Trade Example #2
In this Track 'n Trade Trading Training video, I want to take you through, and I want to go through a trade with you using the Gasoline through this nice seasonal uptrend. You'll notice we're using the Seasonal trending market, the seasonal nature of the market to help us make our trading decision, based on what the market has done in the past 10-15 years. Now over the last 10-15 years, we can see out into the future, beyond where the market is currently trading. We can see this is a rally time for this market. So, we want to look for an opportunity to go long this market. We like extremes, we like to look at the market and see where the extremes are. Notice that the extremes, this extreme started clear down here and goes all the way into an extreme that rallies all the way into it looks like May 15th. So, that's kind of our timeline in here. The market is currently trading right here. I'm going to come in with another line, I'm going to put it right here. I'm going to say okay, this is our time frame in which we want to look to be in the market on a long position. We do that, because this is where the market has the highest degree of tendency to go on an extreme level. Right? This is where we break below the extreme, and we have the strongest extreme right up into here.
So, this is our time frame, that we're looking at, to go long the market. Now, as that market, we look over here. We notice that the seasonal historical averages are confirming that same thought process. Notice that the one year, I have the red line, is set to last years prices, so one year. That's what this market did last year. It rallied up through this time frame, and then the three year average for the last three years has kind of rallied up through this time frame. Now, even though the price of gasoline is higher this year than it was last year. We're still going anticipate the seasonal move, or seasonal trend; just at a higher level, or a more expensive level. So, we're going to rally up through this time frame. The way we do that, is we need to get a trigger, something to get us into the market. Now, we have the idea, we have the road map, we have an idea that this market is going to rally positively for us, into a Bull market during this time frame, and during the next three months. So now we need to have some kind of a trigger, something that is going to get us into the market, so that we know when it's time to get into the market.
Now, I like to use the Bulls 'n Bears, now the Bulls 'n Bears has a very strict set of rules that we follow and anticipate, and we use to anticipate these trends and how to take advantage of them. So, I like to use the Bulls 'n Bears.
Now, as we move forward with the Bulls 'n Bears I'm going to use the Bulls 'n Bears Trading System with a mindset that the market is going to be Bullish.
So, here we go with the Bulls 'n Bears. Now, there's a Buy Signal, and that's a wimpy Buy Signal, it's not a very good one, here with the Bulls 'n Bears. We like to see a Bullish Buy Signal. Those of you who do not have the Bulls 'n Bears should get the Bulls 'n Bears, so you can understand how these different rules work. Those of you who do have the Bulls 'n Bears you realize that was a very weak Buy Signal. It's also accompanied by a Bullish arrow. Now, the Buy Signal, of course is a yellow a change over from a yellow to green, but that green is an inside day and it closed lower than yesterday's high, or closed lower than yesterdays low, and of course closed lower than yesterdays high. So, this is a weak Buy Signal, not a very good one. We can either move the market forward and wait for a stronger Buy Signal or we can go ahead and say, well, if it breaks above or continues higher then we're going to get into the market with a contract.
We can come in here and maybe get in with three contracts, because we anticipate that this market is going to rise in price, right? So, let's step the market forward.. nothing happened. There, we got into the market. Now, this is a better Buy Signal, we got in there. Now, the first thing we need to do, is we need to protect ourselves. We're going to put our stop Order in here. We're going to sell all three contracts out, if we're wrong. Let that market advance a little bit, and prove to us that it's going to continue higher. As it continues higher, we can move our Stop, or leave it where it's at. v
What I like to do is start breaking my Stops apart, as soon as I have an opportunity. One thing we can do is we can come in here, and we can say, down here on a lower position, I'm going to put a Stop. That means I have to change this one in Settings; let's take this one over 2 contracts. Just in case this market Stops us out here, say we have two different Stop positions. Now, as that market moves forward, we can anticipate, maybe I'll move this one up to break even. I'll move this one up to where the other one was. Now, we have two positions for Stops, we're going to protect some of our positions. If that market starts to come back against us, we're going to get out with maybe a small loss, or a little profit. If it continues higher, we can take some profits.
Now, as that market starts to go sideways, we can make a decision here. We can say, well, this market is starting to go a little bit sideways, what do I want to do? Well, I can bracket this market, and we know that if we bracket a sideways market, the rule to bracket a market is that you Sell on a bracket to market, or you Buy on a break above the market. So, if the market breaks higher, continues up as we would anticipate in a Bullish trend, we can come in here and we can take advantage of that and say okay, I'm going to buy, maybe I'll buy another one. Add on a position if this market breaks above this little trend, or I can sell this Stop, right up here close and say if it breaks down, I'm going to get out. Maybe I'll put this one at break even. Now I have two Stops to protect myself against the market coming against us. One Stop to get into the market if the market continues higher.
So, this time the market came back against us, got us out of both contracts, and we ended up with, how much? Well, a small profit, $3,000.00. So, at this point, we're saying well, that's not really what we're looking for. We're looking for a big really, but the market is starting to come back against us. Let's go ahead and clean up this, or these positions. I'm going to delete that open order. I'm going to turn off the text, to these. We're completely out of the market, at this point. Let's turn off the text, so we don't have to look at those.
Now we're going to have to wait for another opportunity to get into the market long. Now, this market has gone yellow, yellow, yellow, green! That's another Buy Signal. So, at this point we can say, well, okay, we'll go in this market; let's go in with 3 contracts. We're going to say, okay, if the market fills, and it does, it fills. We're going to set our contracts back, I'm going to set one- I'm going to put, I'm going to come in with two right here. I'm going to sell two out, close, and I'm going to put another one back a little bit behind the first yellow. I can say I'm going to sell one out here. So, that's our three contracts, we're protected against that.
So, let's step the market forward. As the market starts to move forward in our favor, once again, I'm going to turn this text off, so we can see what's going on. Now, as the market starts to come back against us, we hold... oh, a very bad day for us! We have been stopped out. Now we're down, actually we lost, not only on our profits, but we also are down a little bit: $8,000.00, so that was a really bad for us. But we protected ourselves, and now as we move the market forward one more day, yellow, yellow, yellow, let's turn this off. This is the way we work, this is the way the game is played. Now we've gone negative, look at that! We have a Sell Signal, it's a Bullish Sell Signal. Notice the close is higher than the previous days close, and higher than the previous days low. But it's a Buy Signal, it's a Sell Signal, nonetheless. Do we want to go short this market? I don't think so, not now, not with this really strong rally point ahead of us. Saying that this market should be rallying. So, let's step the market forward, see what happens. Well, it's good thing we didn't! Now, had we chosen to go short, we could have come in here with a Stop Order, placed that Stop Order below that red, and said, Sell 1 on a Stop, then Step the market forward. Of course, it didn't go down, it didn't continue if you want to take that counter seasonal trend, and it's not there. So, let's come in here, delete that out of our accounting system. We've gone back to neutral again. As that market rolls forward, yellow, yellow, yellow, yellow, yellow, yellow, yellow, we don't do anything with yellow markets. It's neutral, even though we're right here during this big rally time, when we're anticipating a big rally, the Bulls 'n Bears can tell us when the market has gone neutral. So, we just sit and wait for another Buy Signal. Of course, a Buy Signal would be a green price bar, or a yellow price bar, followed by a green. Of course, it's also accompanied by a Bullish arrow, indicating that the market has changed now from Bearish to Bullish.
So, let's go ahead and place another order. Let's get in here, and we're going to Buy, let's Buy three, once again, on a Stop. If that market is filled, and it's not filled, so let's step forward one more time. There it's filled, we're going to make a deposit, because we didn't open our account with enough money. Let's come in here and say we're going to open our account with $50,000.00 back on April 1st. Now, as that market starts to roll forward, we need to place our Stops in here. We're going to come in here, and we're going to Sell, we can keep our Stops close, all three of them, or we can break them apart. Let's come in here and let's put two here, like we did before, and let's put one back behind the previous yellow. We're going to Sell one back there, so that's all three contracts. So, if we're wrong once again, we'll get out. We're going to wait for this market to rally forward, as it does start to rally, we're going to start to anticipate to move our Stops.
Here we go, this market is starting to make a nice run for us. We want to start protecting ourselves, maybe I can bring this one up even closer. Put this one to break even. At this point, I can wipe the sweat off of brow. We're actually in a good position, we're not going to lose anything, if it comes back against us. So, as that market starts to rally forward, I can slide this up one more time. Now, maybe at this point, we want to hold off, back off, and let that market rally. You know, markets have a tendency to move in waves- two steps forward, one step back. We don't want to tighten our Stops up so close that we get stopped out. There's an example, the market comes back against us. Oh, one more time. We got stopped out with two contracts, but we're still long, with one contract. So, we step forward.. oh, look at that! A big yellow comes back against us, but we're still in at our break even point. Let's step forward, again, where are we at now? Yellow, yellow, yellow, followed by a green, that's a Buy Signal. We can come in here, we can add another Buy, if we would like to. Let's just add one on at this point. Let's step forward, now we're back in the market again, we can leave this one at break even. Of course, it's down here behind the previous yellow. Let's turn off this, too. Come in here, and set that Stop in there. Sell 1, and we're just going to let that market move forward and hopefully we can get out Stop up to break even here soon, and wipe the sweat off of our brow, again.
So, we're going to step that forward, come on, move forward for us. I think I can move that up to Stop, break even again. Let's bring this one up a little bit closer. Start locking in a little profit on that market. Now, that market has come back right on our peak day, now we're still in the market long. We can suck this one up a little bit closer, if we would like. Now, as that market starts to rally again for us, we can start using these areas of support and resistance as places to place our orders. Or we can turn on our overlays, we can turn on our Parabolic SAR, and we can come in here and we can turn on the Bulls 'n Bears.
Now, let's go back over to the Bulls 'n Bears Settings, and turn on the Blue Light System. We can actually come in here and say, okay, I want this order to be right here until the Blue Light catches up to it. Then, I want it to trail on the Blue Light System, so there's the Blue Light. This one here, I'm just going to have it go to the Settings, and I'm going to say trail on the Parabolic SAR. (Parabolic SAR) Now, as the market starts to move forward, those are mathematically calculated Stop Placements for us. They will automatically pull in there, and they tell us of course, right where we should be placing our Stops. As that market moves forward, we're long two contracts. We'll just hang in there until we get stopped out. That's the end of our data, we can't go forward anymore.
Even though we had a really rough start through here, didn't we? We actually had a negative on our trade, for a little while, right through his time zone. But the Bulls 'n Bears helped us pull it out, and we still stuck with it in the long uptrend. We still ended up with a $35,000.00 profit with two contracts up through this little bold trend. So, that's how we can use the Bulls 'n Bears in combination with the Seasonals Indicator, to help us maximize our trading potential.