Jan-2011 - Huge eye-opener!!

It has been tough four months since started trading in commodities.. really loved the commodities movement which suits me well compared to nifty.. but swift movements kill you completely, if you are on wrong trade.. have been testing the system in live trading and started well with the system..but did some errors like early entry and exit, over trades etc have shown me negative returns by the end of first two months..

I have decided to go for trades only as per system and let me stop gambling... i have started Jan-2011 with staying tight on the system.. i am now happy by end of the third month as system gave me decent returns.. just posting the table below for comparison..



After analysing the trades of last three month, i have come to the following conclusion.

1. Never ever enter or exit without having the signal from your system. Only exception is that you should be in very handsome profit in a single trade. I have set the benchmark for the handsome profit as 100 points in oil and 10 points in copper from entry.

2.Don't hesitate to reverse the trade which is in huge loss(don't even think that you will get a chance next day to reverse with less loss.Next day's movement might even erode your capital completely). After reversing, you may overcome all that loss in that entry.

3. Avoid small range counters like Aluminium, Lead and Zinc.Since the range is small, entry and exit happens quite often without realising profits. SL is triggering on the same day whereas you will again see the entry price next day after exiting the trade. It also increases the turnover but the returns are not worthy for the positional trades.

4. Filters should be used to avoid false break-out trades. 0.2% is optimum filter. But if the entry is done after a big rally or fall then 0.3% filter will help to avoid whipsaws.

5. Avoid sitting infront of terminal which makes you to react for every wild tick movement.

6. Adjust the High/Low and close prices of the holiday trades in the next day's levels to reduce loss.

JUST TRADE YOUR PLAN!! thats it.. Keep it Simple Silly!!

Let me rock in 2011!

I should rock this year..

> Let profit runs. Cut the losses

> Never ever hesitate to follow the signal from system whatsoever loss you are in.

> Remove fear

> Develop patience

Let this 2011 will be a turning point in my trading life!!

Basics for Swing Trading

Stay in one time frame! Yes, it is important to be aware of the big picture, but it should not affect where you get into or out of a trade or how you manage it. Don't turn short-term scalps into "big picture" trades
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When in doubt, get out! If the market goes dull and quiet after you enter a trade and makes no progress in the direction of your entry, do not wait until your stop is hit. Just get out! Seek a more active market or better trading opportunity.
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Don't trade in quiet, dull markets. Dow, Livermore, Rhea, Taylor, Gann-all the greats say this over and over. There must be activity and liquidity in order to trade profitably.
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Don't carry losing positions overnight. Exit and try entering at a more favorable level the next day.
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If the market offers you a windfall much bigger than anticipated profit on a trade, lock it in! Take profits and dont trail stop. You will again get a chance.
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Finally, remember that both in short-term trading and mechanical systems, the distribution of winners is skewed. Most of a month's profits might come from only two or three big trades. Much of the time the individual profits may seem small, but more importantly the losses should be small, too. It is vitally important to lock in" the best trades. Be defensive and don't give back profits when swing trading!
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courtesy : Unknown