Prandelli Produced 175 Points Profit in Corn This Year!
Corn PFS Forecast Bulletin Review
By Daniele Prandelli
A REVIEW OF THE 2013 PFS FORECAST BULLETIN &
WITH ANALYSIS OF TRADING RESULTSÖ
Note: Daniele is an Italian National, and English is his 2nd Language.
We apologize for the awkward language, but he is currently studying English
and living in London to improve it, so it is getting better all the timeÖ
To demonstrate the full spectrum of tools and information provided by my PFS Forecast Bulletin & Service, I would like to first give a summary of the 2013 Bulletin for Corn, and then go through the year looking at the updates, which are very important, even more so than the Bulletin itself. As you will see, the Updates apply my analysis techniques in real time, using my Key Price indications and Strategic approach, which adjust the PFS Forecast and trading according to the specific changes in the market as the year progresses.† Following is the actual Bulletin as published for the year 2013 back in October of 2012, followed by the Updates sent throughout the year, and I have provided charts and a brief summary demonstrating the results.† I have emphasized and put in RED the most important points which determined our trading strategy, to make them completely clear without having to read every detailÖ
summary of 2013 Corn market PFS Forecast BULLETIN
Here we can see the 2013 PFS Model for the year 2013. If we look at the model and compare it with the Spot Chart of Corn, you can see that the forecasting model didnít work very well during 2013. But even with this being the case, using my Key Price Levels as discussed in my Daily Report Service where I follow Corn with a precise strategy, we have produced a profit of +175 points this year. This goes to demonstrate that the forecast is not all you need to trade, but serves as a model of potential impulse and turning points which MUST be correlated with the Key Price Levels to determine the Strategy which we will use to trade.
So, we began to trade Corn in January 2013 following the expected uptrend. But then we have to pay attention at the updates that I sent every 2 or 3 months, because they are very important, since I use the Key Prices to determine the trading strategy as it progresses.
2013 PFS Forecast Model
This is the Update sent on January the 8th, 2013:
Prandelli 2013 Grains Forecast Bulletin
8 January Update
As you know from the Bulletin, Iím waiting a general uptrend on the CORN, and we have to trade waiting a confirmation by the prices. My strategy is to use precise prices, in this way I can try to enter LONG always with a stop-loss of 4 or 5 points, no more.
These days Iím trying to enter LONG using the Key Price Level at 687-688 points (this is the price for the March Futures Contract). I did at the moment 3 trades in loss trying to enter LONG, with an average loss of 3 points per loss. But as you can see, this is not a problem, my loss is always under control in this way, and if I will be right forecasting the possible up trend, when it will start I can gain a lot of points just risking a few points in loss.
687-688 is not a very strong price, but market is playing around this level, so Iím trying to trade with this level, and will enter LONG when the market breaks above it. Other interesting levels are 664.5, 674.5 and 709-5 points. If the market will reach these prices, you can use them to trade the Corn. I mean that with these prices you can enter when market is above them, with stop-loss under them. For example, if market will move down to 664.5 points, you can try to enter LONG when Corn reaches this price, with a stop-loss under it. If you are stopped, be ready to enter again if Corn breaks above this level, always with a close stop under it. If market continues to move down, donít worry, it is important that you are FLAT and you donít remain in the market against the trend.
And this is the Chart of the March 2013 Futures Contract:
As you can see, the indication given in the Update was very useful. We could take good profits above 686-688 points because we have seen 2 strong up pushes above this level. Remember, always take some profits when your position is in profit, and leave the rest to run.
I sent another update on February the 17th, but there was no news:
Prandelli 2013 Grains Forecast Bulletin
17 February Update
From the last update we have had a very good opportunity to take some profits from the uptrend forecasted. The Low area was right, and playing with our key price at 687-688 points we could trade the uptrend with always a little stop loss (under 687-688 points). Remember to always take some profit when your position is in gain, and then leave the rest to run. Or you can raise the stop during the uptrend. It is important to not turn in loss a trade that was in profit.
Now look at the chart of Corn, you can see that we are again in a possible Low area, after the descent of February. The Low of Wednesday, February 13th, has been exactly at 687.25 points, right at my key price 687-688 (March Contract). For this reason I re-bought there (trade given in my Reports), with a close stop under it.
The forecast hasnít changed, the PFS is showing a continuation of the uptrend, and a line of energy is supporting Corn as well. So, I will always be LONG above 687-688 points, and always FLAT under it.
As you know looking at the Chart that I posted above, the entry point was right and excellent, we bought exactly at the Low in February, something that doesnít happen every day J.
On April the 4th I sent another update after a big and unexpected surprise:
Prandelli 2013 Grains Forecast Bulletin
04 April Update
Some updates for the grains, where we have seen a strong fall after the NASS March Stocks & Seeding report.
The PFS was working very well. In the last update we said to buy because the Corn was on a support, and the PFS was looking for higher prices. Everything was going very well, with a good uptrend. But the NASS March Stocks & Seeding report made the grains fall on last Thursday. This is something that can happen, which is why it is always wise to take some profits when our position is in gain, and put always a stop-loss.
Now the situation is not easy for Corn, since it broke the past Lows. What I think, looking at my studies, is that we should see a recovery of this fall, because the forecast is looking at higher prices. If we give a look at the PFS, the Corn should push up toward higher prices in the next months.
At the moment the study of prices is not confirming our forecast. The break under the important support at 680 points is really dangerous, and only a fast recovery can put Corn on our track. If I try to give some prices, the main support area is at 555-575 points.
But I would prefer to not see Corn so low. I have different key prices. One of them is at 629 points. So, we can try a LONG position above this level, with close stop under it. Always wait for a confirmation of the uptrend with an intraday chart. If, after buying above 629 points, we see a movement above area 634-640, it may confirm the up push, and also a consolidation above 649 points is another confirmation. Itís not easy to trade in this kind of condition, after a so strong a fall. Focus your trading on one of the Key Prices, and then trade with it, be LONG above it and FLAT under it. The Market cannot remain sidewise forever, hence, if we are right, we will be in the trend soon or later.
Looking at the PFS Time Forecast, there is a possible change in trend around 4-10 April. If we play with the key price, and we try to enter LONG in this time window, we can try to take the position always with a close stop, but you have to be patient and waiting for the prices, without trying to anticipate the Market. It could be really dangerous in this phase.
We have to pay attention to many things now. First of all look at the Chart.† We are trading the May Contract of course, because the March Contract has expired, and we cannot trade it after the Expiration Day that was the last day of February. We were following the uptrend, so in this cases we do the roll-over, meaning we close the March Contract and at the same time we buy the May Contract.
Here is the Chart of the May Contract:
Since the last days of February we were using the May Contract, and we can see that following the uptrend we had new opportunities to make profits from the up push. But at the end of March, there is the NASS March Stocks & Seeding Report that makes Corn fall. Since these are the Commodities, Iíll never finish to tell you that we ALWAYS have to put a stop loss, always! If you followed the rules with discipline, you put a stop under the Low, and after taking some profits from the up push, the worst thing that could happen was to be stopped with a loss of 4 or 5 points. Then I sent the Update on April the 4th, where I said that I wanted to go on following the uptrend, and I was expecting a change in trend around 4-10 April, and I said to use the level 629 to enter LONG. Well, the Low was done on April the 5th, with a Low at 626.50 points. In my opinion another great trade!
Looking at my Bulletin, we are not seeing the expected uptrend, but you can see that with a strategy and with discipline (and with my Updates) we could have made good profits anyway. About my forecast, the unexpected fall ruined my plans, of course. In fact, if we remove the 2 strong red bars, you can see that the trend was up, toward new Highs, but the jump toward lower levels destroyed my forecast. I donít mind, since what is important is to have profits, as always J.
On May the 22nd I sent a new update, but I had no news, I just said to go on following the uptrend with the July Contract, here is the update:
Prandelli 2013 Grains Forecast Bulletin
22 May Update
I wrote the last Report on April the 4th, telling that I was waiting for higher prices in the next months. Well, April the 5th has been the last Low, and we have seen the up push, with the opportunity to take very good profits.
I told you to use the key price at 629 points, and the Low has been 626.50 points, I would sayÖ NOT BAD!
Now Iím waiting for higher prices toward this summer, even if Corn is weaker than I was expecting, but we know that Corn doesnít move as much as Soybeans.
I donít have any update at the moment for Corn. Iím following the uptrend that the PFS suggests. Play with the key prices at 624.50, 645 and 667-668 to follow the uptrend (July Contract).
Actually, we see the continuation of the uptrend, even if it is not strong. Donít pay attention at the extreme movement at the end of July. Unfortunately we cannot trade the July Contract much into July, as you know. But the trend was up anyway.
On July the 31st I sent a new update:
Prandelli 2013 Grains Forecast Bulletin
31 July Update
In the last update I said to follow the uptrend, because it was expected to work till summer. We have not had much satisfaction from Corn, it moved slowly, without any strong up push, but we have still had the opportunity to take some good profits.
The up push has worked till the expiration of the July Contract, where also the September Contract made a High, but then we have seen weakness. It was not easy to forecast the exact moment of the change in trend, but now it looks like the down trend has started. I have to admit that it started a bit in advance respect of my forecast. We have started to trade SHORT under the key price 517.50, this is my most important level at the moment. I will always be SHORT under it with stop above it. The descent should now work till September/October. 519 is also the lowest level of the September Contract before of the last descent, made in May 2012, it makes this price very important and at the moment it is confirming the next down trend.
The next important prices are around 487.50 and 470-475 points.
Not an important update. As you can see from the chart, Corn started pushing down during the last day of June, so the downtrend began. The down signal was under 519 points. So, I said that we had to follow the downtrend, and you can see that it is working till now.
That concludes my review of the Corn Bulletin for the year 2013 till now, October. As you can see it is fundamental to have a constant update, and even if the main forecast doesnít look great, it doesnít mean that we are not still able to take advantage of moves that do take place using my Key Price Levels. It is important that you follow the trend and that you are disciplined when you have to use stops. I think that the updates are very useful, since in them I use the same rules that I use to trade for myself, and now you can understand how Iím able to be in profit of 175 points since November 2012.
It was important for me to show how I work with my Bulletin. Probably no one was expecting such a detailed review over the entire year, but in this way you now know what expect from my service and how to take advantage of it. This year of analysis in Corn is a very good example, because the market did not really follow my expected forecast, but it should help you to understand how by using my Key Price Levels, even if the Forecast is wrong, we are still able to produce good returns in our trading.
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