Corn vs. Soybeans trading

[mballack]

There is still some futures volume in the pits - but the majority of that volume are combo orders where there are options and futures done on the same ticket. Locals really like these type of trades because they can get some pretty good business while still remaining hedged to a certain extent.

As for options - the options pit is where the business is. This is something that really hasn't (and won't in my opinion) ever make it 100% fully to the screen. Just look at the volume difference between the electronic options and the pit. It's huge. You can not get a good sense of volatility on the screen. You can in the pit though.

I really wouldn't compare corn to S&P futures. The fact that they have the same tick size is pretty irrelevant. Corn and beans are very seasonal and actually trade showing a pretty large tilt to seasonality supply and demand issues. Like now - those markets are trading weather. What were they trading last year? The fact that there wasn't any corn - so the market was backwards. And a lot of those factors have carried over this year. If you think you're just going to trade corn - what contract month are you going to trade? If you trade old crop corn contracts, you're trading against basis traders. If you're trading new crop contracts, you're trading against the production side of the business.

Not worth it in my opinion for the retail trader unless you're willing to take on a lot of risk.

 

[brownsfan019]

Quote from mballack:

If you think you're just going to trade corn - what contract month are you going to trade?

Simple - you trade the contract w/ the highest volume. This applies to all futures contracts, regardless if ag's, metals, indexes, etc. I'm not sure why this question always comes up on this board. If you are a day trader, you just trade the highest volume contract and you will never have an issue.

Not worth it in my opinion for the retail trader unless you're willing to take on a lot of risk.

Not worth what? Soybeans provides such gorgeous intraday moves, that are very technical; whereas you can try to trade the slop n chop of the ES?

The more risky market is trying to trade where the brightest, smartest and most capitalized algo's are trading.

 

[mballack]

Quote from brownsfan019:



Simple - you trade the contract w/ the highest volume. This applies to all futures contracts, regardless if ag's, metals, indexes, etc. I'm not sure why this question always comes up on this board. If you are a day trader, you just trade the highest volume contract and you will never have an issue.



Not worth what? Soybeans provides such gorgeous intraday moves, that are very technical; whereas you can try to trade the slop n chop of the ES?

The more risky market is trying to trade where the brightest, smartest and most capitalized algo's are trading. [/B]

I think your argument here is a little off. You say that soybeans provide such "gorgeous" intraday price moves - but yet saying that day traders should only trade the month with the highest volume? You do realize that a lot of those "gorgeous" price moves occur in the back months because cash traders usually trade the fronts?

Not worth what? It's hard for a retail trader to gain an edge trading grains. If you want to be one of those guys who BUYS AT A DOUBLE BOTTOM BECAUSE THE MACD CROSSES BLAH BLAH BLAH - then sure, click your mouse all you want and have fun making a couple ticks on a 1 lot. If that's your game, play it, that's the beauty of trading. But for grains - this of any futures market over the past couple years has traded more fundamentally than anything else. There are more opportunities in spreads and P&L ratio trades because of this. But that's trading - not mouse clicking. And actually require research as opposed to letting your indicators doing the work for you - most of which millions of other traders have access to, making it almost impossible to gain an edge. It's harder for the retail trader to trade these markets because they are so specialized. The reason I don't think it's worth the risk is because for the average trader - the "slop n chop" of the ES is almost a benefit to them because they're not going to look at their screen over the course of two seconds and have the market move limit against them without having a stop on because profarmer cut their yield estimates or something. All it takes is one of those moves to wipe out an account. But sure, trade the highest volume contract. That'll do pig, that'll do.

The ES is a slop n chop because that's a game of size - where retail traders get looped into thinking they can make money on a long term basis by trading it. Just like treasuries, just like forex.

 

[brownsfan019]

Quote from mballack:

I think your argument here is a little off. You say that soybeans provide such "gorgeous" intraday price moves - but yet saying that day traders should only trade the month with the highest volume? You do realize that a lot of those "gorgeous" price moves occur in the back months because cash traders usually trade the fronts?

Here's what I know - compare $ for $ the ZS vs the ES and most days the ZS will provide much more opportunity to make $ (or lose it). And I only trade the contract w/ the most volume.

Not worth what? It's hard for a retail trader to gain an edge trading

That's all you needed to write Mr. Blowhard. The market is irrelevant - trading is hard period. The rest of your ramblings was completely useless and a waste of precious ET server space.

Depending on the method being used to trade, it would be wise for any trader to compare their strategy across a broad range of markets and IMO the ZS is an excellent market for day trading purposes. And if you think you can day trade fundies, good luck w/ that.

 

[grainmerchant]

Brownsfan is right. Soybeans usually are quite volatile. Stick to the contracts with the most volume. July and Nov soybeans are fundamentally the most relevant months to the commercials. December and July corn futures contracts are the most used by corn hedgers.

Quote from brownsfan019:

Here's what I know - compare $ for $ the ZS vs the ES and most days the ZS will provide much more opportunity to make $ (or lose it). And I only trade the contract w/ the most volume.



That's all you needed to write Mr. Blowhard. The market is irrelevant - trading is hard period. The rest of your ramblings was completely useless and a waste of precious ET server space.

Depending on the method being used to trade, it would be wise for any trader to compare their strategy across a broad range of markets and IMO the ZS is an excellent market for day trading purposes. And if you think you can day trade fundies, good luck w/ that.

 

[mballack]

I get it now. You're new to trading!

Comparing "$ for $" moves is irrelevant - not only because they're completely different products, but also because you're neglecting trading size. But sure - one tick on beans is equivalent to one tick on SPs.

Again you're arguing against yourself when you say "the market is irrelevant" and then saying that you "need to compare strategies across different markets." If the market/product is irrelevant, why bother comparing? This is where your ignorance really shows because you're leading people here to believe that all markets are technical, you can take one strategy and apply it to other products and have a good P&L - regardless of risk! Unless you're a delta flow monkey, this is nearly impossible. Grains trade fundamentals more often than not. The order flow is behind it.

Good luck with your trading though. Just remember - the Clearinghouse isn't an actual "house."

Also - the browns are terrible and haven't been relevant... well, ever.

 

[dunleggin]

Quote from mballack:

..and P&L ratio trades..

Never seen that term/phrase before, can you give an example, please.

Btw, welcome to ET. If you're closely connected to the ags markets I hope you won't let the reaction discourage you from further input on this forum. You made some germane points in your posts, and probably it's wise advice to many. But IMO it's pointless wasting time and energy on ET arguing about edges (I've been there).

I've spent a lot of time reading up on ags fundamentals. I think it's essential to understand what's affecting and what might affect one's trades, whatever the trading timeframe. Nevertheless, I'm never going to be as clued in - and certainly not in timely fashion - as the basis traders, merchandisers, Cargill analysts et al.

I developed an algorithmic model that swing trades based on a prediction of the GPM of the crush. It is statistically very successful but in acknowledgement of your point about sudden and violent moves, the occasional heavy loss is invariably due to some weather scare warping the spreads.

From what I gather, there are multitudes of algos working in the Soy spreads ?

 

[clacy]

Quote from mballack:

I get it now. You're new to trading!

Comparing "$ for $" moves is irrelevant - not only because they're completely different products, but also because you're neglecting trading size. But sure - one tick on beans is equivalent to one tick on SPs.

Again you're arguing against yourself when you say "the market is irrelevant" and then saying that you "need to compare strategies across different markets." If the market/product is irrelevant, why bother comparing? This is where your ignorance really shows because you're leading people here to believe that all markets are technical, you can take one strategy and apply it to other products and have a good P&L - regardless of risk! Unless you're a delta flow monkey, this is nearly impossible. Grains trade fundamentals more often than not. The order flow is behind it.

Good luck with your trading though. Just remember - the Clearinghouse isn't an actual "house."

Also - the browns are terrible and haven't been relevant... well, ever.

I'm pretty sure Brownsfan is one of the few on this site that know shit from shinola FYI.

 

[Swan Noir]

I don't really have a dog in this fight but I do have a comment. If you join a forum don't you want to get the lay of the land first before you square off against a long time poster, particularly one who is quick to clarify a point or answer a question for someone with less experience in a given market, time frame or whatever? Why mix it up with guys that are knowledgeable but more importantly helpful when they can be?

I mean WTF is it all about when by your third or fourth post the sarcasm is already permeating all you say? Look at the nature of this thread. No one is tooting their own horn or otherwise playing as if they are a trading guru. Relax a bit ... speak in a softer tone for your first ten posts.

Quote from mballack:

I get it now. You're new to trading!

Comparing "$ for $" moves is irrelevant - not only because they're completely different products, but also because you're neglecting trading size. But sure - one tick on beans is equivalent to one tick on SPs.

Again you're arguing against yourself when you say "the market is irrelevant" and then saying that you "need to compare strategies across different markets." If the market/product is irrelevant, why bother comparing? This is where your ignorance really shows because you're leading people here to believe that all markets are technical, you can take one strategy and apply it to other products and have a good P&L - regardless of risk! Unless you're a delta flow monkey, this is nearly impossible. Grains trade fundamentals more often than not. The order flow is behind it.

Good luck with your trading though. Just remember - the Clearinghouse isn't an actual "house."

Also - the browns are terrible and haven't been relevant... well, ever.

 

[nokomisjeff]

Quote from Swan Noir:

I don't really have a dog in this fight but I do have a comment. If you join a forum don't you want to get the lay of the land first before you square off against a long time poster, particularly one who is quick to clarify a point or answer a question for someone with less experience in a given market, time frame or whatever? Why mix it up with guys that are knowledgeable but more importantly helpful when they can be?

I mean WTF is it all about when by your third or fourth post the sarcasm is already permeating all you say? Look at the nature of this thread. No one is tooting their own horn or otherwise playing as if they are a trading guru. Relax a bit ... speak in a softer tone for your first ten posts.

Well spoken