Check out here below how the forecast model worked in the previous four years!
There is no reason to explain anything; the 2014 Cotton Forecast Model was just perfect.
The 2015 was not an easy year; you see how many choppy movements we had to deal with! But still, as I said before, the Model was able to forecast the main trend of the year.
The 2016 Cotton Forecast Model was able to forecast the main trend of the year, but we had probably some troubles in July due to a strong fast up push, lasting just 3 days. The dots blue line tries to simplify the model, showing how the main trend was the real one we had to follow, and even if we had to suffer in July, with patience we could make very good profits! A constant uptrend started in February as suggested by the forecast, and even if we were about to close the position at the beginning of July, it was a great trade anyway. We cannot trade every swing buying at the Low and selling at the Top!
The forecast was good until June, when Cotton was to a make or break point: the PFS (the Polarity Factor System forecast model) was about to push to new Highs, but Futures broke the support of the previous days, beginning a strong fall. In the Update of April 20, we said: “If something goes wrong, we need a level to protect our position and remain FLAT, this is at 75.70: a consolidation under it can be a dangerous signal”. The down acceleration under 75.70 is evident in the July Contract; we had to close any LONG position under it:
With the December Contract, we simply said that we were expecting
weakness, and we said to use the level 72.00, always SHORT under it with
STOP above it, or waiting for a movement below 66.40, which has not
happened. Unfortunately, the last months have been quite boring, because
Cotton remained choppy around the same levels. We saw a strong up push
between August/September, but that was the Irma Hurricane effect, indeed
Cotton moved back again, as we were expecting.
In July, we said Cotton had a very important level at 75.80, and the Irma Hurricane effect pushed Cotton to a High at 75.75. We are working with great levels, and for a trading purpose, these are even more important than any forecast.
The up push of the last days, in the December Contract, moved Cotton above 72, which is very important, and we can follow any uptrend above it with stop under it. We are expecting higher levels from 72, in December.
I will never stop saying this: the price map is very important to plan a trading strategy.
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