Futures; Chicago

Traders face a dizzying number of indicators and methods to help them determine the next move in the markets. You have oscillators, moving averages and Fibonacci retracements just to name a few. The fact is, many traders unfortunately miss major market moves because they are sorting through the mixed signals generated by multiple indicators. Get back to basics when trying to determine market direction. To do that, start with one of the most common charting tools -- trendlines! By starting wit...

Trendlines

European Consolidation Being Leveraged

Euronext, Deutsche Boerse (DB) and the London Stock Exchange (LSE) appear to be negotiating for control of Western European exchanges. The flavor of relations between the two exchanges took a dramatic turn once Reto Francioni was inserted as Deutsche boss last year. Francioni stated that consolidation was inevitable, prompting a February meeting in Paris of Euronext users who demanded that clearing and settlement be separated from any sort of merged entity. And as for the LSE, Euronext says i...

Energy Markets Heat Up

Energies have been the hot sector of late and that has created increased interest and competition, forcing the confirmed leader, the New York Mercantile Exchange (Nymex), to face added competition. Large-scale changes will soon affect the energy markets, including electronic trading of Brent crude by Nymex and an electronic challenge to Nymex's benchmark WTI crude oil contract by ICE Futures, formerly the International Petroleum Exchange (IPE), which is owned by the Intercontinental Exchange ...

Managed Money Review

Hedge Funds Moving On?

With the war over in regards to hedge fund registration, hedge fund professionals at the Managed Funds Association Network Conference wanted to know what to expect from the new registration rule and subsequent Security and Exchange Commission (SEC) audits. The House of Representatives has passed a version of the Pension Reform Act that would carve out State and non-US retirement money and increase the limit to 50% before ERISA rules kick in. Phillip Goldstein, manager for hedge fund Opportuni...

Trading Places

Davidson Back at Cme

Hot Commodities

Live Cattle Drive Lower

Yen Under Pressure

Markets

An Uncertain Future for Equities

Traders and analysts' forecasts run the gamut for the remainder of 2006, but they agree on a few themes: Active traders will fair better than the individual investor, technicals appear more bullish than fundamentals, and navigating sectors may be a better approach than picking broad market indexes. Besides recommending traders keep a close eye on earnings, many traders and analysts agree 2006 is the year to carefully observe which sectors are set up to outperform. Analysts suggest traders loo...

Market Strategy

Sugar: The 32-Year Trend

The recent bull market in sugar was somewhat predictable but do not fret if you were late because there may be more to go. Here is how it has played out so far. Brazil in 2004 announced it was 100% energy efficient. This makes sense because it controls about 15% of the world sugar market and is a heavy producer of ethanol. As sugar continued its steady move, damage from Hurricane Katrina pushed it a few hundred points higher. Now with $3.00 per gallon gasoline and crude at $70 a barrel, the s...

Forex Trader

Forex Trading Tips

The challenge of successfully trading forex lays in its global nature. The common first impression is that forex trading requires too complex an array of fundamental and technical information. Here are some tips to help guide you through your trading: 1. Scan the latest news on currencies. 2. Scan weekly and daily charts for trends. 3. Know the direction of the US Dollar. 4. Identify price levels to get long or short. 5. Pay close attention to the four-hour chart. 6. Choose profit/loss target...

Equity Trading Techniques

Trading Rectangles: Tactics and Money Management

A strong trading signal must be accompanied by solid money management for a trader to fully exploit the benefit of the signal. Money management concerns the proper administration of profits and losses and must be synchronized with trading tactics to achieve discipline and maximize profits. While money management is vital for success, it still needs an indicator that can properly time the markets. This is where intrarectangle trades come into play. An intrarectangle trade is one that takes pla...

Trading Techniques

Forget the Psychobabble - It's the System!

Evaluating and improving trader psychology has become a cottage industry in recent years. Numerous books have been written about the subject. While important, excessive focus on the psychology of trading may take up more of trader's time than necessary. True, early in the career of all traders, trading success is very much a function of psychological factors, as is technical expertise or market information. There was a time when the psychological make up of the traders was thought to be the c...

Metals/Energies Rallies Good for Grains

Grains often have been the beneficiary of strong rising trends for energy and metal prices with the bulk of the upward or bullish move for grain prices taking place after the energy and metals sectors had risen near a cycle peak. "Carrying the load" compares Japanese yen futures with the Baltic Dry index and sets an interesting stage for analyzing the flow of cash from one market to another. The initial setup is that a major peak or top in both ocean shipping rates and the Japanese yen should...

Trade Like a Switch Hitter

One of the downsides of mechanical systems is their tendency to thrive in some market environments and blow up in others. If only you could tell ahead of time when a logical shut-off time was approaching, you could increase your performance substantially. This concept of trading "switch" is controversial among mechanical advocates. However, by expanding the concept you could identify complete trading environments, thereby targeting those that have promise and avoiding those that do not. The s...

Statistical Analysis for Traders

Fundamental analysis often creates some unique problems for traders. First, fundamental relationships are hard to quantify. Second, not all data are created equal. Third, it is easy to make mistakes that render one's fundamental conclusions invalid. Thankfully, there are simple, straightforward analysis methods that can be used on widely available fundamental data that you can use to forecast commodity prices. Regression analysis is one such tool. Regression analysis objectively estimates pas...

Futures 101

Indexes Equal Instant Exposure

Despite near record low volatility in equities, demand for derivatives on equity indexes continues to grow as more capital is benchmarked to indexes. At the highest level, indexes are intended to lower costs and broaden exposure to a variety of underlying investing instruments, and historically speaking they have succeeded wildly and there has been a commensurate proliferation of indexes. The difference between a futures contract on a commodity and a stock index is minimal and largely concept...

Online Trading

Matching Best Electronic Markets

Matching algorithms decide which orders get filled and in what order. Knowing the key differences is important and could affect how you structure a trading program. If the number of contracts on the executable bid is greater than the number of contracts at the first lowest offer, the unmatched quantity is matched against open resting orders bearing the oldest trade date. This is known as "first-in, first-out" (FIFO). Gold prices hit 25-year highs in early January. With its new electronic gold...

Managed Money

Top Traders of 2005

The Barclay commodity trading advisors (CTA) Index was in the red through the summer and needed a return of 2.52% in the fourth quarter to end up at 1.94% and prevent finishing in negative territory for only the fourth time in its history. The growing field of option writing performed well as would be expected in a difficult environment for trend followers. John W. Henry & Co had a down year in 10 of its 11 programs. Richard Scully, principal of Scully Capital Management and a long term t...

Trade Trends

Options' Electronic Frontier

Now, every American securities options exchange has implemented some form of electronic trading. The result: volumes are soaring even in times of low volatility; transaction costs are lower than ever; and strategy trades like butterflies and straddles can be executed electronically. But options on futures are disappointing, says Paul Ehrhardt, who runs PM&F Investments. Technologically, however, there is no reason futures options should not be as successful as stock options, says Jan Tilf...

Trader Profile

Di Tomasso: Surviving and Thriving

John Di Tomasso's money under management (MUM) today is where it was in 1995, approximately $5 million. He was coming off of back-to-back 50% plus years, which would allow his MUM to grow to $100 million, but the program then dropped more than 60% in 1998 and 2001. Despite the near fatal drawdowns, Di Tomasso characterizes the changes to his Equilibrium Trading program as minor. He describes his strategy as value investing. After years of being ignored due to the large drawdown, Di Tomasso is...

International News

Uniform Regulation

Cftc to 'Evolve' U.S. Exchanges

Keeping Tabs

Software Review

Tradecision V 2.1.67

Alyuda Research's Tradecision V 2.1.67, a type of artificial intelligence program used to identify hidden trading patterns, is reviewed.

The Inside Story

Etf: The 'Hail Mary' Security

Nate Most had come to the American Stock Exchange (AMEX) to run a new business, the futures business. When that effort fizzled, Most shifted to develop new derivative instruments. He came up with the idea of a warehouse receipt-like vehicle similar to that used in foreign stock ADR's. The result was a portfolio depositary receipt. Depositary receipts (shares) would only be created through creation units of 50,000 shares or more and redeemed through redemption units of 50,000 shares or more. S...