Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading_15 doc

See Equity balance AUD/CAD, triangle and losses AUD/JPY, reversal symmetrical triangle AUD/USD: continuation patterns major breakout signal trade reversal rising wedge seven-month dou

From time to time throughout this period, the accountswere capitalized in part by notional funds The notionalfunds were included in the calculation of performance.

Value Added Monthly Index (VAMI) specified by theCommodity Futures Trading Commission (CFTC) Neitherthe CFTC nor the National Futures Association (NFA) hasreviewed this material.

From April 1991 through April 1995, I granted a power ofattorney over my proprietary accounts to another trader.However, because I made periodic trading decisionsduring this time, the performance of this trading period isincluded herein The drawdowns of this period are notincluded in a table reporting the size and duration ofdrawdowns in Factor LLC’s proprietary trading in Table9.1 I retired from the trading business from April 1995through the end of 2006 During this period I pursued somenon-profit political and social endeavors In January 2007, Ionce again began trading a proprietary account using theprogram represented by this book In September 2008, Iwithdrew funds from the proprietary account to below thelevel required to implement the trading program described

in this book However, I took very selected trading signalsfor my proprietary account in 2009 and experienced aprofitable year

The performance of the proprietary trading record from

1981 through 2008 was at a leverage of three times thatcurrently employed by Factor LLC

Anticipatory signal See Major anticipatory signal

Apple Computer, H&S bottom in

Assets See Equity balance

AUD/CAD, triangle and losses

AUD/JPY, reversal symmetrical triangle

AUD/USD:

continuation patterns

major breakout signal trade

reversal rising wedge

seven-month double bottom

Average investors, advice for

Babcock, Bruce

Barclay CTA Index, versus S&P 500 Index

Bear hikkake pattern

Bear market, in EUR/USD

Bear trap

gold

soybeans

“Best Dressed List”

continuous patterns in copper

eight-month H&S bottom in S&P

evolution of plan and lack of

four-month H&S bottom in NZD/USD

fourteen-month coil and nine-month descendingtriangle in EUR/CHF

fourteen-month symmetrical triangle in sugarH&S bottom in crude oil

seven-month double bottom in AUD/USD

seven-month triangle in gold

six-month ascending triangle failure in USD/CADsix-month wedge in EUR/USD

sixteen-week horn in GBP/USD

summary

Best practices, in Factor Trading Plan

Big Short: Inside the Doomsday Machine, The (Lewis)

Black box systems

Bottom line trades/bottom liners

Boundary lines:

breakouts

ice line

Last Day Rule

Break-away gap, in corn

Breakouts See also Major breakout signal; Minor breakout

Brent Sea oil See Crude oil

British pound See GBP entries

Bull hikkake pattern

Bull market:

copper

of 2009, H&S bottom and

Bull trap

DJIA long and short trades

year of trading gold

year of trading sugar

Chart book economists

Chart redefinition, gold trade and

Charts See Classical charting principles

Classical charting principles

benefits of chart trading

history of

ideal chart patterns

limitations of

Closing price, importance of

Cocoa, premature breakout in

Commodities, as percentage of liquid investment assets Commodities Corp

Commodity/forex traders:

favoring 30 percent right approach over 70 percentright approach

performance of

reasons for profitability of

Commodity pool account

Congestion

break away gap

major breakout signal trade

minor continuation signal trade

Correlation, between markets

Cotton, miscellaneous trades of

CRB Index, December 2009–April 2010 chart Crude oil:

continuation rectangle and pyramid triangleH&S bottom

horn

Last Day Rule

major anticipatory signal trade

major breakout signal trade

Daily charts, use of

DAX:

false breakout

major breakout signal trade

Day traders, advised to avoid commodity trading Descending triangle:

Month One, December 2009

Month Two, January 2010

Month Three, February 2010

Month Four, March 2010

Month Five, April 2010

performance evaluation

Discipline, successful trading and

Discretionary trading plans

Dollar, Australian See AUD entries

Dollar, Canadian See CAD entries

Dollar, New Zealand See NZD entry

Dollar, U.S See USD entries

Donchian, Richard

Double bottom, seven-month double bottom in AUD/USD Double top:

Dow Jones Industrial Average (DJIA):

case study of short and long trades

continuation H&S top in utilities

minor reversal signal and miscellaneous trades of100-year chart

outlook for future

trailing stop rule

Elliot Wave Principle

Emotions See also Personality and temperament

good and bad trades and

not removable from trading

profitability and

Entry, to trades See also Identification, of trades

Equity balance:

avoiding daily checking of

commodities as percentage of liquid

EUR/CHF, fourteen-month coil and nine-month descendingtriangle

EUR/GBP:

minor pattern continuation trade

problematic diagonal chart pattern

six-month wedge

Euro See EUR entries

Existing open positions

Exit, from trades:

first big trade

proprietary trading record

Factor Trading Plan See also Case studies

idealized construct of entire year

monthly returns from 1981

trade risk management

Fan principle, crude oil

Fishhook buy signal:

December 2009–April 2010 chart

double top reached

minor continuation signal trade

minor reversal signals trade

price target

sixteen-week horn

time framing example

trailing stop rule

as 2010 opportunity

Gold:

case study of year of trading of

continuation H&S and symmetrical triangleDecember 2009–April 2010 chart

Horizontal versus diagonal patterns

Investors, advice for average

Kansas City wheat See Wheat

Last Day Rule

Major anticipatory signal:AUD/CAD

Major pyramid signal:

GBP/USD

performance evaluation Market runs

Markets:

correlation between

goal of

keeping trading plan in sync with

Market Wizards (Schwager)

Markup/markdown

Mechanical trading plans

Minor breakout signal, AUD/CAD Minor continuation signal:

trading record

Month Five, April 2010

background

classical charting principles

outlook for future

Novice traders:

advice for

books recommended for

NZD/USD, four-month H&S bottom inOCOs (one cancels the other)

Oil See Crude oil

Open positions, existing

Orange juice, minor continuation signal trade Order management

Patience, successful trading and

Pattern breakout See Breakouts

Pattern recompletions

Patterns, interpretation of

Pennants:

Personality and temperament See also Emotions

Platinum, ice line in

Point and figure (P&F) charts

ratios to express relationship of risk to return

in typical percentage of trades

Rectangular top, in sugar

Retest Failure Rule

Returns See Profit; Risk management

Reversal failure top, in soybean oil

Reversal H&S pattern, in copper

Reversal M Top, in EUR/USD

Reversal rising wedge, in AUD/USD

Reversal symmetrical triangle, in AUD/JPY Reversal top, in silver

Reversal triangle bottom, in sugar

in Factor Trading Plan

ratios to express relationship of return to risk Rounding top, in EUR/JPY

Round-trip (popcorn) move

Barclay CTA Index versus

December 2009–April 2010 chart

eight-month H&S bottom in

false breakout

Last Hour Rule

major breakout signal trade

minor reversal signal and miscellaneous trades

Self-forgiveness, for trading mistakes Short sellers, present in all trades

Skid, in forex markets

Slippage, in forex markets

Sovereign default, T-bonds and

minor continuation signal trade

minor reversal signals trade

miscellaneous trade

retest failure rule

Spot forex market

Stops:

entry and protective

risk management and

Straight-line market runs

Sugar:

case study of year of trading

December 2009–April 2010 chartfourteen-month symmetrical triangle inmajor breakout signal trade

major pyramid signal trade

minor reversal signal trade

out-of-line movement

price target

reversal triangle bottom

as 2010 opportunity

triangle and running wedge

weekend breakout rule

breakout signal/retest trades

major anticipatory signal trade

outlook for future

Traders, characteristics of successful

analysis of self and trading plan

knowledge of trading signals

leap of faith

Trades, categories of

Trading Commodity Futures Using Classical Charting

Principles (Babcock and Brandt)

Trading for a Living (Elder)

Trading plan

capitalization and

keeping trades in sync with

necessary elements

personality and temperament and

risk management and

success and analysis of

Trading platforms

Trading signals:

criterion for valid

successful trading and

Transaction costs, of day trading

Triangle See also Ascending triangle; Descending

triangle; Symmetrical triangle

AUD/CAD losses

copper

o juice

Twelve-week rectangle in Dow Jones Transport IndexUSD/CAD:

continuation and pyramid patterns

failed ascending triangle

Value Added Monthly Index (VAMI)

“V” bottom, in soybean oil

Viking horn

Vocabulary, of Factor Trading Plan

Volume, importance of

Wedge See also Rising wedge; Running wedge

continuation wedge in soybean oil

major breakout signal trade

minor continuation signal trade

soft prices

Yen See JPY entries

Zero-sum game, commodity trading as