Inch by inch!

I love this man always ! - Al pacino. Let it be good or bad, he always make you think about him for few days. And this speech, no way!







Script:



I don’t know what to say, really. Three minutes till the biggest battle of our professional lives all comes down to today. Now either we heal as a team or we’re gonna crumble, inch by inch, play by play, ’til we’re finished.



We’re in hell right now, gentlemen, believe me. And, we can stay here — get the shit kicked out of us — or we can fight our way back into the light. We can climb outta hell one inch at a time.


Now, I can’t do it for you. I’m too old. I look around. I see these young faces, and I think — I mean — I made every wrong choice a middle-aged man can make. I, uh, I pissed away all my money, believe it or not. I chased off anyone who’s ever loved me. And lately, I can’t even stand the face I see in the mirror.


You know, when you get old in life things get taken from you. I mean that’s…part of life. But, you only learn that when you start losing stuff. You find out life’s this game of inches. So is football. Because in either game, life or football, the margin for error is so small — I mean one-half a step too late, or too early, and you don’t quite make it. One-half second too slow, too fast, you don’t quite catch it.

The inches we need are everywhere around us.


They’re in every break of the game, every minute, every second.


On this team, we fight for that inch. On this team, we tear ourselves and everyone else around us to pieces for that inch. We claw with our fingernails for that inch, because we know when we add up all those inches that’s gonna make the fuckin’ difference between winning and losing! Between livin’ and dyin’!


I’ll tell you this: In any fight, it’s the guy who’s willing to die who’s gonna win that inch. And I know if I’m gonna have any life anymore, it’s because I’m still willin’ to fight and die for that inch. Because that’s what livin’ is! The six inches in front of your face!!


Now I can’t make you do it. You got to look at the guy next to you. Look into his eyes! Now I think you’re gonna see a guy who will go that inch with you. You’re gonna see a guy who will sacrifice himself for this team because he knows, when it comes down to it, you’re gonna do the same for him!


That’s a team, gentleman!


And, either we heal, now, as a team, or we will die as individuals.


That’s football guys.


That’s all it is.


Now, what are you gonna do?

Trade Update - Intraday

Can't resist myself from doing this intraday update which I normally don't do.



Crude oil was sold at 3919 and it is trading at 3810 now (previously sold one lot at 3977 and booked it at 3930)..let the lady luck smiles at me till tomorrow morning :).




I badly need this success after all missing the good junk from previous carnage.

Trade Update - After the break!!

Excellent trade cycle, I would say once in couple of year opportunity has just passed by. Crude oil sold at 4199 reached 3543 and gave buy signal @3785. Buy has reached 4030 yesterday and about to give SELL today if 3919 is breached.

Copper was sold originally around 435 and reached 387 and gave buy at 400 and still in buy mode now. It is about to give sell today if 400 price level is broken. But copper is making typical which happens quite often now a days.

Also, did not have proper TA levels by tuesday due to long weekend at Indian markets. It may sound funny but that's how I have been slightly struggling with my system. If Indian markets or US markets are closed,I would be having the pinch next day. I will remain mostly neutral on those days.

Back to the trades from today onwards. Since Feb, I have never been with empty hands except by first two weeks of this month when I missed to eat the yummy and fatty stuffed bread fully. I could eat only a slice of it :)

Commodity Trading - Insight

Most of us hear lot about commodity trading as they are hot products in today's financial world. I believe that they are going to rule the future. But we have lot of "ifs" and "buts" about commodity trading. I tried to submit my view on commodity trading from my short span of experience.

Commodities to whom ?

- If you are a true follower of technical analysis.

- If you are a person who can obey to the mechanical system without any manual intervention.

- If you are a person who can trade only with 50% of the capital to manage MTM requirements.

- If you are person who believes that swing trading can make you rich than intraday trades.

- If you are a person who can simply ignore all noise about markets from media, forum etc..

- If you are a person who has a mental fortitude to just follow price despite of any good, bad and ugly events.

Why commodities?

- TA is precise when applied with commodities compared to equities. Of course, you must follow one system consistently.

- Almost traded 24 hrs in a day. It’s actually an advantage as you are in a position to manage trades when it reacts to any news/events across globe

- Traded globally with high volumes. Group of people cannot control prices.

- If you are trading in Nifty future, only alternate is bank nifty future and there is no other alternate apart from stock futures. But each major commodity is like one nifty future.

- Risk reward ratio is excellent in commodities.

- Great liquidity with low margin requirements.

What are all wrong myth about commodities?

- Rapid moves kill your trades. Of course, if you are not a disciplined trader. If you are well armed with right system and stop loss guard, these rapid movements are actually a gift to traders.

- It requires more time. Overtime pays extra J. But on serious note, we don’t need to spend all our time in terminal if we do positional trades. I personally feel that positional trades are good. So, we can simply place orders and forget it. But the extra effort whatever we are putting in commodities is real worth in terms of profit compared to equities.

- You may have to take the physical delivery if contract is not squared. Can you imagine, your nifty future contract will stand unsettled due to no buyer or seller?. In the same way, it will not happen in commodities too. Exchanges and brokers have systems in place to make sure that your contracts are rolled-over or squared well before market close on the expiry day.

- I have never seen my book in green with nifty itself. How can I think about commodities?. This was the main concern holding me back when I thought about commodities. But, the fact is different. Due to the volatile nature and higher range of price movements, commodities make you more disciplined and organized. You will realize within 2-3 trades that how disciplined you should be to keep survive in this market. I always thank commodities as it keeps me standing on my toes always.

- Very sensitive to global events. Yes, but I see it as an opportunity rather than nuisance. I have observed that TA makes you to enter on the right side well before any event/news. There will be a huge volatility but your SL will save you for sure. Even if you have to reverse the trade with huge loss, don’t hesitate but do it and the reversed trade will give you huge profit after compensating the previous loss.

Where should start?

- Start checking charts from metatrader platforms, forexpros, stockcharts etc.. All the major commodity charts are available here and data too available.

- Apply your TA knowledge with these charts and observe them.

- Don’t do paper trade for long time. Start real trades in small quantities.

- You can start real trading with smaller contracts such as silver micro and lead/Zinc mini etc where margins are very low like mini nifty.

What are the commodities can be considered for trading?

I will prioritise the commodities as below to start the trading.

1. Crude oil

2. Copper

3. Silver

4. Gold

5. Nickel

6. Lead

7. Aluminium

8. Zinc

Which exchange is better ?

Above said energy, metals and precious metals contracts are traded with volume in MCX.


Agro commodities like Pepper,Guarseed etc are traded with volume in NCDEX.

What are the margin and lot size?

Which TA system is best?

Any system which helped to take profits in equities, nifty future can be used for commodities. But due to bigger range of prices and volatility, success ratio might differ between nifty and commodities for the same system. So, I will personally advice to back test systems with both nifty and commodities for relative performance and settle with the specific system accordingly.


Moving average cross over will lag the entry and exit in commodities due to higher range of the price movements. This is just my personal observation. We can still use MA with other appropriate tools attached to it. I always believe that approach is important with commodities rather than the TA system.

What are the Don’ts?

- Never over trade.

- Never average when the first trade is in loss.

- Never do blind trade. Always follow the entry and exit as per your study of TA.

- Never hesitate to exit at stop loss even for a single trade. Always remember that you are trading the contract which is being traded simultaneously across globe.

- Avoid small range counters like zinc, lead and aluminum when you are in initial phase of commodity trading.

- Don’t react to news or events. Just follow the signals from your system.

- Never ever predict or assume the price levels to make quick entry and exit. Just follow price action.

What are the Do’s?

- Always trade only with 50% capital.

- Always trade with fixed position for certain period.

- Try to do multiple lots per contract. Off-load part qty whenever you have profit.

- Have a eye on commodity prices on dollar value too i.e, listed in NYMEX,CME and COMEX.Prices from MCX are dependable to INR value. So, even if the commodity has run up in its original dollar value, MCX price may not proportionately move up but lag slightly. This may impact MCX based TA levels in a slight way which may lead to whipsaws.

- Whenever U.S markets are closed, trade less on those days as movement will be less with low volumes.

- Exit only at stop loss. Don’t try to exit due to volatile moves. Commodities always shake weak hands.

- Trades based on any SAR system should be traded with filters. Especially after the bigger trending moves, allow more % of filter than normal. This will keep you engaged in right trade.


All the above are from learner's perspective. I have not gone deep into subject. Please use as an preliminary source on your search about commodities trading.If you have any doubts, please feel free to post in comments and i will try to clear them as much as possible.


I have made this   presentation   based on my commodity trading experience only. So,if you are serious about commoditiy trading please check this presentaion also before start trading.

Good luck!!

Gotcha!!

"And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine – that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance"

- Legendary Trader Jesse Livermore

When I read these lines first time, I skipped it as usual which I normally do after reading such famous quotes :).. When I started shaping up as a trader, I understood the pain which this man should have gone through before writing these lines.. And today is the day, I really feel the power of this quote..

What a trading week..It cannot be better than this ever in life!!.. Entire globe is bleeding.. every index and commodities are crashing like there is no tomorrow.

Ok, am i seeing this first time? nope, still had the nightmare of lehman brothers collapse days.. but this time, it's different. am staying on the right side.







YES. Had shorted both crude oil and copper well before the vote session on debt ceiling at U.S parliament..

Crude oil was originally shorted at 4299 and it is now trading at 3579 with 720 points profit.300% returns from capital.


Copper was originally shorted at 436 and it is now trading at 396 with 40 points profit (200% returns from capital)

No stop loss hit in between for both the above trades.

In the same week, Nifty had lost 500 points which translates into 100% returns.This is what I love about commodities. If you are on right side, you can make smart money.

Ok.. how much I have pocketed!! Not bad this time.. Had taken enough cut from the fall.. but should have sat tight.. Had to square of the positions due to heavy work load at office and having doubts of bottoming out. System still stays in short and I must have also stayed. But, very happy to realise that having a system in place which can really take you to the path of glory if you are disciplined!!.Yes, i remind myself to be more disciplined which is nothing but sitting tight!!