% of the data.Section Two discussed measuring standard deviations ofmonthly returns in order to arrive at a conservative accountsize for a given portfolio. The following formula can beused to calculate the standard deviation of any group ofdata. The first step is to calculate the “average” value.The second step measures the deviations from the averageto arrive at the standard deviation.• Step 1 — Calculate the Average Value over the Number ofPeriods under ConsiderationThis is accomplished by adding up the sum of all of thevalues and dividing by the number of periods:sum1 = 0For x = 1 to Number of Periodssum1 = sum1 + value(x)Next xaverage = (sum1 / Number of Periods)
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TRADE SECRETS
• Step 2 — Calculate the Deviation from the Average forEach Value• Step 3 — Calculate the Standard DeviationSteps 2 and 3 are done by:a) Subtracting each value from the average.b) Squaring “a” (simply multiply “a” times “a”).c) Sum the value for “b” for each value.d) Take the square root of (“c” divided by Number ofPeriods).sum2 = 0For x = 1 To Number of Periodssum2 = sum2 + ((average, value(x) x (average,value(x))Next xStandard Deviation = Square Root(sum2 / Number ofPeriods)
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THE FOUR BIGGEST MISTAKES IN FUTURES TRADING
TradingResourceGuidev
Tools for Successin Futures Trading
105
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THE FOUR BIGGEST MISTAKES IN FUTURES TRADING
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FOR THE E LECTRONIC F UTURES T RADER , Jake Bernstein — Theelectronic revolution has yanked the rug out from yesterday’s floor based futures traders, and opened the doors to all traders with apersonal computer and a hunger for trading. This new book gives youall the information you need to get started and details the tools youneed to control risk, while reaping profits in this fast moving market.$39.95 Item #10613
C OMPLETE G UIDE TO E LECTRONIC F UTURES T RADING : E VERYTHING Y OU N EED TOS TART T RADING O N -L INE , Scott Slutsky, Darrell Jobman — In thiscomprehensive guide the authors of Masters of the Futures walksfutures traders through everything they need for profitable onlinetrading from order-handling systems to the critical differences betweentraditional and online trading.$29.95 Item #10616
S CHWAGER ON F UTURES : F UNDAMENTAL A NALYSIS , Jack Schwager — Themost comprehensive guide to using fundamental analysis exclusivelyfor futures traders by the author of the run away best sellers, MarketWizards and New Market Wizards.$65.00
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Master the skills for applying fundamental analysis to futures tradingwith this thorough practice guide.Study Guide $30.00 Item #C79X-2487Get Both for $87.00 Item #C79X-2573
J OHN M URPHY ON C HART A NALYSIS , Renowned market technician JohnMurphy presents basic principles of technical and chart analysis in thiseasy to undertstand booklet. It’s a full resource guide to industry’stop tools to obtain a better understanding of what charts can do —and how they can help you grab your portion of today’s trading profits.A Bridge/CRB CD-rom is included containing a full suite of chartingtools allowing you to implement what you learn as you go.$19.95
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D EFINITIVE G UIDE TO F UTURES T RADING , V OLUME 1, Larry Williams — Hewon the World Cup Championship of Futures Trading and now hereveals the winning methods he pioneered — including theaccumulation/distribution method and the %R method — whichrevolutionized the futures industry.$55.00
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D EFINITIVE G UIDE TO F UTURES T RADING , V OLUME II, Larry Williams —Includes 50 pages of Larry’s personal day trading knowledge alongwith a money management technique giving you great odds to doubleyour money.$55.00
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G ETTING S TARTED IN F UTURES , Todd Lofton—To enjoy the rewards ofthe futures market with minimal risk, this newly revised primer shouldbe your first stop. It’s the universal choice for beginning investors inthe futures market.$18.95
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T HE N EW CRB C OMMODITY Y EARBOOK , Bridge Information Systems —Dubbed the “bible” by market analysts and traders since 1939, theCRB Commodity Yearbook provides invaluable reverence informationon 105 domestic and international commodities. It includes seasonalpatterns and historical data from the past ten years, as well as pricingand trading patterns on a monthly and annual basis.$99.95 Item #10531
Now available on CD-rom! 30 years of historical Fundamental Dataon over 100 markets in one convenient source. Similar to the annualyearbook, the CD version offers immediate access to every yearbooksince 1965 using the QuickSearch feature.$195.00
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M AGIC OF M OVING A VERAGES , Scott Lowery — After years of exhaustiveresearch, Lowry shows that the simple, quick and practical movingaverage method is an extremely provitable approach to trading in thefutures market.$29.95 Item #C79X-10219
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THE FOUR BIGGEST MISTAKES IN FUTURES TRADING
T ECHNICAL A NALYSIS OF THE F UTURES M ARKET : A C OMPREHENSIVE G UIDE T OT RADING M ETHODS AND A PPLICATIONS , John J. Murphy — Completeguide to all aspects of technical trading. Written by the world’s leadingtechnical expert, this book details hundreds of indicators, theirderivations, applications, and shortcomings.$59.95 Item #2366
B E A W INNER T RADING C OMMODITIES , Ralph Fessenden, Ph.D. — Here’svirtually the first improvement in Scale Trading technicques in over24 years. Step-by-step guide shows how to take advantage of powerfulsupply/demand forces by using scale trading methods.$29.95
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N EW M ARKET W IZARDS , Jack Schwager — Meet a new generation ofmarket killers. These winning traders make millions, often in hours,and consistently out perform peers. Trading across a spectrum offinancial markets, they use different methods but share remarkablesuccesses. How do they do it?? How can you do it??$39.95 Item C79X-2106
T HE F OUR B IGGEST M ISTAKES
IN O PTIONS T RADING , Jay Kaeppel — Youcan earn big profits in options trading by avoiding the 4 mostcommon—and costly—mistakes the majority of traders make. Theauthor shows you how to avoid common pitfalls option traders encounterthat cause them to lose money in the long run.$19.95, Item #8471
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T RADER ’ S L IBRARY B OOKSTORE — www.traderslibrary.com, the #1 sourcefor trading and investment books, videos, and related products.
E SSEX T RADING C OMPANY — www.essextrading.com, for importantfutures software products and much more.C OMMODITY F UTURES T RADING C LUB N EWS —www.commoditytraders.com, for commodity futures traders or thosewishing to learn about or get started in commodity futures trading.W ALL S TREET D IRECTORY — www.wsdinc.com, provides access to the bestfinancial sources located throughout the internet.
I NVESTOR ’ S B USINESS D AILY — www.traderslibrary.com/traders/ibd.cgi,review the latest business news online.
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About the Author andEssex Trading Company, Ltd.Jay Kaeppel is the Director of Research at Essex TradingCompany, Ltd. and an active Commodity Trading Advisor(CTA). With over 12 years of futures trading and systemdevelopment experience, his expertise as a system developerhas been noted by Technical Analysis of Stocks andCommodities magazine, which has published several of hisarticles on such diverse topics as:A Winning Approach to Futures Trading *Stock market timing with interest rates● Stock market timing with the Stock/Bond Yield Gap● Stock market timing with long-term price momentum● Bond mutual fund investing and bond market timing *● Gold mutual fund investing and gold market timing *●●
Jay Kaeppel is the subject of an interview in the May 1997issue of Technical Analysis of Stocks and Commoditiesmagazine, discussing stock market timing, stock selectiontechniques, trading system development and futures andoption trading.“Formula Research,” a national monthly trading systemdevelopment advisory edited by Nelson Freeburg hasacknowledged Jay Kaeppel’s expertise as a trading systems developer by using two of his original systems as thefoundation of their own stock market and gold fund trading systems.*Copies of these articles are available on the Essex Trading Company website.
Essex Trading Company, Ltd. has been a leading developerof trading software for futures and option traders since1983. Essex Trading Group, a division of Essex TradingCompany, Ltd. is registered with the National FuturesAssociation as a Commodity Trading Advisor and has beenmanaging money since 1995. The President of EssexTrading Company, Ltd. is David Wesolowicz, a veterantrader with over 9 years of experience as a floor trader onthe Chicago Board Options Exchange and the ChicagoBoard of Trade. Mr. Wesolowicz has over 16 years experience as a developer of software for trading applications.Together, Wesolowicz and Kaeppel have developed severalsoftware programs, most notably the award-winningFutures Pro and Option Pro On-Line programs.
COMPANY INFORMATION:Essex Trading Company, Ltd.107 North Hale, Suite 206Wheaton, IL 60187Phone: 800-726-2140 ext. 155 or 630-682-5780 ext. 155Fax: 630-682-8065E-mail address: essextr@aol.comInternet Website address: http://www.essextrading.com
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Trade Futures Like A ProWith Futures Pro......The most reliable trading system availablefor futures tradersDesigned by Jay Kaeppel and Essex Trading CompanyTRADE WITH SUCCESS● Employs the key principles of profitable futures trading:
Go with the trend, cut your losses, let your profits run anddon’t let the big winners get away.● Percentage of profitable trades averages over 50%. Theaverage winning trade can be double or even triple the sizeof the average losing trade.
TRADE WITHOUT GUESSWORK● Provides specific buy and sell signals for 40 domestic and
15 foreign futures markets. Includes up to 22 years ofhistorical price data for each market.● Generates objective trading signals for a disciplined andunemotional trading plan - the key to your success.
TRADE WITHOUT STRESS● Comes ready-to-trade with market price data and system
parameters set.● Easy-to-use with user-friendly Windows interface and
streamlined design. Data can be updated and trading signalsgenerated in less than 5 minutes a day.● Can be tailored to your own trading style including yourchoice of 3 built-in trading time frames.
TRADE WITH FUTURES PRO● Built-in portfolio management routine allows you to create
the optimal trading portfolio.● Striking bar chart graphics display up to 20 charts at
one time and allows you to visualize each trading signal.● Comprehensive customer service at no extra charge.● Winner of 6 Readers Choice Awards in Technical Analysis
of Stocks and Commodities magazine.
Why Wait To Trade Like A Pro?Visit our website at http://www.essextrading.comFor a Complimentary demo disc and brochure
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“Veteran trader Jay Kaeppel describes the opportunities andchallenges of futures trading with easy grace and engagingwit. After exploring the risks and rewards, Kaeppel showshow the average trader can succeed in futures by embracingfour key principles of trading mastery.”From the—N E L S O N F R E E B U R Gcreator of Futures ProEditor/PublisherTrading System Softwarewinner of 6 Readers ChoiceFormula Research newsletter
aAwards in TechnicalAnalysis of Stocksand Commoditiesmagazine
This book will help you trade futures profitably by showing you how toidentify—and avoid—making four common mistakes that can derail yourplan and reduce your profits.
Following on the heels of his original bestseller, The Four Biggest MistakesIn Option Trading, system developer Kaeppel now focuses his attention onthe volatile futures market and shows traders how to trade these markets totheir advantage.In Kaeppel’s quick reading style you’ll….• Learn how to assess whether you are financially—andemotionally—ready to trade futures.• Determine how much money you can afford to risk.• Learn what leverage is and how it can be used to generate aboveaverage returns without exposing yourself to too much risk.• Understand why “fearing” the market is better—and safer—than downplaying risk.Now, steer clear of trading missteps and learn how to trade more profitably—trade after trade—with Kaeppel’s winning strategies.ISBN 1-883272-08-451995
MARKETPLACE BOOKSP. O . B O X 2 4 6 6ELLICOTT CITY MD 21041
9 781883 272081
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