Factor Update, November 4, 2023
For the week ahead the focus of my attention will be on: DBB-etf, ETH, AVGO, Sugar futures, DBA-etf
For the week ahead the focus of my attention will be on: DBB-etf, ETH, AVGO, Sugar futures, DBA-etf
In recent days/weeks I have discussed that the Factor Prop Account is experiencing a drawdown (DD). Many traders might think that admitting to a drawdown is something to avoid – but not me, and it should not be for you. Steel is hardened by pressure and heat. Good traders become great traders through adversity. My advice to novice and aspiring traders is that more knowledge and wisdom can be gained during challenging periods than during times of glory.
Gold futures vs. Yen futures, Wheat, London Cocoa, Bitcoin, CAC, Cable, NASDAQ, USD/SEK, RBOB, Sugar, Soybeans, European Carbon Offsets, S&Ps, AUD/CAD, and Canadian Dollar.
My analysis of markets in recent weeks has been mainly limited to weekly charts. While I’m sure there are many daily chart patterns I am missing, my bet is that trading conditions will be choppy in the near-term. Weekly charts are more reliable than daily charts in choppy conditions.
https:www.peterlbrandt.com:wp-content:uploads:2023:03:Factor-Report-Mar-5-2023It is important for me to emphasize that I do not take any trades lightly. I am hopeful that every trade I do might be a 150 BP-plus winner. I fully expect most of my trades to disappoint me. Fear of having a trade disappoint me is not a valid reason for me not to take a trade.
Two items:
Targets. I receive a ton of questions about price targets. My sense is that novice and aspiring traders are way too over concerned about targets. If I eyeballed the same chart a dozen times I would likely come up with a dozen slightly different price targets. And, in futures markets the targets of the three major continuation chart varieties (055 roll at first notice day, 056 roll at last trading day and 057 plot the most active contract) are often quite different and even vary from the target of an individual contract month. Just use common sense when calculating a target. The target orders I place are typically based on the target of the traded contract month. A case in point is found below for FTSE.
Symbols. The symbolling system in futures is a complete mess. It seems as if every data provider and brokerage firm use different symbols for the same futures contract. This is why I most often list the futures contracts and not the symbols when mentioning my positions.
FTSE futures, Litecoin, MATIF Corn futures, Russell 2000, Soybean Meal, Sugar, British Pounds, Eurodollars, German Bund, Cotton, and Silver
Merry Christmas
We wish members of the Factor and your families a very Merry and festive Christmas. This is an abbreviated edition, showing only the charts for which the Factor Prop Account holds positions or initially will consider positions next week.
Trading commentary
2022 has been my best trading year since 2018 and the most frustrating year trading since 2013. The charts were extremely difficult to trade this past year, especially in the last half, with an extraordinary number of false breakouts and morphology.
The first half of the year was pure splendor, with grains and interest rates undergoing wonderful and sustained trends. My positive performance was stacked into the first half of the year. From Aug through Dec, I have felt a constant state of self-defense.
Trading commentary: The markets during December are often quite tricky. I am winding down my trading for the year. My interest will be limited to weekly chart patterns. In the weeks ahead I will be preparing an update for the annual “January FX Effect” report and the annual Best Dressed List.