Thursday, September 29, 2011 EST
We recently pulled the MTR-TM off of the site to review it after the recent whipsaws. 

The last Market Up signal held even after the market retraced around 8%.  This caused us to take the model off line and review the logic to make sure it was not a bug or data issue.  We found that the rules were intact.  Timing models as a rule (there are free and costly models on the Internet) will have whipsaws in a sideways market.  With the wide range of the recent sideways market it is a confirmation of the difficultly of timing in a sideways chop.  This current sideways market was a great setup for trading support and resistance, but only if you drink decaf coffee. :-) 

We had planned on keeping the MTR-TM offline.  We had many email requests regarding the model and getting back on the site.  In order for us to revise the logic it will a good bit of time.  The model was back tested and forward tested for well over a year, and then it appeared only as a blog for a good while after that.  In order to make any meaningful change to the model it will have to be back tested again to make sure historical trades are good or better.  Then it has to run live for a good bid of time to see how it works real-time on out of sample data.   This can only be accomplished over many months of testing.

Some additional background information:  The MTR-TM is fully automated there are no human fingers of massaging of the data or making a second guess on any of the signals.  Each night a schedule job collects the data and performs all the calculations and sends out email alerts. 


The MTR-TM can be found under the Market Analysis menu.


Tuesday, September 27, 2011 EST
If you are looking for new trading book to sharpen your trading skills take a look at Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading by Peter Brandt.  This book will allow you to look over the shoulder of a professional trader and learn from his winning and losing trades. We found the book to be a very refreshing change from most books on trading. It was written in a style that did not just present the good, it presented the bad as well and had many lessons any trader can benefit from.

Peter Brandt entered the commodity trading business in 1976 with ContiCommodity Services, a division of Continental Grain Company. From his start in the commodity industry, Peter’s goal was to trade proprietary funds. But, he first needed to learn the business.

From 1976 through 1979, Peter handled large institutional accounts for Conti, including Campbell Soup Company, Oro Wheat, Godiva Chocolate, Swanson Foods, Homestake Mining and others.

In 1980, Peter founded Factor Trading Co., Inc. In his capacity as the CEO, Peter was primarily engaged in trading proprietary capital. Factor Trading also produced market research and managed the trading activities for several large institutional clients. Among Peter’s institutional trading clients was Commodities Corporation (“CC”) of Princeton, NJ, at the time one of the world’s largest trading houses.

In May 1995, Peter retired from full-time involvement in the commodity business to pursue not-for-profit interests. He remained inactive from the commodity trading business until January 2007 when he once again began trading proprietary capital.

Peter also has a blog where he shares his market insights from time to time.

Here is a wonderful bit of wisdom from Peter's blog. 

Success in trading starts with seven things:

1. Human personality and character traits consistent with assuming risk
2. Proper capitalization
3. A correct perspective of market speculation
4. A comprehensive understanding of risk control protocols and statistical probability theory. Using protective stop orders must properly flow out of a correct understanding of probability theory.
Using protective stops is not the same thing as sophisticated risk management. Risk management is far more complicated than the vast majority of novice and aspiring traders comprehend
5. A keen understanding of human frailty as the biggest hurdle to profitable market operations. Traders need tools for recognizing and managing human emotions
6. The development of a comprehensive trading plan, addressing all possible contingencies. A trading plan must reflect the unique personality of the trader.
7. The patience and discipline to correctly execute the guidelines and rules dictated by the trading plan.

The Book - Diary of a Professional Commodity Trader