Trade Example #4
In this Track 'n Trade Trading Training video, I want to take you through one more trade. We're going to trade Gold this time. We're going to use the Seasonals and the Bulls 'n Bears as a combination to help us make our trading decisions.
One of the great features about the Seasonals Indicator, is that it can help know when markets don't have much of a tendency to trend real strong. So, you'll notice that right through this time frame with Gold, that the Seasonals Indicator is just indicating that this market through this time frame generally just kind of wanders sideways, doesn't have any real strong trends, one way or the other. No extremes, remember, it's the extremes that we're always looking for, extreme levels. Now, remember, we identify those extremes by coming into the Seasonals Indicator, and turning on the thresholds.
Now, the threshold above the 80, we like to see things pop up above 80 and below 20, at a nice long trend. Through this time frame, you'll notice that we're not seeing anything like that on the blue scale. I like to watch the blue. Now, the 15 year, it's a nice one to see, too. But the blue scale is the one that is most important to me. So, during this time frame, you'll see we're just not seeing a whole lot.
When we trade Gold, we want to look for a specific time frame. One of our favorite times to trade Gold is right here, September into October. That's our favorite. Now, the extreme starts all the way back here into, starting in August and notice it comes back down below the 20 percentile and then it rises up through, into the 100% above 80. So, that's our optimal trading time frame, right through here. So, that's what we're going to look for to take advantage of; using the Seasonals Indicator in conjunction with the Bulls 'n Bears.
So, let's come in here, we're going to draw a vertical line on here. We're going to mark that off, and we're going to say okay, here's our target. Now, we can go one or the other. This time I'll probably go for the first one. Let's say that we don't want the horizontal line. So, that's our time frame, that's our rally point, we want to really try to take advantage of a rally, coming in through that time frame. So, we're going to step the market forward, again we're going to use the Bulls 'n Bears as our trigger to help us make the decision on whether we want to get in or not. If it doesn't rally, then we don't want to get in. If it goes negative, we don't want to get in. We want to wait for it to rally into this time frame. Notice that the Bulls 'n Bears has gone yellow, yellow, yellow, yellow, and yellow one more time. Now, there we got a Bullish Buy Signal. It's right at the right time. It's right at the right time. It's not a very strong Bullish Buy Signal, it closed at the same that it opened. It closed basically the same, or even a little lower than the previous days close. It's not a very strong Buy Signal, so I wouldn't want to just jump in with the market at this point. But we are accompanied by a Bullish arrow, indicating that the market is changed momentum from Bearish or negative or neutral, to Bullish.
So, we can come in here, and since this is such a strong rally point, such a strong extreme from one to the other, this is a time frame in which we might want to load up with more contracts than just one. So, many people ask me, they say Lan how do I know when I'm supposed to get in with more contracts than just one? Well, this would be one of those opportunities or one of those times when the Seasonal Indicator, when the odds are in your favor, and you're looking to get into the market in a position like this: Where it's strong odds say that this market should rally through this time frame, so we can take advantage of that. So, we're going to get in with three contracts here. We're going to step the market forward, and of course we need to make our deposit. Let's come come back to oh, September 3rd, and we're going to get in with..this is Gold and it's a full size contract, so we're getting in with 3 contracts, so we have to have about 50 grand to play with.
So, as this market starts to rally, look at that! Nice jump up in our favor, that's a good thing. We need to protect ourselves, we're going to come in and we're going to put a Stop in here. Let's put a couple of Stops right here. Two on one place, and let's put another one down here, below the yellow. So, we're going to come in here and we're going to change that one to 1. So, we broke our Stops apart. Now, we're going to step that market forward, nice rally, and nice rally, keeps rallying. Let's move this one up to break even here, or maybe even up to that little break even point. We could even put this one up to break even. Look at that, we're already in a no loss situation, where we have both of our Stops above our entry point. We can wipe the sweat off of our brow, and hopefully this market will continue to rally. If we hold our Stops a little too tight, it might come back against us and stop us out, just as the market starts to rally. But we're doing okay, we're doing okay, we might even want to suck this one up a little bit to that area of... see that little shelf area the little area of support. Make sure that one is right at our break even. We're in good shape here, we can now continue to follow up and trail this market.
Now, at this point I'm going to turn on my Auto-Trailing Stops. I'm going to come in here to my Overlays, I'm going to first turn on my Parabolic SAR. I'm going to come into the Bulls 'n Bears, Chart Overlays, Properties, Bulls 'n Bears I'm going to turn on my Bullish Bearish. Now, I have those two mathematically calculated spots that I can take advantage of. Now, one thing I'm going to do in this order, is I am going to come in here. I'm going to change the Settings from 2 to 1. So, that's 1 Stop here, 1 Stop here, and I'm going to change this one. I'm going to go in there, and I'm going to say okay, let's make this 1 Trailing Stop based on the Blue Light System. I'm going to make this one Settings based on, Trailing Stop based on the Parabolic SAR. As that market steps forward, we're going to calculate those Stops, based on those two different mathematically calculated Stop Placement zones. Now, I'm going to come down here with this other Stop. I'm in the market with 3 and I can, I can move this one manually, I can just put it right at break even. It's basically the same spot as the one that's on the red line, as the red Parabolic SAR. But I'm going to say Sell 1, and it's not going to be trailing, or automatically trailing.
So, now as that market starts to move forward, you'll notice that my Trailing Stops are following the market up. Now, we've hit our target zone. Look at this! We're right where we're at. So, we have a Trailing Stop that's trailing on the Blue Light. We have one that's trailing on the Red Light, and we have one that's sitting back here right at break even.
So, now we have the opportunity of having three different strategies playing in the same market, at the same time. So, if my first one gets stopped out, I'm still long the market with my next one. Now, this came back, got us out, we took our profits, took our profits. We're up $13,000.00, but if the market continues to rally, which we have this little pull back and then another little rally peaks- see how it kind of does that. It's kind of common, it happens over the last 10 and 15 years. So, maybe this thing has another little bit of energy in there to go forward, once again. If it does, our other stops are going to continue to trail behind it. At this point, if it comes back against us, we'll get stopped out, or it will continue to rise. Now, we're anticipating, at this point a down trend, right? But we're still long the market. This market generally blows off through here, but because we're still long the market, doesn't mean we just get out. If this market is going to continue to rise, we're going to continue to trail our Stop up there. We're going to let this market continue to give us money. We don't care if the market says that it's suppose to drop. If we're already in the market long, we're going to stay long. So, as this market continues to rise, we're going to stay long.
Now, we have this Stop that's sitting way back here at break even. If we want to, we can move that one up and protect some of those profits. In fact, we could even come in here, and go Settings, and say, well let's change that one now to Trail on the Blue Light System. Since the other one is no longer trailing on the blue Light System. Now, we have two Stops, one calculated to trail each of the systems. Now, as that market comes back against us, oh! We didn't get stopped out, that was close, though wasn't it? Came back, the Parabolic SAR kept us right at the right spot. As that market rallies, look at how their coming together. The Blue Light and the Parabolic SAR are almost right on top of each other. So, as that market continues to rally, those Stops are going to move automatically up there, and protect us in our position. There, both of them got stopped out at the same time, on that hard pull back, for a $25,000.00 profit, on this particular example. Where we used the Bulls 'n Bears as our trigger, based on our Seasonals Indicator.