Commodity Traders Club NewsÔ
"The Commodity Futures Trading Knowledge Network"
Copyright© 1993-2015 by web.trading
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Enclosed is a true story of my recent experience in commodity trading. I hope it will be informative to your subscribers.
Fundamentals alone are not enough. Although most traders use technical today, some fundamentalists do surprisingly well.
My discretionary day trader was employed with an old family company that had all the facts on hogs, cattle and particularly pork bellies. He knew how many hogs there were, when they would be slaughtered, and how much hogs and bellies were in storage.
Amazingly, within 5 months my account increased from $1728 on Feb. 1st to $26,115 on June 30th. Naturally, I was very impressed. I had been trading commodities on some options since 1978. In my first few trades I made about $18,000. It was only beginners luck, because in the next 14 years I had a net loss of about $150,000.
In Canada, I am allowed to make 100,000 in capital gains without paying income tax. Similarly to rules in the United States, I could not claim my loss because I had no gains. I understand that Americans can at least write-off $3,000 per year against other income, and claim some costs of courses and trading programs. The 1/4 million, income tax-free opportunity was happening. The pain of loosing so many thousands of dollars using Tradex 21, Commodity Trend Service, Robbins, Jake Bernstien, Seasonal Trades, Various Managed Funds, CTA's and a dozen other brokers (and of course, plenty of my own trades) was soon to be erased from memory.
Technically, I had already paid income tax on my losses, because it was tax-paid money used for trading.
Pork bellies had come down a long way. Personally I was very disturbed that my broker wished to hold short positions. Using my simple computer charting program, "Wilder's One Day At-A-Time," I noted the stochastic was very low, and the MACD was confirming a change.
Trusting my broker, and obviously too greedy, I reluctantly stayed with the fundamental plan.
The government livestock report came June 30th after the market had closed. It was all bad news. We were short 6 contracts of July and August pork bellies. My broker phoned and explained that the market would probably open limit-up on Thursday July 1st. It surely did.
Bellies were limit up for 3 days, and by July 6 I had lost 6 x 3 x 800, or $14,400. Naturally, I was absolutely livid. My broker assured me the government report was over done, and that there would be a sharp correction.
Then the Missouri flood, jump in soybean and corn prices, and Russian purchases put the finishing touch to my account, and I am left with only $411. That's a $25,700 fundamental mistake ($34,000 Canadian).
So, what should I do now? Give my pork belly trader another chance? Why should I dream that things could be better in the future? I am 65 years old, so there certainly isn't a lot of time to replenish my losses. Swing Catcher may be my best chance for now. After all, the trend is my friend (maybe !)
Experiences of a French Trader - Gerard Savry
I begun to study futures in 1986 with a oscillator and plans to trade Stock Indices. My first trading system was Magnus, a methodology created by Michael Chisholm, for S&P 500 and OEX options.
The system promised that for $895, I would make lots of money! If the daily and weekly stochastics smoothed (%K/%D) with 3 units go in the same direction and the daily pointed in a new direction, 25 to 30% to buy, and 75 to 80% to sell. Then buy a call or go long and vice versa. It's God in a trending clear market, not good in very erratic markets...too slow and signals comes late.
I have read many books and gone to seminars and what can I think about all that is available out there? 80% of the systems are good for a moment, but not all the time. 90% of the traders can't follow a system, and they lose money.
Not a month goes by where I don't receive a Holy Grail system information packet for making a fortune from Windsor Books. We can get many ideas about trading stocks and commodities, or making a fortune, by building our own unique and personal system.
With shared ideas and techniques with other traders we gain time and avoid mistakes. This CTCN Newsletter is very valuable and I thank Dave for creating it. I'm impatient to get it.
Members can contact me with a letter c/o CTCN or Fax (My English is not perfect). I am interested in having contact with members who have experimented with Trident and Options Investment - a Hotline with great 'false' information. My Fax number in France is 33.134.28.01.47.
Product Reviews - Scott Russell
Here are a couple of reviews of some products out on the market for futures traders. Before I get to them, however, here is a brief history of my trading career. I started trading at the beginning of 1990.
My first approach was to trade the seasonal patterns outlined in the Seasonal Trades Portfolio by Frank Taucher. The results were pretty mediocre, mostly due to my meddling with the system and making many beginner's mistakes (buying when I meant to sell, forgetting to cancel good till canceled orders ... etc.).
During the last few years I also purchased several of the popular systems, including Swing Catcher and PPS (Pattern Probability System by Curtis Arnold). Again the results were somewhat mediocre, this time mainly due to the lack of time to consistently follow the system. Thankfully I didn't make all the mistakes!
The big mistake that I did not make, and why I am still trading today, is that I did not overtrade. Not making this mistake will allow you to make all others and still be around so that you can learn more from them. And now to the reviews:
It includes all the popular indicators, functions and studies that a trader could want with the ability to modify any of these. The program contains some very simple systems and gives the user the capability to either modify these systems or create and backtest one's own.
As I mentioned earlier, the program runs through Windows. This makes it pretty easy to use for those that are already familiar with the Windows conventions, and in its basic charting mode hardly needs a manual.
The images are very good and include a zoom mode to easily investigate any area of the chart. SuperCharts, from what I understand, does most of the things that its big brother System Writer does only at a more basic level; this is especially true in the system writing department where SuperCharts capability is limited to much simpler systems.
The manual also falls a little short in the area of system writing and I have spent hours re-writing systems in order to get them to do what I want them to, sometimes with no success. More examples and a little clearer explanations would help.
I use the CSI data in my Trendx (Swing Catcher) directory to update my charts and the historical data in my Trendxhd directory for back-testing - very simple.
I have not used any of the other charting programs on the market so I can't compare; but for the price, the flexibility, and the educational value, I would say that SuperCharts is a very good bargain.
Day Trading With Short-Term Price Patterns and Opening Range Breakout by Toby Crabel. Book $279, video $29. Although I am by no means ready to start day trading on my own, the subject always sparks my interest. So I took the plunge and forked over the cash for both the book and the video.
The best way for me to describe the book is to quote from its own introduction:
"This book began as a series of research reports presented in the Market Analytics Monthly Market Letter. The book is divided into five sections; titled 1) Opening Range Breakout 2) Short Term Price Patterns 3) Contraction and Expansion 4) The Integration 5) Other Useful Patterns. Each chapter appears in the original form of the research report. While I hope to have minimized any problems which may arise from the article format, the reader should note that there may still be certain redundancies and omissions which have gone uncorrected."
The book is full of short-term pattern studies and the results they produce in various markets. There is a wealth of short-term system ideas that can be used individually or combined to produce what should be winning systems. If anybody is developing or already has a day trading system, this book should be in your library.
The video attempts to do just that. Combine several of these ideas, along with a money management system, into a short-term trading system. The video itself is kind of plodding and could easily have been done in half the time. (Since I was skiing on my Nordic-Trac though, I did not mind too much.)
Whether it actually does this is not for me to say since I haven't tried to trade it. I have tried to program the system into my SuperCharts, but due, perhaps, to my own bungling have been only partially successful. What I was able to do was program in some of the components of the system separately, and back-test them.
These tests do show that some of these components are valid short-term indicators.
Ok, that does it. I haven't (as may be evident) written anything more complicated than a grocery list in probably 15 years. What some people won't do to get a free upgrade!!
Review of Data Services - Matthew Chiang
I am a subscriber to Genesis Data Services. It's data is not that "clean," so I started looking for a more reliable quote service a few months ago.
After comparing prices, dial-up costs, early access surcharge and other facilities, I decided to focus on delayed quotes from Signal, DTN, Bonneville (BMI) and Future Source, which, despite the large start-up fees, give a much better cost-per-quote and availability ratio than any dial-up service.
I live in Vancouver, Canada, and I decided to try Signal FM first. The major reason being that Signal is transmitted via FM, which means much less fuss and installation problems. All others require KU-Band satellite and none has a local office in Vancouver, and I have no knowledge on satellite reception. Signal is therefore an obvious choice. There are 2 versions of Signal receiver, Enhancer (stores 900+ quotes) and Enhancer Plus (stores 12,000+ quotes with 4MB RAM). I obtained the Enhancer and set it up with the accompanying software within 20 minutes.
Signal is transmitted from Mount Symour, the highest mountain in Vancouver, and I can see it from my house. So I should enjoy high fidelity signal, much like my FM radio system.
Much to my chagrin, I had to move the receiver and the antenna around the house to get the best reception, and I still had missing data.
I purchased a FM signal booster from Radio Shack but it wouldn't help. Reception got worse in the evening, during rainy or cloudy days, which is a common problem with FM transmission.
The Signal downloading software also has a problem, such that not all the quotes can be downloaded (all can be displayed though).
I set the software to collect around 60 symbols, each with 2-3 contract months, a total of around 200 commodity-month downloadable quotes per day. But the software would download around 60-70% and spent "hours" looking for the missing quotes from the Enhancer.
I had contacted Signal a few times and a few suggestions were offered, but none worked, so I sent the Enhancer and the software back after trying for 3 weeks.
I was more convinced that FM or satellite transmission are all unreliable. So I focused on BMI which is transmitted via Rogers Cable in Canada.
In terms of cost-benefit, DTN seems to be offering the best value. A third party company also has a spectrum of add-on software for you to convert DTN data into other formats, and it also allows simultaneous downloading and conversion to other format, while still using DTN under DeskQview.
You can use your favorite software together with DTN, provided it runs under DeskQview. I was tempted to subscribe to DTN, had it not been of the FM problem.
I was surprised that BMI has a local technician that could be a phone call away. I did not know until he personally delivered the receiver. If you have a hardware or BMI software problem, he could actually test and troubleshoot on-site, with a 800 phone link to US!
Signal via Cable TV data is clear and stable. The only trouble I had was when Rogers technicians went on strike, they sabotaged the FM transmission network, which caused me 2 down days. The BMI guy took 2 receivers to my house trying to get a better reception over the weakened signal.
BMI officially endorses Ensign 5 technical analysis software, which is bug-free and has all the studies and requirements that a demanding trader needs. Its system's writing section, however, is a minus-minus. Instead of easy language or human language, it uses mnemonics typical of assembler or low-level programming languages. You have to manipulate the memory registers and write simplified yet brain-taxing mnemonics that only a hacker would enjoy. Otherwise Ensign 5 is a good choice, especially that it can convert data into CSI and MetaStock, and each directory can store unlimited number of contracts (Both CSI and MetaStock has 120-contract/directory limits).
It can also store tick or intraday data, as well as daily or weekly ones. Cost is $1,250 + $10/month.
Since I am using Swing Catcher and backing it up with Relevance III and Super Chart, I would not require Ensign 5 or its like. I therefore use BMI's own quoting software: Market Centre 5.
At $195, it's a good bargain: quotes + news + portfolio (simplified trade recording, up-to-the-tick P\L, total commission, margin amount and account balance) + simplified tick, 5, 15, 30, 60 minute, day, week, month charts! Market Centre 5.0 is an early release, and full of bugs. But I can still use the basics. Version 4.0 (without the charting function) is mature and working well, and their technical support is excellent.
I called them up 5 times since I installed the software, and they helped me come around the problems and sent me new release via modem. Meanwhile, they stopped the billing clock until the next release. BMI delayed quote costs $49 per month, plus a one-time setup fee of $500. A 12-month contract is required.
Market Centre 4.0 and its successors have an ASCII transfer function that allows transfer of data at a specified time interval (be it 5-minute, 30-minute or daily), so that you can convert into and run other analysis program.
However, it has no conversion utility and I am looking for a cheap solution (any help?) to convert into CSI and MetaStock formats - ASCII comma delimited, with symbol first (such as BP3U, S3X), followed by date (e.g., 08/25/1993), O,H,L,C, Vol, OI. The order is user definable, and you can include 20 other fields. Quote Butler costs $695 and is too much money. If I can't find a ready solution, I will try to write my own utility so that I can stop my dial-up service soon.
I was told by BMI that a few of the dial-up services use BMI as their source and resell to the public, while limiting the number of contracts, access time, and charge more or less as BMI. Given all these support, and the final shape of Market Centre 6.0 to come, I think it is much more desirable than any end-of-day limited dial up service. (Provided the ASCII conversion utility is ready).
If you have a satellite reception problem, try BMI via cable. There are already many software out there that use BMI data feed, if you are not sure, check with your software supplier.
Day Traders Take a Fast and Costly Route by Stanley W Angrist - 8-31-93 - reprinted with permission of The Wall Street Journal
Every day is not a payday for most traders. Day traders are investors who open and close market positions within the same trading day. They hope their market insights, trading skills and speed of action will allow them to take some profits home each day. In reality, most day traders find that what looks easy on paper is hard to do in the market.
Consider Jeffrey Needleman, a wholesale stamp dealer from Ann Arbor, Mich., who has been investing for 25 years, most of that as a day trader. He says that during the past 10 years he has run a $10,000 account into more than $100,000 in a few months "7 or 8 times" but always manages to collapse it back to below its starting value in a few weeks.
"When you have 30 or 40 winning trades in a row you begin to believe you are onto something and so you start to overtrade and the market takes it all back," explains Mr. Needleman.
Most market professionals shun day trading, arguing that the costs of getting in and out of trades that usually produce only small profits and some inevitable losses will eventually deplete the equity in the accounts of all but the most skilled.
But traders like Mr. Needleman don't much care about expert opinion. He says he is neither a high liver nor consumed with a desire to have great wealth. What he likes, he says, are the "big video game aspects" of day trading. When brokerage firms ask what his goals are, his stock response is that "I just want to have a wonderful time losing my equity."
Other investors explain their affection for day trading in more expected ways. Kent Taylor, an Austin, Texas, investor who traded stock options before he began day trading futures full time in August 1992, says, "I like to go to sleep at night and not worry about the market 'gaping open' against me." An opening gap is when market prices begin the day at a substantially higher or lower level than the previous day's close.
Day traders can play in all the financial markets, but most of them deal in futures contracts, especially financial futures such as the contracts based on the Standard & Poor's 500 stock index or on currencies, such as Swiss franc.
A futures contract is an agreement to buy or sell something in the future, say 62,500 British pounds for each contract, at whatever price prevails on the exchange. Investors who believe prices are going lower sell future contracts, while those who believe prices are going to rise buy futures contracts.
Two things determine whether an investment is attractive to day traders. One is liquidity, or the volume of trading. The other is volatility, or the size of price moves. When the volume of trading is heavy the bid-ask spread for an investment is small, meaning day traders can profit on small price moves. For example, the S&P 500 contract usually trades with only a $25 to $50 difference between what sellers will accept-the "bid price"-and what buyers will pay-the "ask price."
The second requirement, volatility, means the investments must move enough during the day so that the traders will be able to overcome their costs and still be left with a profit. Linda Raschke, a full-time trader and a sometime day trader, says day trading isn't something that can be done everyday. "You do it when the volatility is there," she says.
More than any other individual investors, day traders see their activity as a business. They believe that if they do their homework they will spot a significant move in the market before the rest of the trading world, capture a part of that move, and then exit with a profit.
Anthony Eck, 39 years old, who trades out of his home in Austin, says that getting out quickly is an absolute necessity. So is a strict control system that limits both profits and losses. Trading mostly currency contracts, he will risk no more than $125 a contract. His average loss generally is no more than $50 and his average profit is a minuscule $62 per contract. While many traders would scoff at such numbers, Mr. Eck says that 71% of his trades have been profitable since he started trading about a year ago, making his trading profitable overall.
Tom Meadows, who has been day trading full time only since March, hopes he can make a living doing it, but so far his losses exceed his profits. Mr. Meadows, 50, a former software manager in Austin, says day trading is appealing to him because "I like the idea of having my finger on the pulse of the American economy."
Day trading requires constant attention. In addition to the frequently changing bid-ask spread, day traders also must cope with the time differential required for brokers to fill their orders. It's a business where seconds count.
Mr. Taylor, who trades mostly currency and the S&P stock futures, says he places his orders by phoning clerks stationed in booths along the periphery of the trading pit. He says the clerks can execute an order and report the price to him in less than a minute from the time he picks up the phone to place his order.
Although all day traders claim they kiss the losers good-bye fast, the general lack of success for most suggest they might be a bit slow on the exit.
David Morse, trades from his home in Atlantic City, N.J., says he has been far more successful at the blackjack tables, which he visits after the markets close, than he has been in day trading. After 10 years of trading, "I would give a pint of blood to be able to trade successfully," he laments.
Brokers love day traders because they can generate huge commissions. But brokers openly encourage few clients to trade. "If I saw more success stories I might be more willing to encourage people to try," says William Mallers Jr., president of First American Discount futures broker in Chicago. A day trader can generate as much active a day in commissions, he says as $1,000.
Gann on Astrology - Eugene O'Sullivan
While the charts still resting in Pomeroy, WA show numerous astrological marketings, the only written manual concerning Mr. Gann's financial astrological methods were in correspondence to some of his clients, and this came a year or so before his death at 76 years of age. Here are excerpts from these Gann letters:
Letters of W.D. Gann - Active Angles and Degrees:
By live or active angles is meant Prices and Time Periods where the Longitude of the major planets are or where the squares, triangles, oppositions are to these planets.
The average of the six major planets Heliocentric and Geocentric are the most powerful points for Time and Price resistance. Also the Geocentric and Heliocentric average of the five major planets with Mars left out, is of great importance and should be watched.
You should also calculate the averages of eight planets which move around the Sun as this is the first most important odd square. The square 1" gives 9, the square of 3 and completes the first important odd square, which is important for Time and Price.
Examples of live, active angles: at the present writing, Jan. 18, 1954, Saturn Geo, is 8 to 9 degrees Scorpio. Add the square or 90 degrees gives 8 to 9 degrees Aquarius and equals the price 308-309, for May Beans. The planet Jupiter is at 21 degrees Gemini, which is 81 degrees in longitude from "0" the square of 9. Subtract 135 degrees from Jupiter gives 306 or 6 degrees Aquarius. This is why soybeans have met resistance so many times between 306 and 311-1/4. The price resistance levels come out strong around these degrees and prices and the Geometrical angles come out on daily, weekly and monthly, but the power of Saturn and Jupiter aspects, working out Time to these price resistance levels, is what halts the advance in Soybeans.
24 Revolutions of Time and Price - The earth makes one revolution on its axis in 24 hours, moving 360 degrees in longitude. One hour of Time equals 15 degrees in longitude, and for one hour of Time, we use one cent of Price. This is for highly active markets but can be used for weekly and monthly time periods, as you can see by the Master Chart.
The longitude of the Planets and the longitude of the average of the Planets determine the Resistance Levels as the price moves around each cycle of 24 cents per bushel.
You mark on the Master Chart all low prices with a red circle around them and place around all high prices a green circle. Then note the angles of 45, 60, 90, 120, 135, 180, 225, 240, 270, 300, 315 and 360 from each high and low.
Then check the Longitude of the Planets and the Longitude of the average of the Planets to see when the Price reaches these degrees or aspects and meets resistance. Example: Dec. 2, 1953, May Soybeans high 311-1/4. This equalled 18 degrees 45' in Pisces, close square or 90 degrees of Jupiter, 135 degrees to Saturn and 180 degrees of the averages, and 120 degrees of Uranus.
300 Price equals 30 degrees Virgo. 302 equals 30 degrees Libra. 304 equals 30 degrees Scorpio. On Jan 18, 1954, the planet Saturn Geo. is 8 degrees 30' Scorpio, and 15 degrees Scorpio gives a price of 303, therefore when May Beans decline to 302, they will be below the body or longitude of Saturn and will indicate lower.
At the same time, using the Earth's annual revolution of 365-1/4 days to move around the Sun, a price of 308-1/2 is 0 degrees or square to Saturn. As long as the price is below 308-1/2 it is within the square and in position to go lower.
But by the 24th revolution, when the price breaks below 304, it is in the bear sign Scorpio, a fixed sign and will indicate lower prices.
Study and analyze all options of all commodities in the same way as we have analyzed May Beans.
Remember, when these Resistance Points are met you must give the market time to show that it is making tops or bottoms and getting ready to make a change in trend before deciding that the main trend has changed.
You can buy or sell against these resistance levels and place a stop loss order. Having before you all the information outlined above, you would certainly have gone short of May Soy Beans on Dec 2, 1953 and cover your shorts on Dec 17 at 296 because the price was down to the 45 degree angle from 44 on the Monthly high and low chart.
24 Cent Moves or More - It is very important to watch the action on the daily and weekly chart when the price is up or down 24 cents from any high or low, 48 cents, 72 cents most important because three times 24, 96 cents, 120 or 5 times 24; 144 of great importance because 6 times 24 - very important. You can also use 1/2 of 24, which is 12, and watch 36, 60, 84, etc. which equals 180 degrees or half the circle or cycle.
May Coffee - March 19, 1954 - High 8729. Using a scale of one point to one degree, 8729 equals 29 degrees Gemini. Using a scale of 30 points to one degree, equals 7 degrees 30' Aries. Using one cent to one degree, equals 27 degrees 16' Gemini.
The dollar value is $28,171.00, which equals 11 degrees 45' Capricorn. The average price of 5 options on March 19, 1954 was 8663, which equals 28 degrees Aries, or 60 degrees from the Heliocentric Jupiter.
Heliocentric Jupiter is 20 degrees 35' Gemini, which means that the price of 8729 was at this degree. Heliocentric Uranus is 21 degrees 52' Cancer and the price at 21 degrees Capricorn is opposite to this.
April 16, 1954 is 276 months from April 16, 1931, low 435. Using 50 points per month, the 45 degree angle crossed 8715 on March 19, 1954, and the Sun has moved 8253 degrees from April 16, 1931. Add this to 435 gives 8688 as the resistance angle.
March Coffee - October 1, 1936 low 300. Time to April 1, 1954 210 months at 30 points per month, the 45 degree angle crosses at 5600, and at 40 points per month, it crosses at 8700.
1931, April 16 to March 19, 1954 - Geocentric Saturn moved 285 degrees 38'. This would give a price of 8572. 1936, October 1 to March 19, 1954 - Geocentric Saturn moved 231, which would equal a price of 7230.
1940, May 15 to March 19, 1954 - Saturn moved 181 degrees 35', which gives a price of 6990 and using 45 points to one degree would give 8715.
1940, August 19 - Saturn moves 173 degrees 23'. At 45 points to one degree, this equals 8760 price.
HELIOCENTRIC SATURN - 1931, April 16 to March 19, 1954, Saturn moved 287 degrees 15' which equals 17 degrees 13' Capricorn, price 8632.
1936, October 1, Saturn moved 225 degrees, which gives a price of 7150.
1940, May 15, Saturn gained 179 degrees 44', price 5940.
1940, August 19, Saturn gained 176 degrees 14', price 5842.
HELIOCENTRIC PLANETS, March 19, 1954 -Jupiter 89 degrees 35' equals 29 degrees 35; Gemini. Saturn 214.44 equals 4 degrees 44' Scorpio. Uranus 111.52 equals 21 degrees 52' Cancer.
The average of these 6 planets is 164.17 or 14 degrees 17' Virgo.
GEOCENTRIC PLANETS - Neptune 204.35 equals 24 degrees 35' Libra. Pluto 144 equals 24 degrees Leo. Mars 221 equals 11 degrees Scorpio.
The average of the 6 Geocentric planets is 173.26 or 25 degrees 26' Virgo.
One-half of Jupiter to Saturn Helio is 152.09 or 2 degrees 9' Virgo. The average of Saturn, Jupiter, Uranus and Neptune is 155.10 equals 5 degrees 10' Virgo. 1/2 of this average is 17 degrees 35' Gemini, Jupiter, Uranus 1/4 is 100.43, equals 10 degrees 43' Cancer Heliocentric. 1/2 of Geocentric Jupiter to Uranus is 93.48 or 3 degrees 48' Cancer.
IMPORTANT DATES EACH MONTH - 1st, 15th, 18th, and 19th. The present market is running close to these dates.
The extreme high was 9 months from June 19, low 2 months from Jan 19 low, 6 months from Sept 15, 1953 low and 5 months from Oct 19 high at 5860.
GEOCENTRIC MAPS MOVEMENTS from low prices on Coffee.
1931, April 16 to August 7, 1953 - Mars has made 12 round trips.
1954, October 29 - Mars will be opposite or 180 degrees from its place on April 16, 1931.
1936, October 1 to September 19, 1953 - Mars made 9 round trips of 360 degrees each.
1954, Dec. 9 - Mars will be 9-1/2 round trips or opposite its place Oct. 1, 1936.
1940, May 15 to June 12, 1953 - Mars made 7' round trips or complete cycles.
1954, April 9 - Mars is 7-1/2 cycles or opposite its place on May 15, 1940. Due to the retrograde position of Mars, it will again be 7-1/2 on July 7 and on Aug. 17, 1954 or the third time in opposition to its own place, which is very important.
1940, Aug. 19 to Sept. 15, 1953 - Mars has completed 7 round trips. Note low on Coffee on that date. 1954, Dec. 4 - Mars 7-1/2 round trips or opposite its own place on Aug. 19, 1940.
If Coffee starts to decline between March 22 and 24, 1954, it should continue down to around April 15, when the adverse aspects of Jupiter to Saturn and the Sun to Neptune are completed. From these dates, you should watch for the possibility of a rally up to April 26, 1954, when Jupiter is 120 of Neptune and the Sun 130 of Saturn. This might cause a quick rally followed by a sharp quick decline. By studying all of the data outlined and applying it to Coffee, you will learn more about trend change causes.
March 20, 1954 - W.D. Gann - Apply the same rules to grains or any other commodity and by study and practice you will learn how to determine a change in trend from a strong to a weak position to a strong position.
Remember that you have signed an agreement not to reveal these rules and instructions to anyone, and by keeping these secret discoveries confidential for your own use, you will later receive the very important CE AVERAGE, and the MOF FORMULA which is only taught to students who have taken the same course as you have and we do not reveal it to students who take the minor courses and pay less money.
Chart in Print Copy
The excellent submission by Ken Galloway reminds us how difficult it is to use fundamentals in the commodity markets. In addition to the problem of proper interpretation, there is the concern of the insiders having the knowledge before you and I.
For example, the large slaughter house operators may know beforehand that a large number of animals will be coming to market next week. That will subsequently depress the cash market prices. He can then hedge or sell Futures before the public traders realize the excess meat supply is at the market. Similar valuable and early insider information is available to large grain processors, metals dealers, oil firms, food merchants, banks, etc.
It is very unfortunate that Ken lost about $150,000 trading commodities over a 14 year period. However, it's interesting to note that Ken has not given up like many others would. That reminds me that persistence and determination are the keys to success in life. We must keep on trying, and never give up, on commodity trading or other areas of life.
Gerard Savry's contribution teaches us that many systems work in a trending market but fail when the market goes sideways, choppy or changes trend.
That is why we should look for systems capable of actually evaluating the trend of the various commodities and then picking the actual markets to trade that have been pre-qualified as likely good trending markets.
We all would like to believe there are profitable systems for trading non-trending, volatile or choppy and direction-less markets. However, the truth is that it's much easier to make money trading a good trending market rather than a trendless choppy market. It only makes sense that would be true.
The Product Reviews done by Scott Russell are very good and informative. Scott has done a good job pointing out the major features and benefits of the systems and products.
The review of data services by Matt Chiang points out once again the problems many traders have had with on-line quote services. Your Editor also had many problems with a couple different on-line data services he tried in the past (DTN via satellite, FutureSource via FM, and Signal via Cable TV).
With DTN the problem was constant loss of data due to weather conditions, such as snow, rain, fog and even heavy cloud cover. Those weather related problems did not occur with Signal for Cable but there was still considerable data loss, mostly missing ticks.
The Signal and FutureSource problems cause was unknown and was never resolved or cured.
My experience with FutureSource was some years ago and perhaps is working better now. However, the DTN and Signal problems were fairly recent. Also, many other traders have told me about identical or similar problems involving them (also FutureLink).
Unless you truly need or want an intra-day quote service I would advise against it. In my opinion, and for various reasons I will outline in a future issue of CTCN, most traders are better of with an end-of-day service via a modem, such as CSI in Florida.
The interesting article appearing in the Wall Street Journal teaches us that day trading is very difficult. In fact, the article is more optimistic about your chances to do well in day trading than is actually the case! Remember, overnight position traders normally go against other position traders, but day traders likely are competing directly with the Floor Traders, who have a huge advantage over off-the-floor day traders.
Such as paying no commissions, access to the actual prices at least 30 seconds or more before the on-line quote service sends it to you, and the fact they may know what their colleagues standing next to them are going to do next. Plus, certain other presumed advantages and edges they have other you. If they don't have the 'edge', why do you think their Seats are worth almost a half million dollars!
Gene O'Sullivan's long submission written by W. D. Gann is quite involved and extremely complex but very valuable if interpreted and used properly. Unfortunately, that is true with much of Gann's writings. Gann's work is quite unique, and works great at times, if done properly, but requires lots of studying, research, interpretation, hard work and imagination.
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Thanks to everyone who has contributed knowledge to this issue of Commodity Traders Club News. Without you it would not be possible. P.S. - Remember, as a special reward for making just one contribution/submission per year, you'll receive an automatic 50% price reduction on your renewal. Submissions can be any length, long or short; typed, handwritten or submitted on a disk. Formal or informal. Please participate by sharing your information and knowledge with other traders. Please make a contribution about your experiences, both good & bad with systems, services, advisors, data vendors, and other trading related product.
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