Trading Corn 2012-05-13



I got into trading corn last week. I only made one trade. At one point, I was up about 12 points. In the end, I exited at a 10 point loss. I was hoping for a 20-25 point profit.

It has been nearly a year since I've traded corn. I now remember why I stopped, and why I never should have made that trade to begin with. The reason has to do with a topic for which I plan to write an article under the trading strategies section of this website. That reason is that you, and I, and everyone, should only trade markets that they are comfortable with, are familiar with, and have had proven success with. I have had successes in corn, but overall I just wind up getting my ass kicked.

I tried trading corn catching an MACD divergence paired with some interesting data I got from the COT reports and it was working, and then the WASDE hit. In the past, this is the experience I've had with the WASDE. Preliminary forecasting can either be right or wrong, and then on market open price can either go with the WASDE or against it. So right off the bat, in my experience, there is only a 25% chance that you will be moving with the price after a WASDE. So often, prices will shoot with, or against, the WASDE by some 20 or so points only to rebound in 20 mins and shoot off the other way. Over the two years I've been watching, not necessarily trading, the grains, I can now see why the hordes liquidate en masse their positions the day before WASDE.

What all this really boils down to, for me, is that I don't know the grain markets and I am not comfortable with them. I have a list of standing rules, and I'm seriously thinking about adding "Do not trade grains!" to that list.

Aside from all that, I am looking for a short entry in the USDX and a long entry into sugar, both short term. Also, I'm looking for a bottom in AUD/USD as well as a double top in GBP/USD. Also, I'm still learning about the COT and how to use it effectively. This is also something I plan to write about in the future.

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