This week I only trade once in soybeans, luckily, I earned some, not much ,however for me it’s not a bad ending.

Trading &Portfolio

Learned

As you can see, I shorted soybeans and the system executed a limit price for me. Actually which help me earn is not very accurate and confident technical analysis, it’s the GTD limit strategy.  There are two kinds of “stop” and “limit” ways. One is GTD, which means the system can only keep your limit or stop order is that specific trading day. Another is GTC. GTC way can keep your “limit” and “stop” orders continuously until you cancel them. I think GTC order is really important for me because I am pretty sure I’m a not good predictor especially in a short term. I don’t know whether the price will reach the limit or stop points in a day and I ‘m pretty sure that I cannot change my limit or stop points just at the beginning at next trading day. So GTC order is really good thing for “busy” or “lazy” people who couldn’t adjust their strategy as soon as possible.

Moreover, I use moving average lines to forecast the soybeans price. Actually it’s really useful, five minutes moving average told me that the price would go down.  I  shorted  it and succeed.But at the end of this week ,moving average forecast tells a going up trend ,maybe I should go long in the future.

Information also helped me this week.News told me that Brazil’s export will rise which will leads me to get the conclusion of rising supply and bearish of   price. Basically the US Department of Agriculture’s Brasilia bureau pegged at a record 45.0m tonnes its forecast for the South American country’s soybean exports in 2013-14.The forecast – an increase of 2.5m tonnes year on year, according to the bureau – is 2.0m tonnes higher than the official US Department of Agriculture estimate. That’s why I shorted it and apparently this piece of news gives me a correct indication.

Summarize of six weeks

1. Do not trade too much when you are completely fresh this field.
2. It’s not like FX which I can trade almost anytime, I only trade in weekdays during specific hours. Time is definitely important for futures trading.
3. Information is really important , but also really unreliable if I just considered some piece of news as “information”
4. Be careful to use “stop”& “limit” orders, which means you cannot be too ambitious.
5. Hedge is not suitable for speculators like me. Because my goal is not controlling my loss, it is earning money even I do not have physical commodities.
6. GTC stop & limit orders are a lot sweeter than GTD stop & limit orders.

It’s the last week of this game but for sure it’s not a last week for my futures studying and maybe there will more blogs in the future but that depends !

Anyway I might still have a demo account and practice in this market, it’s  a really good learning process.

This week I only did only 2 trades. But there is something to tell

Trade

Buy November 13 soybeans, sell Jan 14 soybeans.

Portfolio  of my trade

Thoughts

1. As you can see, I did not earn some money generally. Differ from last time I try this stratagie(loss some money). The reason might be  the discrepancy of stop price and the open position price is too large . That reminds me to carefully calculate the stop price when setting it. Some times I just feel it should be a little bit more or less than my opening position price but now, I feel that I cannot be such unprofessional or I lose money.
2. This experience let me think the very purpose of “hedge”. Just like what I learned in 501, it’s a strategy to limit loss because traders (farmers, merchants) are unsure about market trend. So if it is purpose, than apparently I success this time. That reality let me feel that maybe “hedge ” is really not for fresh speculators like me . My purpose is not delivery my commodity and unsure my hard year work in field not just wasting of time, my purpose is earning money even I have nothing physical to provide for the real world.

Technical analysis

1. Bar chart

it’s actually the same as candle chart because it provides same information as candle charts.But it’s not friendly as candle .for sometimes you cannot easily get its trend(going up or down) at the first sight.

1. Some technical data

5,20,50… Moving average(Soybeans Nov13) . I think this three numbers or lines are really useful for people who have limited time and knowledge about this market,like us.Well to be honest I think such people shouldn’t show in the market but…we have to and it’s really good chance to learn.

Basically you can use the most simple way to predict prices in future period. Apparently 5 MA is moving faster than other 2. So if I am a really short term trader of several days, I would choose 5 MA to help me making decisions.For example,for Nov 13 soybeans, it really struggled at the end , longers and shorter are fighting with each other because the body of  candles are really small. However the blue 5 MA line predicted a rise in next period for me .So I might still hold my long soybeans contract. It ‘s nothing about some “physical ” news related real world production or weather , it’s all about technical so I think I should be careful.

2.I find it’s really funny that some website will give you simple suggestions about how you behave in a market. Such as follows, should I really believe, absolutely no. Could I do better on technical analysis than them, absolutely no ! I think it’s function is give you beliefs when you make a same decision as it does. The website is  Barchart .

Enjoy the weekend ~

After 4 weeks futures trading ,I ‘m glad to see that my pace of losing money is getting more and  more slowly. I also find if I do not put a lot of energy in it ,it’s really hard to earn ….for me …till now.

Portfolio

Trades

This week I go short for soybeans firstly not because soybeans always have huge changes in it’s price , also because it has good news about its harvest. Weather dents Brazil hopes in corn ,but not for soybeans. Soybeans harvest was forecasted to be 87.6m-89.7m tons, a little higher than the range of 84.7m-89.9m tons made in last month’s initial projections. I thought larger supply will drive the price down. Real prices confirmed my thoughts while I did not earn something because of a stop price, I will talk that later.

I also go short for wheat this week because I think wheat had boomed up for a long time and I predicted it will go down a little bit last week . while it did not go down but not go up for too much.

Important news

EPA says nothing final on ethanol blend; industry group cries foul.

Environmental Protection Agency on Friday sought to calm a furor over its apparent proposal to reduce ethanol use in gasoline next year, saying that no final decisions had been made about the contentious mandate.  EPA documents that showed the agency proposing an unexpected drop in the amount of corn-based ethanol that would be required for blending next year. I think it’s a really important news that will influences many prices of commodities. Firstly , corn plated area will be impact hugely .However the futures price trend will be really vague because it depends on many factors .What kind of commodity will be the substitute of those corns in certain agricultural area. When the supply of biofuel used corns decline, the demand of such corns actually decline either.  It’s really hard to say how will prices of commodities will go.

Lessons

1.Be careful of stop prices

As you can see, I predicted price correctly about soybeans while I did not earn one dollar. Because I’m really afraid of losing , so I set the stop price just 0.03 differences between the original one. And the system just closed my position when market has regular ,non-trend fluctuations. I used to make same fault when trying hedging  last week. So I guess It’s not a hard lesson ,but hard to really learn and act it.

2.Take it easy with fake trades and fake money , take advantage of chances to lose……..

Even though I lost so much and tell myself that just try to do more trades as soon as possible  because it’s all fake! I still think too much when I doing it. I should tell myself : hey , you won’t earn and won’t be rich after one night or several weeks , just be brave to lose then get lessons.

Plus, I love thanksgiving’s long weekend……sunny day ~~~

Well actually I’m satisfied with my performance this week even I’m still on the bottle…Apparently I have not learned how to earn but after the first crushed day of this week , I’ve got the lesson of not losing so much.

As a bottle , I did not lose more….from Tuesday ,maybe it’s a big success for a loser.

Portfolio

this weeks portfolio is still 

Trades of this week

1. Short corn

Lost about 1700 dollars.It’s a bad decision ,and I feel lucky that I remember to set a GTC stop price of it that I did not lose so much.Not a  huge harvest might lead price to go up for a  short term .That’s why my decision failed.

1. Short soybeans

Gain 5000 dollars.Even many news told me that China will import more soybeans which will make the price go up. I noticed that Brazil planned to plant more soybeans in the future which indicated that large supply in a long term.  Those news helped me to earn a little bit but also let me realized different viewpoints were always there. The important thing is not reading ,but choosing.

Interesting try

I did some interesting try this week, it let me lose some money but still opened another door for me .

It’s all because I have been very no confident  about my judges on futures price. I decided to  open two hedge positions at the same time and set two stop losing price at the very beginning.

The idea is if I don’t know which directions prices will go , I will open to contrary positions and two stop losing prices. Then I will at least win at one contract , and control my lose at a certain level on the other contract. I tried this strategy but it did not take me profit . I guess because I set those two stop losing prices  too narrow ,so differences between stop prices with  open positions prices, so the system will close my positions while  the market having regular fluctuation  Maybe a should try a larger discrepancy  next time.

Actually now I’m kind of not that care about my portfolio because there is nothing for me to tell about winning till now. But I think mistakes and new tries are really valuable for a trader holding fake money.

Something unexpected

At the beginning of this week, I really  saw the power of USDA monthly update report. On Monday , big prices changes happened on every item. While I think something will get more vague because the federal government shutdown. So the Oct.11 USDA report may be delayed. Because people are uncertain about the delaying , I expected there will be larger trade volume next week because of closing positions. Speculators may tend to close their positions. For example , wheat has been going up for a long time and there are so many people open long positions for it in this process. I think this trend will end because of many factors ,which I think the important one is  vague future.

Hope I can experience more in next week.