Markets of interest
The composite risk of an entire portfolio or grouping of trades can be measured in two ways:
• Initial risk at the time of entering trades
• Current risk using revised protective stop levels
Even though I might have moved stops to BE (or even a locked-in profit) on trades, I still consider composite initial risk because it better reflects how much asset volatility I would be experienced if a trend reversal occurs in my portfolio.
As a general rule I limit my composite initial risk on a portfolio of highly correlated positions to 200 BPs max. At the present time my composite initial BP risk on metals and mineral positions is greater than 300 BPs. This means that a broad reversal in these positions would not be fun. I cannot remember the last time I had as many highly correlated positions.
https://www.peterlbrandt.com/wp-content/uploads/2020/07/Radar-Screen-.jpg640640Peter Brandthttps://www.peterlbrandt.com/wp-content/uploads/2020/04/TheFactorReport-small-logo.jpgPeter Brandt2022-03-05 11:35:192022-03-18 10:55:15Thoughts on a Weekend Afternoon, March 5/6, 2022
There is nothing that exposes weaknesses in one’s trading plan like the week that just ended. That was a week that was – and I am glad it’s over. There were more limit ups and limit downs than I remember in many years. It reminded me of the grain and metal markets of the 1970s.
https://www.peterlbrandt.com/wp-content/uploads/2020/07/Radar-Screen-.jpg640640Peter Brandthttps://www.peterlbrandt.com/wp-content/uploads/2020/04/TheFactorReport-small-logo.jpgPeter Brandt2022-02-26 08:14:342022-03-18 10:54:59Thoughts on a Weekend Afternoon, February 26/27, 2022
Trading commentary
There are some trades I enter that I REALLY believe will work. More often than not they do not work as I had planned. They are sometimes my biggest losses.
There are other trades I enter for which I have very LOW (even NO) expectations. In fact, if it were not for orders entered at least one day in advance I would have a very hard time pulling the trigger on these trades. Yet, these are the trades for which I am often quite thankful for having entered – because these trades, more than the aforementioned trades, have a better chance of becoming Pareto trades.
This is another way of saying that my expectation for trades is inversely correlated with their outcome. And, this is why it is important to have orders entered IN ADVANCE of each trading day.
https://www.peterlbrandt.com/wp-content/uploads/2020/07/Radar-Screen-.jpg640640Peter Brandthttps://www.peterlbrandt.com/wp-content/uploads/2020/04/TheFactorReport-small-logo.jpgPeter Brandt2022-02-19 08:14:032022-02-19 08:45:21Thoughts on a Weekend Afternoon, February 19/20, 2022
It is no fun when some really good trades (interest rate markets, grains) must cover the losses of other trades, but that is how it works. Periodically I have a week when all cylinders are firing, but that is the exception.
https://www.peterlbrandt.com/wp-content/uploads/2020/07/Radar-Screen-.jpg640640Peter Brandthttps://www.peterlbrandt.com/wp-content/uploads/2020/04/TheFactorReport-small-logo.jpgPeter Brandt2022-02-12 12:57:242022-02-19 08:45:03Thoughts on a Weekend Afternoon, February 12/13, 2022
https://www.peterlbrandt.com/wp-content/uploads/2020/07/Radar-Screen-.jpg640640Peter Brandthttps://www.peterlbrandt.com/wp-content/uploads/2020/04/TheFactorReport-small-logo.jpgPeter Brandt2022-02-05 14:58:052022-02-19 08:44:44Thoughts on a Weekend Afternoon, February 5/6, 2022
https://www.peterlbrandt.com/wp-content/uploads/2020/07/Radar-Screen-.jpg640640Peter Brandthttps://www.peterlbrandt.com/wp-content/uploads/2020/04/TheFactorReport-small-logo.jpgPeter Brandt2022-01-29 08:07:292022-02-19 08:44:24Thoughts on a Weekend Afternoon, January 29/30, 2022
The Monthly – February 2022
/by Peter BrandtAn archive of the completed month plus highlighted member content
Thoughts on a Weekend Afternoon, March 5/6, 2022
/by Peter BrandtMarkets of interest
The composite risk of an entire portfolio or grouping of trades can be measured in two ways:
• Initial risk at the time of entering trades
• Current risk using revised protective stop levels
Even though I might have moved stops to BE (or even a locked-in profit) on trades, I still consider composite initial risk because it better reflects how much asset volatility I would be experienced if a trend reversal occurs in my portfolio.
As a general rule I limit my composite initial risk on a portfolio of highly correlated positions to 200 BPs max. At the present time my composite initial BP risk on metals and mineral positions is greater than 300 BPs. This means that a broad reversal in these positions would not be fun. I cannot remember the last time I had as many highly correlated positions.
Thoughts on a Weekend Afternoon, February 26/27, 2022
/by Peter BrandtThere is nothing that exposes weaknesses in one’s trading plan like the week that just ended. That was a week that was – and I am glad it’s over. There were more limit ups and limit downs than I remember in many years. It reminded me of the grain and metal markets of the 1970s.
Thoughts on a Weekend Afternoon, February 19/20, 2022
/by Peter BrandtTrading commentary
There are some trades I enter that I REALLY believe will work. More often than not they do not work as I had planned. They are sometimes my biggest losses.
There are other trades I enter for which I have very LOW (even NO) expectations. In fact, if it were not for orders entered at least one day in advance I would have a very hard time pulling the trigger on these trades. Yet, these are the trades for which I am often quite thankful for having entered – because these trades, more than the aforementioned trades, have a better chance of becoming Pareto trades.
This is another way of saying that my expectation for trades is inversely correlated with their outcome. And, this is why it is important to have orders entered IN ADVANCE of each trading day.
Thoughts on a Weekend Afternoon, February 12/13, 2022
/by Peter BrandtIt is no fun when some really good trades (interest rate markets, grains) must cover the losses of other trades, but that is how it works. Periodically I have a week when all cylinders are firing, but that is the exception.
The Monthly – January 2022
/by Peter BrandtAn archive of the completed month plus highlighted member content
Thoughts on a Weekend Afternoon, February 5/6, 2022
/by Peter BrandtMarkets of interest…
Thoughts on a Weekend Afternoon, January 29/30, 2022
/by Peter BrandtThanks to all the Factor Members who took time out of your busy schedules to participate in the webinar on Thursday.