A treatise to Demo Traders”, on behalf of brokers everywhere.
By: Cannon Trading Commodities Broker
Demo Trading. Also known as simulated trading, paper trading, playing with Monopoly money; whatever you'd like to call it, a demo can be your best friend or your worst enemy. Every Futures broker dreads having this conversation with their clients, as it is necessary with every new trader; however, much to a broker’s chagrin, every new trader will say that they already understand when in fact they rarely do. Let me assure you, if you're a new or even sometimes-intermediate trader, you probably don't. You may understand one popular issue of the conversation but odds are if you have been paper trading for five years waiting to be "successful" or to "understand the futures markets" in the simulated world before moving on, you have less of a chance of being successful in the live futures markets because you're setting yourself up for failure (if you ever do, in fact, trade in the live markets). You should seriously consider speaking with a licensed commodities and futures broker before diving in.
For the uninitiated, demo trading is the practice of trying out an online trading platform on a simulated basis—in a free demo trading account, you’re granted simulated funds, you’re placing simulated orders in the markets and you’re shown simulated profits and losses on what your trades might have done for you if you were futures trading on a live platform with live funds. First and foremost, it’s a wonderful technological tool for testing out a platform to see if it will suit your trading methodology. It can also be used to try different trading strategies, but problems arise when one equates simulated trading too much with live futures trading.
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2. Hot Market Review - Currency Markets in Keen Focus This Week
Jim has an excellent daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at jimwyckoff.com click on image below to enlarge
The feature in the market place so far this week is the soaring U.S. dollar and plunging Euro currency. The U.S. dollar index has hit a 12-year high, while the Euro has sunk to a 12-year low. The price uptrend in the U.S. dollar index has just turned into a powerful one, according to the Directional Movement Index overlaid on the daily bar chart. See that the green ADX line is reading 30.43. Any ADX line reading above 30.00 suggests a powerful price trend is occurring in a market. There are not yet any strong technical clues to suggest a market top is in place for the U.S. dollar index.
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Current Account Balance(Q4)
9:00 AM CDT - Leading Indicators(Feb)
9:00 AM CDT - Philadelphia Fed(Mar)
9:30 AM CDT - EIA Gas Storage
2:00 PM CDT - Milk Production
3:30 PM CDT - Money Supply
LT: Mar Coffee(ICE)
Mar S&P 500(CME)
Mar NASDAQ Options(CME)
Mar S&P 500 Options(CME)
LT: Mar 10 Year Notes(CBT)
Mar E-Mini S&P 500(CME)
Mar E-Mini S&P 500(CME)
Apr Crude Lt(NYM)
Mar DJIA Options(CME)
Mar E-Mini S&P 500 Options(CME)
Mar E-Mini NASDAQ Options(CME)
Mar Russell Options(CME)
Apr Orange Juice Options(ICE)
9:00 AM CDT - Existing Home Sales(Feb)
2:00 PM CDT - Cold Storage
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!