This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Futures, published on Wednesday, May 16th, 2018.
Looking to the Sugar futures market for a new trading opportunity. Sugar has been in a down trend and prices have been falling since the beginning of the year (outside of the sideways trading in February). The Trend Seeker is down, though with a weak ranking currently. After making a new twelve month contract low (11.23) on 4/25/18, the market briefly rallied, and has since slightly pulled back setting up a pivot point. Let’s go long on a break of that pivot point (12.10) using the Momentum Entry Technique. The Stochastic indicator is displaying strong Momentum to the upside. The MACD indicator, ahead of the Trend Seeker, is displaying a potential trend shift to the upside already. There is a seasonal tendency for this market to rally into the summer.
Buy the October 2018 Sugar futures contract on 12.12 using a stop order, GTC.
Initial Margin = $1,047 Maintenance Margin = $952
Stop loss: Place sell stop initially at 11.22, below the twelve-month contract low, GTC. (Initial Risk: $1,008)
Target: Place sell limit at 14.12, near the 200-day Moving Average, GTC. ($2,240)
October 2018 Sugar Chart from Bar Chart
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADE PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF THE HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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