more into the charts than I should. By early Saturday afternoon, I have a pretty good idea ifan entry trade will set up in the coming week in anymarkets. Usually, I see weekly chart patterns develop manyweeks, and sometimes months, before an actual pattern iscompleted. This is a problem because once I see a patterndeveloping, I become anxious to become involved. This iswhere patience comes into play. I print off weekly charts (and accompanying daily charts)that might offer a trading opportunity for the coming week.In addition to the many wonderful online charting packagesavailable (I use three different web-based programs), Imaintain printed hard-copy charts of the markets I am eitherin or looking to enter. Part of this exercise is because I wasweaned on paper charts. I find that actually drawing in pricebars by hand each day puts me in better connection withthe markets than scrolling through updated charts on theInternet. Next, I turn my attention to the daily charts. I pay particularattention to the markets identified by my review of theweekly charts, although I look at the daily chart of the activecontract of every market in which I would consider a trade. While my bias is to focus on weekly charts, daily chartsprovide more trading opportunities than revealed by theweekly charts. If a daily chart trading opportunity develops during theweek, I will print out a hard copy of that chart. At about 2 PMSunday, I gather the charts printed the previous day. It is atthis time I determine the entry strategy, risk parameters,and leverage I will use for each market, assuming that apattern breakout occurs. I launch the online tradingplatforms I use and begin placing entry orders and settingup trading alerts so that I will automatically be notified if anyof my entry orders are executed. I most commonly use good-until-canceled (GTC) openorders to enter and exit trades. Some markets arenotorious for running stop orders during the nighttime hours.I carefully avoid entering GTC stops in the night sessions insuch markets as the mini metal contracts, grains, softs,fiber, and livestock (which I seldom trade anyway). I use dayorders in these markets, each day entering the orders whenthe normal daytime trading hours commence. By the time the Sunday afternoon markets open, I havejust about completed all of my order entry for new positions.Orders I do not place on Sunday afternoon (such as stopsin thinly traded electronic markets) are placed early onMonday morning. I am normally awake and have checkedAsian and European trading by about 3:30 AM mountaintime. I am not a very good sleeper. The exact time a trader does cer ...