how to spot one good trade per week
trade2do
Just a few posts ago, I was telling you how i noticed that if I look at the chart and come up with improptu trades they're mostly unprofitable, but if I have in mind long-term fundamentally based trades, I manage to be profitable.
I therefore think that I should focus on such long-term fundamentally-based trades, trades that do not need a stoploss, because I know the markets cannot go any higher (dangerous-sounding affirmation, but practically true).
I can only spot one of these instances per week, at the most, and these trades last a few days usually. Sometimes even weeks.
The markets are not forex, because those don't really have a bottom or a top.
They could involve metals, but I don't have the margin to keep those trades open for days: silver for example could wipe my account out in just a few hours.
So I have discarded already 9 of the 19 futures that I am monitoring.
The remaining 10 markets are:
1) GBL, ZN: looking for a top, from which to go short.
2) CL, NG: looking for a bottom on natural gas
(too dangerous to go short on these, especially with peak oil approaching).
3) NQ, YM, ES (really just one market because of how much they're correlated): waiting for a bottom on NQ
(I should never go short on these indices: too dangerous)
4) ZC, ZW, ZS: looking for bottom on all of them
(I should never go short on the grains: too dangerous)
What are the closest opportunities to being tops/bottoms that I can see? In a descending order from best to worst:
1) at 146 and 135 GBL and ZN are always perfect opportunities (enter short and stay 2 points).
2) the grains seem to go up or down in a sequence of many days in a row, so these will be perfect when one of them (most likely ZW), will appear to have reached bottom (enter after the first big leap up, and stay two more days)
3) Natural gas needs to reach about 3 to be a good bottom. Then you can go long on it, and stay for 3 points.
4) The indices are those that right now look the worst, because NQ recently was at 2500 and it looked great, but I missed that one, because I was busy with my stupid intraday improptu trades, and now it's gone, but I can't short it because with the indices you never know how high they can go.
I will buy a
QG contract, which is one fourth of the regular natural gas contract. If it goes up 2 points, pretty easy to do, I will make 500 dollars, which is better than nothing. The most it can fall is 10 points from where it is, and in that case I'd lose 2500 dollars. I can live with that remote possibility. Right now this same method cannot be applied to any other market, not the grains, not the indices, not the bonds, nor CL.
...
Here, I've created an html page to monitor all of them at once:
View attachment index.html
It clearly shows the situation: extremely oversold on natural gas, bonds and grains. Extremely overbought on stock indices and CL. If I had a lot of capital, which I don't, I would simply go long on all the ones that are oversold, and short on all the ones that are overbought. And stay like this, until I have made about 10k. But I don't have the capital to take these risks. I can only make one bet, and if I were forced to, I'd probably go long on GBL, if it were to fall one more day. Long on NG if it were to reach 3sh. I don't know about the grains, because I am not too familiar with them, but they could keep on falling. I've seen them falling and rising for months in a row. And NQ and CL could keep on rising. GBL and NG seem to be the most promising bets.
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