How to Make Money in Commodities
71
the histories of the contracts. Remember the old saying: "Those
who don't understand the lessons of history are bound to repeat the mistakes
of history."
As Harry Truman put it:
"There is nothing new under the sun. If it is happening today,
it has happened in the past. For the solutions to today's
opportunities ?
look to your history books."
The history books of the commodity futures markets are
made up of the charts and graphs you will be examining shortly.
These unfold what actually happened in
the past to the price of various commodities. Whatever interests
you -- wheat, corn,
soybeans, beef, hogs, cotton, sugar, lumber, orange juice,
gold, Treasury Bills, et. al. -- history reveals the method
for trading your chosen commodity successfully.
72
* * * * * * * * * * * * * * *
* * *
Were there
any futures markets in 1968 that showed the simple price pattern
we have been studying? Did
the pattern reoccur in 1969? Would our method have yielded
profits in 1970? Could you have made a fortune in 1975? 1980?
Will there be potential trading bonanzas in 1990? 2000? We
can answer these questions by looking at some actual case
histories, beginning with the period from 1968 through 1972.
Remember: these are not hypothetical examples.
These charts record the real price activity of real commodity
markets. The
profits earned in these markets were very real profits. Look
through this period of history carefully on your own, before
reading the commentary that follows. As you examine the charts,
recall the principles outlined so far in this book and the
trading methods you have learned.
In each case, ask yourself: "How would I have traded
this market?" Inspecting the charts, determine for yourself
the following:
1 .At which point should you have bought?
2 .At which point should you have sold?
3 .Where should your stop?loss have been placed?
4. How much could you have earned by trading these markets?
73
click to enlarge
CATTLE: PROFIT WAS 300% IN SIX MONTHS.
74
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SOYBEAN OIL: A 300 PERCENT RETURN
ON INITIAL MARGIN
75
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CATTLE: GO WHERE THE MARKET GOES
76
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COCOA: $5,400 PROFIT PER CONTRACT, OR 1,080
PERCENT OF INVESTED CAPITAL.
77
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RAPESEED: PROFIT
PER CONTRACT WAS $3,250, OR 650 PERCENT.
78
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SOYBEAN OIL: 600 PERCENT PROFIT IN 3 MONTHS
79
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SOYBEAN OIL: OIL KEEPS ON GOING UP. PROFIT WAS $3,720 PER
CONTRACT.
80
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SOYBEAN MEAL: MEAL AND OIL MAKE RELATED MOVES.
PROFIT: $1,000 PER
CONTRACT, OR 333 PERCENT
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