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  #1  
Old 01-17-2017, 02:10 PM
Simply Remember
 
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One slow boring way to make money in commodies futures

You need to open a futures account and fund it with at least $10,000. There are commodities that farmers simply will not grow more of if they are losing money.

One of these is corn. The corn market hit $8.00 a few years ago. Farmers increased corn acreage from 88 mil, to 90 mil to 95 million acres in 2016. The price went up in early June as it commonly does due to drought worries. Then price went down, down, down as the giant crop came in. Looking at the 2008 meltdown of everything with crude hitting $35, corn hit $2.90

So we have a bottom of $2.90 that corn farmers will just sit on their crop. With that in mind, when corn hit $3.30 it was time to buy one contract. There is no reason to believe that the price will not go down further. In fact this year it did. But the beauty of this called "scale trading", is as a owner of a long position, you do not have to sell it out. If you bought Dec 2016 corn, you could now be rolled over into Mar 2017 corn. Anyone who did this is up about $1500 and can add to his position if price goes lower.

The temptation to overplay your account MUST be avoided and this kind of pricing may not happen for years again but when it does, it makes money.
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Old 01-24-2017, 11:32 AM
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Nice information. Have dabbled in commodities futures a few times (made a little $$). Patience is definitely a virtue here and paying close attention to what is going on. Enjoy your posts my man.
LM
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Old 01-24-2017, 11:47 AM
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As I write this, March corn is down 7 cents or $350. If is falls in price for one or two more days, it will again be time to buy perhaps one December corn contract.
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Old 01-24-2017, 04:49 PM
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Is there any tricks to trading in these types of contracts or is it just a matter of buy low and wait on it?
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Old 01-24-2017, 06:22 PM
Simply Remember
 
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one million tricks

There are more dirty tricks than I can put here unless I write a book. 90% of people who do this lose money, myself included. I have a tendency to follow a win in a one contract play with a multi-contract investment that moves against me and I am forced to close at a loss.

The fastest money is made selling short. The more sure long term money is made buying or holding a long position. Click on link and see corn, monthly, weekly, and daily. Monthly will show the $2.90 bottom in 2009. There was a one day trade that hit 3.01 after the glut was evident. If corn moves below today's close it will be a buying opportunity. That being said, prices can easily go down much futher. If the dollar continues to rise (see dollar index (/dxh7)
exports will be hurt. I will write more again.

free charts click below

Commodity Prices / Quotes & Commodity Charts - Free
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Old 01-25-2017, 11:02 AM
Simply Remember
 
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tricks

The futures markets have few rules compared to the New York stock exchange. The Federal Reserve does not like it when a George Soros type of person shorts stocks so if you day trade in, say, GM, you are only allowed to buy and sell one or two times in the same stock per day. I do not know the number as it changes; more flexibility in dull slow markets, tight in today's market.

But in the futures market, when the Senate was debating Cabinet picks, the S&P index (/ESH7) was going up and down like a California seismograph. You could buy on dips, sell and go short on highs, all day long. This I cannot do well. Anyone who can is rich and not telling or writing a book.

One of the dirty tricks that is not illegal is called "running the stops". Right now Dec corn dropped to 389, then rose. Suppose you correctly called 389 as the bottom. You would have bought long @ 389.25 to be sure you are filled. But then a worry hits you. What if I'm wrong? So you enter a sell stop at 388.75 This is an obvious spot to place your stop.

Every trader will see that if 389.00 is violated, the stops will be triggered and the market may fall a nickle or more. Your safe play of a stop loss will have doomed you. Two traders can make a one contract sale at 388.75 just to see the stops get triggered, then buy lower and sell higher. The most evident of this was election night. If you were long a basket of blue chip stocks but entered a stop loss @ 17,500 on the DOW and used the Dec /YMZ6 contract, when the Liberals had a panic and sold, you would have sold your /YMZ6 @ 17,499 or so and have missed the current 20,000 rally.

I should stop here as there are whole books on this subject. There are at least two honest reasons for regular people to use these markets but that is another thread.
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Old 02-16-2017, 08:29 PM
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One slow boring way to make money in commodies futures

Ah ok thanks Auburn, I think I'll stay with what I know haha. I don't need to take a 90% haircut.
I have seen a bunch of movies on this and know the general makeup of the industry but it has alway fascinated me.
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Old 02-17-2017, 10:28 AM
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The real reason these markets exist is for farmers. Watch Eddie Murphy in movie "TRADING PLACES". Funny. A total investing idiot becomes a star. In 2006 I bet on a line of CMich -9 -110. I thought the line was Mich. It was Central Mich. I did not have my glasses on and I thought the "C" was something else. By the time I figured it out, the line had moved to a point where it would have been a 35% loss to buy the other side. So I rode out the blind bet. WINNER. Then I became one of the biggest MAC watchers. Great lines on first score FG vs TD.
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