By: John Crane, swing trading guru
Although price fluctuations may seem random, they are the result of many different futures market forces working together in a very efficient manner. Out of this apparent disorder, one begins to see a futures market that is moving in a very deliberate re-occurring swing and futures market timing type patterns, forming as buyers and sellers with different opinions about future prices act.
Since my trading approach is technical in nature and chart based, it made it easier to implement. There are no outside distractions from subjective fundamental news stories and incomplete supply and demand figures. There is no need to try to interpret how the large commercial firms will react to a report or news story. Now, all I had to do is read the futures market reaction and let the world’s best traders do my analysis for me.
Most of the current technical analysis is just a rehash of discoveries introduced years ago by great trading legends such as Gann, Elliott, Andrews and others. Although their trading approaches were different, the premise of their methodologies was the same. They all believed that there were natural cycles, swing patterns and nature futures market timing patterns circulating throughout the futures markets.
Of course the factors of supply and demand play a key role in futures market behavior. However, they do not play the role that most people think. You see the simplistic law of supply and demand is constantly subjected to a force that is equally powerful, hard to measure and infinitely less logical. While it is true that the fundamental factors of supply and demand control the long-term futures market timing, the short-term futures market timing fluctuations are typically a response of a different force…human emotion. As a result of two of the strongest emotions (greed and fear), most traders have a tendency to over-react to futures market timing conditions. When things are going well, traders succumb to greed and overbuy in an effort to maximize profits. When the futures market timing is not going their way, fear kicks in, followed by a flurry of selling. These two opposing futures market timing forces are the reason futures markets timing fluctuate. Supply and demand figures may change, but human emotions remain constant.
**THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER-COMPENSATED FOR THE IMPACT IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES.Swing Trading, Market Timing, Swing Trading Strategies and Reversal Commentary ©2005-2009 reversaltracker.com All Rights Reserved.