Update

Here is the update on my two position trades.

1. Beans - Meal spread.

I first got involved with the spread when it was around $27K. The spread is usually around $15K, so I thought I was in a very good position expecting minimum or almost no drawdown. This spread went as high as about $40K, which means my drawdown was about -$13K! What kind of system is that allowing a drawdown of -$13K, but I had to hold onto because it's a fact based trade. I know eventually the spread will get smaller. If I had money to add on, I would have definitely, but I couldn't in case it would go worse.

Gladly, now it's back about $27K. I added one more leg on it way move down around $31K, which gave the avg cost of $29K. So where is my target? I will take one leg off at $22K level and hold on to the last piece until $18K.

Today, the annual planting report came out and as I discussed earlier, people put lots of beans, which results in a limit down today. If beans (or other ags) have a limit day based on news, it'll likely have a follow-thru in next 2-3 days. As beans limit has changed to 70 cents /b, I may well see $22K level very soon. I personally think beans will go to $10 /b again.

2. Lumber

With the last month loss, I'm in a loss of $4K as of today. Housing markets are still bad and there's no sign of Lumber bouncing, so I'll probably hold this position for a long time. If it gets to 200 level, I'll sell another put. When it bounces back above 260, I'll sell calls, but that's a long way for sure.

Short 1 S at 1327.25

-2 or -$100

We have a support at 1325. I got stopped out on a snap back action. Will short again if it breaks 1325.

Short 1 S at 1345 and Long 1 SM at 353.7

I added a position for the bean-meal spread. Beans opened a lot higher than meal, so it seemed like a good opportunity.

Resume

It looks like everything turned around last week, resumed. Dollar collapsed again last night and grains started heading higher again as well as gold. I'm basically sitting on my hands now. We're at a critical point where anything can happen. In this kind of market, I'll probably get either chopped out or pick a wrong direction, so I'm staying out for a while.

At the same time, I'm working on a new strategy on ES. My trades will be based on volume mainly. Hopefully I can achieve 60%+.

As far as my current position trades go, I'm still holding. In early March, I was in a great danger, but it's eased back quite a bit. Lumber is seeing some strength of speculation of avoiding recession, which means more building. The bean-meal spread is still on the edge. I really should have added when it got down to $40K spread level. I got in at $27K and now it's about $30K, so I'm losing $3K on that. If I added even at $35K, I would have been exited last week. It's all hindsight I guess. I'm waiting to move money from swing account to day trading account soo.

Long 1 S

Result:

+0.25 or $12.5 before commissions

The action was very very slow, so I exited early. Beans ended limit-up .

What have I done... -$1370

Beans and bean oil were limt down, but bean meals were not, so I shorted. Stopped out. Re-shorted, and I stopped out. Reshorted again, moved higher, I added and not to mention I stopped out.

Now looking back, I look like I was on a drug or something.

Short 1 SM at 302.8. Result: -3.2 or -$320
Short 1 SM at 306. Result: -1.0 or -$100
Short 1 SM at 306.1. Result: -4.4 or -$440
Short 2 SM at 308.5. Result: -5.2 oor -$520

I have no execuse on what I did this morning. I moved my stop. I added on a losing trade. Probably the largest single day loss for a while.

Save the economy

Ben Bernanke is the man. Whatever he did, markets just love him (or love what he did).

Gold and Dollar were quite disappoited that 1% cut didn't happen, which is why we're rolling over. It's too early to say, but I think the gold will go to 920 level fairly quickly. Euro will go to 1.54 or 1.5 level quickly as well.

The problem is oil. Yesterday we had about 10-pt range and today about 5 pt range. I thought we were going to see a little more pullback after yesterday's big down, but wow right back up.

Long 1 S at 1302.75

+0.5 or +$25.00

After missing a trade, I 'usually lose, but I got stopped out at b/e.

10 pt move - order rejected

I placed an order, buy stop, at 1281.50 on beans. Guess what happened. Order rejected!!!

What happened was that price approached so quickly that Tradestation wouldn't let me place a buy stop order. With no surprise, beans rallied 20 pts, which is $1K. Based on my exit strategy, I would have been able to pull at least 15 pts per lot.

I can say nothing buy whining here.

Today is FOMC day. This is the day I usually stay away from stock indexes. I'll keep an eye on Gold and Euro though. I think markets expect 100 full basis point (or 1%) reduction in the key interest rate, which will likely happen.

I have not been trading well lately. The spread trade I'm in is coming back, but still a long way to reach my target. I'm attempted to get out at b/e, but I risked so much. If I get out at b/e, I'll not be successful in trading.

The Lumber trade is not doing well either due to housing markets. While this is my first position trade (2 year minimum), it's always pain to hold onto a loser.

I'm looking into implement ion a new day trading strategy in ES. This should be a very consistent strategy. I will trade 4 lots of ES scaling out.

Long 1 YM at 11877

+28 or +$140

Looks like a typical stoprun and short squeeze to me.

Anyway, indexes are really volatile. I may call it a day. I traded way too much.

Long 1 YM at 11877

-8 or -$40

Short 1 S at 1375.25

+9.75 or +$487.5

Finally a winner. Not a huge winner, but should take care of a few losers.

Short 1 S at 1376

-4.25 or -$212.5

Short 1 S at 1412.25

+0.5 or $25

Long 1 S at 1430

-2.75 or -$137.50

Another loser...

Short 1 S at 1396

-2.5 or -$125

Wow. I'm on a losing streak. No follow-thru got me stopped out.

Short 1 S at 1398

-0.75 or -$37.5

As soon as I got filled, I got stopped out due to slippage.

Short 1 S at 1411.25

+0.25 or $12.50

Short 1 S at 1411.75

-2 or -$100

Long 1 W at 1145

-0.25 or -$12.5

I re-entered, but I don't know why I got stopped out at b/e when W went as high as 1155. When things are not working out, jut about everything is against me. It was totally unnecessary stop-out on my previous W trade. Now when I entered again, it got me stopped out at b/e for a no reason. I should have been up +$1000 not -$162.50. Why is it that the more I trade, the more $$ I lose.

Long 1 W at 1145

-6.75 or -$337.5

I totally messed it up.

Long 1 S at 1389.50

+4 or $200 (before commissions)

I missed the 20pts move and looks like I exited too early on this one too. It's like I'm seeing things, but can't get things to work properly. I'm not losing money, but I'm not making much money.

Today's action in soybeans seems to be a short squeeze. Well deserves for a retracement. One thing to note is there's a big trendline, I think, right below 50EMA. While Ii'm thinking about shorting at 8EMA, I have to be careful there.

Long 1 S at 1361.75

-0.25 or -$12.50 (before commissions)

It'll probably go higher. I had to use a tight stop because I didn't want to get stuck short on a limit down.

Liong 1 W at 1103.75

Result:
+1.25 or $62.5

Too tight of stop yet again. Wheat's now at 1114. It popped higher to 1110, but came right back to stop me out at b/e and kept going higher. I liked it because Wheat was the strongest of all. I really need a runner. So far none this month. Just one runner is what I need each month.

Sick

I was right in direction darn 3 times, but I got stopped out all three times. I missed a short at open, so I waited for 30 mins to enter a short. I can't believe what just happened. I was using tight stops, but 3 out of 3 stopouts in a row??? Don't you feel like when you miss a trade, it goes in your favor a lot. If you're in, you get stopped out. Furthermore, as soon as you got stopped out, off it goes.

Markets are not syncing with me today. Yesterday was a golden and I left too much on the table. I will keep betteing on Soybeans down trend.

Short 1 S at 1479

Result:
-2.75 or -$137.5

I'm using too tight of stops. Direction is right, but it wiggles too much and it's just killing me.

Short 1 S at 1485

Result:
-2.5 or -$125 (before commissions)

Short 1 S at 1485.25

Result:
-3.5 or -$175 (before commissions)

Rolled over 2 Lumber

I sold March 2 Lumber at 200.60 and bought 2 May Lumber at 230.50 esentially rolling over.

Short 1 S at 1500.75

Result:
+3 or $150 (before commissions)

Entered again, but exited too early. Is this a stop run? I don't know.

Short 1 S at 1519

Result:
+0.5 or $25

It got me stopped out at the exact tick, and now it's trading at 1493. I knew if we take out 1501, yesterday's low we're gonna see a crazy down move.Damn it.

Long 1 YM at 12172

Result:
+2 or $10 (before commissions)

Short 1 S at 1528.75

Result:

4.75 or +$237.5

I re-entered even after I got stopped out.

Short 1 S at 1529

Result:
-3.75 or -$187.5 (before commissions)

Short 1 S at 1533

Result:
+0.5 or $25 (before commissions)

Tried to nibble in, but not much downside follow-through.

Hate the markets

Usually when someone hates markets, that means 'losing money.' I'm no exception.

1. Money club
As some of you know I'm involved with money club. The club's position is 99% of time against the market direction because it utilizes time decay in options. I don't want to see Gold, Oil, Grains etc make new highs. Yesterday, when gold dipped 20 pts, I was relieved, but today it's +25 making a new high. Crude is +3.50 still going. Euro making a new high and even Coffee is +1.2%. Yet, this is still managable. The real deal comes....

2. Position trades
Lumber is just not taking a break at all. Yesterday limit down. Today down again. I'm net -$5400. The soybeans-soymeal spread trade is even worse. Net -$13000. These are supposed to be all fact-based trades, so eventually it'll go in my favor (sometimes it takes years) but I was totally not expecting this much drawdown this fast. I have a big chunk of money coming in July, so I thought it'd be okay, but -$18000 is more than half of my portfolio and I have to worry about margin calls unless this move slows down.

I'm honestly not sure if I can survive on this. I thought I got better, but the same thing happens again and again. Sign me up guys, I'll be one of those 95% who lose money...

Long 1 S at 1550.50

Result:
+1.25 or $62.50 (before commissions)

So much for yesterday's weakness. Soybeans are up +40 today. I rather short on yesterday's low, but the setup occured, so I entered.

Short 1 S at 1551.25

Results:
+7.75 or +$362.5 (before commissions)

I have so much things to say. Yesterday I talked about the first sign of weakness in grains, so today I entered two short trades. The previous wheat trade was not as clear, so I used a tight stop, which got stopped out on a small wiggle at +$75. What was not clear was that I would like to see all the grains sync together, but corns and beans were not following wheat yet.

Shortly after that, corns and soybeans were approaching the low of the day. I entered a short on soybeans. I saw overnight low at 1543 level and I thought if we could take out that level, we will see the previous day's low at 1534. If we take out that low, we're talking about at least 1520 level. As beans moved down, I trailed, but guess what, I got stopped out at 1543 on a small bounce before taking the prev low. So I left lots on a table, but trading 1 lot is hard because you need to book profits, yet need to trail accordingly.

Now, I see more drop in beans / corns for next few days. I will add additional contract on my beans/meal spread.

Short 1 W at 1100

Result:
+1.5 or $75.00 (before commissions)

Short 1 S at 1559.25

Result:

+3.75 or $187.5

Lucky I got the almost dead low.

I'm still facing a possible disaster on the spread trade. It seems that we might see some consolidation, or a possible pullback from this point. I haven't seen a weakness for a long time. I may short S swing.

By the way, I got assigned on both 240 and 220 March Lumber puts. I'll roll-over some time this week to May contracts.

Monthly Total - Feb 2008

Day trading account: +$934.48
Swing trading account: $0

Even if the swing account shows zero, I have a huge drawdown in open positions. I'll include them once I close them. Last year I was not that good at day trading, but this year has been consistent (I know they are small but steadily growing).