You Can’t Lose Trading Commodities
$9.76
| Author(s) | |
|---|---|
| Format |
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| Pages |
396 |
| Published Date |
1998 |
In You Can’t Lose Trading Commodities, Master Wiest shows that with proper position sizing you can consistently make profits even if you let losses run and cut your profits short. Wiest’s trustee on trading commodities centers around a money management technique known as Scale trading. Scale trading technique involves accumulating a commodity as its price declines and selling as prices rebound. You will be holding a long position with no stops when the seasonal cycle bottoms. Stocks can go to zero, but commodities cannot. Low prices reduce supply as costs make it unprofitable to produce a commodity. The lower prices causes users to substitute this commodity for others increasing demand and raising prices.
Scale trading involves placing your orders ahead of time to buy at increments down and selling on resting orders at prices slightly above costs. Because you take your profits quick and increase your losing positions, there may be long periods of time when you are sitting with losses and short periods when you have profits. Wiest’s position sizing technique is how he pulls consistent profits out of scale trading. Letting your losses run and cutting your profits short uses a relatively large amount of capital to produce modest consistent gains.
The number of contracts traded in a Scale Trading system, fluctuates in accordance with each market’s volatility. After catching the absolute bottom which Wiest often does he always gets out before the market makes its real move. A simple trailing stop instead of scaling resting orders would catch the rest of the seasonal move. Like many successful trading techniques, scale trading is intended only to supplement your ordinary income, not to replace it.
Contents:
- The Las Vegas System
- Supply /Demand
- The Scale Trading System
- Why You Can’t Lose
- The Bank roll
- Selecting the Scale
- Worth 10,000 Words
- The Mid America Contract
- Taking a Profit
- How Can I Lose?
- Taking a Loss
- The Complex Scale
- Scaling from the Short Side
- Starting Too High
- The Rollover
- Compensating for Carrying Charges
You Can't Lose Trading Commodities By Robert F. Wiest pdf
4 reviews for You Can’t Lose Trading Commodities
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Robin Christensen (verified owner) –
Terrific trading strategy. Well written. Easy to read and understand.
Carmen Vu (verified owner) –
I can’t say enough good things about this book. I have not had a single losing trade since 1996. I got to know the author on a first name basis and he is not pleased with the gal in Florida that took over the business. Be aware of a similar trading system. In my eyes, the scales orchestrated by that firm were (are) not set up properly. You can expect a comfortable 20 – 40% return each year trading Wiests way (Ive had more several times). There was one year when I had a paper loss the first year, broke even the second, and the third and fourth year my account just screamed. (I had 74 coffee contracts at one time…lots of oscillations) The best thing about this is I can continue to be a contractor, real estate investor, farm investor and don’t have to watch the market once a scale is set up. There is one drawback to this….I would not trade this way unless you have at least $100,000. Having this much (or more) creates many more opportunities for oscillations which will help with the draw down of the account. I had a student that made $48,000 in six months…not bad but he was extremely lucky. All the commodities we scaled went straight up in short order. Not a good lesson in true scale trading. I had mentioned I haven’t had a losing trade since 1997, in 1996 I just got out of silver and the only thing to scale at that time was feeder cattle. I was the only one on the floor at REVCO that made money that year (a fair amount mind you) and the broker kept on cheering me on when I put 10 and 20 lot orders to buy feeder contracts. I just kept buying, he kept cheering me on stating “man, your account is going to be really fat at the end of the year”. I kept buying more and more contracts not figuring them properly to my scale. I had 263 of those puppies, (thats not a typo, I had 263 feeder contracts and was reported on the floor of the CME)Well…..it went against me….they liquidated my account….I sold a 50 lot at the all time low. Look at the chart, someone had to be a buyer and someone had to be a seller, I sold 50 contracts at the low,…lucky me.) Thats what happens when you don’t scale trade and speculate. I know several grain traders at the CBOT and several S&P and Bond traders at the Merc. They think Im crazy for trading the way I do but I know for a fact,…I have pulled more money out of the market than they have over the past 20 years….plus I don’t have gray hair like they do. The system works so well that you will probably become bullet proof and want to change it. And when you do…well you will become like most all traders.
Jaliyah Clarke (verified owner) –
The book is outdated but it is still worth it. There are only two chapters that is worth reading. Everything else, don’t even bother reading it. It is a good read if you are into long term investing. There is a chapter on using mini contract if you don’t have the require capital to trade. Although, the MidAm is no longer around, there are still mini contract on the grains, coffee, crude, ect. You just have to look for them. My trading platform has them and checked the trading volume. Very low but we are talking about long term not short term like a few minutes! One key that I will say is that you have to wait for the commodities to hit low, depress prices before starting to buy. Also, when prices are high as well, to short them. But I would not suggest shorting them if they are high. They can go higher before breaking. (I know from past experience! Ouch!)
Kamdyn Velazquez (verified owner) –
After reading this book 5 years ago, I was able to track down Bob Wiest and got to meet him. He had suffered a stroke and was in the care of someone. He seemed to be broke. The lady caring for him didn’t know much about his past, and I just wondered whether he had gone too far with his system and it had cost him. I was deeply intrigued. Nevertheless I pressed on and started trading.
I’ve been scale trading since. I have consistently made money and am very happy with the results. I would just make a few adjustments that I have learned over time:
1. Bob Wiest advocates to keep on buying no matter what, when the commodity you’re trading tanks. I’m more conservative, choosing instead to hang tight if the floor is opening up below me. Sure, this limits my profits but also limits my risk.
2. The book does not mention much or anything about commodities in contango — i.e. those where the further out the expirations the higher the prices. When contango is very pronounced this could have a very adverse effect to your bottom line if you’re forced to roll over trades, since you’re selling low and buying high. Now I’m much more cautious where I observe this structure in a potentially scaleable commodity.
3. I’m now also exploring the possibility of hedging my scales with options. One must be careful here. For example simply buying a put is not without risk: Options are depreciating assets and you could lose a lot if you don’t know what you’re doing.
4. I would add that it would be healthy to read other books that give further insight and viewpoints on scale trading, such as Value Investing in Commodity Futures by Hal Masover.