A Simple But a Potentially Very Profitable Methodology for Trading Commodity Futures & Forex Markets...
We have been using this unique trading methodology to trade the commodity markets successfully for some time now. The method is really quite simple and easy but can also be quite profitable.
. . . It involves buying higher swing-lows and selling lower swing-highs. Also known as pivot-points.
A definition of these swing-highs and swing-lows is appropriate here:
A swing-high is a high bar with lower bars on both sides of it.
A swing-low is a low bar with higher bars on both sides of it.
The more lower bars to the left of a swing-high the better.
The more higher bars to the left of the swing-low the better.
That makes them more significant and presumably more powerful swing points. However, only one bar on either side is acceptable (but two or more to the left are usually stronger signals).
My trading methodology requires two (or more) consecutive swings, with the second one being a higher swing-low than the preceding one for a buy. Alternately, the second swing-high must be a lower swing-high than the preceding one for a sell.
The long trade entry takes place when your commodity broker enters the market for you on a buy-stop, which gets triggered two ticks above the high price of the last bar (the bar following the swing-low pivot bar), for a buy.
The short trade takes place on a sell-stop at two-ticks under the low price of the last bar (the bar following the swing-high pivot bar), for a sell.
Your stop-loss order is placed 6-ticks under the lowest price of the last swing-low bar on a long trade.
The short trade stop goes 6-ticks above the highest price of the last swing-high bar. You can make some really outstanding money using this simple, but very effective trading methodology.
By David Stone
Secrets of time durations of profitable & losing day-trades
Most successful day trades last approximately 7-minutes. That assumes the trader is using a reasonable profit objective and exiting the trade as his profit target gets hit.
Most losing day-trades last approximately 45-minutes, based to our hands-on research. That’s because the trader relies on hope once he sees the trade appearing to fail. He hangs on to the losing trade hoping it will turn, finally the loss becomes to big forcing him to exit the trade.
For those of you who actively trade (or desire to learn how to trade) the financial and futures markets, there are a lot of other things outside the markets you should be following. But, I guess my bigger message is for those of you that aren’t in the futures markets, whether you trade them or not, the futures markets have a significant impact on what happens in the other financial markets, including forex, currencies, options and stocks. That’s why you should soak up every piece of good trading knowledge like a sponge in a quest to clearly see the bigger picture.
How many trades are needed for statistical validity?
Many traders ask how reliable is their track-record as far as statistical validity goes.
They may see some statistics on seasonal trades showing a market was up from April to June during 12 of the last 14 years.
They may have experience with their own trading system showing 8 of 9 winners following say a 5 unit moving average crossing over a 9 unit moving average.
None of these are valid from a statistical validity standpoint. That's because according to mathematical expert and statistician a minimum of 30 occurrences are required for statistical validity.
Please keep this in mind when evaluation a trading system. Anything less than 30 samples is not statistically accurate.
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