Appendix A
Factor Trading Plan Signals
Table A.1 contains the signals and trades of the Factor
Trading Plan from December 7, 2009, through April 20,
2010. The results of the trades open as of April 20 are
marked-to-market. Please read the disclaimers in the
Author’s Note for a complete explanation of the
performance reporting.
TABLE A.1
Appendix B
Quick Reference to Charts
The following tables are intended to be a quick reference
guide to the charts in this book. The tables list various
elements of classical charting principles, trading signals,
and trade management techniques used by the Factor
Trading Plan and where they can be found in the book.
Table B.1 lists the charts in the book according to which
classical chart pattern they illustrate.
TABLE B.1 Charts by Pattern
Table B.2 lists the charts in the book based on the type
of signal generated and the appropriate trade management
strategy.
TABLE B.2 Charts by Signal Category and Trade
Management Technique
Appendix C
Recommended Resources
Barrie, Scott, The Complete Idiot’s Guide to Options and
Futures, 2nd ed. New York: Alpha Books, Penguin Group
(USA), 2006.
Peter L. (with Bruce Babcock), Trading
Commodity Futures with Classical Chart Patterns.
Brandt,
Sacramento, CA: Commodity Traders Consumer Reports,
1990.
Chicago Board of Trade, Commodity Trading Manual .
New York: AMACOM, 1999.
Edwards, Robert D., and John Magee, Technical Analysis
of Stock Trends, 8th ed. Boca Raton, FL: CRC Press,
2001. [Note: The author uses the fifth edition of this book
for personal use.]
Alexander. Trading for a Living: Psychology,
Trading Tactics, Money Management. New York: John
Elder,
Wiley & Sons, 1993.
Kiev, Ari, The Mental Strategies of Top Traders: The
Psychological Determinants of Trading Success.
Hoboken, NJ: John Wiley & Sons, 2009.
Kiev, Ari, Hedge Fund Masters: How Top Hedge Fund
Traders Set Goals, Overcome Barriers, and Achieve
Peak Performance. Hoboken, NJ: John Wiley & Sons,
2005.
Michael. Liar’s Poker: Rising Through the
Wreckage on Wall Street. New York: W.W. Norton &
Lewis,
Company, 1989.
Lewis, Michael. The Big Short: Inside the Doomsday
Machine. New York: W.W. Norton & Company, 2010.
Murphy,
John, Technical Analysis of the Financial
Markets. New York Institute of Finance, Prentice Hall
Direct, 1999.
National Futures Association, Opportunity and Risk, An
Educational Guide to Trading Futures, 2006, PDF
download
at
www.nfa.futures.org/NFA-investorinformation/publication-library/opportunity-and-riskentire.pdf.
Schabacker, Richard W., Technical Analysis and Stock
Market Profits: The Real Bible of Technical Analysis .
Hampshire, UK: Harriman House, 1998.
Schwager, Jack D., Market Wizards: Interviews with Top
Traders. Columbia, MD: Marketplace Books, 2006.
Schwager, Jack D., New Market Wizards: Conversations
with America’s Top Traders. New York: John Wiley & Sons,
1992.
Schwager, Jack D., Market Wizards. New York:
HarperBusiness, 1993.
Teweles, Richard J., and Frank J. Jones, The Futures
Game: Who Wins, Who Loses, & Why. New York:
McGraw-Hill, 1999.
In addition to the extremely insightful and informational
books cited previously, I recommend a few services that
provide web-based trading platforms, price quotes,
charting capabilities, and other research.
FactorTrading.com: This is the official web site
of Factor LLC. The web site attempts to identify
and report on the best examples of classical chart
patterns in the commodity and forex markets.
Periodic chart stocks are also featured.
Mercenarytrader.com: This quirky and brilliant
web site is written for professional traders by a
couple of skilled professional speculators (using
pseudonyms). Mercenarytrader provides unusual
macro analyses of markets and global economics
that break the mold of conventional wisdom. The
authors/traders frequently blow holes through the
sacred cows of Wall Street. Loaded with great
insight on the things that really matter to be
profitable.
Trade
Navigator: By Genesis Financial
Technologies, Colorado Springs, CO (800) 8093282. For the money this is the best and most
user-friendly quote and charting platform
available. Actual trading can be executed from the
platform through selected futures commission
merchants (FCMs). Live customer support is
readily available and extremely knowledgeable.
Commodity Research Bureau: I grew up as a
trader with CRB products and services. CRB has
been serving the commodity industry with
excellent resources for more than 70 years.
CRBtrader.com provides a multitude of valuable
market research and quote and charting functions.
Barchart.com: This is a free web site with quote
and charting capability. When I am on the road
without my own computer I stay in contact with the
charts through Barchart.com. I weekly print off the
charts for the markets I will be closely monitoring
from Barchart.com, using the “Classic Style Chart”
setting. I then keep these charts up to date
throughout the week by hand.
Author’s Note
This book is educational and not intended to promote any
product or service of Factor LLC now or in the future.
Monthly performance data for the period covered by the
book represents a combination of data and not the trading
activity of any specific account. The combination of data
includes:
An exempt commodity pool managed by Factor
LLC
Periodic trades in a proprietary account
Management of trading signals according to the
rules and guidelines specified by the Factor
Trading Plan
Because no specific account has fully reflected the
signals and trades reported in Part III of this book, the
performance data reported herein should be considered as
hypothetical. However, the performance reported in the
diary portion of this book in Part III closely mirrors the
trading performance of the actual exempt commodity pool
managed by Factor LLC. Past performance is not
necessarily indicative of future results.
Factor LLC traded proprietary accounts from October
1981 through April 1995. From October 1981 through
March 1991 the proprietary accounts were controlled solely
by Factor LLC under the trading program or early versions
of the trading program represented by this book (see the
performance capsule of Factor LLC in Figure AN.1).
FIGURE AN.1 Factor LLC Performance, October 1981–
September 2008.