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Strong gains today in both Gold and Feeder Cattle.
Here are my comments on my open positions based on the day’s price action.
QO – Mini Gold
Trade: Long 1 contract of Jun Mini Gold
Entry Price: $1,230
Risk: stop placed at $1,215.25 risking $737.50
Target: $1,600
Daily Comment: Gold surpassed the 61.8% retracement mark today and closed above the right shoulder to negate the head and shoulders pattern. I am looking for follow through buying tomorrow to confirm the break.
GF - Feeder Cattle
Trade: Short 1 contract of May Feeder Cattle
Entry Price: $1.4625
Risk: stop placed at $1.4865 risking $1,200
Target: Target $1.28
Daily Comment: Feeder Cattle broke lower today with prices trading limit down and posting a new closing price low.
Here are my comments on the opportunities I’m watching based on the day’s price action.
SB - Sugar
Sugar traded back down through the 61.8% retracement mark during the session. Prices finished off the lows posting a candle with a lower shadow and closing back at the 61.8% retracement mark.
CL – Crude Oil
Oil continued higher again today and is now within a whisker of the 200 SMA. We may see the test of this level tomorrow.
ZC – New Crop Corn
Corn surpassed the 200 SMA during the session but finished off the highs posting a candle with an upper shadow and closing at the 200 SMA.
Here are my comments on my open positions based on the day’s price action.
QO – Mini Gold
Trade: Long 1 contract of Jun Mini Gold
Entry Price: $1,230
Risk: stop placed at $1,215.25 risking $737.50
Target: $1,600
Daily Comment: Gold confirmed the break of the 61.8% retracement mark today trading up strongly to new highs and posting a bullish full bodied candle. Prices paused at the psychological $1,300 level today but once this level is broken prices could trade quickly up to the 161.8% extension at $1,333.
GF - Feeder Cattle
Trade: Short 1 contract of May Feeder Cattle
Entry Price: $1.4625
Risk: stop moved to $1.4625 risking $0
Target: Target $1.28
Daily Comment: I moved my Stop to break even at the stat of the session after yesterday’s limit down move.
Feeder Cattle opened lower posting another new low. Prices recovered throughout the session but could not hold onto the gains closing slightly lower and posting a doji candle.
A very strong finish on the last 2 days of trading in April helped erase almost all my losses for the month. I finished the month with an overall loss of 1.6%.
My trading was very active in April. I suspect the new journal had a part to play as the journal has helped me get into a more regular routine with my market analysis and decision making. I believe this has also led to overtrading and taking positions which may not have been the highest quality. This is something that I am now more aware of and will need to manage moving forward.
My risk management was also very active in April which I also suspect the journal had a part to play in due to the public nature of the process. I micromanaged my stops more than I do usually which has led to positions moving in my favour after being stopped out despite the original stop placement never being challenged.
I’ll start the monthly update with comments on the positions I am still holding at the end of the month.
QO – Mini Gold
Gold finally found direction in the last week of April after trading sideways for most of the month. Prices broke out to the upside and surpassed the 61.8% retracement mark with impulsiveness to finish the month. This has allowed me to my stop up to the level I would use for the 61.8% retracement break to lock in some of the profit on the trade.
It looks as though the uptrend in Gold has resumed and I am looking for prices to trade up to the 161.8% extension at $1,333 in the coming weeks.
GF - Feeder Cattle
Feeder Cattle finally broke out of the 4 month rectangle channel during the month. Prices have continued to accelerate to the downside since the break finishing the month at new lows. This has allowed me to move my stop to break even.
I am looking for prices to trade down to the 161.8% extension at $1.28 in the coming weeks.
Next is a review of my closed trades during April.
ZL – Soybean Oil
My initial trade in Soybean Oil was very good. It was a great setup and I followed all the rules. The trouble came when I attempted to pyramid the position after it became a solid winner. This only led to being whipsawed around and giving back a large chunk of the gains made on the original position. These losses were further exacerbated through poor order management.
Since I exited the trade prices looked to have surpassed the 61.8% retracement mark with impulsiveness only to quickly turn around and trade lower and break the 40 SMA. I am now neutral where Soybean Oil is concerned.
SB – Sugar
My trade in Sugar was also very good. It was a great setup and I followed all the rules. While there is an argument that I could have exited the position when prices came up to the 61.8% of the contract range which was a potential source of resistance, this is an example of a decision that is much easier to make in hindsight.
The decision to exit the trade when it broke key support was a good one and saved giving back anymore of the gains on the trade as prices continued to move lower after the break.
Since exiting the trade Sugar has found a bottom and has resumed its uptrend. Prices have struggled to surpass the 61.8% retracement of the recent range but Sugar rallied strongly to finish the month and looks like it may have finally surpassed this level. Confirming price action is required early next and I may look at potential areas to enter the trade should this occur.
DX – US Dollar Index
This is an example of a trade that I micromanaged that has come back in the direction of my trade. Since being stopped out of the trade prices have never tested the 61.8% retracement mark used as the basis for entering the trade and have continued their downward momentum finishing the month at lows not seen since August 2015.
Whilst saying this, there is also the argument that the risk involved when I entered the trade was too high hence the reason why I was so quick to move the stop down to a point where the risk was more manageable. In cases like this I would be better served waiting for a retest to enter the trade with lower risk or passing on the trade altogether.
ZN – US 10 Year Notes
This is an example of a poor trade made even poorer through errors and bad decision making. I originally entered a Short position when prices traded up to the 61.8% retracement mark which is not one of my usual trade setups. The idea that this level might act as resistance was more of a possibility rather than a trade setup and I should never have entered into a position based on this. I almost got out of it unscathed when I decided to exit the trade at breakeven but poor order management put me into a long position which I should have closed immediately upon learning of the error. I let the erroneous trade play out and ended up making a loss on a trade I should never have been in in the first place.
Since exiting the trade the Notes have continued lower but found some support to finish the month. I am neutral where the Notes are concerned at this stage.
ZM – Soybean Meal
A good trade setup and I followed all my rules on the entry. There is an argument that I exited the trade without giving it sufficient room to run as the 61.8% retracement level used as the basis for entering the trade has not been challenged at this stage. However, the position was subject to extremely high volatility that I wasn’t comfortable holding through so I am happy with my decision to exit the trade regardless of what has happened to the price since that decision.
Soybean Meal was testing the July 2015 highs to the finish the month and the evidence at this point suggest that prices will continue higher towards the 161.8% extension at $370.
HG – Copper
This is another example of a micromanaged trade. After being stopped out of the trade Copper rallied strongly to finish the month exceeding the 200 SMA with impulsiveness. The recent high at $2.325 needs to be broken for further confirmation of a bullish break.
Again there is the argument that the risk involved when I entered the trade was too high hence the reason why I was so quick to move the stop up to a point where the risk was more manageable. In cases like this I would be better served waiting for a retest to enter the trade with lower risk or passing on the trade altogether.
To finish the monthly review I will comment on some other markets that I am watching for potential trades in May.
CL – Crude Oil
Oil rallied strongly during April. Prices finished the month at the falling 200 SMA which is a potential level of resistance. There is also a major 61.8% retracement level just above the 200 SMA at $48.57 which could provide further resistance. My preference at this stage is to trade Oil from the short side at these levels but a long trade could also be on the cards if these levels can be surpassed. This is market that I will be watching closely in May.
ZC – New Crop Corn
Corn attempted to stage a bullish break during the month surpassing the 200 SMA after a long downtrend. Prices quickly failed this level but have traded back to finish the month at this level. I would prefer to see prices surpass the 61.8% retracement mark of the previous high and low at $4.15 before drawing the conclusion that a bullish break has been staged.
HE – Lean Hogs
Hogs failed the 200 SMA during April negating the potential bullish break. Prices finished the month strongly surpassing the 200 SMA once again on the back of thoughts of increased demand from China for US pork. I am looking for prices to break the 61.8% retracement of the recent range at $81.98 with impulsiveness to draw a bullish conclusion where Hogs are concerned.
KC – Coffee
Coffee was unable to hold above the 200 SMA during April negating the potential bullish break and finished the month on a bearish note. I am neutral where Coffee is concerned at this stage.
CC - Cocoa
Cocoa prices rallied strongly throughout April and appear to have broken the 61.8% retracement of the recent range with impulsiveness to finish the month. If the bullish signal is credible prices could continue to the 161.8% extension at $3,860.
A small loss today with gains in Gold and Sugar offset by losses in Feeder Cattle.
Here are my comments on my open positions based on the day’s price action.
QO – Mini Gold
Trade: Long 1 contract of Jun Mini Gold
Entry Price: $1,230
Risk: stop moved to $1,242.50 risking $0
Target: $1,600
Daily Comment: Gold tested the previous high on the open before moving higher in the overnight session breaking through the psychological $1,300 level and posting new highs. Gold was unable to hold onto the gains posting an indecisive doji candle.
GF - Feeder Cattle
Trade: Short 1 contract of May Feeder Cattle
Entry Price: $1.4625
Risk: stop moved to $1.625 risking $0
Target: Target $1.28
Daily Comment: Feeder Cattle was higher today. Prices closed off the highs posting a candle with an upper shadow.
SB - Sugar
Trade: Long 2 contracts of July Sugar
Entry Price: 16.05
Risk: 15.48 risking $1,277
Target:
Reasons for entering the trade:
Technical: Prices have broken through the 61.8% retracement mark of the recent correction.
Fundamental: A supply deficit is currently forecast for Sugar production.
Daily Comment: Sugar was lower today. Prices closed off the lows posting a candle with a lower shadow.
A loss today with gains in Sugar outweighed by losses in Feeder Cattle and Gold.
Here are my comments on my open positions based on the day’s price action.
QO – Mini Gold
Trade: Long 1 contract of Jun Mini Gold
Entry Price: $1,230
Risk: stop moved to $1,242.50 risking $0
Target: $1,600
Daily Comment: Gold attempted to break through the psychological $1,300 level again during the overnight session. Prices were lower during the day session retesting the previous high once again and posting a candle with an upper shadow.
GF - Feeder Cattle
Trade: Short 1 contract of May Feeder Cattle
Entry Price: $1.4625
Risk: stop moved to $1.625 risking $0
Target: Target $1.28
Daily Comment: Feeder Cattle was higher again today but it is still trading below all of the falling moving averages.
SB - Sugar
Trade: Long 2 contracts of July Sugar
Entry Price: 16.05
Risk: 15.48 risking $1,277
Target: 18.42
Daily Comment: Sugar traded lower throughout the day but finished strongly to close slightly higher and post a candle with a long lower shadow.
