Each market day, MorrisonOnTheMarkets.com (MOTM) will provide technical market insights on a wide range of commodities. The site is intended to demonstrate technical-analysis methods that I apply for speculative trading in my personal account. I've used these methods to make trading decisions for most of my 30+ years trading commodities, professionally and personally. I intend to be transparent, providing information about specific trades I am considering or actually have made. Periodically, I will provide actual results of the trades.
"tells you what Ken is trading, why, and provides the results"
Unlike most market advisory services, MOTM is not intended to provide trade recommendations. Instead, it will supply actual trades or trades under consideration, supported by my personal risk capital. All MOTM subscribers must decide for themselves if these tools are suitable for their own application, considering their own amount of risk capital and personal risk tolerance. Commodity speculation is extremely risky, and commodities are quite volatile. Sizeable sums of money can be made and lost due in part to the margined leverage.
“ technical tools provide a balance to fundamental analysis, removing much of the emotion and bias from market decisions”
The trades I choose to make are driven solely by methods and tools of technical analysis. If applied with strict discipline, technical analysis minimizes the role that emotion plays in making market decisions. It's based on real price data and removes bias from the mountain of fundamental information in the marketplace.
MOTM trade decisions are not influenced by fundamental analysis. Every subscriber has numerous sources of that information. MOTM is intended to provide a unique perspective that analyzes and anticipates trend changes in the market prices based on price, volume, and other technical factors.
MOTM trades are driven by short-term and intermediate-term moving averages and momentum indicators. I use methods derived from a Japanese technical market method known as "golden cross" and "black cross."
Simply put, a golden cross occurs when the short-term moving average rises above the intermediate-term moving average and the latter is also rising. Conversely, a black cross occurs when the short-term moving average sinks below the intermediate moving average and both are likely to continue lower.
Returns to risk capital and trading results are usually optimized when one is "in the trade" as the change in trend occurs and remains in the trade until the trend, by the same method, reverses. My trading style is to anticipate when these changes in trends are about to occur. Although it requires more patience and discipline compared to trading breakouts or breakdowns, I would rather risk being wrong about a trend change than miss the trend change altogether.
This does require a higher degree of risk tolerance. I urge subscribers to be aware that I am often a few days early in trade entry and exit points. And, yes, I sometimes get trend changes wrong. Over a long period of time, my experience in applying these methods over a wide range of commodities has resulted in successful trades about 60% to 70% of the time. It does vary by commodity. Related to this, the "average" time of a trend (and trades based on trend changes) is roughly 30 days. This too varies widely, depending on a variety of factors.
“proven methods that anticipate “golden cross” and black cross” changes in market trends resulting in high % of profitable trades”
Once a trend change is confirmed and I'm in the trade, I will discuss general price targets based on trend line support and resistance price points and often illustrate these with charts. The direction and momentum of the short- and intermediate-term moving averages will remain the dominant factor in determining exit points and stops.
When prices trade through the obvious chart levels, I will discuss measured targets based on prior chart patterns. I tend to be general in my price targets. Over the years, I have found it is more important to observe how the market "acts" at critical price levels than to set rigid entry and exit price levels.
A combination of price, time, volume, and market sentiment are also important. Compared to most practitioners of technical markets, you will probably find my price targets more flexible -- for instance, "I will sell at 3.75-ish" instead of "I sell at 3.75." In this example, the market may only reach 3.72. Depending on the makeup of the moving averages and how the market acts at that price, I may view this as having satisfied my price objective. The nature of markets and trading is part art and part science.
“sets flexible price targets recognizing markets and trading are part art, part science”
In sharing my methods and results, I aim to enhance subscribers' understanding of trading commodity futures. Speculative commodity trading is risky and can be intimidating for everyone at times. We all seem to know somebody who "lost their shirt" trading commodities. Commodities and commodity speculators continue to have a rather negative public image, even though they facilitate much-needed liquidity.
One of the most important "rules" for any commodity trader is to commit an adequate amount of risk capital that you can afford to lose in its entirety in the worst-case scenario. Further, I try to limit the number of trades and margin requirements to no more than about 50% of my total risk capital account at any time. That enables me to weather the storms and the occasional "surprise" without being forced to liquidate or to produce more risk capital to make margin calls. For the purposes of illustrating MOTM results and performance, I will use a total risk capital account of $40,000 which is roughly twice the initial margin required for one contract each for every commodity I will follow. Unless otherwise specified, the performance and trades reported here will assume one contract.
“improves knowledge of the role and influence technical tools have on today’s
fast-paced, volatile markets”
Finally, in MOTM, I will discuss and illustrate prudent risk management and capital preservation, primarily through the use of stops, as appropriate. I tend to use stops very sparingly as, in my experience, they often signal price capitulation at the stop prices, rather than a breakdown or breakout. Regardless, stops are a necessary part of prudent risk management. After all, return of risk capital is the most important "rule" in trading and investment.
“uses stops sparingly, but recognizes return of risk capital is more important than return on capital”
I hope you enjoy MorrisonOnTheMarkets.com as much as I will enjoy sharing my methods, results, and a little bit of my knowledge from more than 30 years of trading experience.
Your feedback is encouraged, but I can't promise I'll always be able to answer your questions. Please remember that I'm here to show you what I'm doing, not to make specific trade recommendations for individuals. You or your trusted financial counselor will have to do that. I won't respond to requests for specific, individual trade advice.
“Contact Us whenever you have questions or suggestions how Ken can improve to help you make money”