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TFC Commodity Trading Forum

Re: Corn prices higher/Randolf

Yes everything you say is correct. But the markets reflect the future and the likelihood of these events actually occurring. Just like the broad market prices bottoming out 'before' a recession bottom and topping out 'before' an economic high. The prices wont wait until the local news says all is lost due to the weather as the professional weather services will know the odds of that actually occurring and large traders will be playing those odds long before the local headlines. Waiting for CNBC to say its a fact will be after the fact not before. The price charts will give you those odds as price can't be hidden. So the ultimate question is if you wish to trade a volatile market with extreme possibilities ahead how do you do this without undue risk. Ignoring risk is sheer stupidity of course. Might as well give your trading money to charity instead. Lots of ways to skin a cat but if bullish there are a multitude of put option combinations that will help insure you from loses and can even quickly catch a price reversal. And if not confident in a strategy stand aside or trade a market with less volatility. The ETF:CORN does cover 3 contracts including the Dec/13 contract so is 'smoothed out' somewhat too. There are other ETFs that will smooth out the grains even more by combining several grains in one ETF so you catch a 'grain move' rather than trading a single grain that is more volatile. Quantifying risk is what it is all about not being right about anything. Only thing ever right is the market itself.