You are here: Educational Videos » Historical Simulator Plug-in » Day Thirteen
Historical Simulator Plug-in
Day Thirteen
Video Transcript
Okay, it's tomorrow. Let's go in and get our data. Alright, we've got our data. Okay, let's go and check our commodities, see if we made any money today! Looking at that Corn contract, of course we're not making any money on Corn. It keeps going in this little teetering sideways thing.
Step- well, that's nice. It dropped right into my number 3 position. I guess at this point, if we wanted to, I'd like to see it retrace one more day before I call that a 1, 2, 3, bottom formation, placed an order to break above the number 2 point, place my stop loss behind the number 3 point. Don't really want to do that yet, let's wait and see if if it retraces just a little bit. But, we're watching it, we're keeping an eye on Corn here.
Let's go on to our Feeder Cattle. We're liking Feeder Cattle, we're feeling good about our Feeder Cattle. Let's step our Feeder Cattle forward. Oh, nice move in Feeder Cattle! Hey, look at that, we're up $975.00 in open profit on our Feeder Cattle, close profit of $295.00. We're making almost $1,300.00 in Feeder Cattle..$1,400.00, $1,300.00 in Feeder Cattle. We're feeling good about this buy 1 limit on our next point of resistance is clear down here. I don't know what to do about this, I don't want to lose that.
See, now, this is where I was telling you earlier about what..10 days ago. I was talking to you about moving your stop loss down, and how much money you lose when it retraces. Now, we have to worry about where we're going to put our stop loss order. We need to bring that thing down here. Look, I tried to bring it down here too far. Oh, it won't let me bring it down here too far. It won't let me break the rules. Okay, I can't bring a stop loss down further than what my order market is at, so I need to keep it up above the market. Where do I want to put it? Let's put it right above that 3rd tic right there. Buy 1, if that market turns around and comes back against me, what does my key say? $1,000.00, that's where I better stay back. Stay back about at $1,000.00, that's $1,700.00. Oh, that means I better bring it in a little closer. Let's bring it down to that next tic, right in there.
Do I want to get that close? What if that market turns and pops right back up turns, and pops right back down? Let's look at my 50% retracement level. Oh, look at the 50% retracement level, which one of those is.. let's clean this up a little bit. Turn that text off, I can't see what I'm doing here.
Alright, so, 50% retracement, oh, I'm behind the 50% retracement a good, safe distance from that move. I think I'm okay, I think I'm going to leave my stop loss right there.
I get stopped out sometimes, and it really bugs me. I bring my stop losses in, from what I think is an okay distance, and it ends up being too close. The market turns around, pops out, takes out my stop loss, turns right around and drops all the way down to the floor. I go, oh, and it happens to me more often than I wish. More often than I want to admit. I get stopped out, because I pull my stop loss in too close.
You know, that's that fear and greed thing that happens in me. I get in there, and I don't want to lose that money. I don't want it to come back on me and then lose too much money on a retracement. I want to do the right thing. I keep trying to think I'm doing the right thing by pulling that stop loss in, but sometimes I pull it in a little too close.
Sometimes what I do is I'll use the Fibonacci Ruler. I'll say, okay, maybe I should have my.. I don't put my stop loss at the 50% level. Often times, I'll put it back at the 38% level. See that? That's about where I'm at here with this one, so I'm feeling good about that.
Now, where I want to be safe, I want to make sure I put it right on that 38%. That's better, that's about right in there, that's good.
I don't like to bring my stop loss too close, but I don't like to have it too far away either. So, sometimes what I do is rather than looking at the retracement levels, I'll go back and I'll look at how far the market has been retracing in the past.
Oh, look, it's been retracing $1,800.00 on that one. You know, what's the distance? I'll look at the distance of retracements in the history. How far did it retrace on that one before it turned around? $707.00. How far did it retrace on this one? It retraced $1,120.00. How far did it retrace on this one? $1,400.00, so it looks like between $1,000.00 and $1,500.00 is where this market has been retracing. Of course, I'm not going to count that one, that one is too huge.
Maybe we can look at this one, over here; $1,600.00 retracement. This one here, $1,300.00 retracement, so a little over $1,000.00 retracements. So, what am I at here, I'm that's a $1,400.00 retracement, so I think I'm okay. I think I'm okay with how far back I'm holding my stop loss. It's a big concern to me, it should be to you too. Always want to watch and check all the places you can to give you as much help as you can on where to place those stop losses.
Alright, let's go to our next contract. Okay, step.. what happened? Gold, it came back against me. I'm down $420.00 in Gold. I'm taking that Gold ring I bought for my wife back tomorrow! I don't like Gold today. I don't like Gold at all, but it's okay, it's still below that trendline. It's still below that trendline.
Let's move our stop loss just above that trendline. I want to keep that stop loss just up above this trendline that's happening right here. I don't like Gold. I want Gold to drop harder.
Alright, Lean Hogs, Lean Hogs, step forward- oh, beautiful move in Lean Hogs. I'm going to go buy me a half of a pig tomorrow. We're going to go have some pork-chops, and apple-sauce tonight! We're open profit $1,180.00 close profit $910.00. Now, I have another dilemma- where do I move my stop loss order? Where do I move my stop loss?
The key says the volatility is in the range of $1,000.00. Historically, market has been retracing $1400.00, $900.00, $60.00, $1,200.00, $1,100.00, $1,500.00, $1,300.00, you notice I'm not doing these exact. It doesn't matter, it doesn't have to be exact, I'm guessing; it just has to be close. $1,400.00. A lot of people get really concerned about numbers being exactly perfectly close, they don't have to be exact. You know, let's drag this down here. Oh, we're close, there it is, that's close enough. You know 58.85, last time it was 58.83- so what? It's close enough. This isn't brain surgery, it's estimated surgery. Okay, here we go. It just needs to be close, just close.
So, we figure this market has a tendency to move in areas, you know of $1,100.00, the key says $1,000.00, so I want to make sure my stop loss is back at least $1,000.00. I could probably bring that stop loss back in behind that 2nd tic. But I'm moving pretty hard down, I'm going to put it behind the 3rd one. I'll bring it down right to my entry point. That looks good. It's our break even point on that last one, on those contracts.
So, if it does come back against me now I'll lose all my open profit of $1,180.00. But I put my stop loss, which is short one, right at the entry point, of where I got in. So, what that's going to do is that'll get me out with no loss, okay? So, at least I'm locking in no profit. I'm either playing with peoples money, I feel a lot better about that, I like playing with other peoples money, not my money.
Okay, Lean Hogs, let's go on to Live Cattle. Live Cattle, let's step this market forward one day.. oh, not so bad. Nice long move, but it didn't close all the way at the bottom, but that still, I think put some money in my pocket. Open profit $1,060.00, close profit $370.00. Okay, I got that same dilemma, what do I do? I have to move my stop loss. Short 2, I think I'm going to bring it down, just above this tic here- how's that?
Let's go on to our Oats contract. Okay, you guys that called me on the phone the other night and said, "Place an order in Oats for me, I want to see what it'll do!" Step- ding! Sell 1 stop, oh... look at that! It gaped way down, opened clear down here. That market moved clear down- see that big, huge gap? That's means that's a pretty wild market. It opened clear down here. Even though our order placed up here, if we back that up- see where we placed our order? We placed the order here, but the soonest that the floor could clear that order was clear down there on the open. They filled it clear down there, so we had some serious slippage here. That's what they call that, slippage. Seriously, about $335.00 in slippage. We ended up losing $62.50. We got filled about right on the open here, and then the market closed higher than what we were filled. So we lost $62.50.
Well, that's pretty good, though. I mean, that's a hard drop out of that thing. That means the market is probably going to continue down. I'm going to worry now about where to put that stop loss order. Do I want to put it here, do I want to put it here, do I want to leave it up here, where do I want to put it? Right across there? You know, maybe we'll just pull it in there.
Let's look and see some distances of market movement here, there's one for $1,000.00, there's one for $700.00, there's one for $1,000.00. What does our key say? $675.00, so I can leave it right there, that's good. Give this market some room to grow, coming down.
Okay, Oats, let's go on to Silver. Anything in Silver? Step..oh, see, it's just meandering back up that line again. Okay, step.. well, what do you think here? What do you think here? What do you think? I don't know, maybe.. maybe a little head and shoulders here. I don't know, I'm thinking maybe little head and shoulders here, another retracement.
I'm going to come in here, and I'm going to set a little buy order- to buy on a break above, I want it to break above that place. I'm going to look at some resistance points. Maybe I would put another one right in here that would get me out, get a little quickie right in here. Maybe one, maybe anther one here, 2, let's just do 2 on a stop. Buy stop 2, right in here is where we said we would knock ourselves out with another one. Let's see, we're going to sell 1 on a market if touched. On a quick jump up, and then we're going to follow with a stop loss, maybe up to this area right in here. This area of support, maybe this area here doesn't want to push pass there. Break through that trendline maybe.
I need to decide where I want to pull some money out of this market, maybe right in here. So, we'll sell another 1 on a market if touched and call that good for the day. Trying to buy 2 and sell 1 here, and sell one there- what would that profit be? You get 1 to here, that would be $150.00, another one here that would $680.00. I don't know, is this a good idea? That's our risk reward, basically risking $550.00 for a $500.00 profit. It would be more than that because it would be $175.00, $600.00, $700.00 profit.
I don't know, I guess you might as well give it a shot. What do we have to lose? It's only money, right?
That's not a good attitude, we better plan our trade and trade our plan! Also, only make good trades, because otherwise it's going to be someone else's money.
Alright, find out tomorrow!