Week 3–What I Went wrong–Still lossing money

Beginning balance from 10-01-2012,Position Value: $0.00Cash Available: $38138.84Equity: $38138.84

Realized Gains: $-1862.00

Processing transaction 14 of W2Zcontract 8 acquired at time 943 with price 872.000000commission charged: $0.50Processing transaction 15 of W3H

contract 9 acquired at time 1401 with price 883.000000

commission charged: $0.50

Date W2Z-short Base W3H-long Base Equity
Oct. 03 871.50 -0.5 883 0 $38162.89
Oct. 04 873 1 884 1 $38137.94
Oct. 05 869.25 -2.75 879.75 -3.25 $38112.99
Oct. 06 857.50 -14.5 868.75 -14.25 $38150.54

Offset W3H and then hold a short position on W3H with price in 874.75.

Oct. 08

861 -11 W3H-short $38449.59
871.25 3.5
Ending balance as of 10-08-2012,Position Value: $4775.00Cash Available: $33674.59Equity: $38449.59

Realized Gains: $-2275.50

What went wrong for Third Round?

Last week, because of the Friday stock report, the price of wheat saw a quick strike. I have read that “under a range trading strategy, you would sell the market when it gets to the top of its range and buy the market when it gets to the bottom of its range”. I guessed that after a fast increase, the wheat price would welcome a downward trend in short term. However, the situation of short stock of wheat would rise up the future price especially before another harvest coming. Therefore I hold a short position on December contract and a long position on March contract. I just followed the news as well as price change on the website of GMEGroup. However, I ignored the most important thing, backing to fundamental analysis of commodities—the supply and demand of wheat. From above chart, we can see that wheat future price showed a downward trend, but with a little bit change. Therefore the base for W2Z and W3H are so low that there was not a large gain or loss on my account. Until, Oct.6th, there was a relative big jump. I am still looking forward to a big increase in March price. Because the farmers expect a higher price due to recent short stocks, then I guess that after experiencing a harvest in Australia and South Asia, farmers would increased stocks to raise up the price. However, the price on September just saw a big jump. Therefore it is too hard to say that the price would go father in March. Also I made another mistake, I offset my long position on W3H from Saturday, however, the trading system delayed that proposal. I lost the good opportunity to lower my loss.

1 thought on “Week 3–What I Went wrong–Still lossing money

  1. Hi Laura, thanks for sharing. I’m investigating the delay of order process at TradeSim. It seems it’s working fine with my orders but few students seemed like experiencing trouble with it. If you can send me details of your order, for example, submitted time and executed time, I’d be happy to look into it.

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