As I forecasted last week, soybeans and corn rose sharply this week. My open positions approached to breakeven.

Soybeans: Paid price 13.1475 VS Last Price this week 13.0925

Corn:Paid price 4.5325 VS Last Price this week 4.405

Soybeans and Corn had been declined continuously after a huge slump at the beginning of October. My lack of knowledge and risk-loving in the futures market resulted in a tremendous returns immediately. As a risk-lover in the beginning of trading game, I insist my own belief ” buy large amount of futures at low price  and sell high price on the basis of my forecast in a short time” in order to pursue a quick returns. After suffering a huge loss, I thought sustainable investment ( Hedging has the smallest risk) is a better method to survive in the competitive futures market

Decision and Prospective  Analysis:

Corn:

Soybeans:

I did not do any transaction  this week because of upward trend in soybeans as I expected last week. It is a good opportunity for me to remain the quantities of soybeans so that I achieve breakeven immediately in the near future. According to Bloomberg news, soybeans and corn will rise persistently on account of improving demand for both futures. This news was a sign to tell me that soybeans and corn may reach to peak in the next week. The harvest of soybeans and corn will be end at Nov. This another sign tell me that those futures will approach to zenith before next harvest season. Therefore, waiting for zenith is only way for me now.

News about Soybeans and Corn:

Soybean, Corn Futures Rise on Improving Demand; Wheat Advances

Portolio Summary from positive to negative:

I enjoyed a 2.25% returns on Sep 27. I think I am a good trader in the trading game. However, I suffered -39.75% returns unpredictably on Oct 1st after unanticipated news posted. I suddenly suffered a trap which induce me hardly to adjust my negative returns situation. Then I continued to encounter -42.04%  returns on Oct 10. I have suffered -22.07% returns on my last week`s portfoilo. This week`s portfoilo begun to rebound slowly (-14.43%). It is a connotation that my portfoilo will achieve breakeven soon becasue of 7.64% increase .

Lessons from this week:

According to “The Art of War” , it said that enemy does not move and I do not move. I think this ancient maxim can be used in the futures market. The fluctuation of futures represents the enemy of speculators which enable us to lose or gain money. If  fluctuation of futures do not change enormously, the method for traders is on standby. When fluctuation of futures, it is a good chance for different traders to gain or loss.

Happy Halloween~

Last week, the tendency of soybeans did not change drastically. My position was still sustained a huge loss in my trading game. The negative returns (red colour number) had lasted for three weeks. Patience is important for me to confront current situtation becuase soybeans will reach peak in the following weeks theoretically.

Decision and Analysis:

As a speculator, I always expected price of soybeans to be rapidly gone up  after taking a long position in order to achieve margin. However,The the unanticipated and weather news enable soybeans to deviate from my predict. For weather news, cold and wet weather in central areas of the U.S resulted in the rise of soybean futures. Basing on the weather news, I can expect that soybeans will increase immediately . As news expecting, the price of soybean futures increased sharply from  $12.66 to $13.00.  The  price of soybean was under observation till Oct 17 morning,however, there is no forebode of slump in soybean futures market.As a result, I decided to purchase 1 soybean futures contract for Nov 13 position. The soybeans fallen back to $12.91 immediately after unanticipated news posted . The news showed that china would import the more soybeans from U.S.  Therefore, I made a small loss immediately from soybean futures because of slow decision-making. I could not take lots of actions after I purchased too many soybean futures contracts. I expected soybeans to have an increasing trend with good unanticipated news next week so that I can survive from my big loss.

Soybeans News Link:

Weather News:http://www.bloomberg.com/news/2013-10-16/corn-swings-as-investors-weigh-drier-outlook-for-midwest-crops.html

Unanticipated News:http://www.bloomberg.com/news/2013-10-17/corn-swings-on-u-s-harvest-outlook-as-rain-aids-south-america.html

Portfoilo Summary:

I have suffered -42.24% returns on my last week`s portfoilo. This week`s portfoilo begun to rebound slowly (-19.24%). It is a connotation that my portfoilo will achieve breakeven soon becasue of 23% increase .

Lessons from this week:

1. The the unanticipated news have deeply influence on futures than weather news, so we should make a decision on futures immediately.
2. Short hedging is a good method to get out of risk if you are risk-netural trader.
3. “ Do not be penning-wise and pound foolish” .This idiom reveals that purchasing too many contracts at a time is a terrible action becuase trader is difficult to adjust next strategies flexibly.

Good luck and look forward to my long-term investment in next week.

My portfolio`s open positions :

Last Week:

VS

This Week:

I compared last week`s  with this week`s position. I found that Corn and soybeans slumped continuously. My portofilo`s return is negative. My loss has been exceeded 40000 dollars.

New Knowledge from FRE 501 Class about Futures Market:

Basis：

The definition of basis is equal to the cash price minus the futures price. In the trading game, I can find some data about basis for different month futures contracts to predict prospective trend of futures. It is better for me to choose a potential futures which will rise.

My perspective analysis about Soybeans and Corns:

Soybeans:

With excess supply of soybeans from huge harvest, soybeans continued to stay bottom. It approached to hit 19-month low. I think this is an opportunity to short and cover soybeans futures as a short-term investment. Nevertheless, upcoming rain weather which will slow harvest would have a chance to save downturn of soybeans. Soybeans start to be dramatically rebounded on Oct 8. With rainy season continuosly, I predicted that soybeans will boom in the future. Furthermore,the harvest of soybeans will be ended at November according to seasonal reason. The difference between supply and demand of soybeans will cause shortage(Supply>Demand).  This condition will push soybeans to be jumped sharply in the November.Therefore, I would not do any transaction on soybeans now in order to pursue high returns in the future.

News Link about Soybeans: Soybeans Futures

Corns:

The tendency of corn was almost the same as soybeans, but corn slid to three-year low. So corn decreased continuously in whole week. The harvest of corn will also ended at Nov. I felt that corn to ascended in the  November because of shortage of corn.  So I did not sell the corn immediately to reduce my loss immediately. I decided to do a long-term investment on corn.

News Link about Corn:Corn Futures

Tendency of my portfoilo:

There is little increase  from Oct 1 to Oct 4 in my portfoilo.  However, my portfoilo has approached to hit 1-month bottom again.  I expected my portfoilo to be beakeven in the future.

What I learned from this week: 

1. Pursuing high returns always bring high risk.
2. New knowledge about future market is necessary. It can help you to make a proper decision to achieve the profit.
3. Pay more attention in the long-term investment.

Good luck and look forward to my long-term investment in next week.

Bitter Experience from this week`s Trade:

The beginning of this week:

Soybeans and corn futures had expectant trend through last week. Corn and Soybeans had a fluctuation with a narrow range (small increase and decrease during this period). As I mentioned last week, wheat had a prospective analysis on trend which means that wheat would rise sharply this week because of large export from US to other countries. So I made a decision (purchased 10 wheat contracts) on Sep 30 in order to gain the quick returns. The result from this short-term investment was gratifying ( I gained 2250 margins).

Tremendous Change in the mid-week:

After gained profit from wheat transaction,I planned to proceed with several of short-term investment in wheat and corn. In addition, I expected my long-term investment in soybean to steadily rise at  October . When I woke up on Oct 1, soybeans and corn`s positions turned into red which means that I suffered a huge loss. However, I still looked forward to the growth of soybeans. Because I encountered the same situtaion about soybeans and corn suddenly slump one day), then soybeans and corn rapidly increased. Finally, I sold them immediately and gained roughly $2500 profit from this trade. Sp I thought I should pay more patience on the change of my futures.Unexpectedly, those futures slumped continuously in the following day. I knew the reason why slump in soybeans(Too many Inventories reason) and corn(big harvest reason).My purchasing power became negative so I could not reduce my loss throught trade.

Prospective Analysis about Corn and Soybeans:

Soybeans:

With excess supply of soybeans from huge harvest, soybeans continued to stay bottom. It approached to hit 19-month low. I think this is an opportunity to short and cover soybeans futures as a short-term investment. Nevertheless, upcoming rain weather which will slow harvest would have a chance to save downturn of soybeans. Soybeans start to be dramatically rebounded on Oct 3. With rainy season continuosly, I predicted that soybeans will boom in the future. Furthermore,the harvest of soybeans will be ended at November according to seasonal reason. The difference between supply and demand of soybeans will cause shortage(supply>Demand).  This condition will push soybeans to jump sharply.Therefore, I would not do any transaction on soybeans in order to wait for high returns in the foreseeing.

Corn:

The tendency of corn was almost the same as soybeans, but corn slid to three-year low. So corn decreased continuously in whole week. The harvest of corn will also ended at Nov. I felt that corn to rise in the next week because of low supply. So I did not sell the corn immediately  to reduce my loss immediately. I decided to do a long-term investment on corn.

Trendency of my portfoilo:

There is slump from Sep to Oct in my portfoilo. My portfoilo has hit 1-month bottom. However, the sign of resurgent in my portfoilo is slow. I expected my portfoilo to be beakeven in the future.

What I learned from this week:

1.  I should purchase futures carefully. Do not buy huge amount of futures (greater than 10 contracts) once. Becuase remarkable gain and risk exists simultenously.
2. New knowledge about future market is necessary. I only use the purchase and sell sales. I should learn something about cover and short.
3. Pay more attention to global future market.

Good luck and look forward to my long-term investment in next week.