The Monthly | Blog Edition | April 2022

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A glimpse inside the Factor Member Portal

From the just-completed month

April Numbers

  • Tweets posted on our Private Member Twitter: 131
  • Updates and Special Reports posted on the Member site: 7

Snippets from Thoughts on a Weekend Afternoon

Peter’s thoughts on the finished week and the week ahead | Issued most weekends

May 8, 2022

History is not guaranteed to repeat. Yet, when analog situations begin to develop it is important to be on the alert.
The U.S. stock market indexes are developing possible rounding top patterns on the charts, as shown below:

This roll-over reminds me a lot like the 2007-2008 period.

APRIL 29th

There are some things to remember when adopting a trading program with monthly/weekly charts (no daily charts with trading decisions limited to weekends).

1. In my opinion, trading weekly bars in the manner discussed above is COMPLETELY incompatible with monitoring the markets during the week (even if it is an end-of-day review). If I were to adopt this approach to trading it would have direct implications on the nature of communications to members of the Factor Service.

2. In that weekly price bars (or closing prices) would determine entry and initial protective stop levels, a 50 BP risk would likely cut in half or more the sizing of trades. My guess (using assumptions not discussed herein) is that net performance would be less than halved and Profit Factor would deteriorate by 30% or so. Marked-to-the-market drawdowns would also increase to 10% or more.

3. I can easily argue that the risk per trade on a longer-term program could be bumped from 60 or so BPs to 100 BPs as long as highly correlated trades are not simultaneously held.

4. Trade management would need to become much more mechanical and rules-based than is my current practice.

5. All significant changes in a trading program have unintended consequences.

Factor Member Private Twitter

Top Six Tweets

 

Recommended Reading

Contains an affiliate link to our Amazon Store

Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets

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  • Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
  • The Weekend: Thoughts on a Sunday (Weekend) Afternoon
  • The Monthly: Issued monthly, will provide an overview of the completed month and highlighted member content
  • Private Twitter Page: Real-time alerts on interesting charts and observations, member dialog, the process of trading, the human aspect of trading, and risk/trade management (streamed on the member site as well)
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View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.

I hope you will consider joining the Factor community.

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