This week, I found a website called barchart.com. Although I have the first half of the term (and some very valuable trading experience) behind me, I still need lots of explanations for how the markets work in order to verify my line of thought. Barchart was therefore a great discovery, because not only did it provide brief explanations for the daily changes in prices, but one article in particular helped clear the air on how weather reports should be analyzed. It is called “Watch Out! It is Raining in South America” by Chris Lehner of Archer Financial Services. He tells his readers to be more realistic about interpreting weather information by going back to a basic understanding of harvest seasons in the northern and southern hemispheres. Instead, he expects that there will be more “bouncing of grain markets due to changes and rumors about weather than a basketball during an NBA playoff game.” http://www.barchart.com/headlines/story.php?id=7178068
I think the article could make for a good read for anyone looking for a summary or refresher of Jim’s notes on futures trading so far because the article helps to tie the theory of daily price volatility and spread positions into the current state of the market.
Another link called “Futures 101” might also be useful for anyone needing to brush up on the theory. http://acs.barchart.com/sample/support/fut101.htm#buying
2 replies on “Week 6: Cool Source of Information”
Hi, Ishrat!
Indeed, it is cool source of information, thanks for sharing.
You are right, there are applied explanations of a commodity market. Especially, I do like an explanation on price movements in a section “How Volatile are Grain Markets?” because I thought there was a significant price volatility in a grain market in last two months, but it was not, indeed. The author made a right point by saying that with extreme volatility and daily and weekly up and down price movements, the traders usually end up looking at the current market and somehow to predict the future market movements.
Furthermore, the author’s explanation of spread is comprehensive since the spread is a great tool when one does not know how to predict the market. The last week I had the same confusion since it is said that the stock is estimated relatively low for grains and a plentiful harvest of soybeans is expected in south hemisphere; therefore, by going spread I could somehow avoid the loss.
I really enjoyed reading. Good luck on trading!
See you tomorrow!
I’m a big fan of bar chart, too! Hope it works well for your strategy.