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Support & Resistance Levels

This Blog provides futures market outlook for different commodities and futures trading markets, mostly stock index futures, as well as support and resistance levels for Crude Oil futures, Gold futures, Euro currency and others. At times the daily trading blog will include educational information about different aspects of commodity and futures trading.


Day Trading Mind Traps & Precious Metals: ETFs vs Futures & Trading Levels 8.03.2020

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Precious Metals Trading

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Day Trading Mind Traps 

“One way our brain helps keep us safe is to protect us from an awareness of our weaknesses. The brain believes that it is better to be falsely confident than recognize the real risks. This protective mechanism tends to work against us in trading.” Kenneth Reid, Ph.D

MINDING THE MIND

The mind can play tricks on us. Intuitive Trading is an attempt to mind read the market, which makes us susceptible to whipsaws. Hindsight Bias causes traders to underestimate the difficulty of trading, while Competency Bias causes us to over-estimate our abilities. These are mental banana peels that set us up for a fall.

INTUITIVE TRADING

Intuitive trading is a natural response to excessive randomness and non-linearity in the market. But making informed guesses is not the same as formulating a rule-based pattern-recognition system that gives a trader a true edge. Without a rule-based plan, intuitive traders expend a great deal of energy mindreading the market, which will not improve your odds of success. In fact, professional traders make a good living exploiting the emotionally-driven behavior of intuitive amateurs.

Precious Metals Trading: ETFs vs Futures

Gold is hanging around its most expensive prices since futures on the commodity started trading almost half a century ago in 1974. While the price levels have increased, the action around gold has not. Volatility has only risen slightly in gold products, and it is in fact still below its historical average. As gold feels out new highs in a more calculated manner, its metallic companion silver has almost doubled in volatility.
precious metals trading
Whether it’s by price extremes or large moves, the curiosity of many stock traders is piqued. But those familiar with precious metals trading may have a hard time finding the right precious metal product to speculate on since the choices vary widely in exposure, size, and look.

Metals or Mining Stocks?

Exchange-traded funds (ETFs) that package stocks in the mining business might be the easiest first venture into metals, but ETFs such as XME and GDX can diverge greatly from the commodity itself. Their correlation to the equity market can push them one way as metals pull them the other creating significant long-term deviations.
precious metals trading
Some ETFs that track commodities more closely, like GLD and SLV, can be heavy on capital usage. For example, the shares needed to see daily movement in an SLV position greater than $50 would cost between $1,000 and $2,000. These expensive ETFs make large returns on capital difficult to attain.

Capital Efficiency at What Cost?

Futures contracts on gold and silver can offer large fluctuations for smaller capital requirements than stocks and ETFs, but traditional metal futures such as /GC and /SI can be too large for the everyday investor. Both markets have seen daily moves exceeding $2,000 just in the last week, and silver futures have made multi-thousand dollar moves a regular event.
New futures products like Small Precious Metals (/SPRE) present smaller investors the capital efficiency of futures at a more manageable rate than traditional products. The product moves close to $100 on the average day, and its initial margin is usually around a few hundred dollars. Also, it combines gold and silver into the same product, so you don’t have to decide on which precious metal to trade.
precious metals trading

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 when it comes to Futures and Precious Metals Trading.

 

Futures Trading Levels

8-03-2020

precious metals trading

 

Weekly Levels for August 3rd-7th

 


precious metals tradingEconomic Reports, source: 

https://mrci.com

precious metals trading

 

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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“What Futures Markets Would you Recommend a Newcomer to Start With?” & Futures Trading Levels 7.31.2020

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Voted #1 Blog and #1 Brokerage Services on TraderPlanet for 2016!!  

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Day Trading Futures

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Tomorrow is the last trading day of the month. I have noticed markets will sometimes act “different” on the last and first trading days of the month.
Depending on which markets you like to trade, do some homework, look at last and first trading days of the months from previous months, see if there are any patterns you can see, certain times of higher volatility etc.
On a different note, I was asked this morning, “what futures markets would you recommend a newcomer to start with?”
While the answer will vary based on perspective trader risk capital, risk tolerance, personality etc. I do think that there are a few markets that might be a better start for first time futures day trading.
I personally would say, leave the mini SP alone. yes it has the biggest volume but there is quite a bit of size on the bid/ask that may make this frustrating for new traders.
My favorite markets to share with first time traders are:
MICRO mini sp
MICRO NQ
mini Dow
ten year notes
and
 mini crude/ mini gold
The MICROS on both NQ and ES will track the ES and NQ 99.99% are tenth the size and are excellent products in my opinion for day trading futures newcomers.
The mini Dow moves similar to mini sp but the value per point/tick is smaller, still has good volume but not as hard to get filled on the limits as the mini SP
The 10 year notes are usually less volatile than the other markets mentioned. Completely different type of trading personality and offer a good diversification option for new traders and experienced traders.
The mini gold and mini crude are another good option because it is the smaller contract size of two markets that can really move, offer volatility and RISK but the availability of the mini sized contracts make these two a better option for beginners until one has experience / risk capital and appetite for the standard contract sizes of gold and crude oil.

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 when it comes to Futures Trading.

 

Futures Trading Levels

7-31-2020

 


Economic Reports, source: 

https://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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TRADE ENTRY Approaches & Trading Levels 7.30.2020

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Many different ways to make and lose money trading futures, even more so when day trading.
Today’s action in Metals futures ( gold and silver mainly) led me to write about different ways to enter the market:
Three main TRADE ENTRY approaches out there, in my opinion.
The first is what I call the “trend is your friend”. A trader looks at few different time frames, looking to see if there is an established trend on longer time frame ( example 60 minutes chart) and then trying to look for pull back on lower time frames and “join the trend”. Only works for certain markets and only works few times of the month as most days markets do not have an intraday trend.
Second method is what we call break out. Traders will look for markets that have been in a lower volatility situation using indicators such as ADX for example. Then they will look at the chart to find what they feel are levels that if broken can fuel a stronger move in the same direction. These levels can be extracted visually looking at the chart or using highs/ lows of X periods. This method works better on some markets than others. I noticed that crude oil and gold futures tend to have better chances of a continued breakout move than the mini SP 500 for example.
The third one many traders use and believe in is “mean reversion”. Stock index futures in my opinion will fall into this category many trading days. Traders will sometimes use RSI or Williams %R to get a feel for when the market gets away from the mean and will use counter trend methods in this case. Use of stops, when counter trend trading is even more important as you do NOT want to get caught on the few days a month when these markets do incur a break out situation…..
Obviously, all methods have good days, bad days and I guarantee you, none of these methods work all the time on all markets. Knowing the above and trying to understand what method should be the primary method for the market YOU trade and which can be used as secondary can help you while trading.
Next time I am going to touch on something I feel is even more important….Exit Strategies….

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 when it comes to Futures Trading.

 

Futures Trading Levels

7-30-2020

 


Economic Reports, source: 

https://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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Big Things at the Small Exchange & Futures Levels 7.24.2020

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Voted #1 Blog and #1 Brokerage Services on TraderPlanet for 2016!!  

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Small Exchange

 

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Big Things at the Small Exchange

SMALL EXCHANGE RESOURCES

A New Way to Trade Equities, Commodities & Forex!
Gain exposure to popular markets with standardized tick values and expiration dates on the Small Exchange. This brand new exchange joins the benefits of trading futures like capital efficiency, with the accessibility of the stock market. Learn why Smalls are a simple yet exciting addition to your trading plan.
New products by a new exchange!!
Contracts are using pricing format like stocks and equities and include the following:
Small Stocks 75 finds the most active stocks from the five major sectors – technology, industrial, energy, financial, material – and adjusts with shifts in the equity environment to give you an engaging stock market at all times.
Small Precious Metals combines and weights the three most popular metals by global production, US consumption, and trade volume to give you one comprehensive perspective.
Small US Dollar is priced directly to the dollar, and it spreads USD exposure across the Euro, Chinese Renminbi, Japanese Yen, British Pound, Canadian Dollar, Australian Dollar, and Mexican Peso.

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 when it comes to Futures Trading.

 

Futures Trading Levels

7-23-2020

 

small exchange


Economic Reports, source: 

https://bettertrader.co/ 

small exchange

 

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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Weekly Options as Trading Weapon & Future Levels 7.23.2020

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Voted #1 Blog and #1 Brokerage Services on TraderPlanet for 2016!!  

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Dear Traders,

Like us on FaceBook!
Get Real Time updates and market alerts on Twitter!
Allow Cannon Trading to make 2020 the year of a BETTER Trading vision!!
🙂
Trading 102: Tired of Getting Stopped Out on your Day trades?
Weekly Options as Trading Weapon
by John Thorpe, Senior Broker
There are 100’s of indicators available to traders to assist with decision making that can be applied to technical analysis, which is precisely the reason to utilize a sound and inexpensive weekly ES strategy to compliment a day trading strategy.
  1. There are two main uses for the Weekly options As a hedge, no need for stops
  2. As a pure speculation. A relatively inexpensive way to speculate on market direction in a time frame that can be for minutes, hours or a few days without the need to use stops.
Briefly, the definition of an option contract from the National Futures Association is: An investment vehicle which gives the option buyer the right—but not the obligation—to buy or sell a particular futures contract at a stated price at the specified expiration date. There are two separate and distinct types of options: calls and puts. These weekly options are European Style, Exercisable to the nearest futures contract at 3 pm Central time on Friday. If in the money by any amount, the exercise is automatic.

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 when it comes to Futures Trading.

 

Futures Trading Levels

7-23-2020

 


Economic Reports, source: 

https://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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