Lumber

[treeman]

Thanks for the insight...

I hear you about demand (specifically right now). You also prompted me to check out some historicals...

 

[SChinaSeaTribe]

I been trading same system since late 91, and has to do with 9 years prior, testing proved to me certain at % I would eventually capture 95% of the extremes and learning to hedge allowed me to get 100% . And now I believe in concept where I get in don't matter at all most of the time. But getting in proper can allow me to have astro reward to risk based on hedging. Have one target on 10% of position and rest goes to breakeven plus, automation seeks 75% of 9 year range. Have multitude of added proper signals and when to hedge when expecting counter moves which often reversed into adding more to trend trading.

I am curious to know your preferred method of hedging.

 

[Handle123]

I am curious to know your preferred method of hedging.

I guess you going to remain curious as I am never going to be sharing this. What I will say that past 8 years of studying been wild discoveries of what I was missing.
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Lumber been an interesting ride, it is one of few markets don't have options, so I use options of IP International paper, and it is a stock I am well versed on as I have traded it for many years, it adheres to many chart patterns well. So as you never be covered enough on limit moves, I took additional Calls as I am use to longer times of losses in the futures till I find the extremes, longest were 23 in crude oil at 147 and yet I was ahead of monies as a couple of the shorts hit the first targets and resumed to make new highs, very much how the indexes recently have done the same. I noticed with Lumber it do 2 limit up moves then 3rd day hit or get very close to limit so I was selling short on 3rd day and buy options in IP to cover, took few more tries of being stopped out in Lumber and exiting options later and on May 18th sold off the high/hedged. What is interesting to me is ability to make money on overall position as seldom in the futures do I get out at breakeven, but cause of the volatility of this market, flipping on 4th different way of trading long term system due to volatility and time stops, keeping the options made money over all. Options are often a chess game of what "if's" and should be covered way back in Trading Plan, always know the answers before the questions. I took added position on the 29th/hedged-see how it goes.

 

[syswizard]

Wow, Lumber appears to have had a blow-off top. So now the question is : Will the 580 level hold ?

 

[maxinger]

Thanks for the insight...

I hear you about demand (specifically right now). You also prompted me to check out some historicals...View attachment 186598 View attachment 186599

I guess you trade Lumber. because your nick says so.

 

[maxinger]

super strong uptrend since Apr 2016.

anyway I don't know how to trade such futures due to its very low volume.

 

[syswizard]

super strong uptrend since Apr 2016.

anyway I don't know how to trade such futures due to its very low volume.

Just buy and hold 5 contracts. What's the problem ?
Now keep in mind, if housing declines, that would be the worst case scenario for you.
Keep track of those housing starts....not looking good recently.

 

[maxinger]

Just buy and hold 5 contracts. What's the problem ?
Now keep in mind, if housing declines, that would be the worst case scenario for you.
Keep track of those housing starts....not looking good recently.

I only do day trading. No swing and position trading.

 

[treeman]

To you, is it a sale because it made a new high or do the economics not match the price?

Is lumber a griffin good?

 

[Onyx]

Is the commodity price of Lumber used around the world to price Lumber/Timber in each continent such as Australia currently facing a shortage of timber(lumber) so pricing here locally has gone up for certain timber products such as Pine Timber/Lumber ?