CBOT Wheat Futures

[wheatking16]

Chicago wheat retraced and now getting a bounce off of the previous resistance.

I anticipate that this will go much higher.

What was once resistance often acts as support.




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[TechAnalyst]

Chicago wheat retraced and now getting a bounce off of the previous resistance.

I anticipate that this will go much higher.

What was once resistance often acts as support.


[ATTACH]9139[/ATTACH]

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I agree fully.

Do you mind if I ask if you are with Klarenbach or simply promote their good work?

[wheatking16]

I agree fully.

Do you mind if I ask if you are with Klarenbach or simply promote their good work?

My name is Trent Klarenbach and I currently work alone.

Thank-you for the compliment.

I enjoy your work also.

[TechAnalyst]

Thanks,

Mitch Miller here.

[wheatking16]

Thanks,

Mitch Miller here.

Nice to meet you Mitch.

I look forward to bouncing some ideas off of you in the future.

[A990]

Would you buy futures to replace sales here and if so what month?
....anybody?

[FarmJunkie]

This is refreshing. Posters with actual names and something to add to this site. Not the regular bullshit artists. Keep it coming guys. Very informative stuff. Stuff that matters!

[wheatking16]

Would you buy futures to replace sales here and if so what month?
....anybody?

Here are my thoughts using the weekly charts.

THIS IS NOT ADVICE.


The green line signals the price above that I would be interested in a long position.

The red line signals when I am wrong about the trade and my initial stop would be below this level.

The blue line indicates the VWAP which I considered relative to the chart.



Let me know if these charts are difficult to read and I can publish them in my newsletter and share a link.

As I struggle to attach the last chart, I will consider sharing a link instead in the future.

[AlbertaFarmer5]

Here are my thoughts using the weekly charts.

THIS IS NOT ADVICE.


The green line signals the price above that I would be interested in a long position.

The red line signals when I am wrong about the trade and my initial stop would be below this level.

The blue line indicates the VWAP which I considered relative to the chart.

And that advice ( which according to the disclaimer is clearly not advice...) is probably the hardest thing to convince ourselves to do, to buy AFTER it goes up so much, and to sell AFTER if goes down so far. Human nature and greed is to try to capture the entire move, not the center low risk portion.

[wheatking16]

And that advice ( which according to the disclaimer is clearly not advice...) is probably the hardest thing to convince ourselves to do, to buy AFTER it goes up so much, and to sell AFTER if goes down so far. Human nature and greed is to try to capture the entire move, not the center low risk portion.

Ego is a destroyer of men...... and their trading accounts.

[BreadWinner]

Thanks for the trading info!!

[TechAnalyst]

Would you buy futures to replace sales here and if so what month?
....anybody?

For those so inclined I do think the timing is right. In Chicago, the 60 min chart gave a nice bull buy (that I watch for) on the recent correction. It has an initial target of $8.33/bu (7.82 currently). That goes with a buy on the daily chart with a target of $8.53 and a buy on the weekly chart with a target of $8.70. The real potential lies in the saucer on the monthly chart, suggesting a much more significant rally may lie ahead.

As for the mechanics, that is more risk tolerance and personal preference. If using futures and intending on holding the position for some time (unless the market tells you not to), you may as well go directly to the March 22 Chicago contract. The trade will start to roll from Dec to March soon anyway.

If you prefer the limited risk of options and are willing to lose some time value, Dec 21 call options may be an interesting play if the timing works out. They expire Nov 26th so there isn't much time value left. One can be purchased near the money for likely less than what would be risked on a stop. Then re-asses in a couple of weeks.

It is worth noting that the Minneapolis contract is the proper replacement for our hard red spring wheat but it is already about a $2.50/bu US premium to Chicago. One should always try to buy the strongest market (or sell the weakest) but in this case given the premium already in place and the greater liquidity in Chicago, I would suggest the Chicago route is the less risky trade.

Hope that's helpful.

[BTO780]

Just give $18 for my wheat and call it a day.

[wheatking16]

For those so inclined I do think the timing is right. In Chicago, the 60 min chart gave a nice bull buy (that I watch for) on the recent correction. It has an initial target of $8.33/bu (7.82 currently). That goes with a buy on the daily chart with a target of $8.53 and a buy on the weekly chart with a target of $8.70. The real potential lies in the saucer on the monthly chart, suggesting a much more significant rally may lie ahead.

As for the mechanics, that is more risk tolerance and personal preference. If using futures and intending on holding the position for some time (unless the market tells you not to), you may as well go directly to the March 22 Chicago contract. The trade will start to roll from Dec to March soon anyway.

If you prefer the limited risk of options and are willing to lose some time value, Dec 21 call options may be an interesting play if the timing works out. They expire Nov 26th so there isn't much time value left. One can be purchased near the money for likely less than what would be risked on a stop. Then re-asses in a couple of weeks.

It is worth noting that the Minneapolis contract is the proper replacement for our hard red spring wheat but it is already about a $2.50/bu US premium to Chicago. One should always try to buy the strongest market (or sell the weakest) but in this case given the premium already in place and the greater liquidity in Chicago, I would suggest the Chicago route is the less risky trade.

Hope that's helpful.

This is gold.

[wheatking16]

I typically use the Daily chart for idea generation and then break it down to lower timeframes for my entry and initial stop identification.

Using a lower timeframe that breaks into equal increments of the market hours, as TechAnalyst did with the 60-minute chart, is a solid practice.

The weekly chart was chosen for my idea as I assumed that is applicable to the producer timeframe.

I did, however, use the Daily chart for my entry identification using both the recent relevant low and the Anchored VWAP for my initial stop.

They both lined up well on the Weekly, hence the decision to chart that timeframe.

As the trade progresses, I will move to a lower timeframe, ie, Daily or 1-hour, to raise my stop.

The Daily chart below illustrates that the trade idea was triggered.

Now we are presented with the challenge of maximizing profit while protecting gains.

When and where do we raise our stop?




Exploring the lower timeframe 1-hr chart below, I added the purple Anchored VWAP from the recent low.

Now it gets tricky,

Does one raise their stop to breakeven, increasing the chance of getting stopped out early and missing a larger move?

Does one retain the same stop for the time being providing more opportunity for this trade to work out?

Does one use a lower timeframe and raise their stop below the purple VWAP?

This is the art of trading where the Mona Lisa can quickly turn into a stick man.






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