Copper - Back above $3lb!

[wayneL]

What i'm about to share with you, i do so only as a warning to others trading CFD's.

Today i wanted to go short on Copper (may07). I've been trading gold and oil recently on support and resistance, with some minor success. The contracts were all minis. I looked at the chart, and thought this looks like a nice safe spot to enter and it looked like it was slowly breaking down. I put in my order for 5 (yes 5 contracts), thinking it was a mini .

Immediately i realised my mistake, too late, the spread took 1500.00 right away. I thought, oh my god.....then i thought...wait, trade it like i planned...be cool, calm. It proceeded to push UP through the channel line over the next two hours and when i finally pulled the pin i lost 6900.00.

So far in my trading over the last couple of years i've never taken a loss like *this, they've been much smaller, on shares, using tight stops.

This was a stupid, stupid mistake which i hope non of the other "inexperienced" members here make.

I had no real plan
I did not check out the contract size properly
I took no consideration of risk at all

I was gambling, plain and simple.

CFD's are dangerous....be aware.

Cheers,

Onya for sharing that CanOz. I have a file called the "You Idiot" file, where I stash away such experiences. We all have them Those that have been around a while have thick ones LOL. Mine's very thick. lol

It's the one disadvantage of futures IMO (or CFD derivatives thereof) is remembering all the different contact sizes, different expiry dates, symbols ETC ETC ETC.

I have a folder I made up that contains all the relative info for each commodity:
*trading hours
*ticker
*expiry months
*notice period (if any)
*trading unit
*tick size
*value of one tick
*contract size
*approximate underlying contract value
*typical statistical volatility

I refer to it before making a trade even though I pretty much know it, it takes the stress out of remembering that when I'm concentrating on a potential signal.

fwiw

 

[professor_frink]

Sorry to hear that canuck

Sounds like you've learned your lesson and won't be doing anything like that again in a hurry, so there are always positives to come out of situations like these

FWIW, I've done something similar on the nikkei- there are 3 different nikkei contracts, accidently bought the big one, got stopped out for 4 times more than planned

Ended up missing a trade the day after because I spent too long making sure I was trading the right one and the market got away from me. And yes, it would have been a winner(probably would have been stopped out if I got filled LOL!)

 

[CanOz]

Thanks for the tips fellas. Good advice, feels better to get it off my chest too...no one to really talk to about it here....still shell shocked.

 

[petervan]

May need a new thread shortly, maybe middle May -Copper-Back above $4lb!

 

[CanOz]

This sucker's getting ready to roll over and die....still not game to short it though

Cheers,

 

[CanOz]

And over it goes....

 

[petervan]

I,ve jinxed it LOL

 

[CanOz]

I like the way these pivots line up for this retracement to finish just below the gap, before the next move up.....any one agree or care to comment?

 

[YOUNG_TRADER]

Lots of articles on strikes at major mines and Xstrata declaring force majeure due to flooding etc should help price

http://www.platts.com/Metals/News/6375894.xml?sub=Metals&p=Metals/News&?undefined&undefined

http://www.hemscott.com/news/latest-news/item.do?newsId=41921028331683

http://www.forextv.com/FT/AFX/ShowStory.jsp?seq=212439

$4 by the end of the month

 

[CanOz]

Lots of articles on strikes at major mines and Xstrata declaring force majeure due to flooding etc should help price

http://www.platts.com/Metals/News/6375894.xml?sub=Metals&p=Metals/News&?undefined&undefined

http://www.hemscott.com/news/latest-news/item.do?newsId=41921028331683

http://www.forextv.com/FT/AFX/ShowStory.jsp?seq=212439

$4 by the end of the month

I agree, but i'm just waiting to find the best spot to re enter, long this time.

Cheers,

 

[YOUNG_TRADER]

I agree, but i'm just waiting to find the best spot to re enter, long this time.

Cheers,

Whats the news around the Chinese traps Cana?

 

[CanOz]

Whats the news around the Chinese traps Cana?

In regards to what YT? The biggest news here is thats it finally spring! Although i'm not certain i've thawed out yet.

Cheers,

 

[YOUNG_TRADER]

In regards to what YT?

Bird Flu! Nah

Copper of course, any local news reports etc etc?

 

[CanOz]

Bird Flu! Nah

Copper of course, any local news reports etc etc?

No, the only fundemental info i get on metals is on the net, and mostly from you guys. I trade with the charts so i only pay attention to major news really. Besides i couldn't understand anything in the media here, i can't even get the "China Daily" here, unless its a day late.

Still lots of building going on here and its just re started here in the north, as they shut down for winter in most Northern Cities. I would think the demand after Spring Festival must have increased for most construction type metals?

Cheers,

 

[CanOz]

Copper blazing away towards recent highs yet again.

 

[BREND]

Copper has no sign of slowing down:
http://basemetal-trading.blogspot.com/2007/04/copper-no-sign-of-slowing-down.html

 

[YOUNG_TRADER]

China's Copper Imports More Than Double on Building (Update2)

By Xiaowei Li and Xiao Yu

April 23 (Bloomberg) -- China, the world's biggest consumer of copper, more than doubled imports of the metal in March as the peak demand period for the construction industry began.

Imports of refined copper and alloys rose to 208,014 metric tons, 142 percent more than a year earlier, according to data issued by the Beijing-based customs office today. That's the highest since at least January 2004, according to Bloomberg data.

China's year-on-year imports of copper, used in electrical wiring and pipes, have risen every month since December, as the country stopped running down its domestic stockpiles. The price of copper has gained 26 percent so far this year.

``The high level of refined copper imports was expected, reflecting rising seasonal demand and high profitability of importing in the past months,'' said Wang Xiaodan, an analyst at Minmetals Star Futures Co.

Demand for refined copper in China may rise 10 percent this year, faster than in 2006, as the nation builds more electricity generation capacity, according to CRU International Ltd.

Imports of copper concentrate rose 2.3 percent to 313,407 metric tons last month, the customs' statement said. Exports of refined copper and alloys fell 93 percent to 3,097 tons, it said.

China may slash imports of the metal by half from April and throughout the second quarter because of soaring prices, said traders and analysts, including Li Zhifeng at China Minmetals Nonferrous Metals Co.

Import Profitability

Traders in China increased imports in the first quarter as the ratio of domestic prices to the London Metal Exchange global benchmark made it profitable. The ratio, which was around 9.5 in February, fell as low as 8.8 in early April and stood at less than 9.0 April 20.

For imports from Chile, where a free trade agreement allows exemption from import duty, a reading above 9.2 indicates profitability. For other countries, a reading above 9.4 is conducive to imports.

The ratio is usually calculated by dividing the Chinese cash price in yuan by the London cash price in dollars. Chinese importers have to pay 17 percent value-added tax, 2 percent import duty, freight charges and other costs.

London Metal Exchange copper for immediate delivery settled at $8,005 a ton April 20, while the metal traded in Changjiang, Shanghai's biggest cash market, between 71,800 and 72,000 yuan a ton the same day.

On the London Metal Exchange, copper for delivery in three months traded 0.1 percent down at $2,840 a ton at 9:15 a.m. Shanghai time. Copper for delivery in July rose as much as 1,360 yuan, or 1.9 percent, to 74,200 yuan a ton on the Shanghai Futures Exchange, and traded at 73,850 yuan at 9:15 a.m. local time.

China Demand

China may consume 4.3 million tons of copper, mainly to meet power industry demand, compared with 3.9 million tons last year, London-based metals consulting CRU said April 17.

The country's output of copper fell 2.5 percent to 220,000 tons in March and gained 4.2 percent to 702,000 tons in the first quarter, according to data from the National Bureau of Statistics issued April 20.

Copper stockpiles monitored by the Shanghai Futures Exchange rose 10 percent last week to 67,016 tons. Stockpiles of the rival lightweight metal aluminum fell 21 percent to 61,644 tons.

Alumina imports fell 35 percent to 355,101 tons, while nickel imports rose 5.5 percent to 7,737 tons. Zinc imports fell 43 percent to 20,063 tons, and exports of zinc surged 245 percent to 33,868 tons, it said.

Exports of aluminum fell 66 percent to 38,491 tons, while imports of aluminum rose 7.2 percent to 47,451 tons, it said.

China is the world's biggest user of copper, aluminum, nickel, zinc and lead.

 

[wayneL]

Far canal!

 

[Sean K]

Far canal!

You OK Wayne?

 

[wayneL]

Just the mind boggling at big numbers