Diary of a Professional Commodity Trader (E-Book) von Peter L. Brandt

Acknowledgments xiii

Part IFoundations of Successful Trading 1

Introduction 3

The Invention of a Commodity Trader 3

Why I Wrote This Book 7

This Books Audience 9

The Books Road Map 14

Chapter 1The History and Theory of Classical Charting Principles 19

My Perspective of the Principles 20

Three Limitations of the Principles 21

Summary 22

Part IICharacteristics of a Successful Trading Plan 23

Chapter 2Building a Trading Plan 25

Trader Personality and Temperament 25

Adequate Capitalization 29

Overall Risk Management 30

Points to Remember 32

Chapter 3Identifying the Trades and the Trading Vocabulary 33

Trade Identification 35

Vocabulary of the Factor Trading Plan 35

Points to Remember 54

Chapter 4Ideal Chart Patterns 55

Reversal H&S Pattern in Copper 56

Reversal Rising Wedge in AUD/USD 56

Continuation Wedge and Reversal Failure Top in Soybean Oil 57

Reversal Triangle Bottom in Sugar 58

Continuation and Pyramid Patterns in USD/CAD 58

Reversal Top in Silver 59

Continuation H&S Pattern in the Russell 1000 Index 60

Continuation Rectangle in Kansas City Wheat 61

Continuation Rectangle and Pyramid Triangle in Crude Oil 61

Continuation H&S Top in the Dow Utilities 63

Continuation Triangle, Reversal M Top, and Flag in the EUR/USD 63

H&S Reversal Top and Three Continuation Patterns in the GBP/JPY 65

A Reversal Symmetrical Triangle in the AUD/JPY 66

Two Continuation Patterns in GBP/CHF 67

A Triangle and Running Wedge in Sugar 67

An H&S Bottom in Apple Computer 68

A Major Continuation H&S and Symmetrical Triangle in Gold 68

A Series of Bullish Patterns in Copper 70

A Failed Ascending Triangle in the USD/CAD Crossrate 71

A 12-Week Rectangle in the Dow Jones Transport Index 72

A Rare Horn in Brent Sea Oil 72

An H&S Bottom Launches the 2009 Bull Market in the S&Ps 73

Summary 74

Points to Remember 74

Chapter 5How the Factor Trading Plan Works 75

Trade Identification 75

Trade Entry 84

Trade Risk Management 85

Trade Order Management 86

Points to Remember 89

Chapter 6Three Case Studies Using the Factor Trading Plan 91

A Remarkable Technical Event in the Dow Jones 92

A Year Trading Gold 94

A Year Trading Sugar 104

Points to Remember 113

Chapter 7Characteristics of a Successful Trader 115

Intimate Knowledge of Trading Signals 116

Discipline and Patience 117

Analysis of Self and of the Trading Plan 117

It Takes a Leap of Faith 120

Points to Remember 121

Part IIIA Five-Month Trading Diary: Let The Journey Begin 123

Chapter 8Month One: December 2009 127

Trading Record 129

Summary 143

Chapter 9Month Two: January 2010 145

Identifying Trading Opportunities 146

Amending the Plan 151

Trading Record 152

Summary 170

Chapter 10Month Three: February 2010 171

Sticking to the Plan in Choppy Markets 171

Trading Record 173

Summary 187

Chapter 11Month Four: March 2010 189

Trading Record 190

Summary 201

Chapter 12Month Five: April 2010 203

Relying on Classical Charting Principles 204

Trading Record 205

Outlook for the Future 210

Summary 214

Part IVThe Wrap-Up 215

Chapter 13Analysis of Trading Performance 217

How the Trading Plan Performed 221

How the Plan (and the Trader) Evolved 227

Summary: Best Practices Going Forward 228

Chapter 14The Best Dressed List 231

A Seven-Month Double Bottom in AUD/USD 231

A 14-Month Coil and Nine-Month Descending Triangle in EUR/CHF 233

A Six-Month Wedge in EUR/USD 234

A 16-Week Horn in GBP/USD 235

A Four-Month H&S in Bottom NZD/USD 236

A Six-Month Ascending Triangle Failure in USD/CAD 237

An Eight-Month H&S Bottom in the S&Ps 238

A 14-Month Symmetrical Triangle in Sugar 239

A Seven-Month Triangle in Gold 240

A Series of Continuation Patterns in Copper 242

An H&S Bottom in Crude Oil 243

Summary 243

Postscript 245

Appendix A Factor Trading Plan Signals 249

Appendix B Quick Reference to Charts 257

Appendix C Recommended Resources 269

Authors Note 271

Index 275

PETER L. BRANDT has been a full time professional commodity and foreign exchange trader for over thirty years. He has worked as a broker to large industrial clients, traded for his own account, and was one of the early pioneers in the commodity hedge fund arena. Along the way, Brandt published a highly regarded newsletter calledThe Factor, and also collaborated with Bruce Babcock Jr. to publish the highly acclaimed book,Trading Commodity Futures with Classical Chart Patterns. Primarily devoted to trading proprietary capital in commodity and forex markets, Brandt has achieved a lofty average annual rate of return of 68 percent during his career.

The author can be reached at plb.factor@gmail.com