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Bill Luby of VIX and More May 15, 2008 Email this article to a Friend  Printer friendly page

The graphic below says it all – and the official beginning to hurricane season is two weeks from Wednesday.

Given the supply issues with oil and natural gas, even the threat of a hurricane in the Gulf of Mexico is sure to cause considerable consternation. Of course, with all the global warming, this year’s prediction from the folks at Colorado State University is not particularly soothing:

"Based on our latest forecast, the probability of a major hurricane making landfall along the U.S. coastline is 69 percent compared with the last-century average of 52 percent," said Phil Klotzbach of the Colorado State hurricane forecast team. "We are calling for a very active hurricane season this year, but not as active as the 2004 and 2005 seasons."

I’ll have more to say on weather and volatility as we get deeper into the hurricane season.

by Bill Luby (VIX and More )

Disclaimer:

Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests.

Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk.

There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital.