Wednesday, January 29, 2014

恭贺新禧


马年到,新春闹,开开心心生活好;
祝福你,乐逍遥,马到成功喜气到;
扬鞭策马向前跑,年年岁岁吉星照;
马年福瑞长相伴,龙马精神得意笑。

Tuesday, January 14, 2014

Trading Signals Sharing

I am sharing with you guys my FtR 9.7 Trading Strategy signals.

FtR 9.7 is a swing trading strategy designed to capture "swing movement" in a particular futures market. It typically holds a trade for 1-5 days, depending on market situation. It generates about 5-15 trades per month. I will cover 7 futures products that trade in CME GLOBEX Platform. They are:-
1) Gold (GC)
2) Crude Oil (CL)
3) 30Y US Treasury Bond (ZB)
4) Corn (ZC)
5) Soybean Oil (ZL)
6) Soybean (ZS)
7) Wheat (ZW)

Each trading day, I will email subscribers the trading signals, which includes exact entry and exit orders before market open, that is 7:00 AM (Malaysia Time). The email reads like this:


Below are the trades done from Oct 2013 till early Jan 2014. Is shows the results of one contracts basis per signal generated. Commissions and fees are excluded in calculations.



Here is one trade signal from Soybean Futures (ZS) in Oct 2013.


If you are interested in subscribing to my trading signals sharing or have any questions, don't hesitate to email me at bmdtrader@gmail.com

Order Types and How to Use Them

I am writing this post to explain few types of orders we normally use in trading.



Market - This is the most basic and frequently used order type which tells the exchange's computers to execute your order at the next available price.  If you are buying your fill price will be the next available offer and if you are selling your fill will be the next available bid. To get a better indication of where you might be filled you need to look at the current bid/offer. For example, above is the bids/offers for Crude Oil June13. If you Buy Market 1 lot, you will get fill @ 92.98. If you Buy Market 10 lots, you will get 1 lot @ 92.98 and the remaining 9 lots @ 92.99. The difference between bid and offer is known as spread. In a liquid market like Crude Oil futures, the spread is small, in this case, 1 tick.  The advantage of using market order is that you will certainly get your fill in the fastest possible time. However the pitfall is that in a fast moving market, when liquidity is low, you might get very big slippage.



Limit - This is an order to buy or sell at a designated price. Normally we place a limit to buy is below the current market price, while a limit to sell is placed above the current market price.  For example, you place a Buy Limit Order for Crude Oil futures 10 lots @ 92.00 when market is trading higher (92.97 vs 92.98). All orders are filled on a First In First Out basis (FIFO); your order will be placed in the queue on the exchange’s computers.  Your order will only be filled after those orders in front of yours are executed.



Stop - Stop order are used as stoploss as well as entry for some traders. A Buy Stop Order is placed above the current market price and Sell Stop is placed below the current market price. Stop Order is a price order turn into Market Orders once the designated price trades. For example, we place a Buy Stop Order 10 lots Crude Oil futures @ 94.00, when market is currently trading @ 92.89 vs 92.90. When market trades @ 94.00, our Buy Stop 10 lots @ 94.00 will become Buy Market 10 lots. This means when market trades @ 94.00, we will buy 10 lots Crude Oil at next available offer price. Once triggered, our order will compete with other incoming Buy Market Orders; therefore doesn't guarantee our fill price same as the Buy Stop Price.  The difference between Stop Price and Fill Price is slippage.  

Order Cancels Order (OCO) - An OCO is actually two separate orders that are placed around a position, one of the orders is your Limit order to take a profit and the other is your Stop order to get out at a loss.  The advantage of this order is that once the profit or loss order is hit, the trading platform will cancel the remaining order for you. For example, you buy FCPO @ 2280 and place your Stoploss, a Sell Stop Order @ 2269 and Profit Target, a Sell Limit @ 2300. Once market trades either 2269 or 2300, the other order is automatically cancelled. However, I don’t think Bursa Malaysia Derivative or futures brokers in Malaysia offer this order in their services.  

Trailing Stop - A trailing stop allows you to enter a Stop loss order and have it move as the market moves in your favor based on your preset parameters.  This allows you to lock in a potential profit if the market moves in your favor.  Let say you short FCPO @ 2280, with stoploss @ 2300 and no profit target. When market moves lower to 2250, you can have your stop moved lower down to 2265. You may continue to lower your stops if market moves lower, ultimately when market reverse and take out your stops, you are out with reasonable profits. But don’t forget stops order doesn't guarantee you exit at your designated stop price. There might be slippage.

There are numerous more advance orders that are available in the marketplace but I don’t think they are available in our markets yet. So, I won’t cover here. Now, you know the type of orders. Try to incorporate these orders in your trading strategy and hopefully it helps you in your trading. 

FtR Trading System Performance Update: Jan to Jul 17

Rebounding from steep drawdown last month...