A terrific tool to supplement your chart analysis by pointing out exact price "hits" at multiple levels in any market. We are using it with the Gecko-Charts database for commodities, but it can be used with quite a number of computerized charting databases, including those for stocks. It provides the support and resistance price levels in a table you can both view and printout. Very, very handy! Very, very quick!

Here is what the reports from this software provide:

All the exact price "hits" in the chosen market(s) over the period of dates and/or price range you specify. It defines how many hits there were at each price, how many of those were at the High price and how many were at the Low price. For each of those price barriers it defines the dates the hits occurred, the Open, High, Low and Closing prices those days, plus the associated Volume and Open Interest numbers. You can choose the minimum number of "hits" you want reported to keep the report from being too cluttered. And, you can choose to have the data reported in Ascending or Descending order.

If you are tired of the eye-strain associated with trying to determine multiple price barriers on multiple charts, this is the tool for you. You will need a computer with adequate capacity and access to a computerized database of the markets in which you are interested. You can receive it on a CD for only $149.95 plus $4.95 for shipping/handling.

Fraction of a Simulated Report Page Below (Selection was 2 or more hits, Descending)

C2K Corn
CONTRACT MONTH AND YEAR: May 2002
REPORT IS IN DESCENDING HIT VALUE ORDER

Take the daily trade updates for a test drive:

Let’s talk about price barriers (support and resistance) again. There are two things to keep in mind here; the size/strength of the barrier and the age of the barrier. The strength of the barrier is determined by the quantity of hits near, and exactly at a given value. The older the barrier is, the less likely it is to influence where the price movement will stall. Do such price barriers always stall or reverse a price movement? Of course not. “Always” and “never” are two words we cannot use in this business. But if you have been following these paper trades carefully, you may have noticed just how often they do.    

 We use these price barriers to help us decide where to set our entry and exit targets. In fact, I usually try to use them to help me pick the place to insert my stop loss too. Let’s say I’m planning to go short with an entry target just below a price barrier at 1.00. I might place my entry target at 0.95 and my stop loss just on the other side of that barrier at 1.05. I think of this as “sheltering” my stop loss behind a price barrier. Caution; I have done no statistically valid studies to show that this practice works better than just placing the stop loss 1/3 or ¼  of the profit potential away from the entry target. Have you? Let me know.

One last word on price barriers. As many of you know, I use Rich Martins software to printout the price barriers for me. I’m a “seasoned citizen”, a great-grandfather in fact. At my age, picking out the barriers from a chart is a painful exercise that I’m very happy I can avoid.

My wife is an accountant. She says the primary difference between and economist and an accountant is that economists don’t have enough personality to be an accountant. And that my friends, is her best joke.

Ian B., I enjoyed your call and kind words too. Keep Ireland green and golfing!

DISCLOSURE OF RISK:

THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS CAN BE SUBSTANTIAL; THEREFORE, ONLY GENUINE RISK FUNDS SHOULD BE USED. FUTURES AND OPTIONS MAY NOT BE SUITABLE INVESTMENTS FOR ALL INDIVIDUALS, AND INDIVIDUALS SHOULD CAREFULLY CONSIDER THEIR FINANCIAL CONDITION IN DECIDING WHETHER TO TRADE. OPTION TRADERS SHOULD BE AWARE THAT THE EXERCISE OF A LONG OPTION WOULD RESULT IN A FUTURES POSITION.

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 TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.