The Rural Voice, 1981-10, Page 14Playing the markets
Business grad John Feeney, 22, spends
90 hours a week working with the markets
by Joanne Rimmer
He had $1400 in September. By next
July he had $22,000. But four weeks later
he was $15,000 in the red.
Today 22 -year-old John Feeney figures
he has recouped that loss and is "about
par" in the commodities market.
"There's big bucks to be made in the
market and big bucks to be lost." His
startling turnover occurred when he was
in first year at Wilfrid Laurier University.
Now a business grad, Feeney feels his
three years' experience in the stock
market give him enough knowledge to go
above par and start making money.
But that doesn't mean he'll stop
learning just because he's out of school.
Feeney spends close to 90 hours per week
working with the market. When he's not
trading, he's studying history charts or
reading market literature. he s been to
conventions, read biographies of success-
ful people and has talked to lots of traders.
The most important thing he has
learned in all this is "the only way to be
successful in lite I11arKet place W lu ue,LSc
a trading system; a clear cut, undiscre-
tional plan with definite buy and sell
signals." With this in mind, Feeney has
created his own trading system to reduce
losses while maximizing profits.
"Back then I was a greenhorn; playing
day by day with no clear-cut strategy. It's
called management by crisis." he ex-
plained. This situation has been reme-
died.
"Trend" is the key to Feeney's trading
system. "Everyone who plays the market
is searching for trend but few people can
get a handle on it." For his purposes,
Feeney has defined trend as the up or
down tendency of the market by analyzing
the time frame of price. Cyclic al analysis
only analyzes time, (for example a period
of seven years) but the time frame of price
takes both time and numbers into account.
"Trend is further divided between the
major, intermediate and minor trends."
The minor
trend, the first indication of the direction
of a particular commodity, suggests the
timing of each trade. The intermediate
trend prompts Feeney to take a position in
the market by making a trade, and the
major trend affirms the intermediate
trend so that Feeney increases his trading.
With each purchase, however, Feeney
places a protective sell -stop order under
that day's lowest price. The sell -stop order
commands his broker to sell the commod-
ity as soon as the price hits a particular
level. This is how he minimizes his losses.
"So far that stop has never been hit in
about 70 per cent of the cases."
This example, Feeney explains, is valid
in a "bull" market. A trader who is
considered "bullish" expects prices to
rise. However money can be made if
prices fall and Feeney considers it wise to
participate in this market trend as well.
This kind of trader is referred to as a
"bear". The trader might sell a commod-
ity at a high price, then buy it back when
it's at the lowest price, thus making a
reasonable profit. In this case, Feeney
would put a protective buy order slightly
above the price at which he sold the
co mmodity.
"Farmers tend to be bullish." Feeney
commented. Most people tend to be
bullish, he explained, for it is natural to
want prices to rise when dealing in the
market. "The farmers love to see prices go
up because they have 100 acres out back
and if prices rise they're winners all
around." To be a bear "seems unnatur-
al"
Many farmers in this area practice
hedging, by selling their crops when the
prices are hopefully at their highest, then
delivering the product at harvest -time.
Feeney suggests farmers go one step
further. Sell when prices are high in the
spring, but if the prices drop during the
summer, buy the•commodity at a low price
and sell again when prices rise. This is a
"bearish" practice.
Feeney's interest in the commodity
market started in the farming community
when he way working with his brother-in-
law, Donald Nott, on his farm. He
observed Nott and his associates, mostly
farmers, struggling with the commodity
markets. After this exposure to the
market, Feeney developed a strong
interest in it, and he played and
researched the market through his four
years of university. He now has an office in
the Nott home and devotes all his time to
the market. He feels to be successful in the
PG. 12 THE RURAL VOICE/OCTOBER 1981