Tag Archive for: Member Q&A

Tweet Storm

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While on Twitter last night, I engaged followers in an unscripted Q&A session.  The exercise was quite enjoyable in fact and we thought we would share the experience on the website today.    Here is a transcript of that Tweet Storm for you.

 

 

Factor Membership

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Peter Brandt is a 40+ year veteran of trading. Through his Factor Service, members receive:

checkTrading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
checkWeekend Update: 10-16 pages full of in-depth chart analysis and charting commentary
checkAlerts: Detailed information on specific charts as unique opportunities present themselves
checkMarket Commentaries: Communications on specific topics regarding market speculation and trading distributed periodically
checkWebinars: Monthly member-only webinars where Peter speaks about current conditions and fields member questions
checkKnowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of content
checkAutomatic notifications: Email and social media notifications are sent out when new content is published

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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. Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about. For more information watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

Factor Trading - An Introduction

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Factor Member Questions

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  Below are a few Factor Member questions from this past weekend's report I thought you might enjoy.   Question: Peter, how do you protect against large open trade profits from disappearing?    - Factor Member Answer: Read More

Taking Profit – A Trader’s Challenge

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Taking Profit

The following is a discussion on Taking Profit from our member Q&A feature at Factor Trading.

 

Question:

Your reports on markets and discussions surrounding the more thorny issues of portfolio/trade management and emotions are without parallel. I am writing you in hopes of some advice. I am having problems with my trading in the sense that I often take my profits on a trade before it reaches my target, sometimes well before the target is reached. In other words, I am not being disciplined enough with trades that are going in my favor. Is there anything you can suggest (a book, a trade process, etc.) which can help me improve and work on my trade discipline? Thanks very much.

–Factor member, London

 

Response:

You describe a challenge that faces all discretionary position traders at some point in their careers. The temptation to take profits in a trade are overwhelming, especially during difficult trading periods and drawdowns. After watching the initial early profits on a few trades turn into losses creates a great emotional urge to grab a quick profit the next time one becomes available.

Ultimately this is a challenge every trader must work out for him or herself. There is no easy answer — what you describe is basically an inner battle that must take place with each trader. I engaged this inner demon early in my trading career — and I must admit that the “take profits before they disappear” inner voice makes itself heard even today. The upstream swim against human nature never ends — although it does get easier. Base emotions are never really defeated for a discretionary trader — the best we can do is to manage counter- productive urges.

I must start off by emphasizing that being a “target trader” is not for everyone. I know very successful traders who seek a three or four-day price surge (or break) and then step aside and look for other similar opportunities. I also know successful traders who would not think about “target trading” — they want to ride out a trend for as long as it continues (using various trend-following techniques).

If it is your strong desire is to be a “target” trader, let me suggest simple moving averages may be a way to get there — but you must look at this challenge as a marathon (requiring several years of development) and not a quick-fix.

If your account allows for a multiple-contract position futures, you might allocate at least one contract initially to a simple moving average system of your design. Perhaps you stay with the position as long as the 8-day or 14-day or 21-day or whatever moving average confirms the trend — of course then taking profits at the target if that is your goal. It is quite easy to split an equity or spot forex position into tiers for the purpose of delegating a partial position to a trend following model.

 

Hope this helps.

plb

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Factor Membership

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Peter Brandt is a 40+ year veteran of trading.  Through his Factor Service, members receive:

checkTrading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
checkWeekend Update: 10-16 pages full of in-depth chart analysis and charting commentary
checkAlerts: Detailed information on specific charts as unique opportunities present themselves
checkMarket Commentaries: Communications on specific topics regarding market speculation and trading distributed periodically
checkWebinars: Monthly member-only webinars where Peter speaks about current conditions and fields member questions
checkKnowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of content
checkAutomatic notifications: Email and social media notifications are sent out when new content is published

.

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.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

Factor Trading - An Introduction

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Risk Per Trade

Why do you cap your risk to 100bps per trade?

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Risk Per Trade

A question from a past member only webinar.  “Why do you cap your risk to about 100bps per trade?”    I thought you might find this interesting.

 

 

Consider joining the Factor community where we run a monthly one hour member only Q&A session.  All past webinars are archived on the site to be viewed at any time.

 

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Factor Membership

.
Peter Brandt is a 40+ year veteran of trading.  Through his Factor Service, members receive:

checkTrading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
checkWeekend Update: 10-16 pages full of in-depth chart analysis and charting commentary
checkAlerts: Detailed information on specific charts as unique opportunities present themselves
checkMarket Commentaries: Communications on specific topics regarding market speculation and trading distributed periodically
checkWebinars: Monthly member-only webinars where Peter speaks about current conditions and fields member questions
checkKnowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of content
checkAutomatic notifications: Email and social media notifications are sent out when new content is published

.

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.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

Factor Trading - An Introduction

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What would you tell your younger self - Peter Brandt - Factor Trading

What Would You Tell Your Younger Self?

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This video except comes from our monthly Member only Q&A.  The question was:  Looking back over your trading career – What advice would you give to your younger self?   I thought you might find this interesting.

 

 

 

 

 

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Factor Membership

.
Peter Brandt is a 40+ year veteran of trading.  Through his Factor Service, members receive:

checkTrading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
checkWeekend Update: 10-16 pages full of in-depth chart analysis and charting commentary
checkAlerts: Detailed information on specific charts as unique opportunities present themselves
checkMarket Commentaries: Communications on specific topics regarding market speculation and trading distributed periodically
checkWebinars: Monthly member-only webinars where Peter speaks about current conditions and fields member questions
checkKnowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of content
checkAutomatic notifications: Email and social media notifications are sent out when new content is published

.

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.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

Factor Trading - An Introduction

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February Member Only Webinar

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Dear Factor member.  Join us! Member only live Q&A with Peter - Thursday, February 9th at 11am Mountain Time Read More

Sample Member Q&A’s

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Here at Factor, we receive so many great questions covering Risk Management, Trade Management, Classical Charting Principles, The process of Trading, and the Human Aspect of Market Speculation.  As followers of our public blog, we wanted to share just a handful of these Q&A’s with you.

 

 Factor Question
When considering a futures trade, is your decision to take a trade always based on the chart pattern you see on the continuous chart? For example, when you look at the recent trade for cotton, the cotton continuous chart shows a recognizable pattern yet the chart for the Dec contract for cotton looks quite different. With such a discrepancy what criteria do you use to decide which contract to buy/sell and at what entry level?

 

Answer: A continuation graph plots the price of the “front” or nearest futures contract on a rolling basis. I use several types of continuation charts – each different based on when the chart rolls from the nearby contract to the next contract.

-055 – rolls on the first day of the expiration month

  • -056 – rolls at expiration
  • -057 – rolls based on volume and open interest (plotting the contract with the most liquidity)
  • I do not think one variety is necessarily the best – I attempt to identify the version that most clearly explains price action
  • I am adamantly opposed to back-adjusted charts that attempt to “fill in” the price difference between an expiring contract and the subsequent contract

There are several things a trader needs to understand about continuation graphs.

  • Continuation graphs provide a larger perspective of market trends. For example, the Dec Cotton contract had limited trading history.
  • Continuation graphs of ag markets (especially perishable commodities) and markets with large carrying-charge or inverted structures can be very misleading.
  • More often than not the daily graph will provide a similar or confirming chart pattern to the continuation chart.
  • Trades are made in individual contract months. When the chart of an individual contract month does not support a trade signal of the continuation graph I skip the trade.
  • When both the continuation and individual contract month chart suggest a similar narrative, a leading breakout by the continuation graph adds credibility to the trade.

 

Factor Question
For a beginner in charting and trading, what are the best patterns to look for?

 

Answer:

  • H&S, right-angled triangles and rectangles
  • Extremely well-defined boundaries with little or no “spindle” confusion
  • 12- to 26-weeks in length

 

Factor Question(About turning $50,000 into $1,000,000) You are very critical of the promoters of trading systems and training programs that offer promises of huge profits. I share your criticism. Yet, surely you know some traders who have turned $50,000 into $1,000,000 in a matter of a few years. If so, how did they do it?

 

Answer: I personally know some traders who have achieved this type of profitability. Yet, there are some things all aspiring traders need to understand about 10-fold and 20-fold profitability. First, I know no trader who has achieved this level of profitability with a system or trading approach. Such levels of profitability come from ultra-leverage in very substantial and sustained one-off trends – not by applying day trading techniques learned from a $3,000 trading video. Second, the leverage and risk taken to achieve this level of profitability represent a two-sided coin. I cannot recall a single trader who has achieved a 10-fold or 20- fold return during less than a five year period who has not also experienced at least one 50% drawdown in the process. Herein lies the dilemma – and a question. If you, as a trader, ran a $50,000 account into $1,000,000, then experienced a drawdown back to $500,000, which frame of mind would you have:?

A. You just made $450,000 – what a fabulous thing

B. You just lost $500,000 – what a bummer

There is another dimension to a 10- or 20- bagger that I must mention. A big trading score requires far more than the desire to make it happen, perseverance, incredible patience, discernment, boldness and the right trading tactics. It requires the right markets at the right time in a trader’s career – and that is largely a function of luck. Without the intervention of providence no amount of desire/boldness/trading tactics will make it happen.

 

Factor Question
 What trading and performance metrics do you regularly or periodically calculate?

 

Answer:  Great question. I am highly data driven and believe the data I have collected on my trading performance over the years is a small gold mine. The metrics I maintain include (but are not limited to) the following.

  • 3 – and 1 – year Gain-to-Pain rations
  • 3- and 1-year RORs
  • Annualized worst drawdowns
  • 3- and 1-year Calmar ratios
  • Win rate
  • % of trades constituting the bottom line
  • 3- and 1-year average win size to loss size ratios

These are the metrics I believe really matter to performance outcomes.


Factor Question
 What changes, if any, have you made in your trading since you wrote Diary of a Professional Commodity Trader?

 

Answer:  Even though I have based my trading on classical charting principles since 1980, the tactical aspects of my trading have evolved over time. There are several areas of my trading today that are modified vs. 2011 – the year “Diary” was published.

Trading frequency – Back in the 1980s and early 1990s I typically made 25 to 30 trades per month. At the time “Diary” was published, my monthly trading frequency had declined to 15 to 20 trades per month. My present goal is to enter no more than 10 trades per month.

Pattern Selection – My focus is on horizontal patterns. While I will trade an occasional symmetrical triangle or wedge, these patterns must meet additional criteria.

Pattern Duration – At the time of “Diary,” I considered patterns of 4 to 10 weeks in length. My focus now is on patterns 10 to 20 weeks in duration. I will trade a smaller pattern if it is part of a larger pattern – either as a launching pad or continuation pattern.

Trade Management – I am much less likely to retain my initial stop levels. I make every attempt to as quickly as possible move a trade to a breakeven proposition.

 

Factor Membership

Factor Members enjoy a monthly live Q&A session with Peter Brandt.  They’re also encouraged to send in their questions at any time.  The Factor maintains a database of these member Q&A’s on the website so all members can learn from this interaction.

 

Factor Membership is available and 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.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

 

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Factor Update – April 9th

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Factor Update - April 9th

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