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Some pretty impressive moves in the grains. I feel like Wheat was probably a very rare type of situation where the technicals and fundamentals aligned almost perfectly.
I could imagine that a sophisticated fundamentalist might have seen that situation coming.
I did some quick research and actually Russia is by far the largest Wheat exporter, almost double of Canada, which is the 2nd largest. Ukraine is number 5.
I guess the other grains got pushed up more in a group type of action, since they came back down, but Wheat closed limit up.
For example Corn exports are lead by the US with Ukraine on #3 with about half the amount, and Russia on #6 with only 1/6 the amount Ukraine exports.
I read Soros' book a while ago, and that seems like a typical situation how he would decide for a trade. Estimating to which further situations a major political event leads and what that means for which market.
It's going to be interesting if there's coming a 2nd limit-up day, but besides from an interesting market, pretty shitty situation that's going on there right now and I'd be glad to do without those limit-moves in this case.
Edit: Or might be better to say "Seeing a major political situation coming and anticipating that in the market"
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Can you help answer these questions from other members on NexusFi?
Fantasizing about limit-moves to the moon led to overlooking a H&S in Cotton.
Cotton
The duration is the very minimum for a H&S and the right shoulder looks not so much perfect shoulder-like, but the requirements are given and it's a situation I have to recognize and place an order. A plus-point here is, that there is clearly "something to reverse"
"Thou hast been faithful over a few things, I will make thee ruler over many things"
At the point where I start to get upset! It is more complicated to get that paper-trading account running properly than any live-account I have ever opened up. Immensely frustrating!
Read the part about options in The Futures Game today. If I have understood it correct, it seems that you can construct the same trade with two options, as if you were trading the future.
What comes to my mind is, if there could be a possibility to build smaller contracts in that way. A thing to keep in the back of my head maybe for some time in the future.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
I feel like I execute I. and II. properly and that's not so much the problem anymore, but I start to run towards the diamond on the mountain, and somewhere on the way, in the midst of the jungle, I realize that I wear flip-flops. Instead of bread, water and canned food, I have put candy, Dr. Pepper and cigars in my backpack, and the map I'm trying to follow to guide me through the jungle is from the back of a package of breakfast cereals.
Then, a bit before the point of no return, reality slaps me in the face and I realize that I can't make it to the diamond, and I have to return back to the box.
I climb in again, am glad that I've done no irreversible damage, but wonder how I should ever get through that jungle and on the mountain.
And the other people in the boxes, they look at me in the exact same way like on the picture, just thinking "What the hell is that dumbass doing? Why not stay in the box in the first place?"
PEOPLE TURN YOUR HEAD TO THE LEFT!!!
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Started the chapter Who Wins? Who Loses? An Why?
There are some interesting studies in it that have been done. One is from a man named Charles Rockwell. Getting a real insight would probably take at least a week, but just looking on the surface gives useful clues as well.
He looked at 3 groups: small speculators, large speculators and hedgers. The markets he divided into large markets and small markets. It was done in the late 60s and most of the small markets don't exist anymore, so I think of small markets as illiquid markets.
- Small traders in small markets lose in general (over a period of time of course)
- Large traders in small markets win in general
- Small traders in large markets some do win, some lose. Feels like that average saying "80 or 90 or whatever % lose"
- Large traders in large markets win
- Small traders go predominantly long --> disease transferred from the stock market
- Large traders go to a good degree short and win a good amount doing that
- Hedgers go predominantly short
- Hedgers in large markets lose
- Hedgers in small markets do better there
- Brokers take by far more out of that zero-sum equation between buyers and sellers than I assumed. That's actually from the "Hieronymus study" and says that commissions are almost as much as a winning trader wins.
I'm an Architect and foremost a Strategist.
Probably one of the things where I need the most growth is "Appreciating the need to be an imperfectionist at times". Good thing is that I think a good amount of losing and missing trades, can provide a bit cure in that regard.
And in general I'll try to become more aware of when perfectionism starts to kick in and then try to take a step back and reassess the situation.
There's also a brand-new video released about the principles for dealing with the changing world order:
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Concerning the brief measurements conversation I have to correct something.
Cotton was actually measured in Bales and not in Bushel.
But with Bales there was a similar problem, namely different weights in different countries.
In the U.S. one Bale was 227kg (500 pounds), in the U.K. 331kg and in India for example only 170kg. In India there were even differences in different parts of the country.
Wheat seems to be now on the point where the horror-scenario of being locked in on the wrong side in a limit-move, could have become reality. The comforting thing is, that there were plenty of days time for every reasonable trader to get out of a possible short-position. But definitely a memorable event that's happening here.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Read a bit about Soybeans. Actually from the two products coming from the soybean, you could say that the meal is the main product and the oil the byproduct. Just from guessing, I would have thought it's the other way around.
Soybean Meal is mainly used for animal feed and the Oil for salads, cooking, margarine etc.
The Meal prices are mainly determined by:
- The number and types of animals which consume it/require it as high-protein feed
- Livestock prices
- Price and availability of other similar high-protein feed products
- The level of soybean and soybean meal stocks
- The overall level of domestic and export demand
Oil prices are mainly determined by:
- The price and availability of substitutes such as lard, cottonseed oil and butter
- The level of import of palm oil and coconut oil
- The availability of foreign-produced oils such as palm and coconut oil, sunflower, rapeseed and peanut oil --> This affects the demand for exports
Hedgers (processors / I suppose those who actually crush the bean) in this market actually like to lock in the "crush spread". They buy the bean and sell the meal and oil. In this way the protect themselves in the scenario of rising bean prices and dropping meal and oil prices which would diminish their profit margin.
My "service" of taking the risk off of hedgers would look like:
- Buying the bean from farmers
- Selling the meal to cattle feeders
- Selling the oil to food producers and processors
"Thou hast been faithful over a few things, I will make thee ruler over many things"
That's cool. Looking into all the parameters, I think you can get also a better understanding on how to approach the market and also how to not approach it/which flaws lead to bad results, based on your personality structure.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
