1st_samurai's trading thoughts

1

1st_samurai

Recently got out of my loss and took a -$3,800 beating overleveraged (3-5x capital) short Lean Hogs. Unfortunately, this wiped out about 70% of my trading profits during the past 3 weeks. :(

Despite strength in other currencies, Jyen is surprisingly weak. Bought SF at 7596 low, and also bought the Yen expecting an overall rally in foreign currencies. Dollar exibited a classic elliott wave abc rally, and this was a good short dollar/long Forex period.

Threat of inflation had previously pushed interest rates higher, the bonds lower, and the USD higher. However, Crude is hitting heavy 40 resistance, and if this holds and crude backs down, the threat of higher inflation could ease causing lower rates, lower dollar, and higher forex. This would also help stocks rise, which I view as building a good base for a srong rise early next week.

Sugar remains in a new downtrend and I expect the funds to push it lower at least to 6.30. Spread structure also is weakening.
Up a bit on short at 7.02 July
 
Strong job report slammed my initially good long short term bond/note positions. This is a danger in taking counter trend trades. Maybe I should change my name to the "last samurai." :(

Also note the sudden weakening of SF and Jyen in concert with the decline in bonds/notes.
 
End of day: slammed on long bond/note and long currencies (jy, sf). Cut losses on bonds and jyen.

Fortunately, up on long cotton and short sugar.
 
End of week review:

Seems that I tend to overleverage on bad trades, such as short lean hogs and long bond/note.

I know that money management is key, but keeping the discipline is hard when an extra position is just a mouse click away. I think I need to think of the devastation that can occur (and which has occurred) every time I feel temptation. Better yet, immediately turn off the computer and/or unplug it! Just get away from the trading screen.
 
I usually don't add to a trade. If you add to a winner, you're pyramiding, which is risky. If you add to a loser, you're averaging a loser, which is also risky.

I might scale in some contracts. Depends.


Cut loss short on Yen long last Friday on unusual weakness. That was the right move as the yen cratered. Stayed with my SF, which is holding ok. I was surprised to see USD soar so quickly, but multi-day uptrend should consolidate for a bit.

Looking to exit profitable July Sugar short.

Stock indexes appear weak, but DAQ is into multi-month support along with high P/C fear factor. I'd go long on Nasdaq right here.
Expecting to see higher volatility or turn beginning around Sept 2004 which correlates with March 2003 period from cyclical view.

I would like to sell Lean hogs, but the meat complex is very strong.

Cocoa should have a brief leg up before continuing its monthly downtrend.

Wouldn't touch grains or metals for now, but if Soy can rally a bit it could be a nice short. Rice is unusually strong... and a dangerous short.

Bonds/notes continue a downtrend... wouldn't touch this market either as the downtrend is extended, but going long is risky.

Lumber appears to have topped, but it's also a risky short at this point.

OJ dt should continue with no end in sight for the next few months.
 
EN scaled in around 1400 and just got rid of my contracts at 1412 because I"m expecting a short term consolidation.

Still looking to cover Jul Sugar short in low 630s
 
Quote from 1st_samurai:

EN scaled in around 1400 and just got rid of my contracts at 1412 because I"m expecting a short term consolidation.

Still looking to cover Jul Sugar short in low 630s
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I'm enjoying your posts Samurai.Keep us "posted".
 
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