The 3Dimensional Trading Breakthrough
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Brian Schad<br />
<strong>The</strong> Problem with Protective Stops<br />
Having “protective stops” working in the market for your long/short futures position<br />
doesn’t cut it with today’s volatility! Besides that, all markets are “trending”<br />
towards trading around the clock (as of this writing, New York soft’s markets have<br />
just eliminated day pit-session trading. Only electronic trading going forward).<br />
A buy signal on one day (at .9198) for the Swiss Franc is followed by a 120 point<br />
drop against the position the very next session.<br />
In June of 1997, my client Dan, took a long futures position in the Japanese<br />
Yen when the market presented him with a classic gap-reversal/“Ooops! (Larry<br />
Williams)” buy signal. We were waiting for this opportunity and the market let us<br />
come aboard safely that day and off we went into new contract highs! In a matter<br />
of three or four days the market went from making new highs and being up in<br />
the neighborhood of $4,000+/contract, to opening down 255 points the very next<br />
morning (yes, he had an at-the-money put option for “insurance” too)!<br />
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