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Nice trend in Rice
Posted: Fri Apr 18, 2008 2:52 am
I consider to trade rough Rice on CBOT. It looks that the trend is long and profitable.
Anyone here who have experiece in rice trading and what to look up for?
Posted: Fri Apr 18, 2008 7:09 am
It is a fairly thin market.
Would take a brave soul indeed to go long on RR at this stage. Despite worldwide hunger strikes, evaporating world water supplies and less arable lands being used for Rice (because of the biofuels craze), I think RR will make an awesome Short fairly soon. Just my 2 cents.
Posted: Fri Apr 18, 2008 7:38 am
I've traded thin markets for years and still trade the silly things like rice, oats and oj.
keep in mind that when you want to get in or out of a position there might not be a two sided market. in oj the only bid might be thousands of dollars away per lot, in rice and oats there will likely be no bid at all and you will have to work your order for quite some time.
I also adjust my size for the contract volume so I'm not spending days trying to get out of 20 lots.
basically your actual trading will be night and day from your backtesting.
concerning rice, watch out for some sort of agreement by govts to stop the run up in price. they could set a price limit or dump supply or any number of crazy thing that would send the futures price down the expanded limits for days on end.
Thanks for your comments
Posted: Mon Apr 21, 2008 6:28 am
Thank you for your comments, i more looking to incorporate in long term portfolio but those liquidty things does not feel right.
What a beautiful trend
Posted: Wed Apr 23, 2008 5:06 pm
I just closed out my long rice position a couple of days ago, it is the cleanest trend I have ever seen, in any market. The thing I don't like is the liquidity, huge bid/ask. Althogh I had a tiny position, I was still worried that I might not be able to get out with a decent slippage. Since looks like the thing is still going up, I have probably closed out too early, but in this situation, I would rather be too early than too late.
Anyone else caught a portion of the trend?
Posted: Thu Apr 24, 2008 3:13 am
Been long on Rice since August 2007
I'm only running a very cautious system, with fairly low risk, so my system asked for only 1 contract. Hopefully liquidity shouldn't be a prob. at this level.
Posted: Thu Apr 24, 2008 8:30 am
A great trend indeed Dave
Posted: Thu Apr 24, 2008 9:04 am
sounds nice to be getting out at these levels.
I haven't been able to find a profit target type exit that tests to my satisfaction so I've had to suck it up and assume I'll be giving back a large chunk before my stop price comes close. and of course then I will be trying to find a bid, haha.
even after all that these monster positive R trades make up for a whole bunch of little losers, so the risk seems worth it.
Posted: Mon Apr 28, 2008 5:41 pm
Yeah, Exit is the most difficult aspect of trading, I am still struggling with that. Seems that there is no perfect exits. Either you miss the remaining part of the trend, or you give back a whole chunk - there is not other way around. Baruch said "only liars consistently catch the top/bottom".
Rice futures are exhibiting huge volatility recently, and it is certainly not trending anymore, at least temporarily, so I got out. Now I am considering shorting it if a top formation forms (I am not a pure trend follower, I use a lot of pattern recognition learned in stock trading). Since we are presumbely in a strong secular bull market in commodities while a secular bear/consolidation market in equities, these patterns work so very much better in commodities at this moment. It is my observation that classic chart pattern work best in a strong trend
Posted: Thu May 01, 2008 2:35 am
Notice the reversal of rice at almost exactly $25.
Did people just decide they were not that hungry, or is this speculators targetting a nice round number for the short ?
Given its probably the latter, there will probably be covering at $20-$22 (same round number principal) leaving the long trend intact.
(I'll not take any action other than follow my system, but its nice to observe these things)
Posted: Thu May 01, 2008 10:24 am
Dave, I admire your disciplined approach and your ability to sit tight with a winner (I personally always find it difficult to let profit run).
So in the Rice futures case, what's your exit rule? Are you doing pure long-term trend-following? Also, since you have been in this trade for a long time (since Aug 2007), have you rolled the contract a few times, or you just bought a very long-term contract in the begining?
Posted: Thu May 01, 2008 1:49 pm
I'm just using the out-of-the box Donchian Breakout system.
I use a fixed date roll, & have rolled every 2 months so far.
I know it makes "enough" money in the long run
I've recently upgraded to TB Builder and made some nice but simple enhancements to the standard Donchian system and I'm planning to move over to this in a few weeks. But as a starting point, the simplicity of the Donchain Breakout has been great.
Posted: Thu May 01, 2008 2:21 pm
A great catch indeed.
Yes, as long as we follow the trend, cut losses, ride winners, and bet small, any trending following approach, regarless of the specifics, has to work in the long run. John W. Henry said: The nature of markets is to trend, the nature of life is to trend!
Posted: Wed Aug 06, 2008 6:19 pm
Now that rice has established its down trend for sure, it might be a good time to ride the thing down - that's the beauty of trading, like Marty Schwartz put it in his "Pit Bull" book, AC/DC, it works both ways :
Posted: Fri Aug 29, 2008 11:48 am
Well, apparently I was wrong, instead of going down, now looks like it is trending up again - maybe it will prove me wrong again