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Historical Simulator Plug-in

Day Five

Video Transcript

Okay, here we are, it's the next day, we're ready to rock 'n roll here with our software. We had a good day at work, everybody is happy! Came home, had my dinner sitting in my big la-z-boy chair. First thing I need to do is pull up my charts, I have them up here in front of me. I need to get myself a data download. I got my data, okay, now I'm excited to go through and find what's happening.

Let's look at our Corn contract, let's step that market forward. Eh, coming back down on us again. Corn is just in this long little downtrend, that kind of has these little retracement levels back and forth, you know?

Let's go on to Feeder Cattle, and let's take a look and see if our orders are filled. We're looking for a sell on a break below this one. Let's step, oh, jump back up. In fact, it jumped above our little, it jumped above our little area of resistance there. See that, how it broke above our area of resistance? Well, that's not good; that violates everything that we just did.

So, let's come over here to My Account, and let's reset all of this. We don't like what we just did here. We're looking for a break this day on a- below that little trend. It didn't happen, in fact it went up. So I'm looking at our Stochastics, our Stochastics were right in saying that we're probably going to head back up a little bit.

Okay, well, let's come in here and let's do Viewable Orders From This Chart Only. We have these three.. let's just get rid of all of them. Okay, now what do we want to do on this one? I don't know.. you know what I'm seeing now? Look at this! You know what, I didn't see it before. Left shoulder, little head there, maybe a little right shoulder in here. Maybe looking for a little retracement level there. Maybe a little break below that, I don't know, what do you think of that?

What do you think of that? Now, look at that, that has a nice little downtrend coming down in here. Look how this is continuing right up through here. That's nice right down through there. See how we got our retracements, see how this has turned on us? We had a nice little uptrend here, see that? Nice little uptrend, and now look what we've done here. Now, look at what we've done here, we have a nice little retracement and it's turning, it's going nice little downtrend.

Now, that's a perfect example of a head and shoulders. That's what a head and shoulders does- it's a reversal of a trend, (Just like 123 formation) so a reversal of a trend. You have to have a trend before it can reverse. Now, that's a perfect little trend, right up there. See that little trend, going up this direction? Okay? Then when you have that little head right at the top, then the market changes, and it reverses. Now, we have our nice little downtrend. Everything is coming and touching that area of support on the downside. So, I feel really good about this little head and shoulders, that looks really nice to me. I want that to come up and give me another little peak or two in there. Then, I'm going to place an order on a break below this trendline. I don't want to lose my opportunity here, like we did with the triangle on Oats. I also don't want to jump in too quickly, I'm feeling good about this, but I don't want to be hasty. I would like to maybe have one more day.

Yeah, I like that placement right in here, I keep trying to place that in the right spot, I want it to be at the bottom of this point here, but I also want it to line up with these other areas of resistance. So that's one nice long trend, right down there. That's a good resistance area for me- a good support area. I'm liking what I'm seeing here.

Alright, let's go on to Gold. Advance our chart, what happened- one nice little drop down, still didn't fill our order, though. We're looking for a break below that number 2 point. So 1, 2, 3 break below the number 2 point.

Lean Hogs, oh, Lean Hogs, we love Lean Hogs. We're just dreaming about all the money we're going to make on Lean Hogs when this thing drops through the floor, aren't we? Just nice little- look at this.. see, same thing. Comes back, areas of resistance on the back side of this. That's a perfect example, again of a nice little head and shoulders? See how we have a nice uptrend? Then it changed direction, now we have a cross trend. When it break below that one, it's going to fall back down. I hope it goes all the way down to that little market if touched. We're going to go buy ourselves a brand new motorcycle with all this profit we have over here.

So we need to advance our chart on this one, don't we- 3/5 let's step forward..yes, we're filled! Sell 3 on a Stop. What did we do? Let's look at our account. Oh, we're losing 420 bucks. Oh, that's not good, that makes me feel bad. $420, how come we're losing $420.00 when the market went the direction I expected it to go? I don't understand. Well, what happened is the market came down, it hit our order, it broke through our area of resistance here- our area of support, filled our order, then turned around and opened, or closed higher than where we got in.

Well, that's why we have Stop Loss Orders, and we're going to come in here, we're going to set our Stop Loss Order just above the head on this one. We're going to buy back 3, right? Because we're short 3, sold 3, so we're going to buy 3 on a Stop at 61.10. We decided we were going to do it above the head because the key says $1,000.00 is our initial margin. I like to keep it back behind the initial margin. The reason, is because those numbers are set by the exchanges on the volatility of the market. That's why they change every now and again, because the market gets more volatile, they'll raise the margin amounts.

So I like to keep my risk set, or my Stop Loss back behind that area, and that's about where it's at. So, right behind the head is right where I want to do it. Otherwise, I would put it right behind the number 3 point, but that's not far enough back. See, so I want to give this market room to grow. But now the other theory, too, here is that higher high's are make the trend and lower low's are what makes a downtrend..higher lows.. lower high's, excuse me!

Let me say that again, An uptrend is higher high's and higher lows. A downtrend is lower high's and lower lows.

So with that theory, why would I then put my Stop Loss behind the head, if I put it behind, if it goes below the, if it goes above the right shoulder, that's actually making a higher high, not a lower high. So it's breaking the trendline, right there. So I don't want to do that at this point, I don't know what I want to do here. Do I want to keep it behind the head or do we want to keep it behind the right shoulder? I think I better keep it behind the.. I'm going to stick with my initial plan of keeping it behind the right shoulder, or the head- at least for 1 or 2 more tics. Then, yeah...I think that's what we better do.

Then, we need to go on to our Live Cattle Contract. Let's see... we're really happy with Live Cattle today, too. Let's see, we're looking at this Live Cattle is coming up. It's made some nice Head and shoulders, we're dreaming about all the money we're going to make. Let's advance this chart and see how we do. Oh, look at that! It popped up above our right shoulder. It didn't go down at all. Set us a new right shoulder, that's okay. That's okay, we're not sweating that, that's okay, that's still within our plan. It's just not going to make us as much money as we had wanted to, as quickly as we had wanted to. See, it's just not going to make us our money as quickly as we wanted it to. So there's nothing we can really do in Live Cattle today.

Let's go on to Oats- Oats this is one..OH! Look it's coming back down. So I don't know..I kind of felt bad about not being able to catch that little top, because it popped out of there, but now it's coming back. Maybe that was the right decision.

Let's go on to Silver. Step forward- silver is still just one that's wandering up through this uptrend, and I don't really like it very well. It's not, I wish that one was higher. I wish this one wasn't- hadn't gone down so far. It broke, you know this two trend here. This is bad for me..this is bad for me. So I'm not really...this isn't a really strong triangle. I want to see if it's going to be a triangle, I want to see it form a little bit more triangle out here in this point.

So let's go on to Wheat- Wheat, this last Wheat has been crazy with head and shoulders. Let's step that one forward. Then we'll go to this number 2 point, maybe right there. Still waiting for a retracement back, so that we can get in on a market above that number 2 point, if that retraces back.

So, that's it, that's all we can do for today!

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