Why I like to use STOPS & Support & Resistance Levels 7.12.2018

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Dear Traders,

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Today’s market actions on a few different levels lead me to writing this and sharing a few thoughts about why I personally believe a trader should use stops.*
A couple of events took place today:
The first were the large moves in the energy sector including the very popular crude oil contract.
Crude oil had a range of $4.24 from high to low. That translates to $4240 of a  loss if you were unlucky to buy the high and sell the low…..Not sure why the CME overnight margin for this market is still ONLY $3200 but if you traded futures before you can see where I am going with this. You could have had enough margin to carry long position overnight and find yourself in deficit if you (or the risk manager/your broker) did not take you out of the position in time.
The other meaningful event was that the CME had connection issues across many FCM’s, and routing connections which lead to a situation where certain traders were not able to get out of a position via their trading software (I am proud to say that the majority of our clients had the ability to call us and get help via phone). Its not a good feeling to say the least, to feel that you are “stuck” in the market. However, in this specific case, if you had stops already working on the exchange, you at least had that level of protection.
The moral of the story? Learn to use stops each time you trade. You can get away 9 times (luck, deep pockets etc.) but all it takes is that one time where either your trading capital or luck runs out to destroy your trading account.
As always, we are here to assist and answer any questions via email, phone or chat!
* Note about stops: THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR TRADING ADVISOR, SUCH AS A ”STOP-LOSS”OR ”STOP-LIMIT” ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.

 

Good Trading

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Futures Trading Levels

07-12-2018

 

Contract September 2018  SP500 #ES_F Nasdaq100  #NQ_F Dow Jones  #YM_F Mini Russell #RTY_F BitCoin Index #XBT_F
Resistance 3 2808.42 7382.00 24986 1717.17 6532.06
Resistance 2 2798.08 7336.00 24896 1709.63 6464.69
Resistance 1 2786.42 7296.50 24792 1698.67 6409.88
Pivot 2776.08 7250.50 24702 1691.13 6342.51
Support 1 2764.42 7211.00 24598 1680.17 6287.70
Support 2 2754.08 7165.00 24508 1672.63 6220.33
Support 3 2742.42 7125.50 24404 1661.67 6165.52
Contract August Gold #GC_F Sept. Silver #SI-F Aug. Crude Oil #CL-F Sept.  Bonds  #ZB_F Sept.  Euro #6E_F
Resistance 3 1267.7 16.33 77.39 146 15/32 1.1885
Resistance 2 1262.5 16.22 75.83 146  3/32 1.1851
Resistance 1 1252.5 16.02 73.15 145 26/32 1.1791
Pivot 1247.3 15.91 71.59 145 14/32 1.1757
Support 1 1237.3 15.72 68.91 145  5/32 1.1697
Support 2 1232.1 15.61 67.35 144 25/32 1.1663
Support 3 1222.1 15.41 64.67 144 16/32 1.1603
Contract Dec.  Corn #ZC_F Sept. Wheat #ZW_F Nov. Beans #ZS_F Dec. SoyMeal #ZM_F Aug. Nat Gas #NG_F
Resistance 3 366.0 503.3 873.00 334.67 2.90
Resistance 2 363.3 496.8 867.75 332.83 2.86
Resistance 1 358.3 484.3 858.00 330.27 2.84
Pivot 355.5 477.8 852.75 328.43 2.81
Support 1 350.5 465.3 843.0 325.9 2.8
Support 2 347.8 458.8 837.75 324.03 2.76
Support 3 342.8 446.3 828.00 321.47 2.74

Economic Reports, source: 

http://app.bettertrader.co 

 

 

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 here in 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 judgement in trading.

Posted in: Future Trading News  

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