Commodity Bull Market

Sunday, August 12, 2007

Ag Bull Market is Just Beginning

"If we were sitting at a bar enjoying a beer - a good beer - and I had to tell you only one reason why you should have money invested in the agricultural boom in some way, I think I would say this: Grain inventories are near all-time lows." - Chris Mayer

Rude Awakening Article

Weekly Positions Update - 8/12/07

Date	Position	Qty	Month/Yr	Contract	Strike	Call/Put	Entry Price	Last Price	Profit/Loss	Market Value
01/22/07	Long	1	DEC 08	Cotton			63.00	68.77	$2,885.00
04/16/07	Long	1	DEC 08	Cotton			64.50	68.77	$2,135.00
07/27/07	Long	1	DEC 07	Coffee 'C'			115.30	124.20	$3,337.50
06/19/07	Long	1	DEC 07	Coffee 'C'			120.50	124.20	$1,387.50
12/05/06	Long	1	DEC 07	Coffee 'C'			135.25	124.20	($4,143.75)
03/23/07	Long	1	SEP 08	KC Wheat			502	573	$3,550.00
11/03/06	Long	1	MAY 11	Natural Gas			6.450	7.3880	$9,380.00
03/29/07	Long	1	NOV 09	Soybeans			828	884	$2,800.00
08/11/06	Long	1	MAR 08	Sugar #11			14.50	9.83	($5,230.40)
06/04/07	Long	2	JUL 08	Sugar #11			10.05	10.00	($112.00)
08/01/07	Long	1	JUL 08	Sugar #11			10.48	10.00	($537.60)
10/18/06	Long	1	JUL 08	Sugar #11			12.08	10.00	($2,329.60)
03/20/07	Long	1	JUL 08	Wheat			488	569	$4,050.00
03/21/07	Long	1	JUL 08	Wheat			493	569	$3,800.00
Net Profit/Loss On Open Positions:									$20,971.65

Current Cash Balance	$28,489.20
Open Trade Equity	$20,971.65
Total Equity	$49,460.85
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$49,460.85

Cashed out: $5,000.00
Total value: $54,460.85

Monday, August 06, 2007

New "Cash Out" Strategy

Yesterday I started reading The New Market Wizards: Conversations with America's Top Traders by Jack D. Schwager. I'm just over 200 pages in - a very good read so far.

Something I've been thinking about is how I can continue to grow my account at a rapid pace while managing the risk of total obliteration. Awesome gains are possible in the futures market thanks to the amount of leverage you can use - but leverage works both ways. A bad trade can totally sink you if you are overleveraged.

One trader in the book started his first account with $12K and grew it to $250K over a four year period - only to then lose the entire balance in 4 days. This was a common theme in the book - great traders learning their lesson about leverage the hard way.

So my new strategy is to put away a set percentage of gains. For the near future, for every $15K in gains, I plan to put $5K away. This will leave me with $10K in gains to leave in the account and leverage as I like - while still having $5K in the bank to pay taxes with and save for a rainy day.

I am a strong believer in the commodity bull market, and I think it has at least another 10 solid years to run. So I want to make sure that I'm in the game for the next decade! As tempting as it is to leverage up as much as I can to make millions, I need to control this so that I am not wiped out by a sharp decline.

Weekly Positions Update - 8/06/07

Date	Position	Qty	Month/Yr	Contract	Strike	Call/Put	Entry Price	Last Price	Profit/Loss	Market Value
01/22/07	Long	1	DEC 08	Cotton			63.00	70.42	$3,710.00
04/16/07	Long	1	DEC 08	Cotton			64.50	70.42	$2,960.00
07/27/07	Long	1	DEC 07	Coffee 'C'			115.30	122.65	$2,756.25
06/19/07	Long	1	DEC 07	Coffee 'C'			120.50	122.65	$806.25
12/05/06	Long	1	DEC 07	Coffee 'C'			135.25	122.65	($4,725.00)
03/23/07	Long	1	SEP 08	KC Wheat			502	563	$3,050.00
11/03/06	Long	1	MAY 11	Natural Gas			6.450	7.4650	$10,150.00
03/29/07	Long	1	NOV 09	Soybeans			828	874	$2,300.00
08/11/06	Long	1	MAR 08	Sugar #11			14.50	10.12	($4,905.60)
06/04/07	Long	2	JUL 08	Sugar #11			10.05	10.28	$515.20
08/01/07	Long	1	JUL 08	Sugar #11			10.48	10.28	($224.00)
10/18/06	Long	1	JUL 08	Sugar #11			12.08	10.28	($2,016.00)
03/20/07	Long	1	JUL 08	Wheat			488	558 3/4	$3,537.50
03/21/07	Long	1	JUL 08	Wheat			493	558 3/4	$3,287.50
Net Profit/Loss On Open Positions:									$21,202.10

Current Cash Balance	$28,489.20
Open Trade Equity	$21,202.10
Total Equity	$49,691.30
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$49,691.30

Cashed out: $5,000.00
Total value: $54,691.30

Thursday, August 02, 2007

Trade Alert - Bought More Sugar

I couldn't help it - I really think it's waiting to explode...

-----------------------------------   T R A D E S   C O N F I R M A T I O N S   ------------------------------------
THE FOLLOWING TRADES HAVE BEEN MADE THIS DAY FOR YOUR ACCOUNT AND RISK.
TRADE     MARKET     BUY      SELL   CONTRACT DESCRIPTION                       TRADE PRICE  CC   DEBIT/CREDIT
---------------------------------------------------------------------------------------------------------------------
01-AUG-07  NYBOT           1           JUL 08 SUGAR #11                              10.48     USD
TOTAL                      1           EX- 30-JUN-08
                                                                            Clearing         USD           2.00 DR
                                                                            Exchange         USD           4.13 DR
                                                                            NFA              USD           0.05 DR
                                                                            Brokerage        USD           2.13 DR
                                                                            Commission       USD           9.00 DR
                                                                 AVERAGE LONG      10.4800