Here Is My Coffee Trade
09/15/2015 7:00 am EST
Michael Seery, of SeeryFutures.com,examines the coffee futures market in the December contract and explains why he is recommending that commodity futures traders take a short position as the chart structure has improved tremendously.
Coffee Futures—Coffee futures in the December contract are trading higher by 450 points currently trading at 121.00 a pound as I’m now recommending a short position as the chart structure has improved tremendously, and if you take this original trade, place your stop at 125 risking 400 points or $1,500 per contract plus slippage and commission.
The chart structure in coffee will improve in two days as the stop loss will be 122.50 risking less than $750 as coffee is the largest contract in the commodity market as the risk:reward is in your favor at the current time so take advantage of Monday’s price rally and enter into a short position as prices are still trading below their 20- and 100-day moving average telling you that the trend is to the downside.
Many of the commodity markets and especially the agricultural markets have rallied in recent days as I’ve been stopped out of many trades, especially in the grain market; however trading is all about risk:reward and whenever you risk a small monetary amount—especially in coffee—you need to take a shot, in my opinion, as coffee can become extremely volatile.
Trend: Lower—Chart Structure: Outstanding
By Michael Seery of SeeryFutures.com