What a busy mid-term week !

At the end of this week, I suffered from a big loss and gained a negative return in -49% compare to last week -34%. When I opened the stocktrak website this morning, I was very down at the first time after seeing  my portfolio value, but then I comforted myself I just lost fuck money in a trading game and it is ending today. Investing in the future trading game is just like playing Roller Coaster, I sometimes found my mood fluctuations with the changing of portfolio value. Although I am not a winner in this game,  the future trading game still a rewarding learning experience for me.

From the beginning to now, my contracts focused on soybean oil, corn ,wheat , milk and wheat. Unfortunately, I lose a lot of value in soybean oil, corn and milk, and only gained a little in wheat and soybean.

A Lesson from my soybean oil and corn!!

As the saying goes, a single slip may cause lasting sorrow, 20 units of soybean oil and 20 units of corn laid the failure foundation for me from the beginning. I made these contracts without any market research and analysis, just trade as a risk lover, before making my decision, I should know 20x corn and 20x soybeans is equivalent to buying  about $450,000 of corn and $510,000 of Soybean oil. These total value occupied my 10%  original value, once these two item suffer from a big decrease, I will be wipe out from the stock market in the beginning, and unfortunately, it happened!!

From the first graph below, we can clearly see soybean oil fall rapidly in the last ten-day of a month, went up with some fluctuation in the beginning before decreasing at the end of October. I bought at $42.5 and ended at $40.73, I found myself in dilemma cause it was hard to make a decision in soybean oil after I buying , and I just waited and watched and did nothing in it, cause once I began cautious after lost a lot of money in the beginning,  I  prayed soybean oil would bring the dying back to life, but it disappointed me.

I bought corn at $4.61 and sold at $4.45 at the end of September, but it played a joke to me that it began to go up in the next two days, I really regretted my stupid impulsion. If my memory did not fail me, I just lose my patient to wait the US report and followed my intuition .

These two big loss taught me that impulse is the devil. It is important to weigh all options before making a decision, if you put the effort in up front it’ll pay off in the long ru

My feeling to the trading game

It was hard for me to describe my feeling to the trading game. From one side, it was interesting cause we can invest in the virtual stock market without any real money, in the meanwhile, we can learn both technical analysis and put our theory into practice. But from another side, our mountains of assignments always keep us away from the trade game, especially in these two weeks , it seemed that everyone paid more attention on the midterm review and just have little time to do analysis and trade in the stock market, some of us put it entirely out of mind. But as a whole, I enjoyed myself in this game although I made losing investment. I read news and charts before buying my items, and this was a good way for me to know more about the global agriculture market. Additionally, I learnt a lot of technical analysis, such as candlestick, K- line, MA forecast and so on. These useful knowledge will help me to invest in the real stock market in the long run. Besides the game, I am so much keen on to read others’ blogs, I gained so much in reading others’ blogs. Not only for their perceptual description, but rational analysis in stock market as well.

What I learn from the trading game

1. To weight the possible outcome before making your decision. For every option, list every possible outcome and label it as positive or negative.

2. Reminded calm attitude. Always remember that impulse is the devil .Stay calm no matter win or loss. Stock market is risky, and sometimes it is unpredictable, we should keep calm to do some analysis and make the next decision.

3. Know When To Sell Your Stocks. It seemed that greed is the nature. Many of us focuses on what and when to buy stock, yet few ever consider the best time to sell. Don’t let your stock gains disappear due to neglect. Before you get in, always know the specific conditions that will signal when it’s time to get out.

In the end, I want to say thank you to Mark, thank you for your patient guidance and encouragement.

Also, I want to say thank you to MFREers, I really learned a lot from you, the positive learning attitude, the rational analysis and awesome sharing.

The US Congress passes bill to end shutdown early Thursday morning. It seemed that many traders finished trade grains in the dark with no USDA report. In the news, U.S. stocks rose on Friday after investors cheered better-than-expected earnings, due to recovery the shutdown may have caused boosted share prices. I also optimistic in the grain stock market and still hold many of  my contracts in the long position.

My portfolio value this week (Friday) increased from –47% to-33%, even it was still a negative return, I was happy to see my portfolio value increase gradually, which means an increasing purchase power for me to invest in Future Game.

The main reason is  wheat. I kept 10 units Dec.2013 wheat in hand now, From the graph, wheat in this week witnessed an huge upward. From the news, we knew that Wheat prices soared to close above $7 a bushel for the first time in nearly four months, as a wet forecast for Brazil, and a weak estimate for the Argentina crop, compounded ideas of strong demand for US supplies. My regular strategy is short high and long low,  with my observation, wheat price will not keep go up in the long period, so I will keep an eye on wheat and short it in a suitable time.

Soybean oil

On October, soybean oil price witnessed an  increasing after an continuous downward in September. Soybean futures rose on speculation the harvest will slow because of cold, wet weather in central areas of the U.S., but soybean-oil futures in Chicago rose to the highest this month after U.S. inventories dropped. After selling 5 units soybean oil，I still have 15 contracts of soybean oil ，it is wise for me to keep them in my hand now，the soybean oil price will rebound in the near future.

I am a long term trading lover  cause the position mainly depends on the information and policy, but short term trading rely on the intuition and judgment. Short term trading in my mind ,is more risky and unpredictable due to the volatile nature of the stock market at times. Within the time frame of a day and a week many factors can have a major effect on a stock’s price.I think I am the person without sharp market instincts, so I cautious with my short position in the last few week.

But it seemed that short-term trading can be very risky, but also lucrative. I got some information from the website, and shared my study outcome here. As a short term trader, he or she must understand the risks and the rewards of each trade, not only know how to spot good short-term opportunities, but also must be able to protect themselves from un foreseen events. The most important one is to Recognize the Potential Candidates

Recognizing the right possible trade will mean that you know the difference between a good potential situation and the ones to avoid.

Step 1: Watch the Moving Averages
A moving average is the average price of a stock over a specific period of time. The most common time frames are 15, 20, 30, 50, 100 and 200 days. The overall idea is to show whether a stock is trending upward or downward.
Step 2: Understand Overall Cycles or Patterns
Generally, the markets trade in cycles, which makes it important to watch the calendar at particular times.
Step 3: Get a Sense of Market Trends

As a general rule in short term trading, you want to set your sell stop or buy stop within 10-15% of where you bought the stock or initiated the short. The basic idea here is to keep the losses manageable so that the gains can always be considerably more than any losses you may incur.

A busy week past away！！

Just remembered  some words How can you text the messages while driving? Honestly, I spent little time on trading and read  news this week, cause the heavy assignment kept me away from the Future Game, I felt myself like a clown who carried many balls at one time with lopping.

Now let us come back to the future game.

                                                         My portfolio summary

I won little in the beginning of this week but lose again in Friday  both because of soybean oil, the price of soybean oil rose little and the went down. It made a downward trend from the September,At the end of September ,Soybeans oil prices are breaking down domestically as new crop supplies and replenishing crusher needs. Favorable weather and a “clear-cut” recovery in soybeans  yields and output will probably result in price pressure. But I am not so sure whether the price of future soybean oil will affect by other factors and go up again, I didnot make a decision to sell it.

What happened recently？

Corn

Corn futures fell to a three-year low,corn futures for December delivery dropped 1.1 percent to close at $4.3325 a bushel at 1:15 p.m. on the Chicago Board of Trade. The EPA is reportedly ready to rule that the blend wall on U.S. gasoline consumption will act as a limit on future ethanol demand ,corn futures have slipped in response. I was tortured by the assignment and forgot to trade in the beginning of this week，I changed  my idea and did not buy corn after Wednesday so I lose little in corn cause I just kept 1 unit in hand after selling 20 units of corn last week.

Feeder-cattle

The downward trend of corn price remind me to pay attention on feeder-cattle. Because the grain is a main ingredient in livestock feed, the price of corn is the main factor” driving the feeder market, if the price of corn decreased，then the cost of feeder-cattle market will cut down. I searched the news and found that Feeder-cattle futures rose to a record as the falling price of corn increased profit prospects for U.S. ranchers who raise the animals before selling them to meat processors. Corn futures in Chicago have tumbled 37 percent this year, the biggest drop among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. Cash prices for cattle were $3 to $5 higher than a week. So maybe I will keep an eye on both corn and feeded-cattle next week and decide wheher to purchase.

Future trading game is continue , although now I  am  a poor guy in this game cause I failure in investment and lose a lots of fake money, I made so much mistakes and I learnt a lot. Last Tuesday, Andrew told us some technical analysis, I was so interested in it, If possible, I think it will better for me to spend some time on learning  those useful analysis, which will helps me to make a more rational investment  rather than simple judge from some news.

In the end, good luck to everyone, both trading game and the mid-term, it seemed that we will have another busy week.

I gained  a huge negative return in corn from the beginning, so in the Monday, I sold all of the corn when I observed that corn slump and still continue a downward trend ,even I knew this is a huge risk, I lost a total 150000 after I clicked my button, and I  almost lose half of my value，which  annoying me the whole week and made me hesitate whether to invest in other items.

MY later decision

After losing a lot of money , I struggled to save my situation but my spirit is willing, my flesh is weak. My purchase power became weak and it means that I can only do some tiny trade.

Another 20 units of soybean oil I  brought in the first week seemed to be a big trouble to me，It was in an downward trend from the beginning and hard for me to make a forecast whether it would go up in this short period, I dared not sold all of them , cause it would cause  another serious losses . I am  But if I still kept all soybean oil in hand, it was difficult for me to made a deal in other items due to my poor purchase power.

I was not sure what will happen to soybean oil , so I sold  5 units of soybean oil . And then I shorted  several units in milk.

what I probably trade next week

corn

The chart witnesses a downward trend from the beginning of September, but it started to rose slightly in the beginning of October after a sudden slump at the end of September. It seemed that it was not a good decision for me to sell my corn in the Monday. Monday’s report showed more supplies than people thought, and yields are coming in better than expected, from the later news I learnt from that Corn for December delivery rose 0.3 percent to $4.4075 a bushel, heading for a 2.9 percent drop this week. Corn futures on the Chicago Board of Trade also edged up. From the trend and the recent news, we know that corn is in a  strong demand, and it probably will keep rising, so I decide to buy some corns next week.

soybean

Soybean witnessed a downward trend in September, but it began to rise in the beginning of October. From the news,Soybean harvesting was 11 percent complete in the main U.S. growing areas as of Sept. 29, trailing the five-year average, U.S. Department of Agriculture data show, In addition, China will continue to import  U.S. soybeans until South America crops are harvested and start moving into the export channel from March 2014. Soybean will continue to rise result from the huge demand, so I also decide to purchase some soybeans even I can just buy little.

What I learned from this week

Just as Mark mentioned, this is a great learning experience – there’s no better way to learn about the market than to participate, and lose some money. I now realized my stupid mistakes, I took too much risk in the beginning, 20x corn and 20x soybeans is equivalent to buying about $450,000 of corn and $510,000 of Soybean oil.  I know it is difficult for me to changeover my situation now, but now I become more cautious than before, I make each deal only after fully research.