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In regards to Rick Ratchford's hog trade, Thought I might show a
different methodology for comparison. (Not to be construed as any kind
of an attack on Rick)!
I agree with Rick that Hogs are probably in the process of bottoming.
However I do differ in trading method.
To recap Rick's trade method - Rick projected a turning date for hogs as
10/21,22 with long term support at 60.10 (Dec.) and was apparently
entering a trade at that time with stops set at a calculated support
level of 59.?? I do not have all of his posts available at this time. At
one point Rick commented that this trade was not for the faint of heart.
Having suffered through some of these heart attacks myself in earlier
years I came up with this as a cure for them!
1. Identify markets which are ready to make major turns.
2. After a possible Low/High has occurred wait for pullback towards
Low/High.
3. Use 2 or 3 day (depending on market and volatility) trailing stop on
pullback to enter trade.
4. Place stop loss beyond pullback extreme.
5. Protect profits with trailing stop placed beyond most extreme of last
2 High/Low points, Trendline penetration or trade reversal signal.
I use weekly slow stochastic, trendlines, major previous support areas,
fib. retracements, cycle studies and gut instinct (There is no better
way to get a feel for a market than to chart it by hand, unfortunately
that limits you to a very few markets you can follow. Always a tradeoff
to be made!) to identify possible major turning points.
O.K. now for Dec. Hogs, It appears that a major low may be in place and
a pullback is now in progress, my strategy is to place a trailing entry
stop at 62.22 and if filled a protective stop at 60.90 for 10/30 only.
If this does not fill I will re-evaluate my stops and place new orders
for 10/31, but only if the major low holds.
This is only an example of my trading strategy and is in no way intended
to be a trade recommendation.
Do not make any trades based solely on someone else's ideas or
recommendations.
Profitus Maximus
Jay Steel
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