Short

Cycle is down for Wheat until August 31st.

Updated

Wheat has just finished a corrective move and because of its nature (Wheat is a very volatile instrument) it may seem to an untrained eye that the trend is up. However, that is not the case in my opinion - cycle is down. To approach this trade now we go long September PUT options, strike 475. The approximate price target is 435 at the point when the cycle bottoms. Later on I will upload ideas giving out recommendations to trade the futures contract, for now we want to limit our risk. Fundamentally, Russian farmers this year are expecting a record crop since the late 1980s, according to the head of Russian agricultural department (Russia is the largest producer and exporter of the grain). Despite this fact, I would avoid reading the news regarding wheat as a trading strategy. There is a lot of misleading information and I just read it for entertainment, not for trading. Please do remember that futures trading involves a substantial risk of loss and is not suitable for all investors.

Don't listen to the noise and I know that you will make a success.
Have a good weekend, fellow traders!

Note

*Investors that are willing to take more risk can enter into a small futures position with a tight stop loss, the sell signal will be cancelled on a STRONG close above 546.

Note

Traders that took the short position in the futures contract - please raise your buy stop to a point where there will be no loss of capital. Just 2 or 3 cents below your entry, not more. (Example: Short opened 535.5, put the stop loss order at 532.75.)
The sell signal will cancel itself on a close above 546.

Note

Note: If you place a buy stop to protect your capital as mentioned above - there should be a limit order placed 1 or 2 cents* above the exit to go short again. (Example: You have a short at 535 and a stop loss at 533 - a limit should be placed at 534.) This practice is done to take a small profit and to eliminate false movements.
*Cents per bushel

Note

Wheat never got a close above 546 (the 4/1 angle), therefore continues on a sell signal.

Trade closed: stop reached

It turned out to be a bad idea at the end. It was only a nice scalping profit trade at first.

CSInvestment

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