Strategy WK3

After the huge collapse and sustain decrease in all this three categories’ market from  Sep. 6th, we finally reaching the “Adjustment Phase” during this week.

Even all the Wiki Exports indicated a bearish in grain future market in the short run, I personally believe that, prices may stay steady during this week, Since the USDA Grain Stocks report will come out on the end of this week (Sep. 30), people may prefer play safety before that.

From Technical point of view, it is obviously that all of Corn Soybean and Wheat is around the oversold situation, which means price must back up in the long term. However, we cannot deny that both Soybean and Corn is still in the Drop Channel. For Wheat, combine the former MACD and KDJ chart with Relative Strength Index, I personally believed that wheat has already get rid of the Drop trend and probably going up at the end of this week.

For Monday:

Finally successfully went 2 short in Wheat @ 634 to stop bleeding.  Holding another 2 long contract and waiting for the price back up.

Still holding nothing in Corn, took a break and look.

For Tuesday: 

Decided to get into the Corn market again because according to the chart, downward trend is being clear.

Corn      -3      @ 646

For Wednesday:

Tried to offset in Corn and Soybean and went long, but unfortunately didn’t enter the market by 0.15 higher than “today’s highest”.

Corn      5      @    650.75

Soybean      3       @    1262

Wheat        -1      @      643

For Thursday:

Miss the daily Due Time!!  @ @   Lost control in Time Management. Forcing myself accept the mistake by not to change the bid form after 0:00 a.m. Another kind of learning experience!

For Friday:

To play safety, offset part of Corn. Realize that Soybean is still in the middle of Drop Channel, also wheat’s upward trend showed clearly in chart.

Corn     1      @ 636

Soybean      -2       @ 1231

Wheat       2       @ 667

Benefit Calculation: 

In case that I cannot be home before midnight Friday (Since I am going my first visit to Victoria *\(^o^)/*), I am posting the Calculation part without Friday’s. I’ll stick it on right after I back home!

Final Balance Calculate Update:

Lost a huge profit since I typed wrong number in Soybean contract by -2, which is suppose to be 2. @ @

Hope you guys have a great weekend! Good Luck for next week!!

I believe this week is gonna be a very tough week for me since I changed my strategy for a little bit. I found that we can always learn more by trading day by day then I decided to have a short-term trading strategy, which maybe exhausted but fun! In case I probably gonna forget what my daily strategy is when Friday’s coming, I am writing it day by day just to explain (especially to myself) why I did this… (*_*)

Pls let me know if you think my strategy is heading to a wrong direction. Thank you all for taking time to point it out.

Monday (Bid @ 21:00, Sunday)

I did a long position for 1 both in Corn and Soybean. I was thinking of playing safety, since I entered the mkt at the very first day at a price of 719 for Corn and 1382.2 for Soybean, I thought it seems like a right time to offset a little bit. Then I sold Corn @ 693 and Soybean @ 1356.

I actually made a mistake by the price since I should set a lower price when I am doing a long position. It’s already too late when I realize it. However, it is the main reason I can changing my safe strategy a little bit since I do wanna fix this lost by the future action.

BTW, I also tried to get a short in wheat @ a pretty high price, like gambling, anyhow I failed by a price of 698, which is around 7 dollars higher than the daily highest.

Tuesday (Bid @ 23:59, Monday – the very last minute, submit in hurry)

Today’s strategy is more complicated, or should I say I’m putting myself into dangerous.

From all the resources I got, as well as Wiki MFRE and friends Twitter, they all showed the grains commodity price is going down.

For now I just realize that it doesn’t means we have always to did a long position when trends up, or short when trends down. All your actions are depending on your OWN strategy. This is probably the most significant thing I learn for now…

You can still earn money even a huge amount of money when you are in a difficult position, which makes the future trading different from Stock market, also much more interesting!!!

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My situation is, Since the day I got -3 wheat @ 695, the price of wheat keep falling down. I actually set myself a “stop loss price” @ 680, but by the day price did lower than it, I just so hesitate to cut it.

I then changed my situation, I did another long position in wheat @ 672.25, even I am not sure if I can make it succeed or not, the reason I did this only because I wanna sell 2 or three of them (I got long 4 in total) by the day after around a higher price, to somehow partially less the lost in wheat.

By the time I act dangerous in wheat, I tried a safety strategy in corn. Did a long position @ 693 to offset all corns, protect the profit I already got.

To Soybean, 2 more short @ a pretty high price – 1363, hope I can enter the market with a reeeeally good luck!

Wednesday (Bid @ 22:00, Tuesday) 

Summary for Tuesday,

• Failed to getting into Soybean market since I bid a really high price in short position. But because of 1363 is my ideal price for soybean for this turn, also the soybean price probably going down, I am not going to change it, just to bid for another day.
• Corn’s closing price a little bit lower than what I bid, but only for playing it conservatively, I still satisfied by what I did.
• Wheat strategy a little complicated since I already lost lots of money in wheat. Went long @ the price of 672.25, earn a little bit by the end of day, gonna sell it the day after, hopefully at a nice price.

I. INTRODUCTION

At the very beginning of starting this Commodity Future Trading game, I was trying to figure out what the rule is and what should I do with a messy. After the first round, things get better and I do realize that the trading game is a very effective way making us understand what’s going on in the real commodity market, also who contribute the most significant impact these days.

Thanks Jim for providing this opportunity to us. Also, thanks a lot to our dear classmates for helping me out of so many questions.

II. Personal Strategy

Before the officially start of the game, I searched the internet for the information about wheat, corn and soybean, decided to enter the market with a short position in corn and soybean, long position in wheat.

For wheat, according to OHLC chart about 9 Sep and 12 Sep，2011, daily lowest price is higher than the day before, in that case I believed that wheat is having a upward trend. But the fact is, which also be proved by market few days later, that the general trend of wheat is still downward.

For Corn and Soybean：The downward trend is obvious in short trend, but for now, personally believed that the next lowest price won’t be lower than 680 in corn.

1st-day bid:

Corn:   2     bid price 719.4  closing price 724.2

Soybean:   2   bid price 1382.2  closing price  1382.6

wheat:   -3   bid price 695   closing price 704.4

I was trying to get into the market with short in corn and soybean, long in wheat. Unfortunately fail in wheat. Even the increasing price of both corn and soybean lead to a loss of my profit, I still have confidence in downward trend of this two. Also, the upward trend of wheat encouraged me to have long in wheat and try to get it the day after.

2nd-day bid:

Both corn and soybean trend back to downward and profit seems getting better, while I found the general downward trend of wheat but I’m already late. With a profit lost in wheat market, I decided to hold it for a while until the price back to 697 or down to 685 – in which situation I have to make a decision to sell them out with blooding in case the lost getting too severe.

III. Margin Profit Calculation

IV. Next Week Forecast.

1. Stop lossing money on wheat, the downward trend probably gonna stay for a while, which make me decide to sell it before the profit from the other two can cover it.

2. Take a long position in corn at a price around 683 and waiting for the next trend being obvious. Hold soybean for another week.

Pic Resource:

http://www.barchart.com/commodityfutures/Grains