“But, What Does the Chart Say?”
Commodity futures’ trading is not easy. It is like an ongoing chess game where trading tactics can change in a moment’s notice. Part of the ongoing difficulty in successful commodity trading is all the input that our minds have to digest constantly every day. A lot of that input comes from newspapers, TV news and TV business channels that have “talking heads” giving their opinions all day long.
Every day, everyone is looking for a fundamental reason for why the markets move one way or the other. The “talking heads” seem to always have an answer. As we have watched the business TV channels in the past, there will be many differing opinions on what will happen. Added to the problem, is the fact that some of these market pundits are also trying to sell their latest book or pump up their ratings. They want to get you revved up emotionally in the hopes that you buy their book; or, to entertain you, so that you will come back and watch or listen to them again and again. It seems that everybody has an agenda. Yes, David Hall Commodities has an agenda. This market letter is my attempt to take some of the emotion out of your trading decisions.
Of the clients that David Hall Commodities has had since 1981 that made their own decisions, many have been unsuccessful in their trading because of too much emotion in their trading as a result of listening to radio shows or TV “talking heads”. The successful clients were those who had a specific plan and stuck to it no matter what. They weren’t affected by the “talking heads”.
Now that information comes quicker, the emotion and trade mistakes occur more often as well. David Hall believes that if you can look at the market unemotionally, your trading results will be better. That is what, “But, What Does the Chart Say?” is all about. It is a way to get some non-emotional technical chart advice to consider when your emotions may be pushing you in one direction or the other. The purpose of this letter is to help you maintain your own personal checks and balances.
A WORD ABOUT THE TRADING TACTICS OF THIS MARKET NEWSLETTER.
In this letter, David Hall will be using several technical tools to confirm whether you should buy or sell; and, how aggressive you should be in that position. If, the vast majority of the indicators that are used are bullish, then the newsletter will recommend an outright buy of a futures contract; and, the newsletter will always suggest a protective stop, in case the trade doesn’t work. (No, David Hall’s trades do not work all the time, nor do anyone else’s).
The idea in commodities trading is to put on trades when the indicators suggest doing the trade. The trade needs to be in the direction of the trend that the newsletter has determined. Then the goal is to keep the risk as small as possible, so that we can come back and trade another day, if the newsletter is wrong.
Occasionally, the newsletter may add to positions, if certain indicators line up just right. If, most of the indicators are bullish and many other indicators are neutral, then the newsletter may suggest a covered call write type of trade, or a call spread rather than an outright long position. If, there are too many indicators that conflict, then the newsletter will choose to stand aside. The same holds true with bearish trades in which the newsletter would be recommending short futures or covered put write or put spreads.
It has been my observation that the vast majority of the time, markets are trading in ranges rather than trending. Covered call writing and covered put writing are very good ways to tackle trading range markets which is what most of my trade recommendations will be. But occasionally when most of the newsletters indicators are pointing one way with no dissenting votes, the newsletter will just put on a futures contract in that particular direction.
