Live Cattle Futures is one of my favorite markets to watch. This is a great trading vehicle, because it has great moves and it is easy to minimize risk. We strive for double or triple our risk for a reward on any given trade. This trade, however, gave us exponentially more reward than our risk. As of this video we have pulled 9.6:1 reward to risk off the table, and have our current stop at 7.6:1 on the remainder of our position. We consistently discuss the importance of consistency in trading. The reason we like consistency is that we do not have to guess what our P&L will be at the end of a given period of time. After “x” number of trades we are confident that our P&L will be “x”.
Live Cattle Futures Trade Breakdown
Let’s break down this Live Cattle Futures Trade. We took a long @ 109.50 with a stop 1.5 point @ 108. 1.8.50 was our second entry to give us a full position long, but it is better to be in then not to be in at all sometimes. Keep in mind, though, there are times when a single entry is more important. In this scenario, we kept risk small so our profit does not have to be astronomical for us to consistently make money. Our profit target was slightly over 30 points from our entry. Risking 1 point to make 30 is always a phenomenal trade. In our trade we protect our risk, by taking some profit and moving our stop in profit. That is key to this trade being so great.
Long entry @ 109.50
Initial stop @ 108
Partial exit @ 124
This equates to a profit of 14.5 points or $5,800 per contract.
One factor that makes swing trading so difficult is that our emotions are allowed to run wild. Swing trading can be very lucrative, but so many people get confused by the speed of that data and the ambiguity of the trades. Our brains really dislike ambiguity and that affects our trades along with any other factors that may be hurting us.
When I first got into trading I did all the bad things that negatively impacted my trading. Trading is an endeavor that takes hard work and dedication to achieve, much like reaching the NFL or NBA. Trading is a great business to be in, and trades like this really build upon a consistent trading strategy.
Swing trading can provide very nice reward to risk as well as more precise money management if used correctly.
Learn to be a consistently profitable trader with our Swing Trading Course.
Comment below and let us know your trade of the month.
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