If week 1 was about where I went right, Week 2 is about how I did wrong (my equity balance is now $38046.8, down more than $1000!).
One of my mistakes came with misunderstanding when I could put in a trade. I thought that trades could go through when markets open and when markets close. I was wrong and it cost me. Basically I closed my trade too late.
I thought I could make a quick buck by going short on Dec 2012 wheat to capitalize on the price drop before the release of the USDA crop report on Friday, September 28, 2012. Reading an article earlier in the week about a large domestic stockpile and low export demand (http://www.brecorder.com/markets/commodities/america/81579-us-wheat-stocks-to-grow-on-big-crop-poor-exports-.html) made me feel confident that I could go short early in the week and close it before the release of the report. Made sense right? Prices were going down the whole week. At one point during this week I made more than $600 on the two trades I put in. I was doing great.
However, I forgot to close the trade on Thursday. By the time I tried to close it the market was closed and it went through Friday’s end. By that time the crop report was released, indicating that stocks were lower than last year’s harvest, and prices (as expected) rose. Loss taken.
If I was able to execute my plan correctly I would’ve closed the short position on Thursday and go long at the same time to take advantage of the low price (and just close as prices would continue to rise).
Read part two of week two to see how I plan to rebound from the debacle.