was successfully added to your cart.

Cart

All Posts By

Peter Karaverdian

A Safer, Efficient and More Affordable Way to Trade Crude Oil

By | Blog

With all the market volatility comes great trading opportunities to the ones that know what they are doing.  But, how about after spending years to learn a product, it now becomes much more expensive to trade?  You have the skills and the knowledge to trade the instrument, but the Notional Value of the instruments has driven up intraday margins to trade them.  We have seen this in the last year with the introduction of the Micro Equities which were introduced in May 2019, as a means and way to bring more traders to the liquidity table of trading products such as the E Mini S&P 500, and the Emini Nasdaq.

When I got into trading E Mini Equity Futures were already far introduced in the late 1980’s, after the larger contracts were not a thing for the retail market to even try to dabble with them.  One wrong tick against you and it costed a weekly salary for most. But then they also got expensive for most traders to participate in, and thus then Micros were introduced.

But what about when market volatility spikes up margin costs, and you have been trading from a small account?  You now have a situation here with this current coronavirus pandemic, and “geopolitical noise and headlines” have caused volatility so such, that intraday margins on Crude Oil are set at 100% margin requirements.  Over $10,000 per contract to trade what was once a $4000 margin with day trading requirements of ONLY $500. 

What do we do, with the skills and knowledge we have but now with a limited account size to exploit a trading plan and strategy on crude oil?  SIMPLE.  We put on a Calendar Spread in the direction of our desired direction.  Let me explain.

Say for example we are trading June Contracts of Crude Oil at $19.69 per barrel close of day on Friday.

Based on your own technical or fundamental reasons you find you want to take advantage of the continuation of this long trade come this week.  You use whatever strategic pullback of price rules, to take an entry but you can not afford to participate, OR you do not want to be a participant in the volatility and thin liquidity of the current month trade. (JUNE)  

We can move over another month FIRST, BUY or LONG the July contract month, and then SELL August at the same time, and create a spread (hedge) trade to reduce not only some of the volatility of the outright contract (June) move, but to reduce the margins it would take to trade by up to 70-95% in most cases.  So now rather than needing a $10,000-20,000 dollar account to trade one contract, we can so this for as low as, $1,000 with what is referred to as Automatic Span Margin Credits.  This is provided to us at some of our preferred broker accounts and platforms that we use.  Let us look at the July-August Spread Trade from Thursday of this last trading week.

Trading View Pro Plus Spread Charts (FREE TRIAL HERE!)

So why are we not taking advantage of trades like this, rather wasting time talking about it with friends and coworkers, etc.?  I personally believe that most of us are not aware on how to trade these products like this and if you have a chance to know how, you can really have a lot more diversified ways to make money in your portfolios.  With a strategy the way I use like this, plus with the correct instrument like Crude Oil, you can trade this intraday. 

Other things may be to use my technical strategies to trade other products with, such as stock options, forex and any futures and commodities. 

The strategies I teach and use for myself are not just here to create a business sale and forget about you.  It has far more meaning than that.

#1 Help a Fellow Trader Make Some Cash.

#2 Learn from other traders how to trade better (I am always in the seat of a student)

#3 Make new friends around the world to meet one day

#4 Better market relationships (birds of a feather)

#5 Helping communities grow.  Everyone has goals and desires with their success in trading.  A lot come from unfortunate places and they want to grow as a community.  I believe in the same.  I believe everyone deserves a shot at the markets in an affordable, efficient, and systematic way, with no stress, no BS, and no hyper techno market babble jargon. 

The approach I was given and took upon myself years ago was one that had pain, ups and downs, and sometimes serious rejection from large players that I would approach for help.  That is how the business is.  Too much ego and selfishness.  My plan is to help the trading community get into these professional trading styles and prosper from them.  I plan on meeting everyone that is part of my trade family and share experiences around the world that WE ALL DESERVE!

Sign Up For Emails And Seasonal Trade Ideas

#SPREADEM

Trade Safe out There and Trade it When You See It!

Peter Karaverdian

ForteTrader

Futures Pro V2 Swing/Spread Trading Version 2

By | Blog

Hi Traders.   

Peter, here with Fortetrader.   Let me tell you what we’re working on. So in the last two years we offered a Futures Spread Trading Course. It was one in which we emphasized  mostly about seasonality. How’d you get into all these future trades and opportunities with seasonality trends and repeat patterns? That is what we learned and applied.  But guess what? Seasonality doesn’t always happen. Seasonality tends to get broken by things like what’s going on today, disease, famine, geopolitics, severe change of weather even people tweeting stuff. 

It changes everything guys and gals. So here’s what I’ve done, I’m creating a new Version that we’ve been doing actually in our camp this last couple of weeks. And it’s been great!  This is going to be called the Futures Pro V2. Now in this program I will add to the old and take some old stuff that is irrelevant out. We will emphasize more on the technical aspects and approaches of the markets.  

Second Change.  Now normally we have a Facebook Inner Circle, okay? It’s a small, tight niche group of people, of traders that are trading seasonal spreads. 

We’re going to migrate that group into a Discord group. A little private online community away from the FB Media Platform.

Once I’m done with that, I’m going to go more into these videos about our new charting technologies that we’re using. Things like TradingView. Check out a free trial for 30 days here.  

There’s a lot of tech guys out there. We have an arsenal of tech friends that are helping us build things that are automated, buy and  sell signals, even automated plotting tools. Aren’t you guys interested in that? A lot of people have been. 

We have a partnership with Tradestation brokerage. Amazing,  global powerhouse brokerage. And they have given us free access to an algorithmic trading, state of the art platform that normally costs you $500 per month if you were to lease this on your own. They are giving us free CME Globex data (normally $21-$30 per month) FREE,  and no inactivity fees for not using the platform for live trading, all while using their simulation platform again for free. No other broker offers this type of technology to utilize discounted futures span margins and place active ratio spreads. It’s insane.  

The strategies that we are going to be learning in V2 are diverse.  From Spread trading Systems integrated into seasonality and even Forex in our bonus section just to give you a teaser.  Futures Pro V2 is going to be the last place you will need to find a trading home. 

As another bonus, I will be showing you a quant style trading strategy that I self discovered later to find that Quantitative firms trade secretly like this.  We’re going to spread trade with them, okay? And these are what quantitative machines do. We’re going to be doing this stuff, taking advantage of these things that hardly anybody knows even exists. 

Best thing is Tradestation is offering a special 100% Rebate off our futures subscription for Futures Pro V2, so this is all eventually going to be free! 

In addition I personally write a check every time we get a new subscriber for 10% that goes to handpicked humanitarian, environmental, and animal care groups.  These groups have been hand picked to ensure that their proceeds have over a 96 percent rate to the cause not the owners pockets.

You get a 100% rebate. We give it to causes and services to make sure you get better at or start with good trading skills.

Sing up on our mailing list for updates and trade ideas I share through our email list!

Sign Up For Emails And Seasonal Trade Ideas Free

#SPREADEM

So it’s going to be pretty cool. We’re looking forward to this. 

This is what I’m personally working on in the next week or two for this launch.  I am setting the course to a changing environment around us and the markets, to get everybody in here to be able to make this kind of success in your trading career. Be efficient, consistent and profitable.

Trade Safe Out There and get on our Mailing List For Updates!

an animated image of a bar graph

Learn to Trade Futures Online

By | Blog

A futures contract is a standardized agreement between two parties to buy or sell an asset or any commodity at a pre-determined price at a specified date in the future.

These contracts are traded on an exchange which means one party agrees to buy a specified quantity of a commodity or securities with delivery on a date in the future. The seller, on the other hand, should agree to the trade and its underlying conditions.

Various types of financial players in the futures market including speculators and investors. These players sometimes include companies that physically trade commodities.

If you wish to learn to trade futures online, keep reading. We are here to help you make sound and informed financial decisions.

Online trading of futures is becoming increasingly popular. Even though the standards of internet retail trade have improved over time, you still need to be careful with certain things.

Choosing the Right Broker

If you have set out to learn to trade futures online, getting this step right is crucial. Having the right introducing broker (IB) or a futures commission merchant (FCM) onboard is essential. An IB or FCM is a middleman who comes with a commission rate. Some charge a bit higher depending on the services they provide. It is very easy to open an account with an online broker. But how do you find the best broker for yourself? Here are some tips.

  • Check out the broker’s clientele history and reputation in the industry. Find out when they started working online. This would give you an idea about their experience.
  • How much do they charge? Although we believe price should never be the primary deciding factor, it is a major concern to the ones starting online because they usually have a tight budget, to begin with.
  • How user-friendly is the trading platform they use? A trading platform allows you to interact with your broker so it must be easy to use, speedy, and reliable. Make sure your broker offers a demo account for you to have an idea whether it allows you to analyze the markets or not and more.
  • Does your broker have a mobile trading app? Mobile trading apps allow you to trade on the go, close and open positions, monitor your position, and make adjustments.
  • Find out the trading accounts available, what services do each offer and how much you need to deposit to be able to sign up for a particular one.
  • Does your broker offer any customer support 24/7? How well do they resolve issues? Do they offer live chat? Get in touch with customer service and see how well they respond based on personal experience.

Choosing the Right Trading and Charting Platform

Another important element of learning to trade futures online is choosing the right trading and charting platform. Your style of trading determines the kind of platform you should go for. There are various trading and charting platforms available and each one is unique for their reasons. Some platforms offer speed while some offer reliability. Some are built for cost while others are built for functionality. Some are expensive while others are pocket-friendly. Also, please note that many vendors also give a discount if you pay for their services in advance. The bottom line is that before you choose a trading and charting platform, think carefully about your needs and style.

Understanding the Data

There is a plethora of data available out there. Typically, there are two types of data available.

Broker Feed

This is the data that your broker provides you so that you can trade. Broker feed is usually filtered which means you don’t get to see every trade since it keeps up with the live prices. Also, it does not reflect historical trends and is often not accurate.

Vendor Data

This type of data feed reflects historical trends and is mostly much more accurate than broker data.

Make sure your trading and charting platform support whichever feed you choose. It is an important step if you are learning to trade futures online.

Your Trading PC and Internet Connection

Most early traders think that firing up their personal computer at home and internet connection will do the job. However, this is not always a good idea. Personal laptops usually have many unnecessary applications installed that often result in clunky operation.

Your internet connection may also not be appropriate for online futures trading. The bandwidth it offers may not be suitable for the kind of data you will be dealing with. Your trading and charting platform may not be able to keep up with the speed at which the market is moving, causing your data to lag. This can cause you to make costly decisions.

Solutions for Problematic Trading Anxiety and Loses

I can help you with your trading issues, especially learn to trade futures.  I have a system in place that has a very high end statistical edge.  Sign up for one of my webinars, or send me an email for a potential skype session, (based on availability)  You can also find us on facebook, at fortetrader.  You can message me there as well.

Know the Symbols, Contract Specifications, and Margins

Each futures contract contains symbols. For example, ZC represents corn, H represents March, and 8 represents 2018. So ZCH8 means Corn Futures Contract for March 2018. The monthly symbols are as follows:

Jan – F

Feb – G

Mar – H

Apr – J

May – K

Jun – M

Jul – N

Aug – Q

Sep – U

Oct – V

Nov – X

Dec – Z

Contract specifications typically include the price, quantity, last trade date, and settlement procedure. Everything except for the price is standardized.

Lastly, the contract margins refer to the amount you need to have in your account to trade a particular commodity. Trading Futures allows you to use leverage which means you do not always require large sums of money to begin trading. You can trade with as little as 5% of the value of the commodity being traded.

Having a Clear Goal

Being clear and having the right kind of motivation is essential. It may seem easy to learn to trade futures online but once you really step in, you realize it’s not as easy as you thought it would be. There are risks involved. So, be serious about your decision. This industry is a booming one and has an immense number of opportunities for anyone who is looking for financial growth.

The first factor you need to be clear on is how much money you look forward to making. Online trading of futures requires a clear plan of action. So, don’t hesitate on spending money on your training and education considering the growth opportunities this market has for you.

A Statistical System That Works

Ever since I discovered how to use my special trading strategy with the futures and commodities market, I never went back to anything else.  This stuff works!  Don’t complicate what’s easy.  I can teach you how.

If you want to learn, how to trade futures like a pro?  If you want to stop losing money with my systematic strategy?  If you want to learn how to be independent so you can move on and manage your self directed accounts on your own?

Learn More Here!

November Cotton Commodity Spread *Free Trade Idea 2018*

By | Blog

Its that time again!  Let’s Make Some Christmas Money!

Our last few trade ideas turned out to be great winners.  Draw down was at a minimum and the rewards have been paying off tremendously.  This month’s trade idea has a historical year after year success.  Not only that what better time of the year as the holidays kick in and the cold start to take over than to hop into a “cozy” Instrument Trade……..COTTON!

Entry Date 11/20/2018

Our bottom key support areas have come to a meet and the ideal trade entry to go long front month Cotton and Short back month is 11/20/2018.  This email or blog may be a day late however I hopped in at a price of -1.25 with a plan to Narrow the ratio between the two legs and come in close to each other.

In simple terms the spread is relatively cheap right now and we want to see the Cotton Spread rise in value.  This is where we make a profit.  In fact as of the time I write this email, I am up 15 ticks.

Let’s put it into percentage perspective.  We have a total cost of $395 reduced margin per spread to get in.  I am up $75 per spread.  In one business day we are up 19%, REAL MONEY, REAL TRADES, NO BULL!

NOW TELL ME WHAT INSTITUTE IS GOING TO PAY YOU LIKE THAT WITH YOUR MONEY!

Happy to help.

I know we have been taking orders for our Boot Camp that is underway and still have not completed the recordings.  But I am more than happy to personally help with the current spread traders out there who have questions.  For those of you that have paid up for the boot camp I appreciate it I am personally working to get the course together asap.  I want this course to be simple, expressive, detailed, and I would like to see one trade pay itself off.
Enjoy the free trade.  Monitor it, watch it, ad see the potential of  what Spread Trading can do for you.

RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Live Cattle Seasonal Spread Trade *FREE TRADE IDEA OCT 2018*

By | Blog

This months new Seasonal Spread idea really stands out.  We spotted this trade with a sell signal early July.  Although the correlation to the historical trends are really high percentage, I really did not like the stagnancy of the price action.  I set a sniper alert on my own iPhone for this trade and here it is.

We are looking to sell December 2018 Live Cattle ticker symbol /LE and buy February 2019 Live Cattle.  This is an Inter-market Spread, so it will be recognized by the Exchanges as a Calendar or time spread and will have privileges of Span Margin discounts.  Initial Margin $660 Maintenance Margin $600.  This is a very nice discount to get in on this trade opportunity.

We are looking to enter this trade on 10/15/2018 at a price of -4.20 and potential exit between price level -8.0 and -10.0.  Each point here is worth $400.  So we are looking for a possible gain of $2,320 per contract and a possible stop at $800, approximately over the 30 year highs at this time frame.

If you are new to this stuff, please do not trade, just follow along what I am doing.  If you have some futures experience try to slowly exercise this trade on paper and see what results you get.

As of this post is being published I am revamping our boot camp course that will help you all out one way or another.  I can almost promise this.  Of course be aware of Risk Disclosures and dangers of trading.

TRADE UPDATE 11/7/2018

For those of you that took this trade and got most of the meat off the bone before Open Interest Started moving their positions out, good job!  This was a very close call.  Sometimes begin greedy does not pay the bills.  Be careful when trying to  everything out of this trade.  I personally myself made $500 on this spread trading one contract only.  A lot of people say spread trading is boring and not fun.  How about if you compounded this contract?  It was a month long trade.  If you had the money in your account to offset span margin increases and other diversified trades and allocated 10 contracts here you would be up $5,000, on a total of a $6200 Margin requirement.  We got an indicator to get out when we saw the exchange double the margin the day before.  This was my personal indicator to get out of the way.

RISK DISCLOSURE:
Futures and Options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

What is the immediate relation between Crude Oil and US Dollar and the Shale Hydraulic Fracturing Effect

By | Blog

The United States Dollar has been the international trade currency.  For all practical purposes let’s say the barrel is $50 a barrel, and the dollar strengthens.  If the dollar went up $1 in strength than this can have an effect on crude oil prices going down to let’s say as an example $46 per barrel.  This is why there is a uncorrelated relationship between the two markets, generally.

Let us say in this reverse example, where United States is the largest importer of oil from other countries.  Because the $ US Dollar is the currency being used to buy this oil, and simply the dollar is being spent in a foreign country, more currency departing our country, hence the dollar will weaken.

Sometimes the inverse relationship get’s twisted as we generate more of our own oil supply in the United States, yet still as our own producer, still import in more oil, there can be a correlated market.  And this is where traders start having scratch your head moments.

Same goes for countries that have to spend more dollars when oil price genuinely goes up and now because of big overall spending by the globe the dollar strengthens.  This has become such a complicated topic between these two currency/commodity market relationships, due to these kind of circumstances.

And now we have fracturing of shale.  This even adds more confusion to things.  It is far more complex than before.

 

The New American Shale Revolution.

A report dated back in 2014 Goldman Sachs’s Jeffrey Currie says that rationale has broken down in the wake of the American shale revolution.

“In 2008 … the US was importing on a net basis nearly 12 million [barrels per day] of oil and products,” Currie writes. “Owing to shale technology, today that number is now less than 5 million b/d. And subtracting out Canada and Mexico, the number drops to 2.4 million b/d. In other words, net imports are over 60% lower than in 2008.”

This has “significantly reduced the correlation between commodities and the US dollar,” he writes

Imports have dropped because the US is now using hydraulic fracturing to extract oil from its massive shale basins, creating more supply.

And it’s during this same 2008 – 2014 time period that there’s been a huge reduction in correlation between oil prices and the US dollar, according to Currie.

According to this analysis, although oil prices have recently dropped as the dollar has surged , one trend doesn’t explain the other.

 

 

RISK DISCLOSURE:
Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

HYPOTHETICAL PERFORMANCE DISCLAIMER:
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES LIKE THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.

How Interest Rate Hikes Impact Interest Rate Futures?

By | Blog

When one talks about interest rate futures, it seems like as if there was only one interest rate future everyone is referring to.  However if you look into this interest rate futures can mean anything for anyone.  For example the interest rate terms are as short as 30 days all the way up to 30 years.  In between these terms there are 5 year, and 10 year Interest rate futures as well.

Each one of these futures products are derivatives of securities which are all within the US Treasury Bonds and notes, basically the debt markets.  They are issued by the US Treasury with different terms and rates, and generally there are yields in between the products.  The Futures Trading markets are influenced primarily by the U.S. Federal Reserve rate decisions and Bond Traders.

Short Term – Long Term

In order to understand the difference in between these terms to really get a good understanding of the relationship of these instruments.

Interest yields or rates on shorter term treasuries are lower, while interest yields and rates on longer term bonds are higher.  Because longer risk for holding for a longer period of time.  Federal Reserve controls short term yields, while Bond Traders normally control the longer term bonds markets.  Normal circumstances these two products move parabolic to one another.

 

The image below was borrowed from source, “illusionofprosperity.blog”

 

 

The Feds control the lowest available short term rate known as the Prime Rate, and this is why they control the overall economy.  Banks are required to hold with the Federal Reserve.

Longer term 30 year Bond Traders influence the market by the buying and selling of these longer term products that have great expectation of bringing in higher rate of returns.  Yields run inversely to price of the bonds.  Keep this in mind if you are looking to trade the yield curves.

When a country is in good standing the interest charged on long term bonds is less, but when there is turmoil, investors sell the long term bonds, thus pushing the yield higher, which in turn increases the borrowing costs for the nation.

A good example of this is the recent U.S. elections and the campaign promises by President Trump. During the campaign trail, Trump promised fiscal stimulus plans to the tune of a trillion dollars. This meant that the U.S. government, under the Trump administration would be taking on more debt to finance its fiscal stimulus plans. With the U.S. debt already near record highs, investors started to sell the long term bonds, thus pushing the yields higher as a result.

So what happens when the rate get hiked up?

So far, we know that bond traders demand higher yield on long term maturities. Therefore, when the Fed hikes rates (on the short end of the scale), interest rates on the longer dated maturities start to adjust accordingly.

But there’s a catch. Just because the Fed hiked the short term rates doesn’t mean that you will see the 30-year bond yields rise as well. On the contrary, the longer end of the bond yields may or may not rise, which as mentioned earlier in this article depends on the market forces and the perception of the economy among a host of other factors.

Many believe that just because the Fed hikes rates, yields across the spectrum start to rise. But that is incorrect. The yields on the longer dated maturities increase, based on bond trader’s perception of the economy and has nothing to do with the central bank. The Fed can only control so much when it comes to influencing the borrowing costs of the economy, but the large portion of this is left to the open markets.

How do Interest Rate Futures get impacted by a Fed Rate Hike?

Short term Interest Notes on Futures have a very dramatic affect vs. the longer term futures binds have very little to no affect, as investors are looking into 30 years of different geopolitical and inflation circumstances, so typically you will not see the larger bonds having affect to this type of news.

Mid term Treasury noes like the ZN, the Ten Year, can be sometimes be used as a gauge between all other bonds as this instrument sits in the middle of the other shorter and longer terms.  Liquidity is large in this 10 year ZN making it a Titanic of an instrument to master and trade.

The ZN is considered a safe haven of investments especially when you see a lot of geo political uncertainty, and risk.  This tends to make the price of the ZN rise in these circumstances. (see main photo of this post)

Now you should have a better idea on how to gauge what and how these markets can move in relation to Fed announcements.

 

RISK DISCLOSURE:
Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

HYPOTHETICAL PERFORMANCE DISCLAIMER:
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES LIKE THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.

Divergence, One of the Most Powerful Trade Opportunites

By | Blog

My journey trading has been great thus far.  I have had the greatest benefit of meeting some of the markets best and most experienced traders in the last few months.  To our benefit and success as an academy, I have had the great humbling experience to have take on a partner and the academies future lead instructor, which has personally gained over 20 plus years of trading experience in the futures and commodities markets.  The name is still, “to be announced” but he has built some of the sharpest traders in his past and also a few successful retail online academies.  One of the main key strategies I have been learning and creating a specific trading plan around this is divergence.

 

Have you heard of divergence?  Do you know what it is?  I always heard of it in my equities days, but flew right past it when it came up.  Because trends are composed of a series of price swings, momentum plays a key role is assessing trend strength. As such, it is important to know when a trend is slowing down. Less momentum does not always lead to a reversal, but it does signal that something is changing, and that the trend may consolidate or reverse.

I am borrowing some content from Investopedia.

Defining Price Momentum
The magnitude of price momentum is measured by the length of short-term price swings. The beginning and end of each swing is established by structural price pivots, which form swing highs and lows. Strong momentum is exhibited by a steep slope and a long price swing. Weak momentum is seen with a shallow slope and short price swing (Figure 1).

Momentum Divergence
Disagreement between the indicator and price is called divergence, and it can have significant implications for trade management. The amount of agreement/disagreement is relative, so there can be several different patterns that develop in the relationship between price and the indicator. For this article, the discussion will be limited to the basic forms of divergence.

It is important to note that there must be price swings of sufficient strength to make momentum analysis valid. Therefore, momentum is useful in active trends, but it is not useful in range conditions in which price swings are limited and variable, as shown in below.

Divergence helps the trader recognize and react appropriately to a change in price action. It tells us something is changing and that the trader must make a decision about the trade, such as tighten the stop-loss or take profit. Seeing divergence increases profitability by alerting the trader to protect profits.

We must note that divergence is not the end all be all of trading.  But when combined with another rule, example supply and demand areas, or daily volume profile, market profiles, we can confirm better entries that may potentially move your probabilities from a 50% rate to a 70%, (just as a figure)  Always remember to keep risk management in mind in any strategy you form.

 

Sign up for our future webinars and enrollment notifications here!

[mc4wp_form id=”415″]

RISK DISCLOSURE:
Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

HYPOTHETICAL PERFORMANCE DISCLAIMER:
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES LIKE THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.

Buying at value areas in trading like you do when you shop

By | Blog

The house you see in this photo is a home my wife and I purchased in 2012.  It was the end of a harsh real estate downfall in California especially, where homes where super over valued before the real state fall in 2008-2009 which led to several years of housing supply and not enough demand to buy.

I remember when we found this home it was sitting as bank wholesale inventory.  We paid about $250,000 for this home in 2012.  We invested about $15,000 in painting the complete interior, exterior, landscape, appliances, and some general maintenance over the course of two years.  The peak almost hit in 2014 when we sold this home for $391,000.  2 and a half year later this home is now only gone up to about $431,000.  A good increase but sitting at its first peak levels, or prior highs of $500,000.  The momentum of the markets this time around has slowed down, one from past experience of consumer and banking markets, I would guess.

The cream of the profit was taken in.  It was bought at areas of value, and sold at areas of peak to another party of interest.  Just like a car.  If there are 20 sellers of a car for $10,000 at the offer, and there are 10 buyers offering $9,000 at a bid, then eventually there are more sellers than buyers and thus can drive a price to meet the limited amount of buyers.

 

This is the same situation in the markets, especially in futures and commodities.  Supply and Demand.  We learn from experience what these levels are.  It is all natural when we are driven to get a good deal on a home, or the best deal on a new car that you can wait and buy at the right timing from the right and willing dealership.

We need to keep this in mind when buying and selling equities, and commodities on the markets.  Whether you are buyer, or a seller, understand where the right places if a trade are based on or biased or you end up putting the odds against your own trade.

This is many other trade strategies can be taught and with repeated practice put into your trading career just like you do when you shop.  It is a mindset.  We offer this at our academy at Forte Trader.  With a 20 veteran lead instructor and other traders with the same goals to adapt and learn form one another in ever changing market conditions.

Peter Karaverdian

Founder, Forte Trader

Join our mailing list for more information on upcoming webinars and course information.  We look forward to working with one another to be successful on your trading goals.

 

[mc4wp_form id=”415″]

 

RISK DISCLOSURE:
Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

HYPOTHETICAL PERFORMANCE DISCLAIMER:
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES LIKE THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.

Trading Psychology

Creating Trading Rule Will Help Control the Emotions of Trading

By | Blog

 

When we discuss the topic of trading rules there are two important topics I can think of that are quite important to most if any, all traders.  We hear it all the time.  But do we, or are we applying it?  It took me a long time to learn this process and still until today if I snap out of it one time, it can blow up a whole month of profits by not following the rules such as:

  • Do not over trade, there are tons of times for trading.  Trading will never go anywhere, but your account will if you are in a hurry to jump on every trade.  Be patient and wait for the one or two good opportunities that have a greater chance of making a move in your direction.
  • Only use Risk Capital, If you can try to treat and handle your Live trades the way you do when you are in SIM, you may see significant difference in our returns.  What I mean is we are more prone to making better trade decisions sometimes when there is no real money on the line.  An example would be of this: Cutting our profits short, and our losses larger, when we sim somehow we do the opposite.  If you are one of these traders, try to keep SIM habits and you may start generating more larger wins.
  • Do not be greedy and many more of this nature, If you are exercising margin, and most of us are, and have 2 lots on a futures contract, consider a 20-30% leverage of profit a really great profit.  In fact you should be happy with even $50 a day at that level.  Stop swinging for the fences on day one.  Slowly scale your account up.

Next we want to know what our strategy is and where it will be located:

  1. Know which markets you are trading, If you are not familiar with a market get to know the correlated market that has intermarket relationship and or ancillary markets.  Sometime you can find a great play a few seconds before anyone else because the opposite market will move before the other, Example the 30 year bonds, vs the E Mini S&P 500.
  2. Know how many markets you are trading at any one give time, this falls in line with not trying to be all over the place.  Be conservative.  If you make one good play a day and take a couple points off the market, imagine doing that with 10 to 20 lots.
  3. Know the time frame for your trading, i.e. Are you day trading or swing trading?  Make sure you do not get margin called by being stuck in the off day hours of trading. In this example I speak about the Futures and Commodities Markets in the United States.  Market hours are 8:30Am to 4:00PM EST.

Once you get this far you should be able to start applying your strategy rules and when and how to get out strategies which is a complete different subject matter, but if you follow rules and detach yourself emotionally from every single trade, you will be surprised to see significant changes in your handling of emotions and in the week end P&L’s.

 

Sign up here for updates on our future posts and press releases!

[mc4wp_form id=”415″]

 

I wasted a lot of time and money my first year following and believing the wrong organizations on the internet.  I caught myself after spending over $15k in educators to figure this out.  Did I learn some fundamentals of the markets?  Yes, I did.  Was it worth the time and money?  No.  So, I opened Fortetrader to make an affordable shortcut for those interested in learning about the Futures and Commodities markets and do it in a narrowed down version of what is out there in the internet community.  I was not happy with companies that keep selling people the next big indicator, or the next big strategy that they do not even trade themselves or when they did, they do not even show the proof they do. I primarily did this to start building a foundation and a footprint of my own journey, as a student, a day trader, and a lifestyle seeker of time freedom and happiness balance via day trading.  It may be possible that as I progress from today into an institutional style of trading that some of my mentors I have met have directed me to do that I may implement it into a course, however as of today, that is not the plan.  Up until today I have gone from using delayed indicators, to price action, and further pursuing styles such as order flows, volume profile and market profile and theory.  Until then do not drop thousands on any kind of online school.  Take it from me it is not worth it.

Can you find a lot of things out on YouTube?  Of course, you can.  I can learn how to fix appliances in my house and save a ton of money on calling a service technician.  Some martial artists are known to have learned and executed some of their most explosive secret moves on the mats because of YouTube.  But when you try to learn something like the markets, something so robust, with so many different styles and methods and instruments, then is when you enter a maze.  A big puzzle.  And it is hard to get out of it.  You need screen time, or martial artists would call it, mat time.  Same thing.  Need to get the fundamentals then dive into the practice of the flow.

I charge $37 for an intro course that will introduce to you downloading and setting up your demo platform account with our preferred vendor, setting up charts, saving workspaces, and setting up strategies for specific markets.  You can check out the course details here.  May not be the perfect thing in the world but it is much better to deal with someone that has the time to pick up the phone and acknowledge you and your passions, and gets you to the next level in your journey, as you may discover your advanced strategies elsewhere.  I am just preparing you to not waste money on some of those guys, “can’t say their names” that charge and then upsell you to tens of thousands.  I have spoken to most of them and they are a bunch of outlying jokers.

Learn a base plan and then dig in and learn most of what you need to on your own.  Our fee helps cover our overhead on server bandwidth, maintenance, and security.  That is why I charge so little.  And while I can I will do my best to be in touch with all your questions and inquiries.  You need screen time, or martial artists would call it, mat time.  Same thing.  Need to get the fundamentals then dive into the practice of the flow.

RISK DISCLOSURE:
Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

HYPOTHETICAL PERFORMANCE DISCLAIMER:
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES LIKE THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.