There was a big pullback in the US Dollar today. Looks like all the talk of the EU is disturbing the traders. The EU is trying to save their currency, they may be able to shake up some of the traders.

The fundamentals for the Euro FX stay the same. It is a non-linear currency. As bad as the US went into recession, it is much worse in Europe. Germany still has the largest economy in the EU. UK does not count as they have their own sovereign currency.

Germany is obviously ticked off about the Euro, let’s see what happens. The technical’s and fundamentals still show the Euro FX in a major down trend.

Good Trading,

Chris Morse
Developer and President
www.tradethink.com
713.429.1668

Good Morning, Looks like the markets are starting to come back in our direction after the last few days of pullback.

We have been short the major currencies, long the dollar and long bonds for the past few weeks. These have been great moves, especially the euro fx short.

The last few days we have given back on our positions, mainly due to the EU speaking out about their currency. Now I think that traders are beginning to fully comprehend the true inefficiencies of the euro fx and it is starting to trend back down as of this post.

Stops are one of the most important tools in the commodity trader’s arsenal. Because commodities are actually with futures contracts they are highly leveraged instruments as trading vehicles. When trading anything utilizing leverage it is extremely important to incorporate stops into your trading plan.

Leverage is truly a double edge sword, which demands respect. On one hand leverage can take ordinary returns and turn them into extraordinary returns. One the other hand, if leverage is not respected (like not utilizing stop orders) it will certainly cut you like a knife.

With commodity futures the sky is the limit. Right now we have a very nice sugar “SB” trade on. This trade was generated by the proprietary TradeThink trading software. The margin on sugar is currently $1,260 to control 112,000 pounds of No. 11 sugar (50 long tons). We got long sugar on 12/11/2009 at 23.57 and sugar closed on 1/27/2010 at 28.36.

Currently there is a profit of 4.79 cents (28.36 - 23.57) for $5,364.80 (479 points x $11.20 per point) per contract. The return on our leveraged sugar contract is an astounding 425.77% ($5364.80 profit/$1,260 margin) return thus far (beats the heck out of trading Yahoo).

The commodities markets are starting to move again. The last blog I wrote at the end of April pointed out that it was a great time to get into some trades again. Well here you can see some of the trades my system TradeThink has show to enter since the last blog post.

As you can see my system TradeThink has show to get some pretty good moves this month. We have movement of some kind or another in almost every market sector. The currencies started really moving in early and mid May. The grains really took off on May 1st. By the way, my last blog post (which said this is a good time to get in) was dated on April 30th which was the day before some of these moves hit. The fuels started a nice run too.

Good Trading,

Chris Morse

The best time to start trading commodities is during a draw down. Most traders focus on a counterproductive time to enter the markets or a trading system. The truth is that after my nearly 20 years in the markets is that most traders lose.

One of the keys to trading successfully from the get go is to pick your entry date. Most traders/investors will watch with wonderment as a system or market goes up insatiably. The problem is that after a big move to the upside there will invariably be a big move to the down side.

I get compensated quite smartly for my trading signals by many professional traders (including floor traders, and CTA’s). There is a reason that professional traders adhere to my strategies, they understand that markets go up and go down. In fact the markets only trend about a third of the time. Most unseasoned traders fall into the trap of getting in after the going is good only to find out that they entered at the top of the move. A seasoned trader fully understands that the best time to get started or to add size on their positions is when things have gone flat awhile.

Bottom line; it is best to start trading when times look the darkest. As trading goes, most thing are opposites. And starting during a draw down is no different.

Good Trading,
Chris Morse
Developer & President
Trade Think, Inc.
www.tradethink.com
888-446-6979 or 832-886-5857
chris@tradethink.com

Feel free to contact me personally for a free one on one trading consultation.

Commodities are once again poised for higher movement as the US Dollar weakens. After much hoopla over the stimulus bill and housing bill, it looks as though commodities traders are beginning to realize that the US Dollar has little choice but to weaken.

With interest rates having little room left to move lower and due to the current 0.25 Fed Funds rate. The Fed is taking a stance of further loosening via the printing of money. The US Dollar has little choice except to move lower. As such, look for an opportunity for commodity traders to take advantage of some moves to the upside. TradeThink is a tool traders can use to evaluate commodity price moves across  various markets. 

Today Gold is up nearly $70 and Crude Oil is over $50 per barrel once again. It looks as though the Feds weakening US Dollar stance may have the opportunity to help jump start inflation.

Commodities markets had been in a sideways motion since about December 2008 and trend traders have paid the price in the form of draw down. There may be some trading opportunities on the horizon if there is commodity price inflation. One tool to help evaluate movements in the commodities markets is the TradeThink commodities trading strategy. TradeThink trading strategies are a proprietary algorithm to show when and where commodities markets (gold, crude oil, corn, bonds etc) may be ready to trend.

Good Trading,

Chris Morse

Developer
www.TradeThink.com
713.429.1668

Disclosure
Commodity Trading has large risks, but also large potential rewards. You must be aware of the risks and be willing to accept them in order to invest in the futures markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to buy/sell commodity interests.

It is a wonder that we live in 2009. We are being told that we are living in the greatest recession since the great depression. One problem; we are currently in a Obama paper recession. What is a Obama paper recession? It is a recession that looks like a recession on paper but in reality is just that a paper recession.

All good things must come to an end eventually. A pretend paper recession will only hold water so long. Eventually things will break. Whether it is a paper recession turned to inflation (which is real) or the eventuality of our governments stupidity coming to fruition. One way or another this recession will become real.

It this quasi recession there are things like unemployment and people losing the paper profits on their homes. Once this is a real recession, just wait and see what can and will come.

Great thing about recessions (real, not paper) is that commodities will boom. This is how I come in. I am a commodities system developer. Once the s*** hits the fan and it will. The only place to invest is where the price action is.

Stay tuned.

Great commodities and futures trading strategies utilize trend following. I am the developer of www.TradeThink.com. Currently TradeThink is both following some very good trades as well as some very choppy commodities markets right now.

According to TradeThink Gold recently looked to keep going up through $1000 an ounce and then bounced to be trading much lower then that price last week. On the other hand, Heating Oil and Crude Oil have been looking very bearish until last weeks spike which took out our Crude Oil protective money management stops, while we were able to hold on to our short Heating Oil trade. Heating Oil went down over 10 cents today ($420 per cent is $4200)

I get asked quite often how a commodities trading strategy could let a winning trade become a loser. It is very simple. Markets need room to breath in order to get the big moves. My commodities and futures trading strategies using TradeThink to identify trends will be right and wrong at times. Yes, there are times when winning trades will become losing trades. Most traders would love a way to hold on to some of the profits on a trade before it gives up the money. However, most traders are unsuccessful in the long run and their preconceptions about market movements are typically wrong. Too many traders are looking for the past to repeat itself. And the traders are looking for the past to repeat itself perfectly. I say the past does repeat itself, but the past does not repeat itself perfectly.

There are basically four ways a trade can mature.

For what would be considered a profitable trade there are two basic ways the trade will show its hand.

1. The trade will go up, consolidate and go up again.

2. The trade will go up, pull back and go back up.

For what would be a losing trade there are a couple of ways the trade will unfold.

1. The trade will go against us immediately and take out our money management stop.

2. The trade will go in our favor and then pull back taking out our protective stop. 

Because winning trades can go up and pull back before going back up and making another move. It is essential to have stops loose enough to be able to catch the big moves. If one were to put some type of optimized stops such as break-even stop or profit targets in the equation, then one would risk not being able to get the full extend of the big moves. The goal of TradeThink is get to the meat in the middle of the big trends. This is trend trading, and with trend trading we are looking for the big moves. Any other type of trading does not work as well in the end.

Good Trading,

Chris Morse

Developer

www.tradethink.com

Toll Free: 888.446.6979

Direct & International: 713.429.1668

Last nights Obama Presidential Address effects commodities markets. After a banner year in 2008 for commodities markets to rise and fall which enabled commodities trading stategies like TradeThink to make hugh trades. The uncertainty plagued by addresses like that from President Obama last evening are sure to take a toll. Commodities trading strategies like TradeThink have been in a recent roar to the upside on the equity curve and now the markets are starting to consolidate some what. Throughout the news of the Stimulus and Housing Bill there have been many excellent movements in the commodiities markets. We have been long the metals such as Gold and Silver, and short the Fuels such as Crude Oil and Heating Oil. While our commodities trading strategies have made much profit in the last few weeks, they have given back a little in the past few days. I look forward to some serious movements in the next few days and weeks.

Good Trading,

Chris Morse

Developer

www.tradethink.com

Toll Free: 888.992.3532 Ext. 801

Direct & International: 713.429.1668

Will the new recently approved stimulus bill help or hurt commodities traders? It depends on the type of commodities trading you are doing. If you are trend trading a diversified portfolio of market sectors, I believe you will be rewarded. I prefer to use TradeThink for analyzing the commodities markets. With a trading system like TradeThink all of the guesswork is removed from the traders decision-making. A trader using a successful trading strategy will be able to trade various markets such as Gold, Crude Oil or even Cotton to the long side or the short side and still have an opportunity to profit.

What is important with a geo-political market place such as we now inhabit is that the markets will ebb and flow. If markets have movement at the rumblings of different stimulus or housing plan announcements, traders are given opportunities to place trades and hopefully profit from an otherwise sad situation.

Good Trading,

Chris Morse

chris@tradethink.com

Developer & President

Trade Think, Inc. 

www.tradethink.com

888.992.3532