October 5th, 2018 - Issue #939
In This Issue
1. Day Trading 202: Tight Stops? Wide Stops? Which One Should I Use?
2. Hot Market Report: Sugar Getting a Bit Sweeter?
3. Economic Calendar
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1. Day Trading 202: Tight Stops? Wide Stops? Which One Should I Use?
Entry signals are very important but just as important if not more is trade management.
By: Ilan Levy-Mayer, Cannon Trading Commodities Broker & VP
This article was published on FinanceMagnates.com back a couple years ago but is defintely a timeless article.
Today I decided to touch more on an educational feature rather than provide a certain market outlook. Many of my clients and blog readers know that when it comes to short term trading I am a fan of adjusting your trading technique/ game plan according to your assessment of the type of trading day that is developing in front of you.
Many new and advanced traders spend HOURS on looking for entry signals. Back testing historical data, creating algorithms to use and much more. I know. I am one of these traders.
Trade management consists of many factors. Some are psychological and some are more mathematical and many are in between. Some of the basic elements of trade management before even entering the trade are: What will my stop loss be**? will i use a stop loss**? What will my target be? will I use a target or just trail the trade if it goes my way?
....Finish reading rest of the article
Wide Stops? Tight Stops?
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2. Hot Market Report: Sugar Getting a Bit Sweeter?
By Ilan Levy-Mayer, VPClick on image below to enlarge
Sugar is part of the SOFTS family along with Coffee, Cocoa, Cotton and Orange Juice. All traded on the ICE exchange.
Daily chart from this morning, (Oct. 5th 2018). This chart was prepared using CQG Q Trader software, which you can demo for 14 days with realtime data.
Note the blue Diamond on Sept. 28th which signaled a major upside reversal. As I am writing this newsletter, the market is flirting with major resistance at 12.64. It is my personal opinion that if we close above 12.64, we can see another strong, quick leg up.
To access a free trial to the DIAMOND ALGOS shown in the chart along with other tools, visit and sign up for a free trial for 21 days with real-time data.
From the fundamental perspective, Sugar has been beaten up pretty bad due to weakness of the Brazilian Real, growing movement in western world to reduce sugar intake for health reasons and ample supply. However, like most commodities out there, markets wil go through cycles of bear, bull and range bounds price action and our job as traders is to try and figure out as quickly as possible which cycle are we in at the moment?
Sugar Futures Specs
Hours: 02:30 am to 12:00 pm Central Time
Margins: $1047 initial, $952 Maint. ( as of the date of this newsletter)
Contract Size: 112,000 pounds:
Point Value: full point = $1120 ( Example: 12.62 to 13.62 ). Min fluctuation is 0.01 = $11.20 ( Example: 12.62 to 12.63) Settlement: Physical Delivery
Months: March, May, July and October. H,K,N,V
Weekly Options:No
Some of the basic fundamentals to keep in mind when you are considering trading the Sugar for this matter:
1. The majority of the world’s supply of sugar is not traded on the open market and sugar is highly subsidized in its country of origin.
2. Supply and demand since sugar is a crop, the two biggest factors will be weather and disease .
3. A growing trend is to use sugar to produce fuel in the form of ethanol. Brazil is the world leader in utilizing sugarcane to create ethanol.
4. U.S Sugar policy matters, be sure to check the tariff-rate quota for the sugar.
Our brokers here at Cannon will be happy to chat about the Sugar market, other softs, other futures, options, futures spreads and much more! Feel free to contact us at any time.
3. Economic Calendar
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 10/05 Fri |
7:30 AM CDT - Ave Workweek & Hourly Earnings(Sep)
7:30 AM CDT - Nonfarm Payrolls(Sep) 7:30 AM CDT - Trade Balance(Aug) 7:30 AM CDT - Unemployment Rate(Sep) 2:00 PM CDT - Consumer Credit(Aug) |
LT: Oct Canadian Dollar Options(CME)
Oct Currencies Options(CME) Oct Mx Peso Options(CME) Oct Us Dollar Index Options(ICE) Oct Live Cattle Options(CME) Nov Cocoa Options(ICE) |
| 10/08 Mon |
COLUMBUS DAY
|
FN: Oct Live Cattle(CME)
LT: Nov Sugar-16(ICE) |
| 10/09 Tue |
|
FN: Nov Sugar-16(ICE)
LT: Oct Cotton(NYM) |
| 10/10 Wed |
6:00 AM CDT - MBA Mortgage Index
7:30 AM CDT - Core PPI & PPI(Sep) 9:00 AM CDT - Wholesale Inventories(Aug) 3:30 PM CDT - API Energy Stocks |
|
| 10/11 Thu |
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Core CPI & CPI(Sep) 9:00 AM CDT - JOLTS-Job Openings(Aug) 9:30 AM CDT - EIA Natural Gas Report 10:00 AM CDT - EIA Petroleum Status Report 11:00 AM CDT - WASDE Report & Crop Production 2:00 PM CDT - Dairy Products Sales 3:30 PM CDT - Money Supply |
|
| 10/12 Fri |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Export(ex-ag) & Import(ex-oil) Prices(Sep) 9:00 AM CDT - Mich Sentiment(Oct) |
LT: Oct Lean Hogs(CME)
Oct Soymeal & Soyoil(CBT) Oct Eurodollar Options(CME) Oct Lean Hogs Options(CME) Nov Coffee Options(ICE) |
| 10/15 Mon |
7:30 AM CDT - Empire Manufacturing(Oct)
7:30 AM CDT - Retail Sales(Sep) 7:30 AM CDT - Retail Sales Ex-Auto(Sep) 9:00 AM CDT - Business Inventories(Aug) 11:00 AM CDT - NOPA Crush |
LT: Oct Eurodollar(CME)
Oct Mx Peso(CME) Nov Sugar-11 Options(ICE) |
| 10/16 Tue |
8:15 AM CDT - Capacity Util & Industrial Prod(Sep)
9:00 AM CDT - NAHB Housing Market Index(Oct) 3:00 PM CDT - Net Long-Term TIC Flows(Jul) 3:30 PM CDT - API Energy Stocks |
|
| 10/17 Wed |
6:00 AM CDT - MBA Mortgage Index
7:30 AM CDT - Building Permits & Housing Starts(Sep) 9:30 AM CDT - EIA Petroleum Status Report 2:00 PM CDT - Dairy Products Sales |
LT: Nov Crude Lt Options(NYM)
Nov Platinum Options(NYM) Nov Palladium Options(NYM) |
| 10/18 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Philadelphia Fed(Oct) 9:00 AM CDT - Leading Indicators(Sep) 9:30 AM CDT - EIA Natural Gas Report 3:30 PM CDT - Money Supply |
|
| FN=First Notice, OE=Option Expiration, LT=Last Trade | ||
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
