So, for one of the new resources that I have been looking at is a site that shows historical prices of the commodities that we are trading. In a sense, it gives you a nice general overview of each commodity and shows some nice trends that occur year to year and a general cycle in prices. For example, looking at Soybeans in October you will recognize that there tends to be a nice rebound in prices near the beginning of the month. I have not necessarily been able to look at them all, but I am sure some of you could find a great use for this resource. I’m also sure that if you are starting to look into technical analysis that this would be a good way to start looking at the different patterns that have occured in the various commodities.

http://futures.tradingcharts.com/menu.html

It’s Game 1 of the 2010 NBA Finals between the L.A Lakers and the Boston Celtics. I don’t see a need to close my bet and am 99.9% sure that I will take all of the winnings. I get greedy and I lose big.

The theme of this week’s post is: “Don’t Get Greedy.” After the huge gains of the past two weeks I was hit with a significant drop off with losses. Last week, I finished with large gains and reported them at their peak. However, instead of closing my positions right away, I felt that I should stick with the long position that I was holding in all three commodities due to the fact that there were such huge gains on the Friday before. Instead, they saw a slight fall (on aggregate) and thus a slight fall in my overall equity balance. Simply put, I got greedy. I saw huge gains that were beyond my expectations and I still wanted more. I have learned my lesson and will from now on seek to set limits on all of my trades. It was mostly in soybeans where I saw my biggest losses and this came from something less based on commodities trading and more from general trading. My main source Arlan Suderman (@ArlanFF101) stated that the significant fall came from a number funds (mutual and hedge) liquidating their positions in the soybean market. In an economic sense, this is a bunch of people lowering their demand for the product and attempting to sell it as much as possible thus dropping price. I was hit hard by this and it showed through price falling approximately 40 on Monday. This type of trading is usually a bit easier to predict in other markets such as in bonds where mutual funds that are run by banks often have a requirement to only hold bonds in firms that have a specific rating. So, once these bonds fall below the rating, we see huge sales of that firm’s bonds. I do not have a strong background in commodities, but my guess is that these funds were seeking to liquidate their positions in the soybean market due to it being approximately being 1 month away from the delivery of the November contracts.

Now, if any of you are interested, in how I came up with my rule of “Don’t Get Greedy” from my times in sports betting, then ask me about it!

https://twitter.com/ArlanFF101/status/252779027864121344