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2007 Trading
Activity
January
2007 Trades
Balance in
Trading Account as of January 1, 2007: $466.34
No trading activity
in January 2007.
Balance in
Trading Account as of January 31, 2007: $466.34
February
2007 Trades
Expiration of
March 2007 Corn Option
Here was a trade where I really messed up
the most in 2006. March 2007 Corn had been in a long uptrend
since September 18, 2006. Even though Trend Seeker was showing
that Corn was still in a strong uptrend, I wanted to try to buck the
trend by buying a March Corn put as I figured that Corn was due to have
a sharp correction. Well, this just goes to show the folly of
trying to trade against the prevailing trend. On October 18, 2006 I
purchased one March Corn 300 put for 11 cents or $550 plus fees and
commissions. My second mistake was in risking too much money on this
trade. To make a long story short, March Corn continued to soar,
reaching a high of 393 on November 30, 2006. Of course, this made the
value of the option drop to nearly zero. On December 31, 2006 this
option had a value of $6.25. Another mistake was that I didn't
have a good exit plan for the trade. I kept thinking that March
Corn would turnaround and I would be able to recoup my loss. But, alas,
that never happened. After the option had lost most of its value, I
figured I might as well stay in the trade in case March Corn did turn
around. As of the end of 2006, it looked as if March Corn was finally
forming a top formation. However, Corn prices nver did drop
signifcantly down before my option expired worthless in February 2007.
My trading account had a value of $460.09 at the expiration
of this option on February 20, 2007.
Balance in
Trading Account as of February 28, 2997: $460.09
March 2007
Trades
No trading activity in March 2007.
Balance in
Trading Account as of March 1, 2007: $460.09
April
2007 Trades
No trading activity in April 2007.
Balance in
Trading Account as of April 30, 2007: $460.09
May
30, 2007: Deposited $1,300.00 into brokerage account.
Balance in
Trading Account as of May 31, 2007: $1,760.09
June 2007
Trades
September 2007
Corn: On Thursday, June 21, I placed an open order to buy 1 Corn
contract at 399.5 cents or lower. On June 11, Corn had at last broken
out of the channel that it had been in since mid-March. Corn prices had
advanced rapidly after that breakout so I was waiting for a pullback to
support to enter a trade to go long. At the start of trading on
June 21, prices were just above support at 399 so I placed my open
order. I got filled at 398.5 cents and I set an initial stop at 394.5
cents. Unfortunately, prices kept plunging that day and I was stopped
out right at my stop of 394.5. So, I had a loss of 4 cents or $200 on
this trade before commissions. I feel like I was lucky to that I was
able to limit my loss to only $200 as the next day, prices fell 18
cents on this contract which would have been an additional loss of
$900. This trade was very much a lesson in learning the value of using
a stop to minimize possible losses.
Trading Account
Balance as of June 30: $1,470.09.
July 2007
Trades
December 2007
Eurodollars: December 2007 Eurodollars had formed a channel and
moved down to
94.58. Prices then moved back to resistance at 94.73 making the
fishhook formation. Prices moved down sharply on July 5 closing at
94.65. I wanted to wait for prices to pull back closer to resistance
before going short in this market.The Trend Seeker rating was Down.
Prices pulled back on July 10
and I put in an open order to go short one contract at 94.67. I got
filled at 94.67. I set my stop loss at 94.72. My initial target for
this market was the contract low of 94.40. The next trading day, July
11, I got stopped out at 94.72 as prices moved as high as 94.735 during
the trading day. I probably should have had my stop set higher, but I
really didn't want to risk much on this trade. My loss on this trade
was 5 points or $125.00 before fees and commissions.
September 2007
Soybean Oil: All of the markets in the soybean complex
seemed to be charging upwards while the rest of the grains seem to be
meandering. This seems to be in line with the fundamental news of the
shortage of soybean planting this season as so much acreage has been
converted to corn planting. Anyway, on the technical front, there
was a trade shaping up in September Soybean Oil using the High Lo
Breakout strategy. On July 10, Bean Oil closed at 38.09 which was above
it's previous high of 38.08 Trend Seeker said the trend was Up and so
now I had signals to enter this market. On July 12, I put in an open
order to buy 1 contract at 38.10 or lower and I set my initial stop at
37.77. I was filled that day at 38.08. Prices closed on Friday, July 13
at 38.30 which gave me a profit at that point of $132.00
However, my joy at finally having some profit did not last long. Prices
gapped way down at the start of trading on Monday, July 16 and so I was
stopped out at 37.65 which gave me a loss of $258.00. I was glad though
I got out at 37.65 because prices continued to fall the rest of the
day, down as low as 37.36 at one point. Today, July 17, prices have
continued to fall, at one time as low as 36.91 before closing at 37.23.
What a nerve-wracking ride!!!
October 2007
Sugar:
Sugar prices, as I have written before, have been
in a channel since the first of April. It looked for awhile as if
prices were going to close below the bottom of the channel and that I
would have a trigger for a trade to the downside. But, that never
happened as prices bounced off the bottom of the channel and moved to
the top of the channel. The Trend Seeker Trend changed to up as well.
On of July 13, prices closed above the top of the
channel triggering a trade to the upside. However, on July 16,
prices fell back into the channel. On July 17,
prices did move back above 9.83 and so I placed an open order to
buy one October Sugar 9.75 call for 38 points (425.60) or less. My open
order was not filled at the price I wanted as the market advanced
significantly, moving up to as high as 10.52 on July 19. So, on July
20, when price pulled back under 10.30, near a support level, I
put in an open order to buy
one October 10.50 call at 30 points or less. This order got filled at
30 points. 11.00 is my first target for this market. On Friday July 27,
October Sugar prices broke below support at 10.00. My plan was to
liquidate my position if prices broke through this support level. So, I
liquidated my option at 17 points. Loss on this trade - $145.60.
July 30:
Deposited $50 into brokerage account.
Balance In
Brokerage Account as of July 31: $855.51
August 2007
Trades
August 7:
Deposited $50.00 into trading account.
August 13:
Deposited $50.00 into trading account.
August
20: December
2007 Corn: On Friday, August 17, I placed an open
order to buy 1 December Corn 320 put at 7.5 cents or less after
December Corn finally closed below the bottom of the pennant formation
on August 16, My open order was filled on Monday August 20 at 7.5
cents or $375. My
first profit target for December Corn is for prices to fall to the
support level at 317. After that, my next profit target is the 300
level, and my next profit target after that is the 280
level.
This trade has been something of a wild ride from
the very beginning. The market moved against my position on the first
couple of days of this trade. On August 23, prices even zoomed up to
372 before pulling back and closing at 362 for the day. Over the next
week, prices continued to fall. December Corn closed at 339 on August
31 and my option closed at 9.6 points or a value of $487.50. As of August 31, my profit on
this
trade was
$112.50
before commissions.
August 31:
Value of brokerage account: $984.08.
September
2007
Trades
September 12,
2007: Liquidated
December Corn 320 Put Option: December Corn prices closed
sharply up on September 12, closing at 356.4, up 15.2 cents for the
day. Since prices went throught the strong resistance at the 355 level,
and, because this market seems to be having so much trouble
breaking out of its trading range between 372 and 324, and, because
this market is staying so choppy, up sharply one day and down sharply
the next, I decided to pull the plug on this trade. Also, I
wanted to minimize any additional loss on this trade because of time
decay on the option. So, I'll just stay on the sidelines until a
better trade sets up and this market gets more firmly established
in a trend. I liquidated my option at 6.0 cents or $300, which gives me
a loss of $75 on this trade before commissions.
September 27,
2007: Deposited $200 into trading account.
September 30,
2007: Value of brokerage account: $992.65.
October
2007
Trades
October 3, 2007:
January 2008 Orange
Juice.
The January 2008 Orange Juice contract broke out of a 1-2-3 Bottom
Formation on October 2 and the
Trend Seeker rating was Up extreme. So, on October 3, I placed an
open order to buy one January 2008 OJ 145 call option for 450 points or
$675. Surprisingly, my order got filled that day at 450 points.
The market
closed up 1.7 cents on October 3 and closed up 3.10 cents on October 4.
My first profit target for this market is 143 cents and my second
profit target is the 50% level of 154 cents. Theres a third profit
target of 166 cents but that level probably wouldn't be reached before
this option expires on December 21. On October 8, I liquidated my
position in this trade as prices moved down to my stop-out point of
134.00. I liquidated my option at 500 points or $750, which gives me a
$75 profit before commissions.
October 11, 2007: December 2007 mini DJIA.The mini
DJIA on October 9 closed at 14237, which was above the
previous contract high of 14213 which triggered an entry signal. Trend
Seeker was Up with a weakest ranking. On October 11, I placed an open
order to buy one
December 14700 call
option for 150 points or $750 and I got filled later that day for 150
points. The market sold off sharply during the afternoon, but did
recover somewhat before the close. On October 15, I liquidated my
option as the DJIA started to sell-off sharply. I liquidated my option
at 127 points which gives me a loss of $115 before commissions.
October 16, 2007:
Deposited $200 into brokerage account.
October 24,
2007: January 2008 Soybean Oil.
January Soybean Oil had closed above the flat top triangle on October
18. I did not want to chase this market, so I waited for it to form a
fishhook formation, that is, come back down just under the top of
the flat top triangle and then rise back above the flat top triangle.
The fishhook formation was completed on October 23, so, on October 24,
I placed an open order to buy 1 January Soybean Oil 42 call for 93
points or better. My open order was filled that day at 90 points or
$540. One point in Bean Oil equals $6. My
price target for this market is 43.97 cents. As of the close of trade
on October 31, the January Soybean Oil 42 call was worth $990 giving me
a profit as of October 31 of $450 before commissions.
October 31, 2007 : Value of
brokerage account: $1,341.02.
November
2007
Trades
November 6, 2007:
The trade in Soybean Oil that I initiated on October 24 turned out to
be a super trade. Bean Oil had moved up nicely since I entered the
trade on October 24. On November 6, January Soybean Oil prices moved up
sharply and hit my target price of 43.97 cents. As soon as my
targe price was hit, I liquidated my January Soybean Oil 42 call
for 250 points or $1,500. That gave a profit on this trade of $960
before commissions. Again, this was really a super trade that provided
a very nice profit for a trade that I had been in for only two
weeks. It was great to see my trading plan work out so well.
November 30,
2007: Value of brokerage account: $1,847.09.
December
2007 Trades
December 6, 2007:
On December 4, March Corn closed at 411.2 cents. The top of the
long channel March Corn had been in since June of 2007 was 409 cents.
Since
there was a close above the top of the channel and since Trend Seeker
said the trend was Up strong, on December 5 I placed an open order to
buy one March Corn 420 call at 16 cents or $800. My open order was
filled on
Decmber 6 and this market continued a nice uptrend. On
December 17, I liquidated my option for 28 cents or $1,400. I went
ahead and liquidated the option because my price target had
been hit and then prices started easing back down slightly. My target
for
this trade was
the
high made on June 18, 2007 of 439 cents. March Corn reached a high on
December 17 of 441 cents. Profit on this trade was $600 before
commissions.
December 31,
2007: Value of brokerage account: $2,384.23
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About
J. Steven Tucker, CPA
Steven
Tucker is a Certified Public Accountant licensed in North Carolina and
has has his own CPA practice for the past eighteen years providing tax
and financial advice to a wide variety of small businesses. He has been
trading commodities, both futures contracts and options for about six years.
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Click
Here To E-mail Steven Tucker
MyLearn2Trade.com
1495 Rymco Drive Ste 203
Winston Salem NC 27103
336-760-1614
DISCLAIMER
Be aware that investment in commodity futures and/or options for
potential profit is accompanied by the risk of loss. You should
therefore carefully consider whether such trading is suitable for you
in light of your financial condition. The benefits of limited risk in
trading futures options is only available for long options (Buying
"Put" and "Call" Options.) "Limited Risk" refers to the amount of any
potential loss, not the likelihood of loss. Trading futures options can
involve the loss of the premium paid on the option, plus commissions
and fees. Past results are not indicative of future results.
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