|
| That is old news & is out of context. Today the pit trade is almost irrelevant. Some years ago, a study by someone I cannot recall anymore profiled trades by the amount of equity in trading accounts. Those with less than I believe $5,000 consistently lost money, in fact I think the pctge was more like 95%.....ag producers in the old days generally sold in the lower 1/3 & is no news to anyone in the grain trade as most producers did not follow the markets as they do today.
The validity of this no longer stands as those who carefully watch the commitment of traders recognize the small trader has been more with the trend of the markets than most expect. While it does occur, it is generally folly to expect to be involved in these markets with $5,000. In these, now huge markets, with an order flow coming in from all directions bids & asks can change several times in a second & if it is a period when stops are executed there can be a lot of air between trades...a market order for example is executed at the next best price & if in the pit, there might be 3 or 4 different bids within, what used to be an 1/8th in grains, in different locations in the crowd & I recall in the 70's bull market & cannot remember the futures expiration in soy oil but the pit was so packed the seller was hoisted above the crowd and passed over to different brokers to execute the order before the bell rang. If you are a producer and hedge, the loss should be limited to the speculation in the basis...and if a speculator...do not speculate with large positions until you know what you are doing & management of capital should always the primary consideration. Futures are more highly regulated than banks & it is a young man's game in the pit as frequently physical stamina is required.
Losses I have taken were generally the result of careless trading & if I do not follow my own discipline and take small losses, they can soon become big losses. There were two famous brothers who lost their share of a family fortune & required the fed to step in & after meeting one of them years ago, for a few minutes, I was surprised, in my opinon, he knew enough to tie his own shoes, let alone swing limit positions around the futures market. His strong suit in life was to carry his lunch in a brown bag & ride the bus versus taking a cab to downtown Chicago.
Futures are like any other business endeavor and requires experience and management.
Edited by SeniorCitizen 1/25/2008 22:07
| |
|
Interesting Info I've picked up
