The Futures Trader's Destination for Over 25 Years

Open an Account
Call Us Free: 1-800-454-9572
Why Trade with Cannon?
  • USA
  • Canada
  • Mexico
  • United Kingdom
  • France
  • Italy
  • Spain
  • Germany
  • Australia
  • Netherlands
  • Romania
  • Belgium
  • Sweden
  • Czech Republic
  • Hungary
  • Switzerland
  • Austria
  • Portugal
  • Denmark
  • Greece
  • UAE
  • Israel
  • Jordan
  • Saudi Arabia
  • India
  • Argentina
  • Costa Rica
  • Peru
  • Chile
  • Brazil
  • China
  • Hong Kong
  • Japan
  • Russia
  • Thailand
  • South Korea
  • Taiwan
  • Philippines
  • Singapore
  • And Many More!
Countries We Accept Clients From | International Calls: 310-859-9572

Risk with Trading | Support and Resistance Levels

Jump to a section in this post:
1. Market Commentary
2. Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000
3. Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Support and Resistance Levels – March Corn, March Wheat, Jan Beans, March Silver
5.Economic Report for February 8, 2012

1. Market Commentary

Hello traders,

Another up day on LOW VOLUME…..

Not much to share as far as market view so another educational piece for your reading pleasure below:

RISK

It is a four letter word. As traders it is something that we thrive on and dread. We chase and fear. We look for and look to avoid. It is RISK. Without it, there is no opportunity for profit. Without it trading lacks potential. With it, failure and heartache are the consequences when it is abused.
Risk itself is not a bad thing. When it is misused by traders, it becomes a problem. Controlled risk presents traders with exciting and profitable opportunities. Uncontrolled, it brings the end to the dreams and careers of many traders.
How should we as traders confront risk? The first step is to respect it. Realize the damage it can do to our account equities when it is abused. The two most important tools that we have to control risk are stops and position size. Oh, I know, you hate stops. We all do. We have all been stopped out at the high or low only to see the market immediately move in the direction that we thought it would. But without using stops on every trade that we enter, disaster will eventually prevail. I have a love/hate relationship with my stop orders. I hate to place them, but love how they save me from large, unacceptable account crushing losses. It is the same for all successful traders. Those foolish enough to trade without stop protection are risking disaster on every trade. Unless you as a trader have developed perfect discipline to exit a losing trade quickly, and according to your pre-entry criteria, stops are mandatory. And admit it, at least to yourself…..do you have perfect discipline? I think not.
The other critical element in controlling risk is position size. By this I mean the percentage of your equity that you are risking per trade. I do not risk more than 3.5% of my equity on any trade. Some traders are comfortable risking 5% of their equity. This amount for me is an amount of risk with which I am comfortable. It allows for aggressive trading, and it allows me to stay in the game ( financially and psychologically) even after a series of losses. This aspect of strategy building is often forgotten by the novice trader. These folks have dreams of “the big hit” or the monster trade that allows their account equity to soar to heights unimagined by mere mortals. The problem is, oops, what if you are wrong? This type of trading/thinking is out of control. It leads to broken dreams and short careers. You must always remember that this is a highly volatile, sophisticated business. Treat it as such. If you want to gamble, jump on an airplane and visit Las Vegas.
The futures markets are highly leveraged, as we all know. Those traders that abuse risk by not respecting its power will eventually join the long list of former futures traders. Risk must be treated like a beautiful, intelligent woman. Treated with respect, wonderful things can happen. But, abuse it, or disrespect it, and suffer the consequences.
As a futures trader you have to embrace taking risk. Understand its impact. Respect it. Stay in control of it. Develop a trading method that makes risk an asset to your account instead of an enemy of your account. Risk/reward analysis is an important part of our everyday lives. Can I make it thru the intersection before the light turns red? Do I need to re-apply my sunscreen? Should I have one more beer before driving home? In trading, always keep in mind your risk versus the reward. A 50% gain in your account is not equal to a 50% loss of equity. A 50% winning trade puts you up by one half. But a 50% loss means that you have to double your equity to get back to your starting point. Respect your risk levels. Trade only using a risk level that you, personally, are comfortable with.
Rome wasn’t built in a day. Neither will your account be built in a day, or a week. Respect risk. Enjoy it’s benefits and may your trading in 2012 will produce profits and satisfaction. Enjoy the ride.

2. Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000

Contract (Dec. 2011) SP500
(big & Mini)
Nasdaq100
(big & Mini)
Dow Jones
(big & Mini)
Mini Russell
Resistance Level 3 1363.33 2560.17 12988 840.63
Resistance Level 2 1354.52 2547.33 12919 835.17
Resistance Level 1 1349.63 2537.67 12876 831.23
Pivot Point 1340.82 2524.83 12807 825.77
Support Level 1 1335.93 2515.17 12764 821.83
Support Level 2 1327.12 2502.33 12695 816.37
Support Level 3 1322.23 2492.67 12652 812.43

3. Support & Resistance Levels for Gold, Euro, Crude Oil, and U.S. T-Bonds

Contract April. Gold March Euro Feb. Crude Oil March. Bonds
Resistance Level 3 1803.3 1.3509 103.21 144 12/32
Resistance Level 2 1777.9 1.3391 101.17 143 25/32
Resistance Level 1 1763.3 1.3328 99.92 143
Pivot Point 1737.9 1.3210 97.88 142 13/32
Support Level 1 1723.3 1.3147 96.63 141 20/32
Support Level 2 1697.9 1.3029 94.59 141 1/32
Support Level 3 1683.3 1.2966 93.34 140 8/32

4. Support & Resistance Levels for Corn, Wheat, Beans and Silver

Contract March Corn March Wheat March Beans March. Silver
Resistance Level 3 647.6 670.5 1241.50 3590.0
Resistance Level 2 645.4 668.8 1238.00 3513.5
Resistance Level 1 643.8 665.5 1235.00 3468.5
Pivot Point 641.7 663.8 1231.50 3392.0
Support Level 1 640.1 660.5 1228.5 3347.0
Support Level 2 637.9 658.8 1225.00 3270.5
Support Level 3 636.3 655.5 1222.00 3225.5


5. Economic Reports

French Gov Budget Balance
2:45am
Crude Oil Inventories
10:30am

Tags: > > Posted in: Future Trading News   | Futures Trading   | Trading Guide  

Download Cannon’s new eBook, “Futures Forthright” instantly.


Quick Tip: After registering you will be emailed login information, so be sure to use an email address you have access to. If you need assistance please call us at 1-800-454-9572, a professional broker will help you through the registration process.
________
Doing Business With
See more...
Loading
Loading

Loading