Trading multiple currencies using tramlines – continued

You won't always get your chart analysis right on the first attempt, says John C Burford. Here's what to do when your trading isn't going to plan.

I will follow up on Friday's post today, because we are being offered a fairly common problem that arises when trading with tramlines the case of an overshoot. It's important to know how to handle overshoots. I'll give you a clue: sometimes, your first tramline placing just isn't good enough.

EUR/USD

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(Contracts of EUR 125,000)Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 254,464
Commitments
129,86264,0183,66272,759138,915206,283206,59548,18147,869
Changes from 09/17/13 (Change in open interest: 36,200)
28,899-5,038115-1,13144,55927,88339,6368,317-3,436
Percent of open in terest for each category of traders
51.025.21.428.654.681.181.218.918.8
Number of traders in each category (Total traders: 198)
4967134552102124Row 8 - Cell 7 Row 8 - Cell 8

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.