CPO Futures Trades In Year 2020 - Horror July August

 We finally able to see the horror of July and August after enjoying the first 6 months of year 2020. 

The 2nd half of this year started with Multiple Losing Trades or MLTs that I always like to quote it. It is the continuous losing trades that can easily kill good traders who "over-trade" suddenly confidently. 

Imagine you face 10 to 20 MLTs in a row, losing 400+ ticks per contract size basis and you are being wiped out due to over-trading. No more money to trade and trends come as what you are expecting.

Greed and Fear - finally kill you. How!? Go to CPO Futures blog to see what is the damage for July August. Scary right!

(More will be updated here in this post by end of this month - stay tune on this post and come back again.)

This were the profit and loss trades for August : +6-75-66-69-59-20 = -283

Let's wait and see what will be the accumulated profit and loss for August this Friday.

Final: 

• The theoretical accumulated loss for August is 283 ticks per contract size basis.
• The actual accumulated loss for August can be more than 300 ticks per contract size basis since there is one trade that unable to be filled at the theoretical SAR at 2701 on 28/8 opening.
• Even though there is a possibility of actual lower accumulated loss due to change of contract month on the 16/8 but profit here is not important since focus is the losses that how far the multiple losing trades that can wipe out good technical trend traders when the traders start over-trading.

Therefore, control the greed and fear!

The issue of theoretical prices in SARs can be replaced with opening prices in order to make sure that there is an actual trade. Then, the profit and loss will be calculated according to the opening prices.

Be a disciplined technical trend trader.    

 

CPO Futures Trades In Year 2020 - July Comment

Multiple Losing Trades happened in July and certain technical trend traders could lose more than RM5,000 (or 200 ticks) per lot in just 5 continuous losing trades! Go to CPO Futures blog and readers traders will be able to see the July trades per contract size basis. We just hope that July is the only month in Multiple Losing Trades!

Always remember to know that trading is not for excitement if you want to make fortunes unless you have tons of money to waste in trading. We know that we cannot avoid Multiple Losing Trades in CPO Futures trading or any other futures products and we must therefore be able to survive such stressful trades that may kill us. 

So, here is my thoughts for this July - Multiple Losing Trades and NO Excitement. 

• Multiple Losing Trades or MLTs - Since we can't avoid MLTs, we raise up our Capital Risk Ratio! Manage high CRR at 5x or even higher if you know that you have proven profitable trades year after year on your trading system. For example, 5x CRR on CPO Futures mean you are only trading 1 (yes, ONE) lot for every RM20,000 in your account! If you can do this without affecting your trading psychology, trading success is not just a dream for you. Keep it up with such psychology and discipline.
• No Excitement - if you want to waste you money on excitement in trading, go ahead and thank you. Technical trend indicator is a kind of program trading indicator and traders will have to put in the orders to trade based on the indicator ! Therefore, be ready to get as boring as possible like a program that have no feeling. Just do your homework and make sure your technical trend indicator has a yearly proven profitable record for the past 10-20 years, then just "BLINDLY" follow and be BORED.

Five more months to go and we shall able to see what is the year end result for the technical trend indicator in CPO Futures trades in Year 2020 updated in CPO Futures blog. The credit has to be given to TOP who had just passed away recently. He taught me the technical trend indicator in year 1990s. The technical trend indicator made profits every year for the past 10 (ten) years except in year 2018 made a loss of 8 ticks (gross in theory). So, you should know how stressful in year 2018!!!

Just for a record: July's Accumulated Loss : 188 ticks per contract size!

Timing A trend To Continue Or To End

It is a skill on its own to time a trend whether to continue or to end unless you are fully depending on program trading that normally cut off the top and bottom 10 to 20%, meaning you won't be able to pick top and bottom since relying historical data calculation alone.

Many traders have poorly (or badly) timed the entries and exits due to the misread the trends especially rely on too many price signals and confirmation. Therefore, try find yourself the most technical trend indicator that you comfortable with and work on its historical records year after year to find its yearly profit and loss record. Then, try the real trading without "over-trading".

I had previously told many readers traders about the probability of trading success:

• 95% failed, 4% survived and 1% made fortunes.
• Squeeze yourself in the 4% category first in the first 5 to 10 years.
• You will be in the 1% category only after succeeding the 4%. 

So, how to time a trend if you are a technical trend trader? The answer is almost near to ZERO!

You have to mathematically know that your year after year trading (January to December like doing business with financial ended December) has proven profit record first if you are following almost 100% the technical trend indicator at least 3 to 5 years. 

The answer is near Zero because technical trend traders face a lot of multiple losing trades and only have few good trends to catch in one year. Before you manage to catch a trend, you may have losing all your money in multiple losing trades due to over trading and no more money when a trend has come for you to grab. So, try get though the storm first - The Multiple Losing Trades. Survive in the 4% category first. 

Maintain high capital risk ratio management and make your trading as boring as possible.

Be disciplined trader.

Finding Multiple Losing Trades

This article is more about futures trading using technical trend indicators and the capital risk ratio needed in order to have trading success.

As we will not know when we will keep buying and selling on trades that keep generating losses in a row on every single trade for more than we can afford to lose, we need to find the best solution by doing historical data collection and back testing them to find how is the pattern of the losing trades.

There was a very good example that happened recently on a technical trend indicator using in my 2 books especially in the "101indicators On Futures Trading" book where there were total 8 multiple losing trades in a row. If 1 point of losses is equivalent to 25 dollar, the 8 multiple losing trades had a total of 198 points of losses which costed a trader to lose slightly more than 5000 dollar per contract which included its trading cost. Without a higher capital risk ratio that more than 3x or even higher to 5x, a trader will fail to proceed his/her technical trend trading dream in futures trading after being hit with such a bad incident.

Remember, this can be happened in just a short period of time for less than a month while the technical trend trader may take more than three months only to recover the losses and accumulate profits in the next three months; which mean, it will be seven months to see a better result if the trader does face the losses in the first month where he starts. Can a novice trader equip with such a strong psychology patiently keep doing trades for seven months?

No doubt the technical trend indicator did make nearly 1000 points in 10 months in its accumulated profits since the beginning of this year, or 25,000 dollar per contract in accumulated profits in 10 months, it is still important for traders to realize that multiple losing trades will kill traders if there is no control in their capital risk ratio management.

In a simple note: Over-trading kills good technical trend traders. No need to keep searching high and low to find how to avoid multiple losing trades if you do not have such risk management discipline. Remember to find a technical trend indicator that can make good accumulated yearly profit year after year and you will be safe along your trading life cycle as a technical trend trader in futures trading.