Can one really successfully trade on fundamentals?

Discussion in 'Commodity Futures' started by mizhael, Jun 29, 2011.

  1. For example, Gartmans always has a bunch of numbers, e.g.
    the current progress of plantation in percentage 35% vs. last year 65% for corn, and he also compared it to 5-yr average...

    And also the estimated acreage 56.57 million vs. 57.00 million, etc.

    Are these numbers helpful to trading at all?
  2. emg


    think like a farmer. If u ran feedlot and grain field successfully, u can trade fundamental in grain.

    Gartman is not a farmer. He is a salesman.
  3. Real Traders trade spreads (basis, arbs, intermonth,intercom etc), Gamblers trade outrights. And in spread trading the fundamentals is vital most of the time.
  4. Yes, professional traders do. One of the best traders I know is a metorologist by training and he trades grains based on his forecasts. He is way ahead of everyone else in the market and is usually right.

    I would say the vast majority of traders that make a lot of money consitently have an information edge over the market, whatever that may be.

    That doesn't mean that having a technological edge doesn't help either. But thats very different than using moving averages and bollingerbands.

  5. bone

    bone ET Sponsor

    Spreads, yes I agree. Fundamentals, bullshit.

    I took on a client in February who was in the S&P Pit. He is now 7 for 7 in the grain spreads.

    All of my clients are killing in the grains.

    I have another client who went live on March 01, 2011 with a $25K account. He has returned 45% net on that as of yesterday.

    In four months, on a net basis, he has over $36K in his account. Advantage Futures clearing, CTS front end, eSignal running my models, those expenses deducted from the account. Non-Member rates.


    Max drawdown ridiculously modest.

    Overnight SPAN performance bond margin credits of 65 % to 90 %.

    I have another client who went live on April 01, 2011.

    Same scenario, returned 10% net all expenses as of Friday June 24.

    And that includes an impulsive scalping debacle which earned my wrath because he deviated from his trading plan.

    Swing trading futures spreads ON A PRICE MODEL.

    Of course, I have 60 clients who keep trading their 'bread and butter' core trades and swing trade my spread for an additional revenue stream. And they were really good before they hired me.

    Any serious prospect whom I screen in advance regarding trading skillsets is welcome to contact my clients privately and independently. Ask them whatever you want.
  6. bone

    bone ET Sponsor

    There is a group of floor grain spread traders who blew out in May. Cost of carry basis models. Ex-commercial guys. One of them posted here frequently.

    Anyone who seriously believes that the electronic markets have not priced in some important piece of fundamental information is delusional.

    Every substantial player including Cargill, ADM, etc. etc. all have electronic execution screens on their desks and they have staff meteorologists and former Dept. of Agriculture employees on the payroll.

    And their opinion has indeed been expressed in the last price print you see. They do not, will not, and never will leave money on the table. They are not lazy. They get a performance bonus.
  7. I pretty Much agree with you on this. But from my personal experience, Lots of the Big Trading Houses that I know, trade their spreads using some form of fundamental data like weather in NatGas ( Waha/Houston Ship Channel spread for example), Freight/ Pipeline costs and differentials to trade Physical Crude spreads and basis etc etc.

  8. bone

    bone ET Sponsor

    I traded the forward book for the largest utility in the US.

    Gas, Power.

    Model Price. We would never leave an errant price "neglected".
    For size. As many as it would take.
  9. bone

    bone ET Sponsor

    It always took me a while to get done.

    And it was always obvious on a chart.
  10. bone

    bone ET Sponsor

    If you are seeing anything publicly disseminated that you believe is NOT already reflected in the last price print...

    good luck and God Bless.
    #10     Jul 3, 2011