by Andy Waldock

Please read, "Swing Trading with the Commitments of Traders Report" for a step by step guide to our nightly Discretionary COT Signals.


    Implementation - Going across the columns from left to right, you'll see the following headers.

    Market - generally accepted abbreviation for the given market. The symbol you use for actual trading may be different than the one listed due to electronic markets or order entry software. Call your broker with any questions.

    Month - The expiration month of the contract that we are following. This is especially important in determining the swing high or low.

    Comm. Mom. - Commercial momentum will either be POSITIVE and listed in BLUE, or it will be NEGATIVE and listed in RED. We will always signal trades in line with commercial momentum.

    Overbought - This indicates recent market POSITIVE movement against the commercial momentum. When commercial momentum is NEGATIVE and overbought is POSITIVE we will begin to look for an opportunity to SELL in line with the commercial?s momentum.

    Oversold - This indicates recent market NEGATIVE movement against the commercial momentum. When commercial momentum is POSITIVE and oversold is NEGATIVE we will begin to look for an opportunity to BUY in line with the commercial?s momentum.

    Action - When a signal is issued, this is where it shows up. There are two options - BUY, or SELL.

    Stop - This will coincide with an action signal and is the recent swing high or low in the given market. We use this as a protective stop point. This allows us to quantify the Dollar value risk to our account prior to taking any given trade.

Please read, "Swing Trading with the Commitments of Traders Report" for a step by step guide to our nightly Discretionary COT Signals.

 

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.