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Seasonal Trades


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Seasonal Trades

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  #201 (permalink)
Vienna
 
 
Posts: 12 since Apr 2019
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depending on cold storage report and cattle on feed (monday , today) it s going to be a wild ride :-)

it looks like a good start right now.

short term behavior in the LEj20-HEJ20 the last two days was a leading indicator .

thats why i was asking!

thx myrrdin!

SPOMI

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  #202 (permalink)
Cape Town South Africa
 
Experience: Intermediate
Platform: Rithmic
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Trading: Commodities:Grains, Meats, Energy
 
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Kruger View Post
Is anyone else considering this spread trade: Buy May20 Soybeans & Sell May20 Wheat (CBOT)?

The entry price is attractive (low) but this is somewhat risky considering the ongoing China-USA trade debacle. I am monitoring the movement for a possible entry early Feb.

Will appreciate the views of the seasoned traders.

Regards

I entered this trade on 4th Feb @ 337,75
On 18th Feb it traded @ 361,75. Had I closed the trade then the profit would have been $1200.00 (before costs)
My profit target was 370,00 so I decided to stay in the trade.
Unfortunately it moved south and with the uncertainty caused by corona virus (mainly), I decided to close the trade yesterday @ 349,00. Profit before fees = $562.50

Regards

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  #203 (permalink)
Legendary Market Wizard
Linz Austria
 
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Kruger View Post
I entered this trade on 4th Feb @ 337,75
On 18th Feb it traded @ 361,75. Had I closed the trade then the profit would have been $1200.00 (before costs)
My profit target was 370,00 so I decided to stay in the trade.
Unfortunately it moved south and with the uncertainty caused by corona virus (mainly), I decided to close the trade yesterday @ 349,00. Profit before fees = $562.50

Regards

In my opinion, you can do two things to avoid loosing on trades just before the target:

1. When a trade reaches 50 % or 80 % of my target I often place a end of day stop.

2. I place a band of exit orders, eg. in the range from 75 % to 100 % of my target profit.

Best regards, Myrrdin

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  #204 (permalink)
London + United Kingdom
 
 
Posts: 1 since Feb 2020
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Thanks for this awesome trade. This really inspired me to look more into commodity spreads. One question I have in regards to the profit target.

How do u define your Profite target. You look at support or resistance levels or do you define that target based on how the spread did during the previous few years.

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  #205 (permalink)
Cape Town South Africa
 
Experience: Intermediate
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marksuper View Post
Thanks for this awesome trade. This really inspired me to look more into commodity spreads. One question I have in regards to the profit target.

How do u define your Profite target. You look at support or resistance levels or do you define that target based on how the spread did during the previous few years.

I generally look at the previous years movements (MRCI) as a guide. Regarding this particular trade, it has moved up since I exited. I, with hindsight, should have stayed in but with all the noise going on in the world, I took the cautious route. Ideally what I was anticipating was a further drop in the price so I exited to lock in the profit and then hoping to re-enter the trade on the bounce (which never happened). Having said that however I can't complain about the profit on this one.

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  #206 (permalink)
Legendary Market Wizard
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Kruger View Post
I generally look at the previous years movements (MRCI) as a guide. Regarding this particular trade, it has moved up since I exited. I, with hindsight, should have stayed in but with all the noise going on in the world, I took the cautious route. Ideally what I was anticipating was a further drop in the price so I exited to lock in the profit and then hoping to re-enter the trade on the bounce (which never happened). Having said that however I can't complain about the profit on this one.

Looking at previous years movement only helps in case fundamentals were comparable a year ago. I prefer looking at years with comparable fundamentals, even if that is some years ago.

Additionally I like comparing the cahrt with the seasonal chart for the most recent months. In case the chart follows the seasonal chart nicely, this is a good argument to enter a seasonal trade.

I also do not enter a trade against the COT data.

Best regards, Myrrdin

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  #207 (permalink)
Cape Town South Africa
 
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@myrrdin
"Looking at previous years movement only helps in case fundamentals were comparable a year ago. I prefer looking at years with comparable fundamentals, even if that is some years ago."

You expressed it better than I did. I was referring to more than one year.

Regards

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  #208 (permalink)
Legendary Market Wizard
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I was asked to give some information on educational sites regarding seasonal trading.

For many years, I am a customer of MRCI. They offer seasonal charts for outright and spreads (intra- and inter-commodity spreads), they offer trade suggestions (I only take them as a suggestion, but do not follow them systematically), and they offer seasonal data regarding volatility, all in excellent quality. (I do a lot of options trading, and, thus, information on seasonal volatility is a helpful add-on.)

MRCI also offers a consulting service. They select individual trades from their database, and explain how to trade them in the actual year. You have to pay extra for this information. I do not use this service.

I also combine seasonal trading with trading based on COT data. I receive COT data from a German data supplier, but was a customer of Floyd Upperman for some time. Of course, you can use the original COT data, which is free of charge, but it is helpful to get nice charts.

Ron99 has developed an excellent database for seasonal trades. You find the link somewhere in this thread, but I assume he will answer to your question.

Best regards, Myrrdin

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  #209 (permalink)
Legendary Market Wizard
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One of the seasonal trades I currently follow is the OJH-OJK spread.

This year it followed the seasonal chart very nicely which for me is a very important argument to enter the trade. I know, it is not grains or meats, but in recent years it has been a good idea to follow this trade.

Best regards, Myrrdin

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  #210 (permalink)
Florence
 
 
Posts: 12 since Jan 2021
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myrrdin View Post
One of the seasonal trades I currently follow is the OJH-OJK spread.

This year it followed the seasonal chart very nicely which for me is a very important argument to enter the trade. I know, it is not grains or meats, but in recent years it has been a good idea to follow this trade.

Best regards, Myrrdin

Hi, I am following that spread too, what is the fair price to enter in your opinion?

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  #211 (permalink)
Legendary Market Wizard
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M4STR0 View Post
Hi, I am following that spread too, what is the fair price to enter in your opinion?

It is difficult to say what is a "fair price". I do not follow the fundamentals for orange juice.

In case the spread follows the seasonal chart, it would be a good idea to enter right now. A Short time ago, it was cheaper. But I am not sure that the price will get back there.

Best regards, Myrrdin

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  #212 (permalink)
Florence
 
 
Posts: 12 since Jan 2021
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myrrdin View Post
It is difficult to say what is a "fair price". I do not follow the fundamentals for orange juice.

In case the spread follows the seasonal chart, it would be a good idea to enter right now. A Short time ago, it was cheaper. But I am not sure that the price will get back there.

Best regards, Myrrdin

Thanks for the feedback, usually when you decide is the time to exit the trade? I had a small account dedicated to seasonals this year and did not got in gain yet but manage to not have a big loss either, -8% I put as a rule to keep the position till the end of the seasonality...But got a lot of reverse trend this summer, I guess due to China buying everything and so I got a lot of stop losses... Any suggestions about this?

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  #213 (permalink)
Legendary Market Wizard
Linz Austria
 
Experience: Advanced
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Trading: Commodities
 
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M4STR0 View Post
Thanks for the feedback, usually when you decide is the time to exit the trade? I had a small account dedicated to seasonals this year and did not got in gain yet but manage to not have a big loss either, -8% I put as a rule to keep the position till the end of the seasonality...But got a lot of reverse trend this summer, I guess due to China buying everything and so I got a lot of stop losses... Any suggestions about this?

Currently, I take profits on the way upwards. I begin with a profit that has been made in almost all years. And end up with a profit that looks a bit optimistic. And sell my 10 or 20 or 30 spreads on the way. (There is a type of order in the IB software which allows for doing this easily.) On a severe drawback or at the end of the seasonal window I close the position.

Best regards, Myrrdin

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  #214 (permalink)
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My DCOT charts are here.
https://public.tableau.com/profile/ron.h8870#!/vizhome/DCOT/Story1

My charts of daily futures settlements since 2006 can be found on this page.
https://public.tableau.com/profile/ron.h8870#!/

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