Sean Pledger

This last week has been pretty slow on the trading front. I came into the week holding short positions on both March and January soybeans. I had offset my corn shorts the previous Friday and was just waiting for soy prices to swing back down to what I believed to be the low side of their equilibrium range. Sunday night I offset my 4 January contracts at 1536 for a net gain of $1349 each. Then Monday morning I offset my 2 March contracts at 1509 for a net gain of $586.5 each. I believe this is was the first week since we began the trading game that I actually stuck to what I planned to do in last week’s blog. I predetermined the approximate level at which to offset by simply looking at the price trends and “running” a rough ARIMA (Auto-Regressive Integrated Moving Average) model in my head. That might sound more complex than it actually is. I basically looked at the recent trend and made an educated guess about how it would proceed in the near term. I used this same strategy to place a limit order on wheat. I expect that at some point in the next week or 2 December wheat prices will drop down below 850 so I placed a price limit order for 4 long contracts should the price hit 848. The price drop at the beginning of the week didn’t quite hit these levels but I still expect it to occur in the near future, and if not, in the mean time I have zero downside risk.