Trade Journal - WEAT, Jan 19 (long)

2 февр. 2023 г.

Trade Journal - WEAT, Jan 19 (long)

Thesis
Last year, inflation was high due to increased input costs of oil. Russia's invasion of Ukraine created supply issues and an increase in demand / reduction in supply. However, WEAT did not perform as expected, and only saw mild gains.

In retrospect, this seems to have been due to pulling from 2021's supply of grains. The thesis remains the same, except that 2022 will have had higher oil input costs priced into the commodity. Therefore, come september, we should see a much higher uptick than last year.

From May 2020 onward, and ignoring the pandemic era, there is a clear support line that the price has fallen below. However, commodities are driven by supply & demand. In keeping with my original thesis, prices might be very cheap right now. On the other hand, people might have planted more wheat this year due to the invasion.

Remember that this is an ETF that tracks commodity prices via futures - the long term chart history shows the same pattern that you get from reverse splits / leveraged ETFs doing poorly. Therefore, we might be able to trust drawings and should rely on technicals.

It also happens to resemble the "asset bubble chart" and it had the double top into a mean reversion.

Tracking
Jan 19
+ Went long 200 shares to have exposure to wheat for long term
- Did not use TA, but some signals indicate an entry. It crossed above the baseline and C1 agreed.
- More TA should be used next time, including volume and C2.
- Exit price is projected to be 10.64 by Nov 1st, based on the 0.618 fib level. Realistically, this should be calculated based on macro factors for a long term commodity trade.
- Position size should be approx 760 shares, not 200. We did not accept enough risk. We could DCA in on the dips / periods of low volatility.
- This is a long term investment-style trade, rather than a trend trade. We don't have a system for that yet. However, we have a defined target of 9.60 to 10.64 by November. ATR is still being tracked for position sizing.


Trades
Jan 19, +200 @ 7.54 (4.95 fee)

Outcome
Ongoing.

2 февр. 2023 г.

Сделка активна

10 февр. 2023 г.

Сделка активна

For a regular swing/trend trade, this should have done TP at 0.18. Instead, I traded the weekly chart and just guessed on the ATR. I should have done TP already, despite what the chart says. Therefore:

Feb 10, -100 @ 7.99 (4.95 fee)

Currently at $45 realized profit, moved SL to breakeven, and now we wait.

21 февр. 2023 г.

Сделка закрыта вручную

As of Feb 21, there was a baseline cross and several short indicators. The baseline alone should signal an exit.

Feb 21, -100 @ 7.67 (4.95 fee)
Total realized profits: $58.90

In hindsight, the entry was fairly sloppy. As of today, there is a setup to enter short.