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