In addition to "Ken" being a very popular name Ken is also a generic dictionary word applicable to successful commodity futures, stocks and options trading because dictionary.com says the word "Ken" when used as a noun means to have knowledge, understanding, or cognizance with mental perception and a vision. Ken is also applicable when used as a verb, in the sense of possessing a wide range of sight, vision or to have relevant knowledge of or about, to be acquainted with, and understand or perceive of ideas or situations, knowledge, understanding, or cognizance; mental perception. To have knowledge of something and understanding. It's really interesting how applicable these dictionary definitions are as far as "Ken" being an excellent name for a successful financial markets trader and a traders web site...
When You Get a Hit, Keep Running Until
You Are Tagged (stopped-out) -
Information for Traders about How 90% Winning Trades
are Possible Selling Commodity Options -
Historical Article of the year by Traders Club member Robert Edwards
Well, it is early Wednesday, Dec 21st and
I have already liquidated my S&P500 "Christmas trade"
which I bought on the close of Monday, Dec 19th and it is
not even Christmas. Yes, I made just enough to pay my commission
with a little extra to go out to dinner, leaving the big dollars
sitting on the table. After buying, I placed a $2,500 stop-loss order.
I was never losing even $1,000, yet I'm already gone. Another
potential home run wasted. Why didn't I make the market take
me out of the trade? I cut my losses short but seem to consistently
cut my gains even shorter.
For those of you that trade the futures markets, there are a lot of other things outside the future markets that you should be following. But, I guess my bigger message is for those of you that aren’t in the futures markets, whether you trade them or not, the futures markets have a tremendous impact on what happens in the other markets. That’s why you should soak up every piece of good trading knowledge like a sponge in a quest to clearly see the bigger picture. Click-here for a free service that gives you unlimited access to 4 trading seminars taught by industry legends Dan Gramza, Jack Schwager, Ron Ianieri, and of course John Murphy. Get started learning from market greats in the comfort of your own home, on your schedule at no cost today . . . click-here NOW to take advantage of this FREE offer!
I watch the daily gyrations of
the futures market and can get better fills than guys with
their Hot lines and market calls. But when the market makes
a small profit I take it, usually in the $100 to $300 range.
I tell myself I'll get back in, but rarely do. Then a few
days later the market really moves and I'm not in. I recently
bought the lows in frozen orange juice, but rarely made more
than a dollar or two on the trades and sometimes took unnecessary
I somehow manage to always get out of a trade
just before the market booms. I am a very short-term trader,
it's just the type of player I am. In my mutual fund account,
I'm up about 16% for the year, remaining almost totally in cash,
except a few trades lasting a couple days here and there.
The same would be true, I guess if I were playing baseball.
Using the baseball analogy, several times this past year I
was at the exact right place in the lineup to come up to the
plate with the bases loaded and the starting pitcher was running
out of gas (momentum fading). I picked the right pitch and
turned the ball back the other direction, hitting it so hard
and fast it was heading for the bleachers for sure. (I had
picked either a top or bottom of a market and had a quick
profit and all I had to do was sit back and place a stop-loss order where
I got in).
The commodity market would never have stopped
me out, just as there is no way an outfielder can catch a
ball hit high into the bleachers. Yet, while everyone else
was rounding the bases, I decided I better play it safe and
stay on first base or worse, I didn't even make it to first
because I ran into the dugout and was called out leaving the
base path. This happened to me recently when I bought December
Cotton at 70 cents but got out at 72 cents while the market
soared up another $12 or more. This happened several times
in coffee. I bought in the 70's for a 2-3 cent profit, when
I would never have gotten stopped-out and could have rode
the contracts to the moon.
My trade research work shows most trades (85% to
95%) are either small winners or small losers, and these tend
to cancel out each other. In fact, with commissions, these
trades usually result in a net loss. However, the few successful
people who make it to "pro" status, put themselves
there and stay there by hitting a few home runs each year.
Here's your chance to analyze that market you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and and no payment info will ever be requested.
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My memory of past losses -- times I struck
out at the plate, the proverbial "Casey at the bat"
scenario, continues to paralyze me. I'm talking about baseball
because commodity trading is the "big leagues."
I've traded since 1980 and I've learned to pick my pitches
as good as anyone. I have a phenomenal batting average, running
between 65% to 80% winning trades. Yet like most average traders,
I will make a profit for the year before commissions, but
will show a small loss after commissions.
I must change my patterns. If I don't change,
I know I will never be anything but a journeyman, going back
and forth between the majors and minors. Just switching teams
regularly every time I decide to try a new program or advisor.
I will end up on a minor league bus someday heading for a
town with a name no one would recognize, with hardly enough
change in my pocket to buy a hotdog!
My new year's resolution is to get some "guts."
I may strike out even more next year, but that is fine -- most
home run hitters do strike out a lot. But they are among the
highest paid players because the home runs make up for it.
The same is true in commodities.
A "super trader" is consistently
successful because he or she hits a few big winners to make
up for the many mistakes. The few big trades that occur in
a year are responsible for the profits of the pros. It is
what makes a "supertrader" claim that title and
maintain it over time. If I can just learn this one point,
I know I can become a "super trader" too! I must
quit taking myself out of the market and force the market
to take me out. When I hit those big hits, I will keep running
the bases until I am tagged (stopped) out!
To diverge a second from baseball, I read
that every time one takes on a position, it's like throwing
an opened pocket knife in the air and catching it with one's
bare hand. Eventually, one gets bloodied pretty good. With
every throw, the chances of getting cut are increased. You
don't want to make any more throws than you have to, and likewise
in commodities you want to limit your trade frequency and subsequent
The more you trade commodities, the more chances there
are of making a mistake. If you trade, you will error. And
yes, every trader gets bloodied. The laws of physics work
the same, whether it's a "supertrader" throwing
the knife or just me. Although everyone gets bloodied, the
super traders have made enough money to buy themselves some
padding, so the blade never actually pierces their hand. They
rarely feel the pain of the loss. They have the confidence
to keep throwing the knife, when I will have already given
up. I may lose next year. If I do, it must be, it will be,
because a better team beat me. It will not be because I beat
Recently Dave called me for the first time
in several months, on my birthday Nov 30th. During that call,
I explained to him that I had recently been quite successful
selling out of the money calls and puts in the Cattle market.
Although I was intermediate term bullish on the market, the Live Cattle
market was in a short-term correction going down. It just happened
to bottom the day Dave called.
I had sold Live Cattle call options in the February contract
all the way down to the low that was hit that day, while selling
additional April Cattle puts at higher and higher premium
values. Because February Cattle was falling faster than the
April, the profits I was making on the 12 short February calls
was equaled to the short-term losses I was experiencing in
the 20 short April puts, although none of the April puts were
ever in the money (I sold April 64, 66, and 68 strike puts
and April Cattle bottomed at 68.20).
With cattle futures bottoming on 11/30, I
took profits on all call options the following morning and
bought 2 April Cattle futures contracts and went long a January
Feeder Cattle. Now, all I had to do was hold the short April
puts and hope the market held the low. The market more than
held up, it rallied strongly in my favor and on 12/5/94 I
was now at near break-even on my April puts, so I dumped them
all and also took profits on the 2 long April futures, and
Jan. Feeder Cattle.
Even though it looked like a good move for
one day, based on the drop that occurred on 12/6, the market
has since rallied greatly and I never got back in. It took
several days to put that position on and I could not get myself
to ever get back to selling puts to put it all back on.
The $9,000 total dollars of put premium I
received when I sold the April puts, has dropped to less than
half of the original amount, to about $4,000. If I had waited
to liquidate the position today, I would have a $5,000 profit
in only 3 weeks. With the rally present in Cattle, it is likely
April Cattle will close above 68.00 and all puts will go off
worthless. It appears likely I could have kept all $9,000.
I told Dave that day on the phone, when live
cattle happened to be at the bottom, that selling the 64 April
Put for over 60 cents ($240) was the best trade on the options
board. Editor's Note: That is correct, Bob did say
that on Nov 30th) Today, three weeks later, the 64 April Cattle
Put is trading at 20 cents ($80). It looks like the option
will expire worthless. Another home run wasted.
I wrote another article in an earlier CTCN
explaining how 90% of
futures exchange option buyers lose, and 90% of options
sellers win. I don't think there is any better trading strategy
in commodities futures trading vs selling out-of-the-money
puts and calls. But I am still working out the bugs.
Ken's Organization will be offering new commodity futures trading
products and new financial services for commodities markets
traders ... Soon you will be able to "trade corn" "trade
wheat" "trade gold" "trade live cattle" "trade mini S&P"
and trade other financial futures markets with trade placement brokerage assistance of your
"Commodity Broker" and Ken the Commodity Trader...
trading tips of the month: Some profitable commodity futures
traders use Fibonacci numbers in their trading. Here is the
fibonacci number sequence under 1,000: 0, 1, 1, 2, 3, 5, 8,
13, 21, 34, 55, 89, 144, 233, 377, 610, 987. Please note, each subsequent number always equals the sum of the prior two numbers in the Fibonacci sequence.
The sunflower is a good example in nature of the fibonacci series of numbers what with sunflowers having florets in fibonacci number spirals of 34 and 55 around the sunflower's outside area. As an interesting note, the sunflower photo image to the right is using Fibonacci ratios itself what with its 233 width by 144 height, and 8 pixel border.
The Golden Ratio a.k.a. Golden Ratio is closely related to the Fibonacci number series, with the numbers 0.618 and 1.618 being most important. On a more personal trading level, successful commodity futures traders like Ken have also discovered 38% 50% and 62% time or price retracement ratios to be potentially profitable trading tools, especially 50%. However, the most important Fibonacci ratios are always 1.618 (uppercase Phi), and 0.618 (lowercase phi). 1.618 is also well known as the "Golden Ratio" or referred to as the Golden Mean. More information regarding Fibonacci Numbers.
Ken the Commodity Trader will have new position trading and day trading tips plus details on these unique and interesting trading methods later, so please visit ken.org on a regular basis. In the meantime, please contact us if you are interested in personal consultation on an hourly prepaid flat-fee basis regarding your commodity futures trading.