Ever wonder what the smart money is doing in the markets? You don’t need to pay big bucks to find out. Just read the Commodity Futures Trading Commission’s free weekly Commitments of Traders report. The CFTC’s COT data is a Holy Grail of market info, listing trillions of dollars in positions in 200+ markets – gold, crude oil, natural gas, silver, forex, equity indexes and lots more. My trading system, which I posted about here for seven years, gave weekly trading signals based on the COT data.
Tuesday, 21 October 2008
Bad Market! Time-Out
My newly created Black Swan Rule went into effect for all my trading setups this week. As I posted last week here, I've adopted this new risk-control rule in order to limit losses when markets are acting out of sorts in relation to the historic data. The rule is this: in any four-week period, if my portfolio experiences a loss greater than six percent (calculated using the weekly close values), I will close all trades on the next weekly open and cease trading new signals for four weeks. Think of it as a time-out for a badly behaving market. That was the case as of Friday's close. So my rule is to close all current trades and cease trading new signals. I will resume following new signals with the Commitments of Traders report for the week of Nov. 11. I will still keep updating my latest signals table and posting as usual during this time. Good luck this week.
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