Weekly Positions Update - 12/16/07

Yesterday I pounded through a great read, Winner Take All: A Top Commodity Trader Tells It Like It Is, by William R. Gallacher. I'll gather my thoughts and post what I took away shortly.

Overall on the portfolio side, I'm sure you notice some major changes from about a month ago (when things were running quite reckless and out of control). I am doing my best to reform my old ways - here's how I'm currently approaching things:

1. Since we're in a flat out bull market for commodities, I'm buying anything that hits a 20-day high. Anything. Could be crude oil, feeder cattle, or sugar - doesn't matter. Everything goes higher in a bull market, so I'm letting the market sift these out rather than me buying and holding something - which I have been doing.
2. If a current position hits a 20-day low, I sell. Again, no questions asked. I'll re-enter the position on a new 20-day high. Easy - automates the exiting process.
3. Not have more than 25-30% of the portfolio "at-risk" at any given moment. In other words, if the world went to hell in a handbasket in 0.001 seconds flat, here's what I would lose.
1. I'm working on a spreadsheet to calculate this, which I am still tinkering with. I'll share when finished. Basically the idea is that I have trailing stops at the 20-day low of each position. The difference between the current price and the stop (times the amount of leverage) equals how much I can lose on that position.
4. The new return goal is 2% per week. If I break this, great. The idea is to try not to lose money in a given week. I figure if I can hit this # approximately, the returns will be great. Helps me to focus on the weekly # rather than trying to triple my portfolio in a year (which is what 2% will do over 52 weeks)
   

This week in the market, we've seen a big rally in the softs and the grains. My entry method put me into corn and soybeans a couple of weeks ago, and I am thankful for it this week. How about that to instill some confidence! Sugar is also showing some life - nice to have you back, sugar!

Date	Position	Qty	Month/Yr	Contract	Strike	Call/Put	Entry Price	Last Price	Profit/Loss
12/07/07	Long	1	MAR 08	Corn			415	438 1/4	$1,162.50
12/14/07	Long	1	MAR 08	Corn			439	438 1/4	($37.50)
11/09/07	Long	1	MAR 08	Coffee 'C'			126.05	133.80	$2,906.25
11/28/07	Long	1	JAN 08	Rough Rice			13.080	13.125	$90.00
11/28/07	Long	1	MAR 08	Soybeans			1108	1175	$3,350.00
06/04/07	Long	2	JUL 08	Sugar #11			10.05	10.84	$1,769.60
08/01/07	Long	1	JUL 08	Sugar #11			10.48	10.84	$403.20
10/18/06	Long	1	JUL 08	Sugar #11			12.08	10.84	($1,388.80)
Net Profit/Loss On Open Positions:									$8,255.25

Current Cash Balance	$58,796.45
Open Trade Equity	$8,255.25
Total Equity	$67,051.70
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$67,051.70

Cashed out: $5,000.00
Total value: $72,051.70

Weekly return: 12.75%