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
Even though you lost some money in the first day with such a a low bid price on corn, you margin after clearing at the end of the week is still pretty good. You bought a lot of contracts too! I think those who bought short on soybean made the most profit especially since it dropped about 20cents on the 15th.
As the productions group, we will try to get more info on corn and wheat so can bid accordingly and not lose so much money.
thanks for sharing your thoughts!
Thanks a lot, Caroline.
To play is safety, I prefer quit the market at the beginning of next week and see how things going on, cuz I’m not sure how long will the downtrend stay, or will there be a little back up.
Good luck for next week!
Hi , I wonder why you want to take the long position in corn. It is said that demand is decreasing and supply is increasing out of US. Hence, I think the corn will go down for a while. I do not know when we can meet the turningpoint.
Yeah, as you said the corn will keep downtrend for a while, but I believe there will be a little back up before the second round drop. To play it safety, I prefer to get my profit for now firstly, and prepare for another fight!
Tarara~~ 😛
Nice! According to diagrams, it’s pretty clear to demonstrate what the trends of price are likely to be, because it is quite easy for the beginners to understand what Commodity Futures is going on. Likewise, the profits part you showed is perfect, since it makes me better to know how to calculate the profits step by step…Well done…
Student8,Deron77
Thanks Deron, and I did read your blog and it brings me a lot of new idea! I believed we can do better in the next week!
BTW, 谢谢老大回复，这个well done让我有了一种身为小弟被老大夸奖的荣誉感。。。 ♪( ´▽｀)
Hey Lixi, I really like ur blog!!!~~~it makes everything so clear with the diagrams!!!~~~I was actually using the similar strategies with u but I think I made it very messy in my blog>”<…and see, last week u was so nervous abt a lot but now u can already get the idea abt the game and wrote such a nice blog!!!:)i believe tat u could always do it!~~~
anyway, good luck for ur everything^^
It’s really not that good as it looks like. However, I did find my backwards by reading you guys’ Blog! Thanks a lot!
BTW, your nickname seems interesting. were you born at the chritmas’ eve?
Your blog is so detailed and easy to read, I think I’m in eager to find such article can tell me what eactly the trading game is~ Thank you~ And after reading this I feel so clear~Good luck in the coming week!
I actually got several articles about future market, but sorry they all write in Chinese and probably talking around Chinese MKT. I can sent to you if you still want.
I love the way your blog is created. The diagrams and graphs and the calculations are so clear. Thanks for teaching me on the calculations honey! And you posted your blog earlier than me on Friday night. You are such a hard-working girl!
So do you!!!! The trading game is soooo much fun, let’s enjoy it!