Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

Trading Cocoa Trail

Figure # 6.28 - I have always found it interesting that fundamental news and the swing trade dates can work in harmony. The September Cocoa is a great example of this phenomenon. Political unrest in the Ivory Coast caused the Cocoa futures market to breakout and race to new heights in late June and early July, but the roaring bull futures market came to an abrupt halt on the July 10 swing trade date. The futures market peaked at 1,737 on July 10 and closed near the top of the daily trading range. July 11, the trail day, traded to 1,738, one point above the previous high, before it fell back and closed at 1,730, warning of an end to the rally.  The next day gapped lower and marked the beginning of a significant futures market collapse.
cocoa
Figure # 6.27 – September 2006 Wheat

The swing trade date, combined with the trail day directional indicator, provided advance warning of the major reversal and selling opportunity in the September Cocoa. The trail day directional indictor warned of this price reversal three days in advance of the 230-point plunge in September Cocoa!

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**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.

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