First of all, I really want to say thank you to my classmates who kept listening to my concerns and helped me out with the housing problems that I faced. If I did not get support from you guys, I think I would still feel depress by now. Fortunately, the housing problems are all settled and everything has gone back to normal. Thank you so so much guys!!!
Since I lost large amount of money last week, I decided to offset all of my contracts at the beginning of this week if the trend of price still kept decreasing. I knew that I would lose money since I was taking long position all the time for the contracts, but I really wanted to get started again. Just like the last time I said, how about just let it lose and get it back later? I will not give up…
Sep 26, 2011
Since the news from Saturday and Sunday is very limited, I did not want to take risk to take long or short position when there was no information provided, so my margin balance on Sep 26 is:
Corn (did not bid): (-3)*(638.4-648)*50=1440
Soybean (did not bid): (-1)*(1258-1259.6)*50=80
Margin Balance=12360+1440+80=13880
Sep 27, 2011
It looked like the price trend went up a little bit by today, but gradually decreased after that. To prevent further decreasing in price, I decided to offset my corn and soybean.
Corn (3 short position, offset): (3)*(649-648)*50=150
Soybean (1 short position, offset): (1)*(1260-1259.6)*50=20
Margin Balance=13880+150+20=14050
Sep 28, 2011
Since I did not have time to summarize the news today, I only looked at the price trends. The price of corn seems like going up a little bit by today, so I was hoping that it would continuously go up a little bit by tomorrow to make a small amount of money. So I decided to take a long position to try it out.
Corn (1 long position): (-1)*(645-630.6)*50=-720
Margin Balance=14050-720=13330
Sep 29, 2011
According to the news, Brazil was threatened by La Nina, which would cause the production of soybean to decrease. If its production of soybean decreases, the price would increase. Farmers would like to increase selling their soybean to Brazil at a higher price instead of selling to the U.S, and importers would like to import from the U.S since the price of soybean is relatively lower than Brazil. As a result, the domestic supply of soybean would decrease in the U.S and the price of soybean would go up. So I should decide to go long on soybean.
I thought this was the main factor to affect the price on Sep 29 since Brazil is the second largest exporter of soybean in the world. If its production was threatened by weather or other factors, it would have effects on the price of soybean. And I think my analysis was correct on this day since the price of soybean really went up on Sep 29.
However, since I drew a wrong diagram when I was doing my decision, which made me think that the price was going down. Instead of going long, I accidentally went short. Fortunately, I did not successfully sold out since the selling price that I bid was too high.
Corn (1 long position, want to offset, but did not success): (-1)*(630.6-632.4)*50=90
Soybean (3 short position, but did not success)
Margin Balance: 13330+90=13420
Sep 30, 2011
Almost all of the news that I read yesterday indicated that the price of soybean and wheat would increase by today:
-China increased its imports of soybean from the U.S
-Drought weather delayed the planting of wheat, and U.S was facing stress of cropping of wheat
-Website of Bloomberg and dairy herd all predicted that the price of wheat and soybean would increase by today…
However, when I woke up this morning and check the prices, they all went down SHARPLY!!!…
Corn (did not bid, so did not offset): (-1)*(632.4-592.4)*50=-2000
Soybean (2 long position): (-2)*(1215-1179)*50=-3600
Wheat (3 long position): (-3)*(637-609.2)*50=-4170
Margin Balance: 13420-2000-3600-4170=3650
T^T…T^T…T^T…
Continuously losing money…so I think I really have to find out the reason why I lost again…and also, although the closing prices have not shown by now, I am quite sure that my profits would be quite negative by the end of this week…
Lessons that I learned at the end of the week: don’t be afraid of losing money, and don’t be afraid of losing money again. Be afraid of losing money again and again…
Hi Yan! So what is your balance as of now? I lost a lot of money too this week, lost all that I gained from the past 2 weeks. Terrible! Anyway, I like your analysis on the Soybean market. Unfortunately this week no matter how much we’ve tried to predict the market nothing seems to be accurate!
Let’s hope next week will be a better week… See you next week! Working with u for the next round of cases for 515 🙂
Hey Janelle, thank you for your comments!~now my balance is 3650…lost almost $10000 in one day!!!~i think a lot of people would be depressed by the price since almost all the factors that i read yesterday on the news are showing that the prices are going up…how come?!!!
yes i totally agreed with you since the price this week is really unpredictable…and i dont know wat i can do about it…
Sure just let us work on it together next week~~~i think we would have a lot of chance to talk abt it:)
Hi Yan,
I lost big this week. It seems like your strategy is mainly based on the news just like me. It is really hard to find out how the news is going to affect the price, I think. Zheng mentioned investors like us should aim at long term and I think he’s right. I hope we can recover our loss next week!
Yijeong
Hi Yijeong~~~yes it is really hard to earn profits according to the news since I think most of them are rumour…LOL…
and I think you are right, we could focus on the long term to see what happen~so…maybe just let us focus on the analysis first…I think I really learn a lot from doing analysis about the news even though it is not very useful for earning profits~~~and then we could earn the profits back after doing a lot of analysis!~I think in this way, we could gain more than what the profits will give to us:)
Anyway, good luck for your biddings next week!!!
hi yan, your calculation is so clear!! thank you for your blog!haha
Hi Zoe, thank you very much for your comments~~~and good luck for your biddings next week!~
Hi Yan,
I am happy that you found a place to live and it is all settled now! I agree with Janelle, your strategy explanation of your bids for soybeans were presented very clear and logical. I think this is exactly how Jim would like us to bid each week.
Wow you have lost a lot of money! Remember to be patient and hopefully you wont be in the red any longer!
Ellie
Hi Ellie,
I just replied to you but I don’t know it does not show on my screenT^T…
Thank you very much for you comments!~and I really want to say thank you for understanding my situation and about the meeting last week:)
Yes I think analysis is more important for us at this moment, and sometimes there are just too many factors for us to consider when we are bidding…so maybe just let us forget about the profits and focus on the analysis…I think maybe we can find out more and learn more from the analysis, and we will not be in the red any more^^
Good luck for your biddings next week!!!~
Yan yan~~~~~~~~~I also wanna cry! I actually bade short for soybeans at pretty nice price and I thought the market would still go up for several days although the maginitude was not that big. So I waited till Thursday night to bid because of the positive news on the demand side. But I totally wrong! The market never listened to its master, it just collapsed as it wanted! The result comes out that I set the price too high to escape. So now I still have one long for each…and……….only left one thousand………let’s hug and cry!TUT~~~
Tasha, yes I think the news on last Thursday really confused most of us…and I think they are all rumours…aii…
I think you start earning back your money from yesterday right?It is a very good news!!!~so just let us forget about the past events, do more analysis and enjoy it~~~
Also, good luck again for your biddings next week:)
Huge lost of this week may only because of the last day. It may not be a long term thing, let’s expect the Monday’s result. High risk also means the high profitability. Or maybe you should try clear yourself from the market for a while and take a look.
Hi Lixi, yes you are right, I should be more clear about the market before bidding~~~so from this week, I did not bid that aggressive anymore, and I want to try to do more analysis about the market and I really enjoy it~although I still lost a lot from analyzing the news, but I think in a longer term, I could be more clear about the market and about the factors which affect the price most~
Also, I want to say thank you for your suggestion about looking at the MACD. I think looking at a longer term, the MACD really tells us a lot~~~
Good luck for your biddings next week!~:)
Hey yan!happy for u that ur house pb has been settled!its more convenient to live on campus!!
Thx for sharing ur analysis on soybean!much easier to understand compared to the news online!!!
My question is which trend chart u usually to check?like before i bid,i usually check CME,but its just the late old trend,which wont show todays trend..and i dont think i can predict price from yesterday trend,since price can be up and down in one day!!!so could you share some useful analysis on how to predict price based on chart?thaxxxx!
BTW thanks for comment on my blog,but i hvnt found it….anyways!thx 🙂
Hi Fancy, thank you very much for your comments!~I think the comments from you guys of my analysis really inspired me a lot !!!~
I usually look at the trend from cmegroup and commodity futures price chart (the one that Jim gave us). But for the last few weeks, my bidding of long or short are mostly based on the news online~that’s the reason why I lost a lot from reading the news only. You could take a look at the commodity futures price chart and indexes in it, especially MACD since it will tell us more about the price trends.
About estimating the price: if I am going to offset a long contract, I will usually bid at a price higher or equal to the closing price from yesterday to offset; if I am going to offset a short contract, I will usually bid at a price lower or equal the closing price from yesterday. And I will estimate the price using the high and low price from the last few days to see how much they change if I am going to take a position or offset a position. For example, if I am going to take a long position, and the low price from the last few days did not increase more than 8 cents, I will bid at a price use the low price from yesterday to plus 9 or 10 cents to buy in; if I am going to take a short position, and the high price from the last few days did not decrease more than 7 cents, I will bid at a price use the high price from yesterday to minus 8 or 9 cents to sell out…but sometimes, the price changes more than I expected…but this is the strategy for me to guess the price.
You could take a look at them whether they work…but I did lose a lot from the last two weeks so maybe you should not follow me;P…
Your trading strategy on the 29th was very sophisticated. Keep up the good work. To build on this might I suggest looking at the main countries that import their soybeans from the US and the Brazil? If you look for news in these countries (specifically their import demands) you might be able to refine your strategy even further. The demand group posted a google.doc that might help you out in this regard. But then again I ate a $25k loss in a day, so maybe you shouldn’t take advice from me =)
Hi Nick, thank you very much for your comments!~
I did read some news about the demand side of the soybean and corn this week, but it seems like they cannot affect the price as we expect that they will do>”<...(hope this will not hurt you cuz it is only upon my own analysis)... Even your loss are greater than me, but I think your suggestion really helps since I think I could develop my analysis further to take consideration about the demand side~since now the economy is very affected by the Euro Debt crisis, but after the crisis is settled later, demand will be a very important factor to look at...so just let us forget about the profits and do more analysis. Good luck for your biddings next week!
your calculations are very clear and helpful! I also predicted that the prices would increase by the end of the week, but apparently they have dropped quite a bit!!
Hi Lisa, thank you very much for your comments!~yea I think most of us are confused by the news from last Thursday, and the price became predictable upon the news…>”<... But I think you still maintain a good profit!!!~I think I really have to learn the strategies from you! Wish that you could keep up your good work and good luck for your biddings next week:)~
nice blogg yann! I think most of us aren’t frustrated because of losing money (well maybe a little) but because the facts that we get inline don’t seem to correspond to what is happening with the prices in the market. In many occasions, we become sure that this will happen, but the total opposite happens. I guess this is why we have this game, and yes, don’t be afraid of losing money! We should be happy that we have this simulated game with fake money, so we can afford to lose! But at the same time we learn! So, like i said on fancy’s blog, just go for it and see what happens! i think the person with the most money at the end of the term should treat us to dinner with REAL money LOL
thanks for sharing =)
Hi Caroline, thank you very much for your comments!!!~
I really feel nice to talk to you since most of our feelings are the same about the trading game, and I think we earn and learn more than the profits could give to us. Yes the market really treated us totally the way opposite when we suppose something will happen, and the factors that we consider seems like not important when they should be…aii…so just let us go for it and see what happens (I really like this sentence)!!!and let us look forward to the “free dinner” at the end of the term…LOL…
Hi Yan!
taking a look at trends can be useful, but sometimes it is misleading, like last week. I had a same problem and I think we should decrease the importance of trends in our minds and judge based on information and news. Looking at trends is something like cheating. However, we lost lots of money because of that cheating. 😉
Good luck in your next week trend
Haha Hossein, it is so funny when you said that “looking at trends is something like cheating. However, we lost lots of money because of that cheating”…LOL…
I know that gathering information from the news are very important, but why I was always confused by them?I usually mislead by the information online and I think sometimes they are all rumoursT^T…so that’s why I switch to look at the price trend when I decided to take positions…
How did you usually gather and select information from the websites? Since I think it is just too much information…:(
Your questions are very generic and also complicated. I can just say we should find some reliable source for news and information. Probably There are some famous analysts and news agencies that we can trust in. However, Experienced trader can distinguish rumours and real news easily. But I don’t think that there is a theory or a certain way to find reliable information.
The power of recognizing authentic source is privilege of a successful trader. If it were easy, all traders were rich.