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Mascoutah, Illinois | It has always been my goal to help people in marketing or trading. If we can step back and take a look at what happened today in corn without letting emotion get in the way we can learn a few things.
The first question you need to ask yourself is what catalyst was going to take us higher today?
1. Was it the 600 million bushels of unharvested corn? Everyone already knew about it.
2. Was it the low test weight and quality of the corn? Everyone already knew about it.
3. Was it a sub 13 billion bushel crop? An extremely small chance of that number being reported.
To take a market higher, you need either momentum or a catalyst that takes everyone by suprise. We had less than a five percent chance of that happening before the report was released. All of the bullish news was already baked into the price of corn. The tipping point was we failed to rally above $4.25 last week which was the fifth time we failed right in front of a report. The market was signaling to sell corn if you were following closely.
*****Remember, we rallied throughout most of the harvest from around $3.20 to $4.25. That is more than a 30 percent move which is unprecedented during harvest season. If you take a look back and ask yourself some of the tough questions, you get it right more times than you get it wrong. Never, and I repeat never be afraid to put a thesis together of why you think markets are going up or going down. Post it on this site, or talk with the guys down at the coffee shop. The more informed you are, the easier I feel it is to make decisions.*****
We all learn each and everday from each other. Using that knowledge to make us better in the future is the most important tool besides not letting emotion get in the way of making a sale or trade. IT IS NEVER A SIN TO ADMIT YOU ARE WRONG EITHER AND TO GET OUT OF A LOSING POSITION.
Edited by djmcountryboy 1/12/2010 22:37
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A trading lesson for anyone interested. (Learning tool)
