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March soybeans are sharply lower in Chicago this morning. At the open the market went below 1200, allowing me to move my stop down to 1210. The beans are down 23 cents as I write this.
Can you help answer these questions from other members on NexusFi?
Bearish day for soybeans. Of course if you're a trend follower looking to consistently exploit your edge, you don't care which way the market is going. Soybeans have now moved below 1190, so I move my stop 10 cents down from 1210 to 1200.
Since I began this thread I have traded soybeans and the mini S&P exclusively. I used to trade a lot more, and for a while I was very profitable, but that led to overtrading which led to a gut wrenching drawdown. I realized for many reasons it's best to cut back. It makes trading much less stressful and takes the emotion out of it. Removal of emotion is key. My goal, like I say on the first page of this thread, is to be unfazed by both wins and losses.
So why soybeans and the S&P? They're both volatile markets with lots of participation. The overnight margins are pretty low. On average, in a month they'll move at least $5000 from top to bottom (or bottom to top), and that's plenty of price action to make money off of. Those are all the reasons I need.
As my account grows I may add a third market. Natural gas can be really good, and I like the major currencies but a lot of times they make their moves when I'm asleep. One day I would like to trade oil but I don't have enough money for it. Not the overnight margin, but the risk. Under my system I would risk $1000 per contract, or $1 in price. That's for full size, not mini. I could trade the mini oil but it's thin.
The S&P rallied on me this afternoon, knocking me out for a break even at 1310. This is how it goes most of the time. Small wins, small losses, and break evens. I figure that's what you get 90% of the time, and the other 10% it's big fish.
Big fish = money trades. All you have to do is get through the pissy little boring trades, the minnows I like to call them, and be ready when the big fish swim by. That how you make the money. Big losses should not be part of your equation, unless you're a fool and don't use stops, or you like to hold positions in the grains on days when major crop reports come out.
The S&P failed to go higher and has in fact reversed, giving me a confirmation to sell at 1300. Days like today you have to have a short memory and no biases. You just gotta be able to go whichever way the market's going to go. Probably helps to ignore the news, too. I cancelled my buy order for 1320 and have a sell order working for 1300.
Stop was hit on soybeans for a 10-cent profit. Entered at 1210 and stopped out at 1200. At this point I have no open positions, with a sell order for mini S&P at 1300.
The mini S&P has rallied overnight, and this morning I initiated a long position at 1320 with a sell stop at 1310. Technically the chart gave a buy signal for 1310 in the wee hours of the night, and had I been awake I may have taken it, but that doesn't matter now. The trend is up.
Soybeans, meanwhile, have given a buy signal for 1210. I expect this to get hit at or right after the 9:30 opening.
Long soybeans from 1215. I wish my 1210 buy order, which I had sitting all night, had gotten filled before the 7:15am close. When I saw that there was going to be a gap up at the 9:30 opening I took that order off, watched the market do its wild and crazy thing for the first minute, then jumped in at 1215. Best I could do at the time. The market has since gone lower, back down to 1210. Of course if I didn't get in at 1215 it would be north of 1220 by now, lol. Oh well. I've learned that if you have the choice between entering a trade a little higher or lower than you want, or waiting for a reversal, don't wait. Just take it. If it's a good trend it won't matter where you got in.
