How Do I Know What Program is Right for Me?

Andy Waldock Trading offers a variety of services and do-it-yourself trading systems:

  • Our Brokerage and Managed Account services are best for individuals who want to trade commodities on the futures market and need a brokerage house to assist them. Our level of service is customized to your desires, from completely hands-off to fully managed for you.
  • The Day Trading program is for individuals who want to be actively involved in the futures market and can tolerate more risk. With Day Trading, you get the benefit of our COT Signals program and the insights it provides along with the necessary brokerage services.
  • For the complete DIY-er, COT Signals offers you our trading system and insights so that you can manage your trades without our intervention or assistance. This program is best for individuals with some level of understanding of commodities trading and the stock market.

Within the COT Signals program, we offer three options – Daily, Weekly, and Seasonal. Which is right for you depends on several factors:

  • How much attention do you want to pay to the market? The Daily program is best for someone who can check the market frequently and adjust mid-day when the need arises. The Weekly program usually requires very infrequent trading.
  • What is your risk tolerance? Since the Daily program has the shortest holding periods, it generally offers the lowest risk.  Since seasonal trades often require you to sit on your investment longer, they require more patience.
  • Are you trading EFTs? The swings in the Seasonal program are large enough to make them ideal candidates for investors in commodity-based exchange traded funds. However, trades in the Daily program are typically too small to be effective in non-leveraged investments. In the Weekly program, the swings are adaptable to the commodity-based exchange traded funds we all know, like GLD and USO, as well as many of the lesser known single commodity-based ETFs like JO and COW

Many people find that a combination of programs – or all three – is the most useful. By combining programs, you get a full picture of the market on all levels. For this reason, we offer a significant discount when subscribing to all three!

The Daily COT Signals Trading System

The Daily COT Signals program is the most sensitive product and is our most “hands-on” approach. Our nightly email looks for turning points in markets that are overextended against the dominant commercial position. Our triggers are based on a combination of factors, including the CFTC’s Commitment of Traders report. This swing trading methodology looks for reversals inline with the commercial traders’ anticipated direction and attempts to profit from failed speculative trends as the market returns to its value area. The Daily COT Signals typically hold trades for three to five days and places a protective stop loss order at the market’s recent extreme price.

Strengths

  • This approach usually has the smallest risk per trade and, since the risk is tied to the chart pattern, the protective stop point is easily identifiable on any daily chart.
  • The Daily COT Signals have the shortest holding period. Combine lower risk and more frequent trading, and you can develop the type of frequency that happens when traders get in sync with the markets.
  • The frequency of trades means you can combine these with bigger setups you may be watching on your own.

Weaknesses

  • This is a discretionary trading method. That means that it’s up to the trader to pull the trigger and stay abreast of market developments.
  • This method works best with actively involved traders who can can check the market and adjust their orders mid-day if the situation arises.
  • The trades are typically too small to be effective in non-leveraged investments. This makes them poorly suited to the ETF markets.
  • You will be responsible for taking your own profits. The only exit signal provided is the initial stop loss price.

The Weekly COT Signals Trading System

The Weekly COT Signals are set up the same as the Daily program’s. The timeframes are larger, the conflict between the commercial and speculative traders is larger, and correspondingly, the swings are larger. The size of the weekly swings also makes them adaptable to commodity-based exchange traded funds like GLD, USO, JO and COW.

Strengths

  • Andy provides market commentary and trading tips above and beyond his weekly COT column for MoneyShow. I’ll keep you abreast of the major market developments within COT reports and provide actionable trading signals and updates that take advantage of the synthesis of the Daily, Weekly and Seasonal emails.
  • The reversal signals generated by the Weekly COT Signals provide a valuable backdrop for the coming week’s action.
  • The Weekly COT Signals allow users the opportunity to employ a fundamental strategy like Commitment of Traders analysis on a multi-timeframe approach when used in conjunction with the Daily COT Signals.
  • The swings are large enough to employ many highly correlated commodity-based exchange traded funds, which are often included in the commentary.

Weaknesses

  • Like the Daily COT Signals, the protective stop loss orders are chart based. This means the protective stop loss orders can be exceptionally large, since we’re now determining swing points at the weekly level.
  • Weekly signals, though powerful, can be infrequent. You may be waiting awhile if you’re focused on a specific market.

Learn More

The Seasonal COT Signals Trading System

Our seasonal analysis differs from others’ approaches because we don’t predict a given day in advance to blindly buy or sell. We focus on trades lasting less than 30-days with a reasonable chance of success while employing strict resting stop loss orders in the market we’re trading. We’ll tell you when to get in, what the risk will be, and when to get out.

You’ll hear “stop loss orders” mentioned frequently because we don’t trade without resting protection in the market. This gives us two advantages. First, it pre-determines our risk, which allows for proper portfolio management. Second, it only takes one tweet, headline or, who-knows-what to turn a market on a dime these days. As such, I believe risk control is more important than ever.

Strengths

  • We take current market conditions into account in the generation of our Seasonal COT signals. This allows us to vary the entry signal and protective stop loss orders to current market behavior. The Seasonal Signals are the easiest to trade in both the futures and the ETFs. They usually require the placement of no more than three orders per trade.
  • The vast majority of our seasonal trades will be executed in the commodity’s front – or most liquid – month. This helps address some of the complications that arise when investing in thinly traded deferred contracts.
  • The swings in our Seasonal trades are large enough to make them ideal candidates for investors in commodity-based exchange traded funds, which we’ll include with each seasonal trading recommendation.

Weaknesses

  • All seasonal strategies have issues with limited data. Not to mention, market seasonality changes over time. Just look at the shift in natural gas from a heating to a cooling energy source over the last fifteen years.
  • Seasonal trades are tough to sit with. It’s possible to see a profitable trade turn into a loser. It’s possible for a trade to wander on both sides of the ledger prior to closing the position. You must be comfortable with the level of your investment.

Learn More

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