My crystal ball seems to be having some technical difficulties. Who knew predicting the future would be so hard (insert annoyed wink here).
To illustrate why I feel that the futures market is a tough nut to crack, I have created this table to summarize my week long trading pain. As you can see, everything I have shorted has gone up and everything I have bought has gone down. My portfolio performance this week has been dismal and seems to be getting only worse. At this time I am down 14% percent, oh wait, I just checked again, make that 15%. Thank god I’ll have an eduction to fall back because this trading gig isn’t really working out!
Lessons Learned the Hard Way
The main takeaway from this week’s trading is that I seem to have an easy time getting into relationships, and much harder time getting out of them, but as it turns out in the world of futures trading: it’s all about the quickie.
Most of my positions actually started out okay, but I was too passive and never closed out any positions. You need to get out while the going is good (not that it was ever that good). I am in the long painful breakup stage. We’re dividing our stuff up and deciding who gets to keep the cat.
Post Break-up Analysis
Corn: Can We Still Be Friends?
Monday at 11am the USDA releases its much anticipated Quarterly Stock Report which will quantify old crop ending stocks, new crop beginning stocks and overall market demand. I am thinking that corn will remain quite low, and this position would be supported by a bearish report. Considering it is the harvest season and production is expected to be one of the largest on record, I am hoping that the price won’t rally much this week unless there are some big surprises in the USDA report. There is talk of a double bottom in corn, meaning the report could send prices up for a short time and before they adjust down to the their current lows. This makes me nervous given my poor predictive capabilities and my inclination to go short next week.
Wheat: A Little Something On The Side
I also have a bit of wheat in my portfolio. I shorted 5 contracts for Mar 14, but unfortunately the price has gone up not down to a tune of .256. The market was at a low and it looks like I got in when the bottom trend was reversing. I am going to get out and take the opposite position this week as there is talk of lowered harvest in Argentina due to freezing and rumors that the USDA report will lower its production numbers. I’m thinking of going for a full reversal on my position here as well.
Soybean Oil: The One Night Stand
I did dabble in soybean oil. It lasted 5 days. I am happy to say that is it over, and not so happy to say that it cost me dearly. Again, I bet the wrong way. Soybean Oil was trending down to record lows, mostly as a result of record crops in Brazil and the US (the main producers), I thought maybe it would reverse, but alas, it did not. I bowed out gracefully and will be spending my remaining free time with Wheat and Corn. Multiple relationships are too hard to maintain.
Play on Players
Next week I will trade early and trade often and try to take it slow, buying only a few contracts at at time (no more betting the house). Last week I was feeling flush with fake money which made me buy more units than my risk profile usually would and has been responsible for my large losses. I am now officially a commitment phobe with my eyes set on becoming a player. In the words of Blackstreet: Play on players.
Harmony, this is PERFECT! Totally hilarious, and also very true- I feel strangely attached to my three soy contracts, despite the fact that they’ve given me nothing but pain. I don’t want to sell them! I am attached, and hopeful, and I BELIEVE in their potential to make me money! Definitely some commitment issues here!!
I think I giggled all the way through this Harmony! I totally had a one-night (or should I say ‘afternoon delight’ with soybeans this week too). I think my dally was a little kinder on my hip-pocket though! I hope we can still be friends?
Let me know who gets to keep the cat!