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
