Английский язык. Практический курс для решения бизнес-задач Пусенкова Нина

The 10 Commandments of Successful Commodity Trading

I’ve been trading for myself and for others going on 20 years. In all my years trading and watching others trade, studying the markets and listening to all the different «gurus of the moment», I have come to find a few simple truths. In no way am I suggesting that these are all the truths or that there is any monopoly on truth, especially in trading. Nevertheless, if one is in this game long enough one starts to notice things. One of those things is that a lot of systems and approaches to commodity trading work a lot of the time, and another is, from time to time, some work exceedingly well.

So why do so many people lose money trading in the markets while others consistently make hundreds of thousands – even millions of dollars each year? It is my contention that for most of us it boils down to a few simple sins. Sins that a lot of people trading in the commodity market tend to repeat over and over again. Like the old man in Las Vegas still hitting on seventeen at the blackjack table, some people never learn. It can be a basic flaw in the system or trading approach or no approach at all. But most of the time, in my view, it is in the trader himself – the one pulling the trigger.

Here, accordingly, is my take on the ten deadliest sins:

I.Thou shalt not risk more money than thou can afford to lose. Also known as «if you can’t afford to lose, you can’t afford to win.»

Let’s face it – this ain’t bean ball. You can lose money! Stop right here, throw away this handbook, forget about trading futures, do something else with the rest of your life if losing whatever money you might trade with would take food off your table, keep your kids from going to college or change your lifestyle. Repeat, there is no system or approach available that doesn’t sustain losses sometimes. The trick is containing those losses.

II.Thou shalt not trade futures without the placing of stops.

Also known as «you’ve got to know when to hold up, know when to fold up.» Show me a futures trader who doesn’t use stop loss orders and I’ll show you someone who loses a lot of money. Before initiating any trade if you haven’t already figured out at what point you would be wrong and would want to cut your losses or, at the very least, reevaluate your position from the sidelines, then you shouldn’t be putting on the trade.[3] You should also have a profit or price objective that is at least twice the proposed risk, and you should never take a profit just for the sake of taking a profit.

Options, of course, are different because of the inherent liquidity problems in some markets and because frequently the reason an option is purchased in the first place is to «ride the wave», or position trade, using the fixed risk of the option premium itself.

III.Thou shalt not let large profits turn into losses. Also known as «stupid».

The most common scenario is: You’ve had a favorable move in the market, maybe you are up a few thousand dollars per contract. Hopefully, you followed the second commandment and placed an open stop loss order when you initiated the trade. But now you are afraid to raise your stop and lock in at least some profit because you don’t want to get «whipsawed» and stopped out. Then the market reverses. So you let the market take back some of your profits, hoping it will turn around again, until all of a sudden your once profitable trade is now under water and in real danger of being stopped out at a loss! What went wrong? The answer is: You didn’t raise your stop. Most pros use a trailing stop system, (a pattern of raising their stop to lock-in profits) based on either chart points or a pure money management approach. You should too.[4]

IV.Thou shalt not let thy emotions rule. Also known as «a fool and his money are soon parted».

This is probably the hardest commandment to keep. Yet, I have never seen a successful trader over the long haul who didn’t follow it. Most people want to be winners. Most people want to make the big score and have the accompanying bragging rights. We all tend to get greedy, speculators usually more so. But trading is a business. You must be cool, calm, and always ready for the next opportunity. You can’t have high highs or low lows because you’ll make too many mistakes, and mistakes mean losses. If you start winning and get «too high», the tendency is to over-trade. By that, I mean starting to make marginal trades just for the sake of making trades, instead of waiting patiently for the right opportunity. If you get too low (this is usually after some losses), you are liable to skip the trades you should be making, or you might try to «cherry-pick» a system or an advisor’s recommendations for fear of more losses, inevitably making the wrong choices. To win this game you must remain clear-headed.

V. Thou shalt not place all thy eggs in one basket. Also known as «live to trade again.»

Ask any pro trader how much of their total account they risk on any one trade and the answer undoubtedly that will come back will be not more than ten percent. Why? Because the successful trader knows that losses are part of the game, and that frequently a few big profitable trades during the year more than make up for all the little losses, and they want to be around when the next opportunity arises.

VI. Thou shalt not buy deep out-of-the-money options. Also known as «you get nothing for nothing».

This is also known as the broker’s best friend.

Now brokerages are in business to make money, ours as well as everyone else’s. Everyone accepts that. And commissions are the energy source that makes it all possible. Most brokers do get some percentage of the commissions as their pay. Since most options are traded on a round-turn basis, it stands to reason that the more options the customer buys, the more money the broker makes. Therefore, the cheaper the option premium the more options the customer can buy. But not all options are created equal. For instance, let’s say gold is trading at $400 an ounce and you think gold will rally. There are usually 100 oz. «call» options offered in strike prices of $400, $410, $420, $430 and so on for a specific amount of time (there are also lower strike prices offered). Keep in mind that at expiration gold must be above your strike price to have any value. It follows then, that at expiration if gold is trading at $420 the $400 «call» option is worth $2,000 (100 ozs. X $20); but the $430 «call» is worth zero. That is why the further away from the market the strike price, the cheaper it costs to purchase. The unscrupulous option brokers will sometimes convince their clients to buy «deep out-of-the-money» options – options that are five, ten, sometimes fifteen strikes away from the underlying market. They are usually very cheap and the broker can buy a lot of them for a small amount of money and therefore rack up a large commission for him or herself. The problem is they have almost no chance of making any money for the client because the market will have to make a huge move in a relatively short period of time to pay off. And although that does happen in commodities, the odds are against it.

It is my experience that options have the greatest appreciation from roughly two to three strikes out-of-the-money to two to three strikes «in-the-money». At our firm, we discourage brokers from recommending buying options much further out than that except in special situations.

VII. Thou shalt not fight the tape. Also known as «the trend is your friend».

The mistake speculators sometimes make is trying to buy or be long while markets are still in a basic downtrend, or selling short when they are in an up trend. Most professional traders try to identify the major trend and construct their trades in that direction. They know that when you trade «with the trend» usually your chances of winning improve. Many times the trend will bail you out of an initially less than great entry point. There are many ways to analyze trends, but most involve some kind of price action like moving averages using daily or weekly charts, or somewhat more sophisticated technical indicators like stochastics or the ADX line.

VIII. Thou shalt not stay in losing trades too long. Also known as «the best trades are usually right, right away».

Let’s face it – you can’t turn a sow’s ear into a silk purse. The best trades are usually right immediately. I know a lot of commodity traders who say, stop or not, if the trade is not profitable within two or three days they’re out, cutting their losses even shorter. They don’t need to hang around just waiting to get stopped out. Experience tells them they will get stopped out. Remember, people have been trading commodities for a hundred and fifty years, the smart traders know there’s always going to be another trade. Cut your losses short.

IX. Thou shalt not follow crowds.

If you are around long enough in this business you come to have a healthy appreciation for the theory of contrary opinion. Simply stated when everyone’s bullish, sell. When everyone’s bearish, buy. That’s because historically, the public is usually wrong. But of course, it’s not quite that easy. It is extreme bullishness or bearishness that you look for. It is not enough to see a lot of bulls around. It has to be everyone and their mother is bullish, they’ve put every available dime in the market, and they think «this time it’s different» and the market will never turn bearish again, or at least not for a long time and all corrections are nothing more than buying opportunities. That’s what you look for – then you go the other way. Conversely, when the market has been flat or falling for it seems like forever and everyone’s given up, thrown in the towel, packed it in and sold out all their remaining losing positions saying «I hate this market and I’ll never trade it again.» That’s when you buy with both hands.

X. Thou shalt not step over dollars to save pennies. Also known as «get a broker.»

This may be the most important commandment of all. Although the «highs» you can achieve when you are successfully trading commodities can be spectacular, you must always keep in mind that this is a serious business. And like many things in life, if you haven’t done it before you need someone to help show you the way. You need a guide. If you don’t understand how to read a chart or the proper terminology to use when placing trades, or what supply and demand factors may affect the currency or commodity being considered, then you should open an account with an experienced commodity broker. Although it will cost more, in the long run I believe you will save money. That’s because it takes time to learn how to trade. Most professional traders spend a fair amount of time in the school of hard knocks before succeeding. They need to live through both bull and bear markets to gain the proper perspective. Don’t kid yourself – experience counts. A good broker can help you greatly in your pursuit of profits. And if you get the right one, you can even «earn while you learn.»

What I’ve tried to do in this handbook is focus on the psychology and discipline of successful trading. Remember, if it was as simple as having a degree in economics, or knowing the implication of every known chart formation, there would be substantially more millionaire traders out there. Obviously, it takes more. I hope I’ve been able to help you to become a more successful commodity trader.

Source: Don Varden, www.tradeamerican.com

Essential Vocabulary

1. future n – зд. фьючерсный контракт

2. place stops – отдавать приказ «стоп»

3. stop loss order (SLO) – приказ «остановить убытки»

4. position trade – позиционная торговля на срочных рынках

5. option premium – опционная премия (сумма, уплачиваемая покупателем за опционный контракт)

6. whipsaw n – «продольная пила»; возможность понести двойной убыток при покупке по наивысшей цене перед снижением и продаже по самой низкой цене перед повышением

whipsaw v – понести двойные убытки

7. trailing stop system – система скользящих приказов «стоп»

8. lock-in v – зафиксировать, законтрактовать

9. chart point – точки на графике

10. money management – управление деньгами

11. contingent order – условный приказ

12. stop-limit order – приказ «стоп-лимит»

13. overtrade v – чрезмерная торговля (расширение продаж компании сверх имеющегося у нее оборотного капитала; чрезмерные покупки и продажи брокером для увеличения своих комиссионных доходов)

14. out-of-the-money option – опцион «без денег»

15. round-turn basis – комиссия за две стороны сделки; разовая комиссия брокеру при ликвидации срочной позиции; завершенная фьючерская операция

16. rally n – значительное повышение курса ценных бумаг или товарных цен после снижения, восстановление уровня экономической активности после спада

rally v – повышаться, восстанавливаться после спада или снижения

17. call option – опцион «колл»

18. in-the-money option – опцион «в деньгах»

19.buy long – «длинная» покупка

20. stochastic a – стохастический (переменная величина, которая определяется случаем)

21. ADX (Average Directional Movement Index) line – линия ADX

22. contrary opinion – мнение, противоположное всеобщему

23. bear market – «рынок медведей»

Exercise 1. Answer the following questions.

1. Is there a foolproof system in commodity trading? 2. Why is it important to use stop loss orders? 3. What is the most common scenario for turning profits into losses? 4. Why is it necessary to be cool, calm and clearheaded in commodity trading? 5. How much do professional traders risk on a trade? 6. Why is it important not to place all your eggs in one basket? 7. Why is it risky to buy deep out of the money options? 8. How do pros regard trends? 9. How do pros identify the best trades? 10. What is the essence of contrary opinion? 11. Why is it better for amateurs to get an experienced commodity broker?

Exercise 2*. Find terms in the text that match definitions given below and make sentences of your own with each term.

1. a market distinguished by declining prices

2. a market distinguished by rising prices

3. an obligation to exchange a good or instrument at a set price on a future date

4. the purchase of a stock, commodity, or currency for investment or speculation.

5. the selling of a currency or instrument not owned by the seller

6. an order with restrictions on the maximum price to be paid or the minimum price to be received

7. the right (but not the obligation) to buy or sell an asset at a given price on or before a given date

8. a recovery in price after a period of decline

9. order type whereby an open position is automatically liquidated at a specific price

10. slang for a condition of a highly volatile market where a sharp price movement is quickly followed by a sharp reversal

Exercise 3. You are a journalist working for Business Week and you are to interview a prominent Wall Street broker who tries to explain secrets of his success. Make a dialogue between these two individuals using the following briefing material.

The Five Biggest Stock Market Myths

When fiascos like the Enron bankruptcy, and auditing scandals occur, investor confidence can be at an all-time low. Many investors wonder whether or not investing in stocks is worth all the hassle. However, it’s important to keep a realistic view of the stock market. Regardless of the real problems, common myths about the stock market often arise. Here we go over these myths in order to bust them.

1) Investing in stocks is just like gambling.

This reasoning causes many people to shy away from the stock market. To understand why investing in stocks is inherently different from gambling, we need to review what it means to buy stocks. A share of common stock is ownership in a company. It enh2s the holder to a claim on assets as well as a fraction of the profits that the company generates. Too often, investors think of shares as simply a trading vehicle, and they forget that stock represents the ownership of a company.

Gambling, on the contrary, is a zero-sum game. It merely takes money from a loser and gives it to a winner. No value is ever created. By investing, we increase the overall wealth of an economy. As companies compete, they increase productivity and develop products that can make our lives better.

2) The stock market is an exclusive club in which only brokers and rich people make money.

Many market advisors claim to be able to call the markets’ every turn. The fact is that almost every study done on this topic has proven that these claims are false. Most market prognosticators are notoriously inaccurate; furthermore, the advent of the Internet has made the market much more open to the public than ever before. All the data and research tools previously available only to brokerages are now there for individuals to use.

Actually, individuals have an advantage over institutional investors because individuals can afford to be long-term oriented. The big money managers are under extreme pressure to get high returns every quarter. Their performance is often so scrutinized that they can’t invest in opportunities that take some time to develop.

3) Fallen angels will all go back up, eventually.

Whatever the reason for this myth’s appeal, nothing is more destructive to amateur investors than thinking that a stock trading near a 52-week low is a good buy. Think of this in terms of the old Wall Street adage, «Those who try to catch a falling knife only get hurt.»

All things being equal, a majority of investors choose the stock that has fallen from $50 because they believe that it will eventually make it back up to those levels again. Thinking this way is a cardinal sin in investing! Price is only one part of the investing equation (which is different from trading, which uses technical analysis). The goal is to buy good companies at a reasonable price. Buying companies solely because their market price has fallen will get you nowhere.

4) Stocks that go up must come down.

The laws of physics do not apply in the stock market. There is no gravitational force that pulls stocks back to even. Over ten years ago, Berkshire Hathaway’s stock price went from $6,000 to $10,000 per share in a little more than a year. Had you thought that this stock was going to return to its lower initial position, you would have missed out on the subsequent rise to $70,000 per share over the following six years

We’re not trying to tell you that stocks never undergo a correction. The point is that the stock price is a reflection of the company. If you find a great firm run by excellent managers, there is no reason the stock won’t keep on going up.

5) Having just a little knowledge, because it is better than none, is enough to invest in the stock market.

Knowing something is generally better than nothing, but it is crucial in the stock market that individual investors have a clear understanding of what they are doing with their money. It’s those investors who really do their homework that succeed.

Don’t fret, if you don’t have the time to fully understand what to do with your money, then having an advisor is not a bad thing. The cost of investing in something that you do not fully understand far outweighs the cost of using an investment advisor.

Source: June 19, 2002, Investopedia.com

Exercise 4*. Fill in the blanks using terms given below.

Digging Deeper Into Bull And Bear Markets

What Are Bear and Bull Markets?

Used to describe how stock markets are doing in general – that is, whether they are….. or…… in value – these two terms are constantly buzzing around the investing world. At the same time, since the market is determined by investors’……, these terms also denote how investors feel about the market and the ensuing trend.

Simply put, a…… market refers to a market that is on the rise. In such times, investors have faith that the……will continue in the long term. Typically, the country’s……. is strong and……. levels are high.

On the other hand, a…… market is one that is in decline. Share prices are continuously dropping, resulting in a……. trend that investors believe will continue in the long run, which, in turn, perpetuates the spiral. The economy will typically slow down and unemployment will rise as companies begin……. off workers.

Characteristics of a Bull and Bear Market

Although we know that a bull or bear market condition is marked by the direction of……. prices, there are some accompanying characteristics of the bull and bear markets that investors should be aware of.

Supply and demand for securities – In a bull market, we see strong…… and weak……. for securities. As a result…… prices will rise as investors compete to obtain available equity. In a bear market, the opposite is true as more people are looking to….. than……, and, as a result, share prices drop.

Investor psychology – Since the market’s behavior is impacted and determined by how…….. perceive that behavior, investor psychology and sentiment are……. to whether the market will rise or fall. Stock market……. and investor psychology are mutually dependent. In a bull market, most everyone is interested in the market, willingly participating in hopes of obtaining a……. During a bear market, on the other hand, market sentiment is negative as investors are beginning to move their money out of……. and waiting in……. securities until there is a positive move. In sum, the decline in stock market prices shakes investor……… which causes investors to keep their money out of the market – which, in turn, causes the……. in the stock market.

Change in economic activity – Since the businesses whose stocks are……. on the……. are the participants of the greater economy, the stock market and the economy are strongly connected. A bear market is associated with a weak economy as most businesses are unable to……. huge profits because……. are not spending nearly enough. This decline in profits, of course, directly affects the way the market……. stocks. In a bull market, the reverse occurs as people have more money to spend and are willing to spend it, which, in turn……. and strengthens the economy.

How to Gauge Market Changes

The key……. of whether the market is bull or bear is the long-term……., not just the market’s knee-jerk reaction to a particular event. Small movements would only represent a short-term trend or a market……. Of course, the length of the time period that you are viewing will…….. whether or not you see a bull or bear market.

For instance, the last two weeks could have shown the market to be bullish while the last two years may have displayed a bearish……. Thus, most agree that a decided…… in the market should be ascertained by the degree of the change: if…… indexes have changed by at least 15—20%, investors can be quite certain the market has taken a different direction. If the new trend does continue it is because investors are perceiving changes in both market and economic conditions and are thus making…… accordingly.

Not all long movements in the market can be characterized as bull or bear: sometimes a market may go through a period of……. as it tries to find direction. In this case, a series of up and downward movements would actually cancel out gains and losses resulting in a…… market trend.

Source: www.investopedia.com, October 3, 2003 (excerpt)

Terms:

drives, decisions, employment, flat, trend, buy, appreciating, stagnation, fixed income, record, downward, supply, profit, consumers, multiple, individuals, exchanges, performance, depreciating, determine, reversal, attitudes, determinant, bull, trading, uptrend, economy, bear, laying, stock, demand, share, sell, fundamental, equities, confidence, decline, valuates, correction, tendency

Exercise 5. Translate into English.

Обзор рынка: Слово премьера

В среду после заявления премьер-министра Владимира Путина о планируемых налоговых льготах для стимулирования нефтедобычи нефтяные бумаги сразу выросли на 5%, вспоминает ведущий аналитик ГК «Регион» Константин Гуляев. Хотя котировки нефти Brent в течение дня снизились до уровня $123, акции «Сургутнефтегаза» на ММВБ выросли на 10,7%, «Газпром нефти» – на 8,1%, «Роснефти» – на 6,2%, «Транснефти» – на 6%, «Лукойла» – на 5,4%, «Татнефти» – на 3,7%. Акции «Газпрома» поднялись на 2,8% – по мнению Гуляева, здесь сыграла роль передача компании без конкурса месторождений с запасами порядка 3 трлн куб. м газа из фонда стратегических месторождений.

Гуляев считает, что рынок также подогрела статистика по росту потребительских цен в США за апрель, оказавшаяся лучше ожиданий: 0,2% против 0,3%. А Freddie Mac за I квартал показала убыток в $151 млн, т. е. существенно меньше прогнозов. В результате индекс ММВБ вырос на 3,5% до 1904,2 пункта, превысив уровень закрытия 2007 г., а индекс РТС вырос на 6,9% до очередного исторического максимума в 2406 пунктов.

Акции «Уралкалия» на ММВБ выросли на 3,4%, «Норникеля» – на 2,6%. Во втором эшелоне обыкновенные акции «Ленэнерго» подорожали на 12,5%, «Омскэнергосбыта» – на 11,2%, Волжской ТГК – на 10,6%. Тем не менее, по мнению начальника аналитического отдела компании «Атон» Андрея Верникова, рынок все еще перегрет и есть риск снижения индекса РТС до уровня поддержки 2290—2250.

По словам начальника управления конверсионных и межбанковских операций банка «Зенит» Александра Карпова, на международном рынке наблюдалась высокая волатильность курса доллара в диапазоне $1,54-1,55/евро, на российских же площадках доллар вырос с 23,81—23,82 руб./$ до 23,91 руб./$, т. е. превысил уровень поддержки ЦБ примерно на 0,12 руб. Как полагает Карпов, спекулянты, продававшие большие объемы долларов Центробанку в апреле, решили частично закрыть короткие позиции. Ставки по однодневным кредитам не превышали 4% годовых.

Источник: Ведомости, 15.05.08

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