How To Trade Cattle Futures

How To Trade Cattle Futures – Each week will provide a weekly chart as analyzed by a team member. We hope you enjoy and learn from this new feature.

This week’s focus is on the August Live Cattle Futures. I’m sure many readers have seen the price of beef increase steadily, even at the end. In recent years, the state of Texas has experienced severe drought conditions that have significantly reduced the state’s water supply and limited the amount of livestock produced. These conditions have caused herders to limit the amount of meat they produce, or in some cases to close stores entirely. We have less and less supplies to eat which causes the price of live meat to rise steadily.

How To Trade Cattle Futures

Over the coming summer months, I expect this trend to continue. US cattle are currently at a 54-year low. Along with the earlier supply base, almanac forecasts are for exceptionally warm conditions across much of the country, including Texas, in late June and into July. The worst winter weather the country has seen this winter is expected to continue throughout the summer. I think conditions in Texas will continue to keep supplies tight and increase the price of Live Cattle in August.

Rising Feed Prices Create Divergence Between Fed And Feeder Cattle Values

The case for a Live Cattle market is also strong on the technical side. We have seen a steep rise in Live Cattle futures since late last year. In the past 2 weeks, the market has strengthened its bullish movement to form a perfect pennant which is a continuation signal. If the market breaks this pennant formation strongly at the top, the next near-term target will be 146.00. Continue reading “Table of the week – Live Cattle” →In this article we will look at the spread futures, which the SeasonAlgo platform provides as the futures spread for March 2016. This is the Live Cattle calendar spread LEZ16- LEV16.

As you know, the free spreads published by the SeasonAlgo platform are always ready in advance. That is why it is always necessary to carefully analyze the current state of the spread, even before starting the time window.

Let’s look at this spread now. SeasonAlgo recommends entering the trading position on March 1 and exiting the position on June 1, 2016. It is a spread with a longer time window. Therefore, if the spread period does not immediately start the cycle, there is still an opportunity to enter trading positions later if there is an entry signal.

Let’s do a more detailed analysis of the spread. The backtest indicates that over the last 5 years the spread has been 100% profit and over the past 10 years there has been one losing trade in 2008. There is little change because this is a very narrow spread. SeasonAlgo recommends risking approximately $270 per contract. This means that in the case with a basic account of $ 10,000 it is possible to enter a position with about two contacts. This spread has a high RRR, which is 3.63 over the ten-year history. During the last ten years, the average profit per contract was $ 496. Average profit can be reached in 50% of the transactions. Now the strategy appears relatively stable.

Futures Contracts Overview

However, the main problem with this spread is that this year does not correspond to any seasonal pattern. Moreover, there is a strong negative correlation with each of them. For example, there is -84% between the spread of the current year and the example of this 10-year period. This means that this year this distribution is not very good. Also, the correlation between each time pattern, especially in the time window, is less than what we usually look for in our trades. When looking at history, we see the spread of 1996, which shows a very similar pattern to the current year’s spread and even sold at the same price level. In 1996 the trade resulted in a loss of $520 per contract. From this point, we think that this spread is dangerous.

A more positive aspect of this spread is the fact that this year the spread was sold at a very low price which means there is potential for the spread price to increase during the time window. However, we must not forget that the time of propagation this year is very disturbing and there is a risk that the price will decrease, which means the development of the spread in 1996.

Another risk factor in the spread is that LEZ16 does not have enough liquidity which also speaks against entering into trading positions.

The spread began to narrow in March and last week it changed to a price channel. Now you can make a double pattern or even a triple bottom pattern and you can start climbing. However, if you want to enter a trading position, we recommend more caution. Given that this time of the year is very poor as well as low liquidity, it is recommended not to trade this spread at all or to wait for many strong signals that confirm the increase. On Friday, March 11, 2016, there was no sign of entry.

Your Guide To Investing In Live Cattle. Live, Full Grown Cattle Are Also Tradable Commodities!

Any information provided is intended solely for educational purposes related to stock trading and is in no way intended as specific investment or trading advice. In the case of specific financial instruments, business strategies, hidden assets or derivatives mentioned on, courses, educational materials, downloads, presentations, videos, websites or online services, it is always and only for educational purposes. , s.r.o., authors of training courses, educational materials, articles, documents and videos or instructors are not responsible for the specific business decisions of individual traders, users of our products or services or participants in our courses.

INVESTMENT AND TRADING including financial instruments and products in particular with high risk. The decision to trade on the exchange is the sole responsibility of the individual and only he/she is fully responsible for his/her own decisions.

Do not enter into any business whose nature and laws you do not fully understand. The risk of loss in trading markets can be substantial. So you should carefully consider whether such a business is right for you in light of your financial situation. Also, the results of historical trades are not a guarantee of future trading profits.

All data presented by , which is taken from other sources, is provided in good faith that the information is correct and up to date. However, please always confirm the updated information provided by the relevant exchange sources, brokers or other sources of information used. , the authors of training courses, educational materials, articles, documents and videos or instructors are not responsible for changes, accuracy or updating. Scored high after high with live April near $140 yesterday before stopping. The red horizontal line drawn on the chart below serves as my line in the sand. It will take a resolution below $139 to confirm a temporary top. In the end I saw the futures on this contract trade back to the trend line below $135 in the April futures… this represents a 2.8% loss in value.

Buying The Cow Hi Res Stock Photography And Images

Beef supplies are historically tight, forcing meat processors and even retailers to pay to fill orders for meat products. This was a greedy child! A break in currency prices will be a preliminary sign that prices on the board must be reset. Read an article on Reuters AM animal expert, making a great analogy… “When you stretch a rubber band too much, you can stretch it the other way when you come back.”

The return plan will probably start with taking profits and as I pointed out there are financial costs as a prelude to the future plan.

Short (1) April live stock futures aim to trade below $135, currently trading at 139.25. Against a risk hold or open let’s buy a February 141 call to stop us if the market continues to run higher. You are covered for the next 22 days. This option should cost around $350 pa. If the futures roll back you make the futures and lose on your option. Worst case you can lose payment with 75 ticks or $ 300 for the future (depending on the correct filling). So you look at $700 in risk for each strategy as long as you come out on top of the options.

As always, I’m here to discuss specifics and give advice. Shoot me an email…Give me a call…I can be reached at: or 312-870-1653

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RISK DISCLAIMER: This information should not be interpreted as an offer to sell or a request or an offer to buy the products and / or financial products mentioned. Actual information in this report was obtained from sources believed to be reliable, but is not necessarily all inclusive and is not guaranteed to be accurate. You should fully understand the risks associated with futures, options and retail trading

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