This was the first week that I did a small panic trade. As usual I did traded a contract in December wheat.
On October 30th I woke up to prices rising. With news from the week before about Ukraine cutting exports and with the anticipation of hurricane sandy, I thought that prices would now rise. Makes sense right? Less exports, less supply higher prices. Impending natural calamity, prices will rise. My logic then was to go short figuring that prices will come back down eventually once speculation on the price rise stops and when people start buying short contracts to offset their long contracts.
However, as the day went along I noticed that prices were already dropping. With my prediction technically correct, I also realized that it would be risky to keep this position, especially with the inconsistencies of Trade Sim. If prices rose, I’d lose. So I figured, close it now and make whatever I can.
Got in at 854.50. Closed at 854.25. Made $11.50. Better than nothing. Equity rose to $41074.25.
Carmelo!
You are the one who told me not to let my emotions lead my trading! “Panic trade” could be read as “emotional trade.” I am glad that you could at least earn some profits (!!!). My losses from my 8 long positions on wheat were 10 times your gains! I learned from reading your strategy, you were one step ahead of me. I was reacting, and you were anticipating. Seems like good approach as the market moves so quickly. I think you were trying to explain me something like that, but I was not ready for it! Thanks for sharing!
And don’t forget your own words: “Logical over emotional, right?”