Weekly Journal
Trading ideas and portfolio tracking. Part I.
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Today, I start the two first blog sections. This one is about weekly trading ideas in futures and stocks. If you watched the Sharpedge courses (which are free, by the way), you know that I mostly trade with trading algorithms. Besides using algorithms, I also trade manually. However, due to lack of time, I trade only on daily and weekly charts, and I usually analyze markets on the weekends. Today, I will share my analysis, and I will start tracking the positions that I took in the course of this blog section. As always all the charts are taken from TradingView if I don't specify the source. So, let's dive in.
JAPANESE YEN
That's right, Japanese yen! Japan is one of my favorite countries, and yen is one of my favorite instruments. This week offers some interesting opportunities, as far as I see. In particular, I think about short position in yen futures. For those, who are not familiar with this instrument, I recommend reading the contract specification on CME website.
First things first, how do I pick futures to trade on a long-term basis? Well, in my experience, the best approach is the Commitment of Traders reports. In Sharpedge course, I classified it as a Sentiment dimension, and it's probably the best sentiment indicator for futures. So I use it a lot. If you want to know more about this particular instrument, I recommend reading Larry Williams's "Trade Stocks and Commodities with Insiders." So, what do we see on the CoT chart for Japanese Yen?
We see that Commercials have a net-short position and the position at its max. The last time I followed this signal, it worked out pretty well - the price fell from 0.96 to 0.91 (note the rounding). Last week we saw the falling, and this week the price closed below the low of the falling star, so I think the trade certainly worth trying. Stop order is just at the high of the falling star pattern, and the target is about 0.9, though it can be extended.
Japanese Yen, Commitment of Traders, 3 years, BarChart.
CORN
Corn futures also offers some opportunities right now. This week or better to say these weeks, corn fluctuated near the lowest boundary of the range that started back at the end of 2014. At the beginning of May, it formed a nice hammer pattern and for the last two weeks, the price was relatively stable and closed in the upper part of the hammer.
Besides, the Commitment of Traders report indicates that commercials took a net-long position. This is yet another good sentiment indicator and supports the trade. Stop order should be just below 300, which is an extremely strong level. The first target should be around 380 - a mean-reverting target. The second one should be around 410.
6 years range on corn chart
Corn, Commitment of Traders, 3 years, BarChart.
POSITIONS AND RESULTS
Since it's the first record in this blog series, our current position is flat. I will try and implement two trades that we described here and make the following reporting table:
Instrument
ZC (Corn)
6J (Yen)
Position
Entry Date
Entry price
Open P&L
P&L
Besides this table, I'll also make an Equity Curve chart and an Analytical Summary after several trades. Next time, I'll also check stocks and tell you about another cool platform called finviz. See you later!