FtR 9.7 June 2014 Signals Update

There is one quality which one must possess to win, and that is definiteness of purpose; the knowledge of what one wants, and a burning desire to posses it.

In June, FtR 9.7 stays under water for the most of the time. The feeling is not great. The last trade, short on Wheat futures lasted more than a week and worked out to be a winner. This helps FtR 9.7 to maintain a "clean sheet" for the year 2014 so far. However, a lot of market are see-saw-ing at the moment, without a clear trend, it is difficult to make big profit.

FtR 9.7 May 2014 Signals Update

FtR 9.7 experienced a rather flattish month this May. 30Y US Treasury Bond Futures (ZB) again dominated the signals with 4 out of 6 trades done.

One market worth mentioned is Gold Futures (GC). It staged a downside break out after spending about 2 months protecting 1280 region. Too bad, FtR 9.7 didn't flash any short signals along its dramatic down movement.

Advice from an Elder.

Last week or the week before (I forgot the exact date), I was "advised" by an elder in my family that futures trading is a very dangerous activity. According to his friend's daughter, who has just recently graduated from a university in US, only "professional bankers" who write program to trade futures are profitable in this business. And retails who wish to make money trading futures "must" "monitor market every minute" and "trade carefully". He hopes I can do "other jobs" to make a living rather than depends on "futures speculation".

No doubt investment banks are the large sharks in the market with many of the banks recorded profitable trading for every single trading day. Retail traders like us are "handicap" if compare to them in terms of capital, experience, program sophistication, execution speed, diversification, etc. However, it doesn't mean retail traders can't "cari makan" in the trading world. For me, before I put my hard-earned money into my futures trading business (I always treat trading as a business, rather than gambling), I must make sure my business plan / strategy possesses the "EDGE" over the market. I need the statistical "EDGE" to execute my trading plan confidently without sabotaging myself halfway through the journey. Why? Because even with the "EDGE", one is still not immune from trading losses. Unfortunately, Holy-Grail doesn't exist in futures trading. When my trading operation is running, I am constantly "monitoring" its progress and evaluate the results quantitatively. When the "EDGE" is fading or failing, I know my business plan or strategy fails and I will need to exit the business. Contrary to the advice, I am not monitoring the market every minute. I don't see the need to monitor the market closely except that you trade based on tick or 1 minute chart, which I don't recommend unless you are "professional traders" working for investment banks, hedge funds or prop trading companies.Those work for me or with me know I seldom monitor market because every trade decision that I made is from my trading systems, monitor or not monitor doesn't make any difference.

I try to understand the advice "trade carefully" as to manage your risk prudently. This one I fully agree. Know your risk for the whole business and for each individual trade to minimize the surprise to the downside. I am not sure my elder's friend's daughter trade futures or not. Hopefully she doesn't, otherwise "kesian" her to have to monitor the market "every minute", probably round the clock. :-)

I didn't heed my elder's suggestion to look for work elsewhere. I am still speculating in futures market to make a living. I thank him for the good intention but obviously his understanding of futures trading is very much lacking. Hopefully I have the opportunity to explain to him what I actually do for a living.

FtR 9.7 Apr 2014 Signals Update

FtR 9.7 System enjoyed a rather smooth month in April. 30Y US Treasury Futures (ZB) contributed nearly half of the profits.

And my last April position which was short on Gold Futures (GC), ended with the precious metal staged a dramatic trend reversal yesterday. Shown above 15 min intraday chart of GCM4.

If you want to trade like what I did in FtR 9.7 Trading System, consider subscribe to my Trading Signals Sharing.

FtR 9.7 Mar 2014 Signals Update

I included two trades that closed today (April 2nd) in March record. The last one was ZB, which happened to be the largest loss for the month. I am satisfied with another profitable month for FtR 9.7. :-)

Four Pillars of Trading Success from a Veteran Futures Trader

I had a long chat with an experienced futures trader that day. He shared with me his four pillars of trading success.

1. Ability to analyze and come out with own ideas.
You should have your own thinking, not to copy others trading ideas. I always stress the important of designing your own trading strategy, not blindly follow some experts' trading method or black box system. You need to understand your strategy inside out, know its characteristics, weakness etc. This is to ensure you are able to follow the strategy confidently when your trading are dealing with market adversity. At the same time, you will know when your system has stop performing statistically like it should in backtesting when market conditions change dramatically.

2. Money
Money here refers to adequate capital. To many, futures trading offer leverage, meaning you can start with very small capital and make huge profits. Many futures trader wannabe I met with started with as small as RM 10K and wished to make ten-fold profits in the shortest time possible. It is possible but the probability is very low. And to make such a huge profit, one need to take enormous risk and this increases the risk of ruin. Capital and risk management in futures trading is as important as cash flow management in a business. If a company faces negative cash flow problem, it might go bankrupt. If you can't manage your risk well in futures trading, your account are doomed to bust.

3. Patient
A good trade does not always start to make money immediately. Sometimes, price goes lower after you bought, causing you with unrealized loss on that particular trade. Panic and impatient trader will exit their position at loss, fearing the loss will widen. If a trade goes in your trade direction, impatient trader will take the profit because they want to lock in the profit and fear the market will take it away if they do not do so. Their behavior prevent profit to grow into huge one. Trend traders on the opposite, let the profit runs as big as possible. In the process, they may let a few unrealized profits turn into small losses. However they reckon this is inevitable and accept this as an expense of running their trend trading business.

4. Luck
Erm... Luck! Are you kidding? Take a look at the chart below.

Scenario 1-You quit your job and started your trend trading business in year 2005. You ended up with very tiny profits or small losses. You were forced to quit trading in early 2006 because profits were not enough to support your life.
Scenario 2-You quit your job and started your trend trading business in year 2006. You were rewarded with huge profits in your first year of trading. Then in 2007, you again made extraordinary profits. In 2008, you probably encountered volatile swings in your account equity earlier in the year, but you have plenty of "house" profits from 2006 and 2007 as buffer. At the end of 2008, you are glad that you didn't deviate from your trading system and were able to take advantage of market collapse to generate spectacular profits.

So, when is the best time to start trading full time? Unfortunately, no one knows when is the best year or so. I am lucky to have started my trading career full time in late 2008. So far, business is running rather smoothly. So, who say luck is not important in trading?

Globex Trading Hours During Daylight Saving

Daylight saving time 2014 will begin at 2AM on Sunday (09 Mar) in US. Most US states will spring forward an hour. Trading in CME Globex will bring forward an hour too.

Those who subscribe to FtR 9.7 Trading Signals Sharing, please don't forget to adjust your alarm clock 1 hour earlier.