Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

brownsfan019

Trading the Grains - Soy, Corn, Wheat

Recommended Posts

One thing that really helped my equity curve become more smooth was using markets where the best opportunities exist. I'll dive into this some other time, but I wanted to bring to focus trading the grains (Soybeans, Corn, Wheat) contracts as weapons in your arsenal when you go to battle each day.

 

Some characteristics of these markets that I've noticed:

  • Open @ 10:30am EST (very convenient to roll to these marekts once other markets have been open for a bit)
  • These contracts move and move quick on the open usually
  • Good liquidity for daytrading
  • Provide a non-correlated market to the indexes or currencies to trade

3 Main markets to choose from in this arena for daytrading purposes:

Personally, I like the movements on the ZS the best.

 

IMPORTANT TO WATCH ON GRAINS: WHEN ROLLOVER IS NEAR

In my haste to get this up I missed an important consideration when trading grains - watching when rollover occurs. When rollover is near, the volume can split over the current and future contract which can cause each contract to slow down b/c volume is split. Just be aware of when rollover is near and watch the overall volume on each contract.

 

Take a peak if you are looking for a non-correlated index market to trade. As always, watch these and practice on sim before placing any real money trades.

 

Just remember that I can't stress enough that these guys will move on the open and move swiftly waiting for no man. I would suggest using a non-time based chart (volume, tick or range) to smooth out the fluctuations a bit.

Edited by brownsfan019

Share this post


Link to post
Share on other sites
[*]Provide a non-correlated market to trade

.

 

 

I agree they are great markets.

 

What do you mean by non correlated?

The three markets are correlated to each other, please explain.

Share this post


Link to post
Share on other sites
I agree they are great markets.

 

What do you mean by non correlated?

The three markets are correlated to each other, please explain.

 

Provide a non-correlated market to the indexes or currencies to trade

 

Post edited, thanks for the question. I should have clarified better.

Share this post


Link to post
Share on other sites

These are relatively cheap contracts, in comparision to Stock index futures-min tick is $12.50. If the concern is daytrading margins it really depends on your broker if they will provide daytrading margin or not.

 

Corn is the cheapest contract. price 340's

Wheat 2nd cheapest contract. price in 450's

Soybean most expensive of the three contracts.. price in the 920's

 

You can get more inforamtion on them at the CME.com, I think they are listed under Agricultural commodities, its been a while since I have visited CME/cbot so im not sure--

Share this post


Link to post
Share on other sites
I am not too familiar with these futures. What is the going rate right now for one contract and what is their tick in $?.

 

My original post has direct links to the CME. I went ahead and did the work for you.

;)

Share this post


Link to post
Share on other sites

Brownsfan,

I was looking at the Corn futures on a 30 tick chart. Is that what you would recommend. I included the early morning move on 9-30 below.

 

Do you have any other ideas for trading these commodities profitably in the early part of the session?

 

What time frame do you usually restrict your trading on these like you do with the ES?

 

attachment.php?attachmentid=13933&stc=1&d=1254553795

5aa70f32daa96_corn9-30.thumb.JPG.a742ce8d545b91d0c99408e754f8d864.JPG

Share this post


Link to post
Share on other sites

Dinero - the chart setting really is up to you and your comfort level. I would suggest opening up at least 3 different chart settings and see what you like the best:

1) Volume Chart - something like 50-250

2) Range Chart - something like 4-15

3) Tick Chart - something like 30-100

The higher the number, the slower the chart will print new candles. From there, it's a comfort level. I personally like range charts on the ZS.

 

Watch them in real-time and see what you like. Just looking at static charts is misleading b/c you might not be noticing that there are bursts of candles printed and then not much, esp. on the open.

 

Lately I've seen the ZS pretty much head in 1 direction once it's decided what that direction is (and usually doesn't take too long). If you can get on the right side, can make some quick money as this bugger doesn't wait around.

 

Good luck and let me know how it goes and what you are seeing.

Share this post


Link to post
Share on other sites

I new to this forum, but not the "Grains".

Here is some more food for thought on the Beans.

Look at Spread Trading "Old Crop/ New Crop".

I am setting up for the next run on the SN10/ SX10 once I see the seasonal lows kick in on the Seasonal Charts.

Just for an example, last years Old / New crop in beans was pretty profitable.

Late Dec 08 the Spread was near the ZERO line. By first week in July it was up in the 200's.

That is $50 per point, per contract. Nice run. Hope to do it again.

Share this post


Link to post
Share on other sites

Some initial observations on ZS from an equity index trader - not in any particular order:

 

1) The overnight (I'm in the us) trading seems to be very active. I assume Asian traders are actively trading ZS.

 

2) As a globex trader I assumed opening price gaps were a thing of the past. Not so with ZS. For some reason the CME designed this contract with a 2 hour and 15 minute time gap before the open outcry session.

 

3) Trying to figure out which contact month to trade (the high volume contract), I did some volume analysis on all the contract months going back to 1/1/09. The current Nov contract has/had the daily high volume going all the way back to the first day my data vendor has data for the Nov contract - 6/29/2009. During this time, the Sept nor the Aug contacts ever exceeded the Nov's volume. Is this typical or was there something special about the Nov contract this year?

 

thanks,

mr. bojangles

Share this post


Link to post
Share on other sites
Some initial observations on ZS from an equity index trader - not in any particular order:

 

1) The overnight (I'm in the us) trading seems to be very active. I assume Asian traders are actively trading ZS.

 

2) As a globex trader I assumed opening price gaps were a thing of the past. Not so with ZS. For some reason the CME designed this contract with a 2 hour and 15 minute time gap before the open outcry session.

 

3) Trying to figure out which contact month to trade (the high volume contract), I did some volume analysis on all the contract months going back to 1/1/09. The current Nov contract has/had the daily high volume going all the way back to the first day my data vendor has data for the Nov contract - 6/29/2009. During this time, the Sept nor the Aug contacts ever exceeded the Nov's volume. Is this typical or was there something special about the Nov contract this year?

 

thanks,

mr. bojangles

 

1) I suppose some overseas guys are trading afterhours. I only trade during pit hours.

2) And IMO that's why this thing will move on the open. There's built up interest while it's closed and that open gets it going quickly. I much prefer that over the 24 hours of the other globex products. I kinda wish everything was just open at 930am and closed at 415pm.

3) No idea.

Share this post


Link to post
Share on other sites

I'm assuming there are some ZS specific economic reports to be aware of. Could you point us towards a good source to find what and when they are - a ZS economic calendar. As a minimum, to know when to step aside.

 

thanks,

mr. bojangles

Share this post


Link to post
Share on other sites
I'm assuming there are some ZS specific economic reports to be aware of. Could you point us towards a good source to find what and when they are - a ZS economic calendar. As a minimum, to know when to step aside.

 

thanks,

mr. bojangles

 

I pretty much focus on trading the first 30 mins or so of the ZS being open, so I'm not looking at any grain reports and what not. I'm in, out and wait till the next day to do it again.

 

With that said, if you swing trade this and/or invest in this, then I would do some serious homework on these markets before putting any real money at risk.

Share this post


Link to post
Share on other sites

I updated the original post but wanted to give an example here showing how the volume can split when rollover is near.

 

When rollover is near on the grains and the volume is split, you should anticipate smaller moves b/c there is literally some people trading the old and some the new and there isn't as much power behind the pushes.

 

Today's example:

 

attachment.php?attachmentid=14700&stc=1&d=1256828318

 

That is taken from my quote window on OEC trader and the last column is total volume for the day. As you can see, the volume is basically 50/50 at this point. As a direct result, we are seeing this type of price movement:

 

attachment.php?attachmentid=14701&stc=1&d=1256828495

 

 

So plan accordingly when you see volume split. Do not expect huge, quick movements as you see when there is just 1 contract being traded.

tl1.png.dd7bf7b04033241c26d68d223522547a.png

tl2.png.e5dc071320a98c764d1888af64456fe8.png

Share this post


Link to post
Share on other sites
That explains a lot. I was watching the ZS yesterday and today wondering why the large moves weren't happening. I really appreciate the post about this.

 

Just glad I thought of it now. But it was apparent today b/c I was sitting there going - come on, what the hell is going on here? I just told these guys on TL that this thing moves and then it's at a standstill. Well, rollover is the one time you may see the movements not be as much. There was still money to be made on the ZS the last 2 days, but the moves are smaller and slower.

Share this post


Link to post
Share on other sites
Just glad I thought of it now. But it was apparent today b/c I was sitting there going - come on, what the hell is going on here? I just told these guys on TL that this thing moves and then it's at a standstill. Well, rollover is the one time you may see the movements not be as much. There was still money to be made on the ZS the last 2 days, but the moves are smaller and slower.

 

There is always money to be made.... its a question of whether I can make it. If you would, leave some for me to make tomorrow instead of selfishly taking it all. :)

 

I am so used to stocks and still relatively unfamiliar with the rollover process. How long should it affect the volume? When do you normally switch to the new contract?

Share this post


Link to post
Share on other sites
There is always money to be made.... its a question of whether I can make it. If you would, leave some for me to make tomorrow instead of selfishly taking it all. :)

 

I am so used to stocks and still relatively unfamiliar with the rollover process. How long should it affect the volume? When do you normally switch to the new contract?

 

The rollover happens fairly quickly - a few days. And all futures contracts have rollover, but they vary based on what market is being traded.

 

I move to the new contract as soon as the volume there is the same or greater than the old one. I do that simply to make it easy and should I somehow forget to close a trade or something, I'm in a contract that can be closed easily b/c as soon as the volume dies on the old one, it dies big time.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 29th March 2024. GBPUSD Analysis: The Pound Trades Higher But For How Long? The global Stocks Markets are closed due to Easter Friday (Good Friday). The NASDAQ continued to follow the sideways trend while other indices again rose. The SNP500 reaches an all-time high, but the NASDAQ remains under pressure from Tesla, Meta and Apple. The Euro continues to trade lower against all major currencies including the US Dollar, Euro and Japanese Yen. The British Pound is the best performing currency during this morning’s Asian session. However, investors are largely fixing their attention on this afternoon’s Core PCE Price Index. GBPUSD – The Pound Trades Higher but For How Long? The GBPUSD is slightly higher than the day’s open and is primary due to the Pound’s strong performance. At the moment, the British Pound is increasing in value against all major currencies. However, the US Dollar Index is also trading 0.10% higher and for this reason there is a slight conflict here. If investors wish to avoid this conflict, the EURUSD is a better option. This is because, the Euro depreciating against the whole currency market avoiding the “tug-of-war” scenario. The GBPUSD is trading slightly lower than the 2-month’s average price and is trading at 49.10 on the RSI. For this reason, the price of the exchange is at a “neutral” level and is signalling neither a buy nor a sell. The day’s price action and future signals are possibly likely to be triggered by this afternoon’s Core PCE Price Index. Analysts expect the Core PCE Price Index to read 0.3% which is slightly lower than the previous month but will result in the annual figure remaining at 2.85%. The PCE rate is different to the inflation rate and the Fed aims for a rate between 1.5% to 2.00%. Therefore, even if the annual rate remains at 2.85%, as analysts expect, it would be too high for the Fed. If the rate increases, even if only slightly, the US Dollar can again renew bullish momentum and the stock market can come under pressure. This includes the SNP500. Investors are focused on the publication of data on the UK’s gross domestic product (GDP) for the last quarter of 2023: the quarterly figures decreased by 0.3%, and 0.2% over the past 12-months. This confirms the state of a shallow recession and the need for stimulation. The data, combined with a cooling labor market and a steady decline in inflation, increase the likelihood that the Bank of England will soon begin interest rate cuts. In the latest meeting the Bank of England representatives did not see any members vote for a hike. USA500 – The SNP500 Rises to New Highs, But Cannot Hold Onto Gains! The price of the SNP500 rises to an all-time high, before correcting 0.33% and ending the day slightly lower than the open price. Nonetheless, the index performs better than the NASDAQ which came under pressure from Tesla, Meta and Apple which hold a higher weight compared to the SNP500. For the SNP500, these 3 stocks hold a weight of 9.25%, whereas the 3 stocks make up 14.63% of the NASDAQ. The SNP500 is also supported by ExxonMobil’s gains due to higher energy prices. The market will remain closed on Friday due to Easter. However, the market will reopen on Monday for the US and investors can expect high volatility. Investors will also need to take into consideration how the PCE Price Index and the changed value of the US Dollar is likely to affect the stock market next week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • MT4 is good and will be good until their parent company keep updating the software, later mt4 users will have to switch to mt5.
    • $SOUN SoundHound AI stock at 5.91 support area , see https://stockconsultant.com/?SOUN
    • $ELEV Elevation Oncology stock bull flag breakout watch , see https://stockconsultant.com/?ELEV
    • $AVDX AvidXchange stock narrow range breakout watch above 13.32 , see https://stockconsultant.com/?AVDX
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.