Weekly Review 7-18-14

Grains continued to trending down. All majors are below their 200MA. There was a bounce on Thursday in reaction to the news of M-plane down over Ukraine, but they were faded the day after. Next week will tell whether it's a retest of b/o point or resuming of the down trend. Soybean couldn't hold its gains even with good export numbers. However it had two strong rejections at 1160 and 1152 in last two weeks. One thing I have learned about grains is trending strongly on supply and demand. There are not many zip zaps. My trading strategies won't work in more than 10% persistent price movement. Corn and wheat have had more than 25% down move in less than 60 days.

Indices are still in up trend despite geo-political risks. Unfortunately I reduced my ES trade to one lot at time in order to trade more grains. I broke my allocation rules.

My progress of last week:
1. Refrained myself from adding to losing positions. except added one to soybean 1250 expiring next week.
2. Added more directional puts to hedge and offset my losses. But I need to do some quantitative study to clear define risk/reward and ratio of hedging.
3. Tighten my add on rules of engagement. I will not use add on in commodities. Instead I will take stops at 1.5-2X and leg up (down) to limit my loss. Add on gives me a false sense of security and temporary relief. But when it comes to take stops at 1.5-2X after add on it increases the $ amount of loss drastically.

My errors and undisciplined activities.

1. Kept moving my stops loss targets on short term price movement. It costed my missed SB exit by $5 last Thursday when there was a good bounce. I didn't keep a cool head during short time volatility surge. Remember to step aside and wait for things to settle with a clear directional pictures.
2. Added one lot to SB 1250 without considering maximum risk factors.

I may be knock down but I will get up again. I will learn from my mistakes and press on. I must obey my rules and take the pain in order to correct my bad habit and be successful in this business.

Quote of the Day: "If you keep doing what you are doing you will keep getting what you are getting."
In my case I will keep getting wiped out if I don't change my bad habit.