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"New CIT (Commodity Index Traders) analysis and custom charts in Feb 2007!" |
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Recognized Quotes from Floyd W. Upperman Jr. CTA "In truth,
it is very difficult to make money on a consistent basis by speculating on
the price fluctuation of any market, but particularly in the futures
markets! Difficult does not mean impossible however, but it clearly
does mean the opposite of 'easy'! Anyone that says this is easy is simply
not being truthful in my opinion! However, when it comes down to it,
sometimes it is simply a matter of being in the right place at the right
time. The key however is having the knowledge to recognize this and the
means to act in a timely fashion (before everyone else knows about it)!
That may be simple, but the waiting as they say is the hardest
part!" "You never
want to be the person left holding the bag (e.g. LTCM in the late 90's).
As we observed with LTCM, even though they were the creators of a very
successful approach for pricing options (which made them millions)
once everyone knew about their trading strategy and how it worked, the inefficiencies they were exploiting virtually vanished over-night!
My name is Floyd Upperman and I have developed my own unique futures trading system unlike any other system I've ever encountered! I've found commodity trading to be a very challenging and fascinating line of work! Now with the explosion of technology and the internet, I've been able to make my entire trading system, over 800 completely unique charts, graphs, and indicators available to private traders for the first time ever! I've spent the last 10 years developing my own proprietary futures trading software. I found out early in my trading career that the commercially available charting software and price tracking systems were not versatile nor complex enough to do the kind of statistical studies on fundamental data and comparison correlation's that I needed to do in order to gain a unique perspective into the market. Using the same software, methods and indicators everyone else was using, basically provided me with the same results as everyone else as well. Thankfully, I recognized this quickly. After reviewing everything on the market, I decided to create my own software package for tracking everything from prices, roll dates and trends to sophisticated correlation studies, intermarket relationships, mean regression analysis and much more! The internet now provides me with the means to make my software available to other traders, who like myself, recognize the requirement for a proprietary system, unique from publicly followed trading software and methodologies. This is rather obvious, since university studies have proven that roughly 80% of those who attempt to solve the challenges of derivative speculating (futures trading) tend to do a very poor job at it, ultimately realizing very little success on a consistent basis! The data would surely show even worse results if 'luck' were removed from the equation! Thus the question is, how does one vast group manage to do so poorly on a consistent basis? I underlined consistent because that is the root of the question. Consistency. Lets consider the following... If a trader is consistently making the same mistakes over and over again, achieving poor results, the poor results will continue on a consistent basis. Furthermore, if an entire group is following essentially the same information, methodology, and perhaps using the same software to arrive at the same conclusions, then the entire group is likely to experience the same results. But still, it would seem that at least half would do a little better. However, part of the issue has not been addressed yet. Following a flawed way of thinking, and flawed system or indicator is definitely a contributing factor, but its not the main contributing factor for achieving consistently poor trading results! There is one single common denominator driving the consistently poor results of the entire group! That common denominator is "Human Emotion". Fear, Greed, and Ego impact everyone in this business to some degree. Without a system to maintain control over these emotions, the emotions will impact the trading decisions and thus result in irrational decision making. Since human emotions can't be turned on and off at will, the interference of these emotions will be felt consistently, at all times, and thus impacting the overall results on a consistent basis. This human factor affects and directs prices behavior. We often look at the market as a thing, "the market". The market is really the result of all the participants, and the actions of each. Much of this is not common knowledge however, and is certainly NOT part of all common trading systems. To achieve success on a consistent basis in this field, one must step outside the realm of common knowledge (what everyone already knows and may already be doing in the market) and tackle the market like a problem needing solved, using the tools necessary to explore and solve the problem at hand. Solving the challenging problem the market provides is not an easy task and never will be because the heart of the matter is wrapped around the complexities of human emotion. The driving force of the market is in fact, irrational behavior. The markets do not behave rationally, because people under pressure do not behave rationally. However, there are certain traits, habits and behaviors that all people possess, and under certain conditions, all people will react the same way! This is part of our overall analysis of the market and something I discuss regularly in my reports. In addition, there are certain patterns in the market that will signal when crowd behavior is extreme or overwhelmingly one-sided. This is something we track and measure. Make no mistake about it, tackling the challenges the markets provide is a very complicated and complex endeavor. Those that try to make it sound simple, probably do not seriously attempt to solve these complexities. The system I developed deals with these issues and includes well defined position management rules and principles along with risk containment procedures, so that we are able to avoid the pitfalls of our own weaknesses as much as is 'humanly' possible! Traditional indicators, main-stream software packages are common knowledge in this business. Everyone starts out using these tools. However, only a few eventually become successful on a consistent basis. I have found that everyone I've ever met that is consistently successful in this business, all have one thing in common. That is, they do not conform or follow the traditional way of thinking. Many people initially fall for the idea that this business can be learned very easily using traditional common-place books, tapes, seminars, and software. That is not the case. This is not a normal business that simply requires following a book of instructions to succeed. Commodity trading is a zero sum
business. That means each
time we make money on a trade, somewhere someone has lost money taking the
other side of that position. We know that based on the facts,
roughly 80% of small speculators lose money trading futures. All
small speculators typically use the same software packages, same
indicators, and they all make the same mistakes, over and over
again. Thus, the average trading life of a smaller speculator is
about a year. New ones are coming in, as old ones give up and
quit. If you want to step outside of the mean, you have to be
willing and able to look at the market differently, in a unique fashion,
I spent a great deal of my spare time and money researching the investment world while working as an engineer. My dream has always been to be self-sufficient. I never wanted to rely on anyone for my financial well being but myself. My greatest desire was to be financially independent. Unfortunately, I discovered this was not a possibility by simply working for someone else. Even though I had a very good salary, saved over 20% of my yearly pay, I could not get where I wanted to be for at least another 15 - 20 years. I needed a business. I knew there was an enormous amount of money in the investment world. I had already started trading stocks and had experienced some success at it. I knew others were making money as well. Stocks were slow however and I did not want to wait ten years for a stock to go up or recover and I did not have the hundreds of thousands of dollars needed for adequate leverage. I found out it was a slow process. Next, I investigated stock options. I found stock options certainly had the ability to multiply my money several times in a very short period, but here again, I made some money and lost money. There was no consistency to it. I had no system and relied on information from the media, newspapers, friends, and gut instinct. All of these sources proved to be inconsistent and unreliable. I needed an approach and a system. Finally, I decided to try commodities. I really knew
nothing about commodities when I made my first trade. I read enough about commodities to understand how they worked, but I did not yet
know how to trade them. I started out like everyone, reading the Wall Street journal religiously
and buying Barrons every weekend and spending hours looking at charts and reading books. Soon, I found I
ended up with the same scenario. I made some money and lost some money. It was then that I made one of
the worst mistakes of my trading career. I decided to let a so called expert show me how
to trade. A broker. He did worse than I did. I lost my profits and nearly lost all my investment money with the broker in charge.
Discouraged, I considered doing what most people do, give up. Somehow though, I found myself unable to
quit. I believed I could make money at it, but I was finding that like
everything else in life, I had to be patient and wait for the right opportunities.
I learned that I could not trade just because I needed the money.
The markets weren't going to yield opportunities every time I needed
money! Therefore, I had to make sure I had other ways to ensure adequate
money for my day-to-day living expenses, while I researched the markets,
and waited for the real opportunities. When the opportunity presented
itself, I learned to pounce and I quickly made money at it! However,
here too, I learned something. I learned that even the best looking
opportunities do not always yield a profitable result. Thus, I
learned that I had to combine risk containment with my patience.
Over and over again I found that if I waited, and if I was cautious, I was
able to make money. If I wasn't patient or if I was reckless, I
almost always lost money! There was a pattern developing here!
There were opportunities to make money, but they did not happen every day,
and they were not easy to identify. Thus, I had to build a complete
system for tracking and identifying these opportunities! By this
time I had already spent a small fortune on different software packages, systems, programs and data providers,
which none provided me with consistent results or the clarity I was seeking. I
figured if I was going to do this right, I had to get all the data and build my own system completely from scratch, based on what I found to
work! Nothing about what I have done has ever been easy. First of all, it is not easy breaking free from the corporate world to venture out on your own. You must be prepared, financially prepared and psychologically prepared. I also recommend having several potential sources for generating cash flow. There is no law that says you can have only one business. I found that there are many ways to make money, of which trading is only one of them. Furthermore, you can trade stocks, commodities, bonds, options, all of which I trade myself. In addition, you can invest in real estate as well as other investments. I decided early on that it would be wise not to place all my eggs into one basket. Trading will always have its ups and downs. That's just how the markets are. You need to be financially prepared for that. Few mention this, but its true. If you plan to rely 100% on trading, which I do not, then you better have enough money saved up to pay for all your expenses in the case you have a down year. I became a CTA to help others learn what I have learned about the markets through my research and hard work. Assisting others inherently keeps me more focused on the markets and my system while generating additional cash flow in exchange for my contribution. While not for everyone, I like working with people, and found that trading can be lonely, especially if you come from corporate America. This job fit perfectly with what I love to do. As you can imagine, when I left the corporate world to go out on my own, there were many unknowns. I left with one goal in mind, to pursue my dreams and to live my life my way. I didn't want to work for anyone else. Once on my own, I had the time to pursue my stock investments, futures trading, real estate investing, as well as the time to build my proprietary trading system and software. Now that software and system is available to anyone in the world. If you want to use the free daily price charts (pit-session), you can do that too, for as long as you like! I was never willing to give up on my dream. You shouldn't either. Whatever your dream, only you can make it happen. Be smart about it however. Never put all your eggs in one basket. During my years as an "employee", I got to know many people who were unhappy in their careers or jobs, but did not know how to break free, or were to afraid to do it. You need to have a plan if you are going to strike out on your own. Futures trading was my plan. My system gave my the confidence to leave the corporate world behind. Later I was able to contribute my trading experience and software to help others learn as well, and that also helped provide me with the means to continue doing what I love! However, even with a plan, it takes guts to leave the security of corporate America to try something completely on your own. Futures traders are entrepreneurs in my opinion, and both major risk takers. I certainly fall into that category, as leaving a comfortable 6-digit yearly income for the unknown was risky. I believe we must be willing to take calculated risks in life in order to achieve and to obtain our dreams. You also must dream and believe in yourself. Thank you for taking the time to read about my background. If you want to learn more about my trading system, I would be happy to work with you on a personal basis and teach you everything there is to know about my proprietary position trading system. If you are an established commodities trader already and simply want to improve your edge in the markets, I would be equally happy to assist you. One of the key elements to my system is the combining of fundamental and technical data. Fundamentals clearly determine prices, not the technicals. Technicals always lag fundamentals. Remember that, this is one of the keys to what I have discovered in the underlying order of commodity prices. Fundamental conditions setup the big bull markets as well as the bear markets. Using my system, we are able to measure the fundamental conditions in each market, and understand when the conditions are statistically significant, indicating a potential major turn in the market. Very Respectfully, "Those that
do this for a living have acquired the necessary skills and knowledge through
years of experience and meticulous market observations."
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