{"id":105,"date":"2012-10-13T01:50:54","date_gmt":"2012-10-13T08:50:54","guid":{"rendered":"https:\/\/blogs.ubc.ca\/rosonluo\/?p=105"},"modified":"2012-10-13T11:06:35","modified_gmt":"2012-10-13T18:06:35","slug":"week-4-what-went-wrong-accident","status":"publish","type":"post","link":"https:\/\/blogs.ubc.ca\/rosonluo\/2012\/10\/13\/week-4-what-went-wrong-accident\/","title":{"rendered":"Week 4 &#8211; What Went Wrong:  Accident"},"content":{"rendered":"<p>I started this week with lots of hope. I was planning and hoping to make a strong comeback on Thursday as the USDA report was being released. \u00a0However, something happened. \u00a0No only my hope went dashed, I am left with a negative balance in my trading account now.<\/p>\n<p>What happened? \u00a0Accidentally, not according to my will, 23 short corn contracts (C2Z) got in my trading account and were executed\u00a0on Wednesday; I was totally shocked and I was also happy for a moment because they were making profits on Wednesday as the corn futures (C2Z) price fell that day. \u00a0I soon got scared as I anticipated a price jump on corn futures on Thursday with the release of the USDA report. \u00a0It&#8217;s based on the information and\u00a0analysis\u00a0from a few sources before Thursday:<\/p>\n<ul>\n<li>speculation about USDA would lower its forecasts on global supplies: dry weather damaged crops from Russia to Australia; Russia cut its forecast for grain export, Australia last month reduced its harvest projection <a href=\"ref\"><sup>[1]<\/sup><\/a><\/li>\n<li>on average,\u00a0analysts expected the corn production would below the USDA\u00a0September\u00a0estimate\u00a0due to the reduction in harvested acres<a href=\"ref\"><sup>[2]<\/sup><\/a>.<\/li>\n<\/ul>\n<figure id=\"attachment_109\" aria-describedby=\"caption-attachment-109\" style=\"width: 300px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/oct-13-ratio-harvest.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-109 \" style=\"border: 1px solid black;\" title=\"oct 13, ratio harvest\" src=\"https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/oct-13-ratio-harvest-300x297.png\" alt=\"\" width=\"300\" height=\"297\" srcset=\"https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/oct-13-ratio-harvest-300x297.png 300w, https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/oct-13-ratio-harvest-150x150.png 150w, https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/oct-13-ratio-harvest.png 432w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-109\" class=\"wp-caption-text\">Source: The Crop Site <a href=\"ref\"><sup>[2]<\/sup><\/a>.<\/figcaption><\/figure>\n<ul>\n<li>Also, there&#8217;s a corn futures contracts continuous chart for the past 20 years indicating the rise in October.<\/li>\n<\/ul>\n<figure id=\"attachment_110\" aria-describedby=\"caption-attachment-110\" style=\"width: 300px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/continuouschartcorn.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-110 \" style=\"border: 1px solid black;\" title=\"continuouschartcorn\" src=\"https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/continuouschartcorn-300x220.png\" alt=\"\" width=\"300\" height=\"220\" srcset=\"https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/continuouschartcorn-300x220.png 300w, https:\/\/blogs.ubc.ca\/rosonluo\/files\/2012\/10\/continuouschartcorn.png 677w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-110\" class=\"wp-caption-text\">Source: Equity Clock <a href=\"ref\"><sup>[3]<\/sup><\/a><\/figcaption><\/figure>\n<p>Therefore, I placed an order to offset all those short contracts on Wednesday night. \u00a0I did something similar once before where I placed an order at night and the order got processed the next day once the\u00a0market\u00a0opened with the open price. I basically trusted that TradeSim would treat my offset with as open order and gave them the open price. \u00a0The prices did go up on Thursday by quite a lot. \u00a0However, the offset didn&#8217;t happen in time as I expected and those 23 short corn contracts got offset at a much higher price. \u00a0I lost \u00a0$1463.50 per contract which lead to a total loss of $33660.5; together with the losing long wheat and soybeans contracts I have been holding since 2 weeks ago purchased at the peak prices, my equity was down to about $100 at the end of Thursday.<\/p>\n<p>I did order to offset the long wheat and soybeans contracts on Thursday, yet with price limits which was not hit. \u00a0On Friday, all the crop futures prices went back down and my long contracts once again suffered further loss which lead my balance down at about\u00a0-$2000.<\/p>\n<p>It&#8217;s a dramatic and traumatic week. \u00a0Although the 23 contracts got in by mistake\/ accident, I could have not lost that much by making a stop loss order to offset or just keep them till Friday. \u00a0This is a big lesson to me.<\/p>\n<p>Thanks VW for encouraging me to write this blog and helping me recover from the trauma.<\/p>\n<p>&nbsp;<\/p>\n<p><a name=\"#ref\"><\/a>References:<br \/>\n1. \u00a0McFerron,\u00a0Whitney \u00a0and Dreibus,\u00a0Tony C. \u00a0 (2012, Oct 09).\u00a0<em>Wheat Climbs as U.S. May Cut Supply Estimates; Soy, Corn Gain. <\/em>Bloomberg. Retrieved from\u00a0<a href=\"http:\/\/www.bloomberg.com\/news\/2012-10-09\/wheat-climbs-on-speculation-u-s-to-cut-global-supply-estimates.html\">http:\/\/www.bloomberg.com\/news\/2012-10-09\/wheat-climbs-on-speculation-u-s-to-cut-global-supply-estimates.html<\/a><\/p>\n<p>2.\u00a0Meyer,\u00a0Steve \u00a0and Steiner,\u00a0Len. (2012, Oct 09). \u00a0<em>CME: Harvest Pressure Pushes Corn, Soy Futures Lower. <\/em>The Crop Site.<em> \u00a0<\/em>Retrieved From\u00a0<a href=\"http:\/\/www.thecropsite.com\/news\/12158\/cme-harvest-pressure-pushes-corn-soy-futures-lower\">http:\/\/www.thecropsite.com\/news\/12158\/cme-harvest-pressure-pushes-corn-soy-futures-lower<\/a><\/p>\n<p>3. \u00a0Equity Clock. (n.d.). \u00a0<em>CORN FUTURES (C) SEASONAL CHART.<\/em>\u00a0Retrieved from\u00a0<a href=\"http:\/\/charts.equityclock.com\/corn-futures-c-seasonal-chart\">http:\/\/charts.equityclock.com\/corn-futures-c-seasonal-chart<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I started this week with lots of hope. I was planning and hoping to make a strong comeback on Thursday as the USDA report was being released. \u00a0However, something happened. \u00a0No only my hope went dashed, I am left with a negative balance in my trading account now. What happened? \u00a0Accidentally, not according to my [&hellip;]<\/p>\n","protected":false},"author":14442,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[593792,568639],"tags":[],"class_list":["post-105","post","type-post","status-publish","format-standard","hentry","category-trading-game","category-what-went-rightwrong"],"_links":{"self":[{"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/posts\/105","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/users\/14442"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/comments?post=105"}],"version-history":[{"count":10,"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/posts\/105\/revisions"}],"predecessor-version":[{"id":117,"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/posts\/105\/revisions\/117"}],"wp:attachment":[{"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/media?parent=105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/categories?post=105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.ubc.ca\/rosonluo\/wp-json\/wp\/v2\/tags?post=105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}