Factor Member Webinar December 2021

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Factor Member Webinar and Q&A with Peter Brandt - Recorded live December 8, 2021 Opening discussion/presentation by Peter  Live questions from Members  
  1. What's the best place to start when learning how to enter and exit trades? 21:42
  2. Do you apply the same ATR filter on stops when exiting a position as you do when entering a position? And, if not, do you use another type of filter to reduce the odds of getting whipsawed by a price excursion that is still within recent volatility? 24:31
  3. I'm new to Factor LLC, so maybe this question is already asked many times. Do you take other fundamentals into account when trading futures - especially COT data / Open Interest? Or just chart patterns like SHS, Triangle, etc. 27:28
  4. If your equities only account is 500k, what would be your standard position size? 29:24
  5. TLT looks like a OOPs. 30:50
  6. What is the minimum account size needed in order to become a professional trader? 31:51
  7. Did you ever try to create a chart of your drawdowns? 33:37
  8. Could you do another session sometime on your weekend screening process? How many markets are you viewing? What service are you using? More about how you do this. 34:54
  9. I need a clarification (I am not a native English speaker, and I am afraid to make mistakes on such an important point). Your weekly/daily trend model for Bitcoin requires two weekly (or daily) candle closes above the 18 weekly (or daily) MA and also an uptick of the 18 weekly (or daily) MA. Correct? Would you mind explaining what exactly meets your criteria for an "uptick" in the context of this trend model? Also, is there any other component to this trend model that I have not detailed above and maybe I have missed? Have you come across, and could you please recommend, any services/tools that allow you to execute entries and exits as per your trend model in an automated way? How do you execute your entries and exits when you are taking some time off, given that crypto trades 24/7 and given that massive shakeouts (like last Friday) may happen even while you sleep? 35:43
  10. Your WEEKLY Trend Model seems down for Bitcoin but seems up for Ethereum. Have you already allocated (or are you planning to allocate soon) a portion of your Trend Model funds to ETH instead of BTC even if your trend model is down both on the weekly and daily for BTC ? In the past, BTC and ETH seemed highly correlated but not this time. What are your thoughts on what's currently happening and how do you plan on taking action? 40:54
  11. How do you use ADX? 41:08
  12. Is a 2021 Best Dressed list coming this year? Honestly, it's one of the best resources for a growing trader. 44:16
  13. How (if at all) do you allow yourself LATE entries when/if you miss the early portion of a breakout which: a) comes after a lengthy consolidation on the weekly timeframe b) shows a huge momentum c) price still has the potential to go higher based on Technical Analysis targets Is the answer different when you are trading crypto vs other assets? 44:54
  14. Do you find a lot fewer swing trading opportunities in futures in the last couple of years? 47:28
  15. Any recommendations for setting stops in a retirement account? It would be a loose stop, but not sure how loose to be. 49:09
  16. Silver. What gives? Frustrating market. And gold McClelllan is positive on gold. 50:49
  17. Where are you able to trade Bitcoin and ETH short with margin? 52:26
  18. Could you talk about the benefits of creating an LLC for trading a prop account? 53:40
  19. I am a new member. I want to ask about your risk-reward, I can see on the charts/opps you post that you normally put 1:1. Is this the case mostly? 54:40
  20. Can you please talk about the daily and weekly chart of ETH? I would like to know more about ETH? Is ETH the leader for crypto currency's now? Especially after holding $4000 since last BTC decline. 56:48
  21. What do you make of the cocoa chart? 58:41
  22. What should I read, how should I trade while I'm learning? 59:18
  23. I'm a relatively experienced stock, options, and equities trader. I've wanted to get into Futures for a few years now due to all the positives mentioned (great leverage, favorable taxation, etc). I'm confident at charting and trading Futures Continuous charts and have been keeping a paper trading log, but the technicalities of Futures contracts makes my head spin! I'm never sure which month's contract to buy based on my trade idea; sometimes the contracts are denominated in apostrophes (i.e. 32nds rather than decimals), some contracts are so large that even with a sizable account, I couldn't afford even 1 contract, and I am paranoid I will accidentally hold a contract through expiration and be beholden to physical delivery! How would you recommend an independent trader without access to a trading floor mentor get a grasp on the world of Futures trading from a terminology and execution standpoint? 1:01:09
  24. When choosing which month to trade in a futures market, what do you look at aside from OI? 1:06:05
  25. Amazon chart. Another frustrating stock. 1:08:09
  26. What's the max number of positions you hold at a given time? 1:09:41
  27. Best resources (books/courses) to learn how to short? Best resources (books/courses) to learn how to HEDGE one's position? 1:12:06
  28. How do you use/why do you have 18 and 8 MA on your charts? 1:13:45
  29. What broker do you use to trade Bitcoin? 1:14:57
  30. Why wouldn't Peter mention Schabackers' book for interested futures traders? 1:16:32
  31. To confirm, you look at a breakout in the continuation chart then trade the breakout in the front month? 1:19:00
  32. Best resources on how to HEDGE? 1:23:19
  33. What percentage of your retirement accounts are in the market today? 1:24:35
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Thoughts on a Weekend Afternoon, December 11/12, 2021

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The Monthly | Blog Edition | November 2021

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A glimpse inside the Factor Member Portal

From the just-completed month

November Numbers

  • Private Member Tweets: 122
  • Posts on the Member site: 5
  • Videos/interviews: 1

Snippets from Thoughts on a Weekend Afternoon

Peter’s thoughts on the finished week and the week ahead | Issued most weekends

Draw-downs are a fact of life for a market speculator (Dec 5, 2021 Report)

I have posted numerous Tweets on the Members’ Community Twitter stream the past week or so about trading during adversity. Why? Because, as I have stated, December is NOT the month to try to make up for the entire year gone by. Over the years I have known several traders who went bust by doubling or tripling down to catch up during December in order to resurrect a year that was not successful. December is typically a choppy month.

I have been open about my intent to get as flat as possible into December. Obviously, the big news this past week has been the large decline in equities and the cryptos. Where do these markets go from here? I am clueless, but my hunch (unsupported by any positions) is that following a struggling rally we should see equity prices further erode and that BTC and ETH could be in for several months of broad trading ranges. Time will tell.
I am looking past the current volatility in equities and cryptos and thinking about 2022.

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Commentary on open trade equity | unrealized profits (November 21, 2021 Report)

Unrealized profits are taken into account when calculating futures and forex trading profits for tax liability. Also, hedge fund managers calculate their performance based on closed trades in addition to changes in open equity (OTE) from one reporting period to the next.

Many traders monitor their asset balances, including unrealized profits/losses. While I report unrealized gains/losses in my annual tax statements, I ignore open trade equity in monitoring my Net Asset Value in real time. Open profits do not belong to me so why would I treat them as belong to me. The only Net Asset Value that I care about is Closed Trade Net Asset Value.

One of the tables/graphs I update regularly is my Closed Trade Net Asset Value – I have this figure going back to 1981 on a monthly basis and back to 2014 on a sequential closed trade basis. In my opinion, how a trader considers open profits can GREATLY impact their emotional state – which can impact their trading disposition. A couple of examples – one hypothetical and one real time – illustrate this.

• Hypothetical: This morning you had a $20,000 open profit in a futures contract but your trailing stop got hit, erasing $10,000 of the profit. In your mind do you think/feel that you lost $10,000 or that you made $10,000?

• Realtime: I would have to figure out the exact amount, but I ended the week with less equity in my Prop Account than I had at the beginning of the week. Yet, closed trades this past week had a composite profit of 80 basis points. So, who cares how much in open profits slipped through the cracks?

My focus (MY GOAL) is to keep advancing my Sequential Closed Trade NAV. The graph shown is for 2021 Futures/Forex/Crypto closed trades. For the purpose of this discussion the numeric values of the “Y” axis are unimportant. Of paramount importance to me is avoiding big losses so that the NAV curve is no more than a few good trades from a new ATH. Even right now I am in trades that based on current stop levels will push the NAV curve into a new ATH. In a nutshell, that’s my goal. I operate on the assumption which has proven itself to me that if I take care of losses, then winners will take care of themselves. Trading is about managing capital and risk. That I need to enter and close trades is simply the plumbing by which that occurs. It is the big losses (for me this is any loss greater than 30 BP per tranche) that screw up the calculus of trading.

Factor Member Private Twitter

Top Six Tweets

 

Recommended Reading

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Unknown Market Wizards: The best traders you’ve never heard of by Jack Schwager

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Members receive:

  • Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
  • The Weekend: Thoughts on a Sunday (Weekend) Afternoon
  • The Monthly: Issued monthly, will provide an overview of the completed month and highlighted member content
  • Private Twitter Page: Real-time alerts on interesting charts and observations, member dialog, the process of trading, the human aspect of trading, and risk/trade management (streamed on the member site as well)
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View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.

I hope you will consider joining the Factor community.

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MEMBER WEBINAR: December 8, 2021, 12:30p MST, Market Review and Q&A with Peter Brandt

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Thoughts on a Weekend Afternoon, December 4/5, 2021

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The Monthly – November 2021

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