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Great post. Quite illuminating. For instance, while you are an accomplished
astrologer it is obvious that, at least in this particular trade, you are
also a well capitalized, sophisticated scale trader. Also, you have a very
thorough understanding of Elliott Wave.
You also point out that your broker is not going to get rich on your
account, which is good - for both of you, actually. As a broker I had MUCH
rather have five guys like you than fifteen daytraders du jour. Not that
one can't successfully daytrade, but I have seen very, very few succeed.
Implicit in your post is that you use several different forms of technical
analysis in your trading. In all of which you are quite proficient and that
fit your personality. Also obvious is your awareness of money management.
I no of no one that uses ONE single thing to successfully trade. Experience
is a very large part of the equation which can not be overestimated.
Personalize it, put it all together, and we have the Holy Grail.
Regards,
Tom Alexander
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> From: nwinski <nwinski@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx>
> To: Jdonato98@xxxxxxx; Real Traders 99 <realtraders@xxxxxxxxxxxxxxx>
> Subject: Re: Sugar Update
> Date: Thursday, July 29, 1999 9:27 PM
>
>
>
> Jdonato98@xxxxxxx wrote:
>
>
> >
> > All the Best,
> > Jerry Donato
>
> Jerry,
> Relax. The last swing on sugar, based on whatever the current
nearby
> contract was, took sugar from a low of 393 to a high of 646 = a swing of
253
> points. So, even if this is a bearish Elliiott ABC rally, one would
normally
> expect for C to at least equal A. The last pullback, which in the bearish
case
> would b the B wave, took Oct. sugar back to the 520 area (don't have
exact price
> handy). Adding 253 points to 520 would take sugar to the 773 area.
Additionally,
> sometimes an ABC pattern has a C wave which is 1.618 times the A wave so
this
> would project a 409 point swing added to 520 = 929. On the other hand,
> occassionally an ABC corrective wave has a C wave which is only .618 of
the A
> wave.
> This would be the most conservative and bearish projection. In this case
it
> would be .618 x 253 = a 156 point move added to 520 = 676. So, at a very
> minimum, one should expect a test and probably slight break out to the
upside of
> the last swing top at the 646 area. Now, I must tell you although I have
tried
> studying Elliott since 1979 when I first met Bob P, I admit to still
being
> stuck in Elliott Wave kindergarten. I find Elliott Wave to be a great
> descriptive language for market analysis. But, when it comes to
forecasting, I
> usually find it too subjective & complex for the pea size brain of this
simple
> minded Astrologer. <G> So, I welcome any expert criticism of my above
analysis.
>
> Anyway, the point of all of this is that I think that the 99% of the
trading
> community tends to be
> too myoptic. Gann taught that the best trades were found by studying the
> monthly and yearly charts.
> Look at a long term chart on Sugar. It was 15 cents just a couple of
years ago.
> Back in the 80s, it traded as high as 45 cents and as low as 2 1/2 cents.
Given
> that perspective, when Sugar was at 4 or5 cents what was the risk to
reward
> ratio of buying some sugar as a long term holding? That is what I have
been
> doing. My last purchase was at 405 on the July contract. At that point I
owned 4
> contracts.
> I rolled to Oct. and then reduced my long position by 1 at 620 based on a
50%
> retracement of the preveious near waterfall 400 point drop which was
absent of
> any significant correction. I have no plans to reduce my position at
anywhere
> much below 8 cents. If sugar were to drop to the mid 4 cent area, I
would add 1
> contract to my current position. If sugar drops to 2 1/2 cents, I would
buy
> another.
> The flaw is that I will have a substantial drawdown if sugar goes under
the old
> low of 2 1/2 cents.
> I am willing to take that risk. On the other hand, while my broker is not
going
> to get rich on my lethargic trading, I figure that if I distribute 1
sugar
> contract on every 200 point increase in price, I stand to gain between
$20K to
> $40K on this position, depending on how it gets there and how long it
takes.
> This is not a bad annuity for something requiring a few thousand dollars
of
> margin and admittedly several times that in equity. So, what I am
recommending
> is to relax, get the bigger perspective, have a drink, read a good book,
cancel
> the live data feed (theres another $5K per year you just saved) get a
hobby to
> keep you occupied during market hours, spend more time with friends and
family.
> Bottomline, you will make more money, have less stress, and be happier.
> Concidentally, this post seems very timely given the breaking news
about
> the day trader in Atlanta who went bonkers. I am not saying that anyone
on RT is
> gonna go out and shoot anyone if stressed out from short term trading..
But you
> may be tempted to yell at your spouse, bark at the dog, or ignore your
kids.
> Warning:: if you adopt this layed back motis operandi don't expect
a big
> Holiday present from your broker. <G>
>
> Relaxedly,
>
> Norman
>
> P.S. I am going away for a few weeks. Trading is too boring. I am planing
a tour
> of the top ten Roller Coaters in the northeast quadrant of the US. <G>
>
>
>
>
> >
> >
> > P.S.
> > This is NOT a a trade reccomendation, only my personal opinion from my
own
> > analisys and charts.
>
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